Railways Bill

HL Deb 14 October 1993 vol 549 cc342-408

8.12 p.m.

Consideration of amendments on Report resumed.

Clause 27 [Other terms and conditions of franchise agreements]:

Viscount Goschen moved Amendments Nos. 37 to 39:

Page 29, line 10, leave out ("either—

(a) on conditions requiring") and insert ("on conditions requiring—

(a)").

Page 29, line 15, leave out ("on conditions requiring").

Page 29, line 18, at end insert:

("(1A) A franchise agreement may include provision requiring the franchisee—

1. (a) to operate any additional railway asset; or
2. (b) to secure the operation of any additional railway asset by the franchise operator or any other wholly owned subsidiary of the franchisee.").

The noble Viscount said: My Lords, these amendments have already been spoken to. I beg to move.

On Question, amendments agreed to.

[Amendment No. 40 not moved.]

Lord Clinton-Davis moved Amendment No. 41:

Page 29, line 32, at end insert:

("() A franchise agreement shall require the franchisee to permit passengers, without additional charge, to use services provided by him between any two places upon presentation of a ticket issued by another franchisee for travel between the same two places.").

The noble Lord said: My Lords, in moving Amendment No. 41, I wish to speak also to Amendment No. 42. The purpose of Amendment No. 41 is to seek to safeguard the present arrangements for interavailability of tickets on parallel routes or routes shared by more than one operator. It was the noble Lord, Lord Mountevans, who raised this issue when we discussed it in Committee and this very full Chamber will recall that debate vividly.

The matter I am discussing is exemplified by a number of examples of which I shall mention one or two. For example, parallel routes between Glasgow and London are operated by InterCity ECML and InterCity WCML. The routes between Birmingham and London are operated by InterCity Great Western, InterCity WCML and NSE Thames and Chiltern. The routes between Glasgow and Edinburgh are operated by InterCity ECML and Regional Railways ScotRail. I could cite many other examples but I shall not do so.

Then there are shared routes, for example the route between Gatwick and London which is operated by InterCity Gatwick Express, Network SouthEast Thameslink, Network SouthEast South London and Sussex Coast. The route between Ipswich and London is operated by Network SouthEast Great Eastern and InterCity Anglia. This situation is replicated in a number of areas as regards both parallel and shared routes. There seems to me to be considerable scope for the confusion of passengers, the embarrassment of staff and even perhaps an increase in prosecutions for perceived fare-dodging if the present interavailability of tickets is not maintained.

The Minister has said before—he has repeated the argument in another context this evening—that it will all work out all right because it is hoped that similar agreements will be negotiated in the future and the Government accept, or take the view that the regulator or the franchising director will already have some limited powers to require mutual acceptance of tickets. But their belief, as I understand it—I refer to what the Minister said at col. 1051 of the Official Report on 1st July when we debated these issues—is the following. The Minister stated that the Government envisage these powers only being used for "high frequency commuter flows".

In my submission, that policy represents an attempt by the Government to avoid outright rebellion by already much-concerned commuters using services, for example, from the south of London, who may arrive at a number of different terminals. It fails to address the problem of the long distance traveller whose original train may have been cancelled or delayed and who finds that the next train to the same destination is to take a different route. That matter must be addressed. Nothing the Government have said so far in these debates can allay the anxieties which commuters already have. I believe that the Government's proposals as they stand at the moment represent a return to the bad old days before nationalisation when few agreements on interavailability of tickets existed. I take the view—this is the view of the Opposition—that interavailability is an important concept, and it has been developed because we have a single railway authority. We want to preserve this interavailability in the interests of passengers as a whole.

I am also addressing Amendment No. 42 which concerns the integrity of InterCity. We are anxious to protect, so far as we can, the benefits of having a single operator of long distance express services. When we discussed this matter in Committee, we sought to provide either for the franchising director to hand over the InterCity business to a single franchisee, or for the franchising director to require operators of InterCity services to co-ordinate their activities, or for him to require operators of any two designated services to co-ordinate their activities. I believe a number of noble Lords who took part in that debate wanted to see InterCity continuing to exist in some form. Perhaps they questioned our enthusiasm for common liveries of trains, uniforms of staff and other such matters. However, the amendment we have now introduced is not mandatory: it is a discretionary amendment which enables the franchising director to exercise an option of letting a single franchise or, if he does not feel this can be justified, simply requiring a measure of co-ordination and the preservation of certain network benefits.

The Government have previously indicated that they are not prepared to enable that discretion to be exercised. We would like to have further and better particulars from the Government as to why that is so and why this discretionary element should not be inserted into the powers of the franchising director.

Perhaps I may now turn to the principal arguments on which we rely to justify the position. InterCity is profitable. It has been profitable for five years in succession. Indeed, the remarkable thing about InterCity is that it is the only long-distance railway network in the world which is profitable. The structure under which it operates permits highly profitable routes such as the East Coast mainline to cross-subsidise non-profitable routes. The most clear example of a non-profitable route in that respect is the West Coast mainline. The benefit which accrues to the public as well as to the public sector borrowing requirement is that there is no need to offer a public subsidy, or at least the need is mitigated if not completely avoided, in such circumstances.

If one breaks up the network, as the Government propose, then without any shadow of a doubt private franchisees will cream off the profits from the lucrative routes and the PSO grant will have to be applied to loss-making InterCity services. That would be the first time that that had arisen for a number of years.

What accounts for the success of InterCity? It is an undoubted success. An essential ingredient has been the unified management that it enjoys. However, in anticipation of the franchising upon which the Government are insisting we already see fragmentation of that unified management. North and south directors replace the single business director. I believe that to he a wasteful duplication of management and I believe that we need to try to retain the unified network which has been so advantageous not only to British Rail but: to the country's transport policy as a whole.

The second measure which has accounted for the success of InterCity is that it has established a reputation for high standards of service: air-conditioned coaches, very good catering facilities on board, senior conductors trained in customer service as well as operational duties, speed and reliability.

If InterCity is dealt with along the lines that the Government propose, I believe that in countries where InterCity has been seen as a service worth emulating and copying—Germany, the Netherlands and Australia—we shall simply be a laughing stock. Why do away with something which has a proven record of great success? Why do away with something which is admired by railway managers around the world? It is an ideological pursuit on the part of the Government.

The option expressed in our amendment of co-ordinating separate successor franchisees has precedent to support it, namely, the grouping of independent television companies on Channel 3. Those companies operate separate regional franchises but are happy to co-operate on programme scheduling and marketing. There are obvious parallels to be drawn. I hope that the Government will not simply rely on ideological commitments but will recognise that there is a practical case, which I have sought to make out this evening, which has to be answered. Although I do not suppose that it will come to anything, my hope is that the Government will accept the amendments. I beg to move.

The Earl of Caithness

My Lords, I am grateful to the noble Lord, Lord Clinton-Davis for his full and detailed explanation. As your Lordships will remember from earlier discussions, these amendments have a somewhat familiar ring about them and I hesitate simply to rehearse the arguments which I gave for resisting similar amendments at Committee stage, good as they were. They are on the record, at cols. 1167 to 1168 of Hansard for 5th July. However, let me summarize the position.

Perhaps I may speak first to Amendment No. 42. We do not want to constrain franchisees' decisions on what colour they should paint their trains or what uniforms their staff should wear. We surely can leave the private sector to decide how best to present its product in the market-place. I can understand some people's fondness for the InterCity brand, but rather than take steps to protect a national system—for example, by franchising InterCity as one unit—we see advantage in more local loyalties being fostered. However, we agree that the marketing image of the "InterCity" brand is slightly different from that of "BR", and we are therefore prepared to consider proposals under which the brand might be made available to franchisees who wish to use it.

Franchising will proceed gradually, and on the basis of the BR timetable immediately prior to franchising. Therefore necessary connecting services can be safeguarded. There will continue to be a national timetable. We have already given commitments on that. Local timetables will be a matter for operators, who will be keen to publicise their services. But the franchising director can impose requirements if he considers it appropriate to ensure the orderly provision of information. We propose that requirements as to through-ticketing will be contained in licences. Nothing more, we believe, is needed in the Bill in these areas.

We cannot accept a universal requirement for the mutual acceptance of tickets, or "inter-availability", as Amendment No. 41 seeks. I remind the noble Lord, Lord Clinton-Davis, that that is not the case now. Many discounted tickets, for example, carry restrictions on the time of travel or the use of particular trains. The Secretary of State's guidance to the franchising director will include reference to the provision of inter-availability. There are undoubtedly instances where it will be sensible for inter-availability to be preserved. The franchising director will have powers to require it. But there will also be cases where passengers are more likely to benefit from competitive service provision if operators are not unduly tied to restrictive obligations. Therefore, we believe that it is right that inter-availability should be decided on a franchise-by-franchise basis.

Discounted fares have already been discussed under the previous amendment, Amendment No. 36, and I reiterated the Government's position on those. We do not wish to be unnecessarily prescriptive, and apart from the schemes which are already protected under Clause 26 we believe that operators should have commercial freedom to introduce their own marketing initiatives. There is no reason why they should not be as effective as BR, if not more so, in attracting additional patronage to the railway.

For those reasons I have to resist the noble Lord's desire to circumscribe operators' every movement with a multiplicity of obligations and restrictions. We want to achieve an altogether lighter touch which will encourage the private sector to come forward and run railway services in a competitive environment with only the necessary level of control to secure effective franchising within the framework of the powers already in the Bill.

The noble Lord, Lord Clinton-Davis, paid tribute to InterCity and many of the services which it runs and the efficiency with which they are run. I too would like to pay tribute to a great many of the InterCity services. They provide an excellent service. We believe that with the private sector taking over the management of those services in various parts of the country we can produce an even better service.

8.30 p.m.

Lord Tordoff

My Lords, before the noble Earl sits down, can he give us any reassurance on the subject of common timetabling? It is contained within one of the amendments. It is an area about which people are worried. I received the composite InterCity timetable by courtesy of British Rail. It is a publication which it has helpfully sent me over the past few years. I was somewhat shocked to read something that perhaps I should have known; namely, that it is the last timetable that I shall receive from British Rail with the various InterCity timetables in it. From April next year there will be no general InterCity timetable. There will have to be several timetables for each of the routes which InterCity—in whatever form it exists—will run.

It is that kind of issue which worries people intensely. Not all journeys are straightforward. During the summer I journeyed from my home in Taunton to stay with my noble friend Lord Mackie of Benshie in Kirriemuir. I was able to go by train all the way to Dundee. I am not sure whether I shall find sufficient timetables to ensure all those connections this time next year.

The Earl of Caithness

My Lords, I understand the point that the noble Lord makes. I am delighted that he went from one beautiful part of the country to another even more beautiful area. I hope that he enjoyed himself very much.

We have already given commitments to a national timetable. I believe that a great many of the anxieties of people will not be well founded. The noble Lord and I have had discussions on previous Bills when he has rightly raised anxieties. Of course people who are used to one system are worried about a change. I think that in the great majority of cases the system to which we have moved has turned out to be better and the people who have used those specific services have found that many of their fears have disappeared. It does not mean that those fears were wrong in the first instance. It is a natural human instinct to have those fears. I take the noble Lord's point. That is why a national timetable is so important.

Lord Clinton-Davis

My Lords, the difficulty is that the Government rely on conjecture and hope but they are interfering with an internationally esteemed, proven success. Against that background it simply makes no sense to deal with the situation along the lines that the Government propose. It is all very well to state that local loyalties need to be fostered. At one time the Prime Minister was much taken with the idea of going back to the four railway lines which were in the private, heavily subsidised sector until nationalisation. He based that on a form of local loyalty. It was meaningless. It has to be said that the Government have not taken up that suggestion made by their own Prime Minister.

It is one thing to say that the Government have made certain commitments. It is quite another to translate those commitments into practice. The Government have no precedent upon which they can base the commitment. The railways privatisation is a totally different privatisation. It has had little encouragement from the private sector to date. There is overwhelming public anxiety, which the Government seek to ignore. They can pass off the debate at the Conservative Party Conference without qualms. But they know of their own knowledge, and Members in another place know from their own constituencies, that there is massive worry about the whole question of privatisation, but about InterCity in particular. Why interfere with such a proven success?

The question of inter-availability is one of the most important issues that confronts us as these unnecessary changes are being contemplated. We may wish to return to the issue at a further stage of the Bill. We shall have to assess the priorities which have to be dealt with at that stage.

To say that the Government wish to apply a lighter touch is, with respect to the Minister, absolutely meaningless. It is nonsense. What the country demands is inter-availability and the running of a service that is a success. Those are issues which are felt to be very much in jeopardy.

With regard to common timetabling, the Minister says, "We have made a commitment. That should satisfy everybody". Government commitments have been made before and have been dishonoured on a massive scale. Therefore I am not much influenced by what the Minister says in that regard.

I urge the noble Lord, Lord Tordoff, to preserve the timetable to which he referred. It will soon have an antique value and will be able to enhance his already substantial earnings from attending this place. Therefore it is a document to be preserved. Having said all that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 42 not moved.]

The Earl of Caithness moved Amendment No. 43:

Page 29, line 38, at end insert:

("(7) In this Part, "additional railway asset" means any network, station or light maintenance depot, and any reference to an additional railway asset includes a reference to any part of an additional railway asset.").

On Question, amendment agreed to.

Clause 28 [Failure to secure subsequent franchise agreement]:

The Earl of Caithness moved Amendments Nos. 44 to 46:

Page 30, line 2, at end insert:

("(1A) In any case where—

1. (a) a franchise agreement which includes provision in respect of the operation of any additional railway assets is terminated or otherwise comes to an end, but
2. (b) no further franchise agreement has been entered into which makes provision in respect of the operation of the additional railway assets formerly operated under or by virtue of that franchise agreement, or
3. (c) such further franchise agreement as has been entered into in respect of the operation of those additional railway assets makes provision in respect of the operation of some but not all of those additional railway assets,

the Franchising Director shall, subject to subsection (3) below, have the power to secure the operation of any additional railway asset with respect to the operation of which no further franchise agreement has been entered into, until such time as it again begins to be operated under or by virtue of a franchise agreement.").

Page 30, line 14, leave out from ("question") to ("of") in line 15 and insert ("in any case falling within any of paragraphs (a) to (d) of subsection (2)").

Page 30, line 16, at end insert:

("(3) The Franchising Director's power under subsection (1A) above to secure the operation of any additional railway asset shall come to an end—

1. (a) where the Franchising Director publishes a notice under subsection (4) of section 37 or 39 below in respect of the additional railway asset in question, on the date mentioned in paragraph (b) of the subsection in question;
2. (b) where the Franchising Director discontinues the operation of the additional railway asset in question in circumstances in which he is entitled to do so without notice under or by virtue of subsection (2) of section 37 or 39, on the date on which that discontinuance takes place;
3. (c) where the operator of the additional railway asset in question gives notice to the Franchising Director in respect of that additional railway asset under section 36 or 38 below, on the date specified by the operator pursuant to subsection (3) (b) of the section in question; or
4. (d) where the operator of the additional railway asset in question discontinues the operation of that additional railway asset in circumstances in which he is entitled to 349 do so without notice under or by virtue of subsection (1) or (2) of section 36 or 38, on the date on which that discontinuance takes place.").

On Question, amendments agreed to.

Clause 29 [Leases granted in pursuance of franchise agreements: no security of tenure]:

The Earl of Caithness moved Amendment No. 47:

Page 30, line 24, at end insert ("(whether in whole or in part)").

On Question, amendment agreed to.

Clause 30 [Power of Passenger Transport Executives to enter into agreements with wholly owned subsidiaries of the Board]:

The Earl of Caithness moved Amendment No. 48:

Page 31, line 23, leave out ("section") and insert ("sections (Re-negotiation of section 20(2) agreements as a result of this Act) and").

The noble Earl said: My Lords, in moving Amendment No. 48, I shall, with the leave of the House, speak to Amendments Nos. 50, 51, 52 to 57 and 300, which also stand in my name. With the permission of the noble Lord, Lord Clinton-Davis, I shall in the process touch upon his Amendment No. 49. I know that the noble Lord, Lord Carmichael, will wish to speak more fully to that amendment in a moment.

These amendments relate to the involvement of PTAs and PTEs in the future railway and are mainly to Clauses 31 and 33 of the Bill, which make provision regarding PTEs and for the amendment of the 1968 Transport Act. There is also a new clause to provide for the renegotiation of Section 20 agreements in the run up to franchising. The remainder of the amendments are entirely consequential upon the amendments which were made to Clause 27 and which provide for the franchising director to secure the operation of "additional railway assets".

I shall deal first with the government amendments to Clause 31. Amendments Nos. 53 and 54 together permit a PTE to specify the minimum level of quality with respect to the operation of a station which the franchising director intends to secure under a franchising agreement relating to services in the passenger transport area. Amendment No. 56 provides for the franchising director and a PTE to enter into agreements concerning the terms of franchise agreements to which the PTE is a party. The subsection is transposed from Clause 50.

I turn briefly to the amendment which stands in the name of the noble Lord, Lord Carmichael. That amendment also seems to be intended to secure that PTEs continue to invest in the railway. I hope that I can reassure the noble Lord that it is our fervent desire that this should continue to be possible, and I would draw the noble Lord's attention to Clause 50, which deals with the encouragement of railway investment.

Moving on to government Amendment No. 58, this amends subsection (12) and replaces the existing subsection (13) of Clause 31 with a new subsection (13) which provides for a PTE and the franchising director to enter into an agreement relating to the provision of services in a PTE area where the franchising director is under a duty to secure those services pursuant to Clause 28. This is the case where a franchise has ended and, for whatever reason, the competition to re-let the franchise has not secured a successor franchisee. The new subsection also provides for the PTE to pay the franchising director for securing the provision of such services. The Secretary of State has powers to direct the PTE to make payments in the case of default of agreement.

Subsection (13A) in Amendment No. 58 sets out the provisions which may be included in an agreement made between the franchising director and the PTE made pursuant to subsection (13) of Clause 31. Subsection (13B) limits the scope of the Secretary of State's powers of direction in the case of a dispute arising between the franchising director and a PTE concerning the making of payments by the PTE under the new subsection (13). He will now only be able to direct the PTE to make payments in respect of services making calls at more than one station in the PTE area or additional railway assets operated for the purposes of supplying those services, and only during the "relevant period", defined as the financial year in which the direction is given, the year before and the year after.

I believe that your Lordships will welcome this amendment, which remedies the previous situation under which the Secretary of State's powers were rather too widely drawn. We also propose to amend subsection (15) of Clause 31 so that if a PTE considers it desirable to enter into a franchising agreement expeditiously, the PTE will be able to apply to the Secretary of State for directions as well as the franchising director.

Moving on to Clause 33, we seek further modification to Section 10 of the 1968 Act, which sets out PTEs' powers, in order to enable them to enter into agreements with infrastructure operators and owners concerning maintenance, development and staffing, and with owners of rolling stock in connection with the terms on which rolling stock is to be let on hire.

The remaining Amendments Nos. 52, 57, 59, 62 and 63 are consequential upon the amendments which have been made to Clause 27 which provide for the franchising director to secure the operation of additional railway assets.

Finally, Amendments Nos. 48, 50, 51, 65, 66 and 300 deal with the treatment in the run-up to the franchising of existing agreements between the British Rail board and the passenger transport executives under Section 20(2) of the 1968 Transport Act. Amendment No. 300 also makes further provision with regard to enforcement.

The existing Section 20(2) agreements will no longer be appropriate after 1st April 1994 when Railtrack is established and the new charging regime commences. New or amended Section 20(2) agreements will therefore need to be in place before 1st April 1994.

The amendments do a number of things to facilitate this process, the emphasis being on the PTEs and BR or its wholly-owned subsidiaries discussing and agreeing the necessary changes. First, a duty is placed on BR or any wholly-owned subsidiary, the PTAs and the PTEs to co-operate in the re-negotiation and amendment of existing Section 20(2) agreements. The Secretary of State will be able to serve notice on the parties specifying the date by which agreement should be reached on the new or amended Section 20(2) agreements. In the event of a dispute as to the terms of the new or amended agreements, either party may refer the dispute to the Secretary of State. In the event of such a referral, or if BR and the PTEs fail to agree on amendments or sign a new agreement by the date he has set, the Secretary of State will be able to give such directions to the board or its wholly-owned subsidiary, or the PTE requiring them to make such amendments to the existing Section 20(2) agreements as are determined by him, and to enter into new Section 20(2) agreements on such terms as are determined by him, by such date as he may specify in the directions.

These provisions are similar to those already in the Bill to deal with disputes which may arise between the PTEs and the franchising director in respect of franchise agreements. I should like to stress that we hope and expect the PTAs, PTEs and BR to agree on the necessary changes among themselves without the Secretary of State being required to intervene.

We recognise the excellent work done by the PTEs in promoting public transport in metropolitan areas and are eager to see this continue in the future. Our amendments are necessary for the furtherance of this aim and I commend them to your Lordships' House.

Having given that very full explanation, I hope that it will solve some of the problems and allay some of the anxieties that the noble Lord, Lord Carmichael, might have. I beg to move.

8.45 p.m.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for his full explanation. I think, however, it is important to put on record something about the work of the PTAs and PTEs. As the Minister will know, one of the more progressive and important ones happens to be in the area in which I live, so I experience it frequently. There is no question but that the PTAs and the PTEs have led the way in the development of commuter rail services in the UK. They used their powers under Section 20 of what I consider to be the great Transport Act of 1968. Much can be done now, but in 1968 that: legislation was very progressive, believe me. The structure was set up under that Act. PTAs and PTEs recast timetables to improve regularity and reliability, they opened new stations and upgraded others. Only in the past month or six weeks, in the Strathclyde PTA, five stations were reopened and there are five to come within the next month or so. The interesting point about these stations is that the local papers showed pictures of them taken from the railway bridge after they had been opened and the stations were crowded with commuters who previously took their cars into the centre of the city or waited for buses. The suburban areas now have a good railway service and the PTEs did a great deal to improve rolling stock and for the electrification of the railway line.

The lead of the PTAs and the PTEs has been followed by the regional and other principal rail networks. Network SouthEast partly used the PTEs as an example and even the Secretary of State for Transport in the other place stressed that he wished PTAs and PTEs to remain active after the Bill is enacted.

Obviously, however, there are points about which we were a little worried. Some of the assurances given by the Minister in his Amendment No. 50 are reassuring, but I should like to emphasise that there are certain amendments that we would like. For example, we would like a minimum period of at least three months before the renegotiation of agreements between the PTEs and the franchisees. We would like the Secretary of State to have the powers under subsection (3) restricted to imposing terms only for matters still in dispute. As the Minister said in his speech, we hope that there will be general agreement. There will be problems, but we hope that ultimately they will be amicably settled. We would not want the power of the Secretary of State to be used unnecessarily.

On the matter referred to under subsection (4) of the new clause in Amendment No. 50, the Secretary of State should be required to consult and take account of the views of the other parties before giving directions. Where the other party is a PTE, the PTA should also be asked for its views because, after all, it is the body which will pick up the bill. Consideration should be extended only to those matters which are actually in dispute.

Similarly, subsection (5) should require consultation, taking account of the views of all the parties. The Secretary of State must allow a reasonable time for that. I know that "reasonable" is not a good legal word, but in an area of life where people are dependent on transport to get them to work and leisure activities, they will be annoyed and the local press and media will be annoyed if "reasonable" is not properly and reasonably interpreted. Subsection (6) must provide for ale PTA to be consulted and for its views to be taken into account before an agreement is imposed.

In view of the importance of the agreements to our major conurbations, it is also reasonable to ask that the Secretary of State submit any agreement that he proposes to impose to parliamentary scrutiny, by use of a statutory instrument to be approved on a positive resolution.

Finally, the Government should take note of the fact that the amendments are incomplete. Clause 140 requires amending for the British Railways Board in the same terms as are proposed for the PTEs, as they too can be subject to directions under the new clause now; or is it their intention simply to use the powers to use the PTEs and PTAs on the right side?

I hope that I have not asked too many questions of the Minister. I imagine that he may have all the answers ready. But if he has not, perhaps he will let me know later. In general, I approve of the amendments that he has made and the assurances that we have had so far on the PTAs and PTEs.

Lord Teviot

My Lords, briefly, I should like to join the two noble Lords in tributes to the PTAs and PTEs; and also to thank my noble friend for his Amendment No. 60, which was the point that I raised in Committee.

The Earl of Caithness

My Lords, perhaps I may deal first with the point made by my noble friend Lord Teviot. I am delighted to have met my noble friend's anxiety on this particular point, and to know that he is satisfied.

Earlier, when I was speaking to a large number of other amendments, I should have mentioned Amendment No. 51. There has been a misprint on the Marshalled List. In the last line it says: a section 20(2) agreement". It means that there is one agreement too many. The word "agreement" should be deleted after "section 20(2)". I do not know whether it makes any difference. It just makes it absolutely clear that we are all talking about the same type of amendment.

Perhaps I may deal now with the point raised by the noble Lord, Lord Carmichael of Kelvingrove. He talked about subsection (2), allowing a minimum period of at least three months for renegotiation of agreements. I understand that anxiety; but I should like to assure the noble Lord that the Secretary of State will not set impossibly tight deadlines. The emphasis is firmly on achieving workable contracts.

The noble Lord also raised anxieties under subsections (3), (4), (5) and (6). Again, I understand those. But I assure the noble Lord that it is fully intended by the Secretary of State that he should exercise his power only in the direction in respect of areas of dispute. He obviously' does not want to go further than that. As to the important point of consultation, the Secretary of State will need to weigh the merits of the case before deciding what directions he should give. That will require consultation with all the parties in dispute. I hope that the noble Lord's anxieties are allayed on that front.

Turning to the other points, I understand the emphasis placed on the agreements. But it will also be important that the agreements are entered into swiftly. I put it to the noble Lord that placing draft agreements before Parliament would cause delay. It is our sincere wish that the parties involved will be able to enter into agreement rather than have the matter referred to the Secretary of State.

With regard to Clause 140, the clause makes it clear that: It shall be the duty of any person to whom a direction is given under this Act to comply with and give effect to that direction". So the board will be under a duty to comply. Subsequent provisions are without prejudice the generality of this provision. It was thought necessary to refer to PTEs in the clause in order to remove any doubt that there may have been that the compliance with the direction by PTEs should take precedence over the performance of their duties under the 1968 Act.

I hope that I have covered the points that the noble Lord, Lord Carmichael, has raised. However, if he wishes to discuss anything with me between now and another stage on this issue, I shall be only too pleased to find time to do so.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for making that rather rash decision. I believe that the Minister's hat is in the right place on this, and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 49 not moved.]

The Earl of Caithness moved Amendment No. 50:

After Clause 30, insert the following new clause:

Re-negotiation of section 20(2) agreements as a result of this Act

(" .—(1) It shall be the duty of the Board and of every Passenger Transport Authority and every Passenger Transport Executive to co-operate with each other with a view to reaching agreement about—

1. (a) the changes that need to be made to existing section 20(2) agreements as a result of the provisions of this Act or anything done or to be done pursuant to any such provision;
2. (b) whether those changes can best be made by amending the existing section 20(2) agreements or by terminating those agreements and entering into new section 20(2) agreements in their place; and
3. (c) the amendments that need to be made to the existing section 20(2) agreements or, as the case may be, the provisions that need to be contained in the new section 20(2) agreements.

(2) The Secretary of State may give notice to the Board, and to the Passenger Transport Authority and the Passenger Transport Executive for any passenger transport area, specifying the date by which they are—

1. (a) to have reached agreement on the matters specified in paragraphs (a) to (c) of subsection (1) above, so far as relating to the existing section 20(2) agreement with which they are concerned; and
2. (b) to have made to that existing section 20(2) agreement the amendments mentioned in paragraph (c) of that subsection or, as the case may be, to have entered into a new section 20(2) agreement, containing the provisions mentioned in that paragraph, in place of the existing section 20(2) agreement.

(3) If, in a case where the Secretary of State has given notice under subsection (2) above, the requirements of paragraphs (a) and (b) of that subsection have not been complied with by the date specified in that notice, he may issue directions to the Board and to the Passenger Transport Executive in question requiring them—

1. (a) to make to the existing section 20(2) agreement in question amendments determined by him and specified in the directions, or
2. (b) to enter into a new section 20(2) agreement, on terms determined by him and specified in the directions, in place of the existing section 20(2) agreement,

by such date as may be specified in the directions.

(4) The Board or any Passenger Transport Executive may refer to the Secretary of State any dispute which arises in the course of negotiations concerning the matters specified in paragraphs (a) to (c) of subsection (1) above; and on any such reference the Secretary of State may give such directions as he thinks fit to the Board and to the Passenger Transport Executive in question.

(5) Without prejudice to the generality of the directions that may be given on a reference under subsection (4) above, the Secretary of State may, on any such reference, give directions to the Board and to the Passenger Transport Executive in question requiring the Board and that Executive—

1. (a) to make to the existing section 20(2) agreement in question amendments determined by him and specified in the directions; or
2. (b) to enter into a new section 20(2) agreement, on terms determined by him and specified in the directions, in place of the existing section 20(2) agreement,

by such date as may be specified in the directions.

(6) Where the Secretary of State gives directions under this section with respect to the amendments that are to be made to an existing section 20(2) agreement or the terms on which a new section 20(2) agreement is to be entered into, any requirement for the consent of the Passenger Transport Authority in question to be obtained to the making of those amendments or that agreement shall be dispensed with.

(7) This section shall apply in relation to any section 20(2) agreement which has been amended or entered into pursuant to this section as it applies in relation to an existing section 20(2) agreement, and "existing section 20(2) agreement" shall be construed accordingly.

(8) In this section—

"section 20(2) agreement" means an agreement made between the Board and a Passenger Transport Executive pursuant to section 20(2) (b) of the Transport Act 1968 (whether or not the agreement has been amended or entered into pursuant to this section);

"existing section 20(2) agreement", subject to subsection (7) above, means a section 20(2) agreement entered into before the coming into force of this section;

"new section 20(2) agreement" means a section 20(2) agreement made at or after the coming into force of this section;

and any reference to the Board includes a reference to a wholly owned subsidiary of the Board.".

On Question, amendment agreed to.

Clause 31 [Passenger Transport Authorities and Executives: franchising]:

The Earl of Caithness moved Amendments Nos. 51 to 65:

Page 31, line 40, leave out from ("under") to ("agreement")") in line 42 and insert ("a section 20(2) agreement").

Page 32, line 25, leave out ("intention") and insert ("intentions—

(za) with respect to the inclusion, in any franchise agreement contemplated by that subsection, of provisions relating to the operation of any additional railway assets wholly or partly within the area in question, and")

Page 32, line 47, leave out ("and").

Page 33, line 3, at end insert:

("(d) may specify the minimum level of quality with respect to the operation of any station (but not any other additional railway asset) which may be required by any such franchise agreement as is mentioned in subsection (5) (za) above.").

Page 33, line 18, leave out ("are included among the services which are to be provided under") and insert ("are provided for in").

Page 33, line 25, at end insert:

("(9A) The Franchising Director and any Passenger Transport Executive may enter into agreements with each other as to the terms on which franchise agreements to which the Executive is a party are to be entered into.").

Page 33, line 42, after (" agreement") insert ("or

(aa) a franchise agreement requires the operation of any additional railway assets as mentioned in paragraph (za) of that subsection").

Page 33, line 47, leave out from beginning to end of line 10 on page 34, and insert ("or the operation of the additional railway assets, and

(c) payments by way of grant in respect of the provision of the PTA services or the operation of the additional railway assets fall to be made by the Franchising Director pursuant to conditions contained in the franchise agreement by virtue of section 27(1) (b) above,

the Passenger Transport Executive shall pay to the Franchising Director, at or before the time at which any such payment as is mentioned in paragraph (c) above is made, a sum equal to the amount of that payment.

(13) Where, pursuant to section 28 above, the Franchising Director is under a duty to secure the provision of any services for the carriage of passengers by railway, or is empowered to secure the operation of any additional railway assets, within the passenger transport area of a Passenger Transport Executive, the Executive—

1. (a) shall have power to enter into agreements with the Franchising Director with respect to the securing by him of—
   1. (i) the provision of any of the services in question, or
   2. (ii) the operation of any of the additional railway assets in question,
   356 until such time as they are again provided under a franchise agreement;
2. (b) shall make to the Franchising Director in respect of—
   1. (i) the provision of any of the services in question whose provision he secures pursuant to section 28 above, and
   2. (ii) the operation of any of the additional railway assets in question whose operation he secures pursuant to section 28 above,
   payments of such amounts, and at such times, as may be agreed between the Executive and the Franchising Director or, in default of agreement, of such amounts and at such times as the Secretary of State may direct; but
3. (c) shall not have power to enter into agreements with the Board or any wholly owned subsidiary of the Board for—
   1. (i) the provision of any of the services in question, or
   2. (ii) the operation of any of the additional railway assets in question.

(13A) Without prejudice to the generality of the provisions which may be included in any agreement made between the Franchising Director and a Passenger Transport Executive under subsection (13) (a) above, such art agreement may, in particular, contain provisions concerning—

1. (a) the services for the carriage of passengers by railway which the Passenger Transport Authority for the passenger transport area in question considers it appropriate to secure to meet any public transport requirements within that area,
2. (b) the minimum level of quality to which any such services are to be provided,
3. (c) the fares to be charged to persons using any such services, or
4. (d) the minimum level of quality to which the operation of any station (but not of any other additional railway asset) is to be secured under sub-paragraph (ii) of that paragraph.

(13B) The Secretary of State shall not direct a Passenger Transport Executive to make any payment under subsection (13) (b) above, except in respect of—

1. (a) any service—
   1. (i) which is provided under an agreement entered into by the Franchising Director pursuant to his duty under section 28 above, and
   2. (ii) which under the terms of that: agreement is required to involve calls at more than one station within the passenger transport area of the Executive, or
2. (b) any additional railway asset which is operated under an agreement entered into by the Franchising Director pursuant to his power under that section,

"call" meaning for this purpose any stop at a station for the purpose of allowing passengers to board or leave the train (including the stops at the stations at the beginning and end of any journey to which the service relates).").

Page 34, line 18, at end insert (", or in respect of any such services and any additional railway asset.").

Page 34, line 29, leave out ("and

(b)") and insert ("or

(b) if a Passenger Transport Executive for arty passenger transport area considers it desirable to do so for the purpose of securing expeditiously that a franchise agreement is entered into in respect of services for the carriage of passengers by railway within that passenger transport area, the Executive may apply to the Secretary of State for directions under this subsection;

and").

Page 34, line 34, after ("above,") insert ("but subject to subsection (16A) below,").

Page 34, line 42, after ("of") insert:

("(i)").

Page 34, line 44, at end insert ("or

(ii) the operation under or by virtue of a franchise agreement of additional railway assets wholly or partly within their passenger transport area,").

Page 34, line 52, at end insert:

("(16A) The Secretary of State shall not give a direction under subsection (16) (c) above requiring a Passenger Transport Executive to make payments in respect of the provision under a franchise agreement of services for the carriage of passengers by railway, or the operation under or by virtue of a franchise agreement of additional railway assets, except in respect of—

1. (a) such of those services as are required by the terms of the franchise agreement—
   1. (i) to be provided during the relevant period in the case of that direction, and
   2. (ii) to involve calls at more than one station within the passenger transport area of the Executive, or
2. (b) such of those additional railway assets as are required by or under the terms of the franchise agreement to be operated during the relevant period in the case of that direction,

"call" having the same meaning in this subsection as it has in subsection (13B) above.

(16B) For the purposes of subsection (16A) above, the "relevant period", in the case of any direction, is the period which is made up of—

1. (a) the financial year in which the direction is given,
2. (b) the financial year immediately preceding that in which the direction is given, and
3. (c) the financial year immediately following that in which the direction is given,

"financial year" meaning for this purpose the period of twelve months ending with 31st March.").

Page 35, line 2, at end insert:

(""section 20(2) agreement" has the same meaning as in section (Re-negotiation of section 20(2) agreements as a result of this Act) above.").

On Question, amendments agreed to.

Clause 32 [Termination and variation of section 20(2) agreements by the Franchising Director]:

The Earl of Caithness moved Amendment No. 66:

Page 36, line 14, leave out ("31") and insert ("(Re-negotiation of section 20(2) agreements as a result of this Act)").

On Question, amendment agreed to.

Clause 33 [Miscellaneous amendments of the Transport Act 1968]:

The Earl of Caithness moved Amendments Nos. 67 to 72:

Page 36, line 16, leave out ("(viii)") and insert ("(vi) there shall be inserted—

"(via) with the approval of the Authority, to enter into and carry out agreements with any person who is the operator of, or who has an estate or interest in, or right over, a network, station or light maintenance depot or some part of a network, station or light maintenance depot, in connection with the building, replacement, redevelopment, refurbishment, repair, maintenance, operation or staffing of the network, station or light maintenance depot or any part thereof;".

(1A) After paragraph (viii) of that subsection").

Page 36, line 18, leave out ("railway").

Page 36, line 20, after ("franchisee), insert ("or the franchise operator").

Page 36, line 22, leave out ("railway").

Page 36, line 30, at end insert:

("(viiic) with the approval of the Authority, to enter into and carry out agreements with the owner of any locomotive or other rolling stock concerning the persons to whom, or the terms on which, the locomotive or other rolling stock may be let on hire;".").

Page 36, line 38, leave out from ("23A.") to end of line 43 and insert:

("(1) For the purposes of sections 10, 15 and 20 of this Act—

1. (a) "light maintenance depot", "locomotive", "network", "railway passenger services", "rolling stock" and "station" have the meaning given in section 82(1) of the Railways Act 1993; and
2. (b) "operator" has the meaning given in section 6(2) of that Act.").

On Question, amendments agreed to.

Lord Tordoff moved Amendment No. 73:

After Clause 33, insert the following new clause:

("Consultation between Franchising Director and local authorities

. The Franchising Director when specifying or amending franchises shall consult with local authorities about the pattern and quality of services and about any changes proposed within the terms of franchise agreements to those services provided by operators and shall take account of the formally adopted plans and policies of local authorities and include in franchises any agreements made between local authorities and British Rail and its successors.").

The noble Lord said: I rise to move this amendment, which is in the name of the noble Lord, Lord Peyton, and myself. The noble Lord, Lord Peyton, sends his apologies for not being able to be in his place at this time due to a long-standing previous engagement. He has already previously offered his apologies to the Minister. It will be for the convenience of the House if we speak also to Amendments Nos. 74 and 298.

We have just gone to considerable trouble to look at the affairs of the PTAs and PTEs. No account is taken in the Bill of the established role of the non-metropolitan authorities in the fields of strategic planning and transport support. We have heard a eulogy for the PTAs and PTEs. I intend slightly to echo that in relation to the non-metropolitan authorities.

It overlooks the fact that many authorities, particularly shire counties and the Scottish regions, make a significant financial contribution to the enhancement of the infrastructure of the country and, in a number of cases, support services for social reasons. So the need to protect the environment is a key factor in the local authorities' approach to rail planning. It is also a significant factor, it must be said, in the Government's approach.

The trouble is that the Bill centralises the planning framework for future rail networks by concentrating responsibility in the hands of the franchising director. So this clause aims to ensure that in undertaking the franchising process, the director takes into account local authority views and objectives.

During discussions in another place, Mr. Roger Freeman recognised the role of the non-metropolitan authorities but said that he preferred to deal with them in the Secretary of State's directions to the franchising director.

The Minister's receptiveness to the principle is appreciated. Nevertheless, we believe that it remains important that the role of the local authorities is specified within the Bill in the same way as it was necessary to specify the position of the PTAs and PTEs.

Perhaps I may spend a moment or two at this late hour of night on what they do. The capital grants from local authorities are generally in the context of partnership schemes with British Rail and/or private sector interests. They range from quite minor schemes such as environmental improvements and provision of disabled access at stations, to quite large scale projects of new station constructions and electrification schemes.

The list is extensive, and goes all the way across the country from North Yorkshire, Cheshire, Humberside, Gloucestershire, right the way up to Lothian and Grampian. I suppose that the refurbishment of the country's most famous viaduct is perhaps the most well known of these items—namely, the Ribblehead viaduct on the Settle to Carlisle line. One is saddened to hear suggestions that that line is under threat again, although that is not directly anything to do with this Bill—or is it, my Lords?

Cheshire County Council, in partnership with British Rail arid the Merseyside PTA are funding the present work to bring the Mersey Rail Wirral Electric services to their natural termini at Chester and Ellesmere Port. In the South Wales valleys the services have been reinvigorated and extended with line reopenings. One of the most hopeful signs in public transport in recent years has been the reopening of these small branch lines, and many of them have been assisted by non-metropolitan authorities.

With the electrification of the East Coast mainline to Edinburgh, the wires were extended over the short branch to North Berwick with a grant from Lothian Regional Council. Derbyshire, Nottingham and Leicestershire are finding funds to invest in the reopening of the Ivanhoe and Robin Hood lines. So, despite the existence of PSO grants, there have been in recent years numerous examples of county councils coming in with revenue support to prevent cuts in services, especially at weekends and in the evenings, which would have had unacceptable social disadvantages. Many of them have been extremely useful in maintaining services for a limited period while demand picked up again and the services became economically viable.

All these things involve significant injections of local authority funds to BR. Stations can cost around half a million pounds and electrification schemes require investments of several millions. So we are not talking about trivial matters at all.

So it is unfortunate that the Bill as drafted does not appear to give any recognition to the funding role of local authorities outside the metropolitan areas. We believe that it is vitally important that there is a recognition of that role and that that recognition should be in the Bill, the local authorities being given a formal relationship with the director franchising the franchise holders and the track authority.

This is special pleading but it is justified special pleading on behalf of people who have made a great contribution to maintaining public transport services in the country. As I said before, Ministers have shown some sympathy with this view. In front of me I have a letter dated 4th October from Mr. Roger Freeman to the secretary of the Shires PTC Consortium, in which he sets out at some length the guidance and instructions for a franchising director about consultation with local authorities. It is fine so far as it goes until one reaches a sentence which states: These arrangements must be implemented in such a way as to place the minimum burden on franchisees. I would expect local authorities to consult you before formally adopting plans and policies dealing with the role of passenger rail services in their areas". There are two points to consider about that. First the phrase, place the minimum burden on franchisees", seems to me to be a weasel way of saying, "find any excuse you can not to". Secondly, the consultation seems to me to be a one-way process. It ought to be the responsibility of the franchising director to consult with the local authorities as well.

The fear is reinforced by a meeting that took place in July in the Isle of Man, at which the franchising director gave what I see is described as a "depressing" address to the conference, depressing from the local authorities' point of view because he indicated that he saw their needs as being met through discussions with the franchise holder after the franchise had been let. That would clearly mean that they would he faced with negotiating for service enhancements with an effective monopoly operator.

So there is real worry within the shire counties and the other non-metropolitan authorities as to the "tone" that is coming out of the franchising director. I believe that noble Lords would not want that situation to continue. It seems to me that the best way round this difficulty is to put something on the face of the Bill—if not this measure then something that the Government themselves might suggest. I beg to move.

9 p.m.

Lord Stanley of Alderley

My Lords, the only point that I should like to make to my noble friend is that it is particularly unfortunate that the Government, for better or worse—very much for worse so far as I am concerned—have given the impression that the views of the shire counties and rural interests as such are of little importance and the franchising director has no need to consider their problems. I am sure that that is not the case. It is a matter of public relations and not getting the message across. I should be most grateful if my noble friend on the Front Bench could try to put this matter right and indicate that these interests are very much thought about and considered by the Government.

Lord Carmichael of Kelvingrove

My Lords, I understand that Amendment No. 74 is to be taken with this one. I shall be very brief. The noble Lord, Lord Tordoff, made most of the points that I wished to make. I have a very long brief, which the Minister will be glad to know I have no intention of reading out word for word. I simply say that it was the brief which the noble Lord, Lord Peyton of Yeovil, was furnished with by people in the West Country—in fact the Somerset County Council. I did not discuss the matter specifically with the noble Lord, Lord Tordoff, but I believe that had the noble Lord, Lord Peyton, been present, he would certainly have spoken on this matter with his incredible facility for words. Having said that, I await the Minister's reply rather than going in detail into the brief.

The Earl of Caithness

My Lords, the noble Lord, Lord Tordoff, moved Amendment No. 73. The noble Lord, Lord Carmichael, spoke to his Amendment No. 74. Perhaps the House will permit me to speak also to my Amendment No. 298, which is grouped with those amendments.

First, I confirm what the noble Lord, Lord Tordoff, said, in that my noble friend Lord Peyton indeed told me how sorry he was not to be able to be here at this stage of our proceedings. He was concerned about this issue but I hope that I shall be able to allay his anxieties in his absence.

Let me say to my noble friend Lord Stanley of Alderley that his impression is completely mistaken. The Government believe that many local authorities do a great deal to promote the use of public transport in their areas. We want to see that good work continue. Therefore we are keen both to see sensible arrangements made to provide consultation with local authorities under the new structure that we propose for the privatised railway and to ensure that local authorities continue to invest in railway assets which benefit the local people. That is a fairly unequivocal statement of support and I am glad that my noble friend nods his head. Perhaps he could take the PR message, if that is how he would like to describe it, out to the counties and tell them.

Perhaps I may start by dealing with Amendment No. 298. That amendment to Clause 134 amends Section 56 of the 1968 Transport Act and will enable non-metropolitan local authorities to enter into agreements with the franchising director regarding the exercise by him of his franchising functions. The purpose of the amendment is to encourage investment in the railway by such local authorities in the same way as Clause 50, now amended, is intended to encourage investment in the railways by PTEs.

I do not believe that that should be at all contentious. We all wish to see continued investment in the railways. The amendment enables local authorities to co-ordinate the strategic planning of investment decisions with the franchising director, who will generally be the supporter of the services using the facilities which the local authorities help to fund. That, I hope, goes a long way towards meeting the concerns of the noble Lord, Lord Tordoff. As the House will have realised, there are different legislative procedures for PTAs and PTEs, but it is important that local authorities continue to help railways as they have done in the past.

I turn to Amendments Nos. 73 and 74. I have to say that I am not persuaded of the need to amend the Railways Bill to provide for statutory consultation with local authorities. Under Clause 5 of the Bill, the Secretary of State is able to set the franchising director objectives and give him instructions and guidance. We therefore propose to include in the next draft of the franchising director's objectives, instructions and guidance a section which will require the franchising director to consult appropriate representatives of local government about the pattern of services and the quality of services to be provided through franchising.

The franchising director will be required to agree practical arrangements which will provide for effective mutual communication between local authorities and franchisees, and to include within franchise agreements a requirement for franchisees to take reasonable steps to keep the local authorities for the areas served by franchised services informed of significant intended changes to the pattern of franchised services.

We expect that local authorities will wish to consult the franchising director before formally adopting plans and policies dealing with the role of passenger rail services in their areas. As to the inclusion in the franchise agreement of agreements entered into by local authorities and BR, as the noble Lord is proposing, it is our intention that franchisees will take on those local authority services under separate agreement with the local authorities concerned. I believe that these requirements will provide for the degree of consultation that noble Lords are seeking without placing undue burdens on either the franchising director or the franchisee.

Lord Tordoff

My Lords, I am grateful to the Minister both for Amendment No. 298, which puts these matters on to the face of the Bill for the first time, and also for the way in which he responded to Amendment No. 73. I dare say that the local authorities would have preferred it to have been written in tablets of stone on the Bill itself.

Obviously, one will need to look with great care at what the Minister said. However, as I heard it, the message goes out loud and clear to the franchising director that he has a responsibility, and that he will be told he has a responsibility, to consult properly and to take into account the non-metropolitan local authority rail activities. For that I am extremely grateful. I hope that it is satisfactory also to the local authorities. Doubtless, if any amendments are needed to improve the situation at a later stage, we can discuss the matter at that time. Meanwhile, I thank the Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 74 not moved.]

Clause 35 [Proposals to discontinue franchised etc. passenger services]:

The Earl of Caithness moved Amendment No. 75:

Page 39, line 24, leave out from beginning to ("Where") in line 19 on page 40 and insert:

(".—(1) This section applies in any case where—

1. (a) any railway passenger services on any line or from any station are provided on behalf of the Franchising Director and he proposes to discontinue those services, or
2. (b) any railway passenger services on any line or from any station are provided in satisfaction of requirements imposed by a franchise agreement, but—
   1. (i) the person so providing those services intends not to continue to provide them when the requirement so to provide them comes to an end, and
   2. (ii) the Franchising Director proposes that they should then be discontinued;

and any reference in this section to a closure is a reference to a discontinuance falling within paragraph (a) or (b) above.

(2) If in a case to which this section applies—

1. (a) the closure is certified by the Regulator as being a minor closure,
2. (b) the closure in question is one in respect of which, in consequence of the application of section 46(6) below, neither section 34 above nor Schedule 4 to this Act is to apply,
363
3. (c) the closure is one in respect of which neither of the conditions in subsection (3) below is satisfied, and any requirement imposed by a franchise agreement to provide the services in question has come to an end, or
4. (d) the services in question fall within any of paragraphs (a) to (c) of subsection (3A) below,

the Franchising Director may discontinue the services in question, notwithstanding any duty imposed on him by or under this Part to secure their provision, and subsections (4) and (5) below shall not apply in relation to the closure.

(3) The conditions mentioned in subsection (2) (c) above are—

1. (a) that all the railway passenger services on the line or from the station in question are provided on behalf of the Franchising Director and he proposes to discontinue all such services on that line or from that station; or
2. (b) that all the railway passenger services on the line or from the station in question are provided in satisfaction of requirements imposed by a franchise agreement, and—
   1. (i) the person so providing those services intends not to continue providing them when the requirement so to provide them comes to an end, and
   2. (ii) the Franchising Director proposes that all such services on that line or from that station should then be discontinued.

(3A) In determining, for the purposes of paragraph (a) or (b) of subsection (3) above, whether all the railway passenger services on a line or from a station are provided as mentioned in that paragraph there shall be left out of account any services—

1. (a) which involve travel through the Channel Tunnel;
2. (b) which are provided otherwise than as regular scheduled services for that line or for that station, as the case may be;
3. (c) which are designated, or which are of a class or description designated, by order under section 46(2) below as services in relation to which section 34 above is not to have effect; or
4. (d) which are experimental passenger services, within the meaning of section 45 below, or which are provided on an experimental basis, for the purposes of section 56A of the Transport Act 1962;

and this section shall not have effect in relation to any services falling within paragraph (d) above.

(4) Subject to subsection (2) above,").

The noble Earl said: My Lords, with the leave of the House, in moving Amendment No. 75 I shall speak also to Amendments Nos. 76 to 79, 81 to 83, 91, 100 to 103, 204 and 212. I need not detain the House too long. The amendments tie up a few loose ends and are clarificatory or consequential amendments. I shall mention the reasons for the more important of the group of amendments.

Amendment No. 75 re-casts Clause 35 to enable it to work properly. Clause 28, as amended, gives the franchising director a duty to secure the provision of services in certain circumstances (for example, failure to let a franchise) as do the closure clauses in circumstances when an operator discontinues a service unless and until consent to closure is obtained.

Under Clause 35 as drafted, where the franchising director is securing the provision of services pursuant to such a ditty, he can only close them where they are the totality of services on that route. He could not, for example, reduce service levels to match falling demand unless he withdrew all services and invoked the closure procedure. The amendment corrects that by making the clause apply in all cases where the franchising director proposes to close a franchised service or a service which he is under a duty to provide. It sets out the cases to which we want the closure procedure to apply and then lists the cases where the closure procedure is disapplied. The approach is similar to that taken in Clause 37 dealing with the closure of networks operated on behalf of the franchising director.

Government Amendments Nos. 77 and 82 introduce the concept of "multiple" and "single track" railways, and provide that removing part of a multiple track railway shall not be subject to the closure procedure, provided at least a single track remains. The idea is to ensure that, for example, if a redundant passing loop is removed, or tracks no longer used following signalling modernisation, then no part of the new closure procedure is triggered. That would mirror the position under the existing closure procedures.

The remainder of the amendments are clarificatory or consequential. I beg to move.

9.15 p.m.

Lord Brabazon of Tara

My Lords, while we are on the subject of closures—we have reached that stage of the Bill—I shall briefly return to the issue which I raised at Committee stage, which was the potential impact of closures on freight services, an issue on which I was glad to have the support of the noble Lord, Lord Ewing of Kirkford. I am most grateful to my noble friend for having discussed this matter with me. I am also grateful to my right honourable friend the Minister for Public Transport, Mr. Roger Freeman, for having written to me on this subject on 4th October of this year. His letter to me goes some way to helping with this situation.

The Government propose that, with the agreement of Bob Horton, the director of Railtrack, they will reactivate Section 54 of the Transport Act 1962, which allows for a notification procedure in respect of goods services closures. I am quoting from Mr. Roger Freeman's letter in this instance. The letter goes on to say that the procedure would involve making orders or directions under Section 54 of the Transport Act and consequently amendments to this Bill are not required. Therefore, I have had to take the opportunity to raise the subject now.

The letter says that the procedure would require the network operator to give written notice of his intention to discontinue the line, first, to the regulator; secondly, to any operator of services for the carriage of goods by rail currently using the line; and, thirdly, to the operators of any private siding on the line. I should like to ask my noble friend to expand on one of those items—the reference to the current operators of services. That is fine as far as it goes, but what about any potential future or new operator or alternative operator of a service who might consider that he could run a service for the carriage of freight on the line?

The letter goes on to say that the notice should give the reasons for the closure and that it should be given not less than three months before the discontinuance of the line is intended to take effect. Is three months long enough to allow someone who might be interested in operating a service or taking over a line to assess the market, to draw up a business plan with financial backing, to negotiate with Railtrack and to complete the transaction? I believe that longer might be required. On the other hand, if my noble friend can tell me that one would need to give only an indication within those three months that one might wish to operate such a service and that that would perhaps halt the procedure or stop it so that someone could go ahead, that would be most helpful.

I am grateful for the letter from Mr. Freeman. I am grateful for what it contains. I should be glad if my noble friend could give me some help in the two matters which I have now raised.

The Earl of Caithness

My Lords, I am grateful for my noble friend's welcome for the letter that my right honourable friend the Minister for Public Transport sent to him. It is another example of how, when a good point is made, the Government are certainly prepared to listen, to consider those representations objectively and to take them into account as necessary.

My noble friend raised a number of quite technical points. Perhaps he will permit me on this occasion to take them away for consideration and then come back to him. On reflection, I may be able to answer them now.

In order to meet the concerns which were raised by my noble friend, the Government decided to reactivate the existing provision in Section 54 of the Transport Act 1962. We shall use what is currently Clause 148 of the Bill to bring Section 54 into line with a future railway. We shall then issue a direction under Section 54 requiring licensed network operators—in the freight context, that means Railtrack—to give the three months' advance notification of proposed freight-only closures or minor closures which affect the operation of freight. We believe that this three-month breathing space will allow freight operators to discuss alternative arrangements with Railtrack—for example, with a view to purchasing the line. During that period we shall expect Railtrack to ensure that any lines covered by a closure proposal are kept in serviceable condition.

I should add that our decision to adopt this policy is not determined by any concern about the future prospects for the rail-freight industry, but is rather designed to address the specific points put to us by the freight interests. I can also advise the House that I know that Mr. Horton at Railtrack is keen to preserve and develop the freight element of the business. If my noble friend Lord Brabazon will permit me to look at the detail of what he said, I shall come back to him before another stage.

On Question, amendment agreed to.

Clause 36 [Notification of proposals to close operational passenger networks]:

The Earl of Caithness moved Amendments Nos. 76 to 80:

Page 41, line 28, a, beginning insert ("Subject to subsection (1A) below").

Page 41, line 44, at end insert:

("(1A) This section does not apply if and to the extent that the proposal mentioned in subsection (1) above is a proposal to discontinue the operation of part of a multiple track railway between any two places, where the circumstances are such that the railway line in question will continue to be at least a single track railway between those two places.").

Page 43, line 33, leave out ("ancillary facilities") and insert ("installations").

Page 43, line 46, at end insert:

(""multiple track railway" means a railway line between any two places which consists of two or more continuous sets of track taking the same route between those two places;

"single track railway" means a railway line between any two places which consists of one continuous set of track between the two places.").

Page 44, line 4, at end insert:

("and those whose operation he is for the time being securing in pursuance of his power under section 28 above.").

The noble Earl said: My Lords, I have spoken to these amendments previously. I beg to move.

On Question, amendments agreed to.

Clause 37 [Proposals to close passenger networks operated on behalf of the Franchising Director]:

The Earl of Caithness moved Amendments No. 81 to 83:

Page 44, line 14, at end insert:

("() the closure is one to which subsection (2A) below applies;").

Page 44, line 26 at end insert:

("(2A) This subsection applies to a closure if and to the extent that it is the closure of part of a multiple track railway running between any two places, where the circumstances are such that the railway line in question will continue to be at least a single track railway between those two places.").

Page 45, line 42, leave out ("has the same meaning as it has") and insert (""multiple track railway" and "single track railway" have the same meaning as they have").

On Question, amendments agreed to.

Clause 38 [Notification of proposals to close railway facilities used in connection with passenger services]:

The Earl of Caithness moved Amendment No. 84:

Page 48, line 24, at end insert:

("and those whose operation he is for the time being securing in pursuance of his power under section 28 above.").

On Question, amendment agreed to.

Clause 40 [Notification to, and functions of the Regulator and the relevant consultative committees]:

Baroness Stedman moved Amendment No. 85:

Page 50, leave out lines 41 and 42 and insert:

("(3) Every consultative committee to which copies of documents have been sent in accordance with subsection (1) above shall consider—

1. (a) the notices and statements sent to it in accordance with subsection (1) above; and
2. (b) every objection sent to it in accordance with subsection (2) above,

and shall—").

The noble Baroness said: My Lords, first, I should like to thank the Minister for the correspondence that we have had during the Recess and for the words that I have had with his officials concerning this group of amendments, in which I hope that I may be rather more successful than at an earlier stage. In speaking to Amendment No. 85, I should like to refer also to Amendments Nos. 86, 87, 88, 89, 90, 92, 95, 96, 98 and 106.

This group of amendments deals with Clauses 40 to 45 and with the proposed closure procedures. The amendments aim to ensure that there is meaningful consultation with railway users' consultative committees in the affected areas and that the central transport consultative committee is also brought in at an early stage.

Amendments Nos. 85 and 86 provide that the consultative committees must consider the relevant documents and objections that are sent to them. I am sure that the Minister appreciates that consultation with rail users' consultative committees will ensure that there is user-input into the decision-making before the closure of the experimental service is put into effect. It is important that the consultative committee should makes its input at this stage because, once the franchising director has published his notice, closure takes place in a very short space of time.

Amendment No. 87 provides that the RUCC's report to the regulator on any hardship that might result from a proposed closure shall also be sent to the central consultative committee. The amendment also allows the railway users' committees to publish those reports as they consider appropriate. These amendments would put on the face of the Bill what is currently long-established practice.

Amendments Nos. 88, 89 and 90 deal with the timescale for the closures. I make no apology for returning to the timescale at this stage of the Bill. We had a discussion on this in Committee, when the Government felt that the timescale was adequate. But the imposition of timescales within which the RUCC and the regulator are to complete their stages of the closure procedure is an entirely new concept. The present legislation lays down nothing specific, except that the Secretary of State may, if he considers that the TUCC closure report has been unreasonably delayed, consent to the proposed closure without awaiting the report under the Transport Act 1962.

I have no objection, in principle, to the imposition of timescales, but they must be reasonable and practicable. A period of 12 weeks for the preparation by the RUCC of its report is unrealistic for a major closure proposal which may attract many thousands of objectors. Even if the regulator allows the RUCC more time, the whole process is governed by the period of 26 weeks, extendable to 52 weeks with the consent of the Secretary of State. There must be more flexibility to extend those time limits.

As we said in Committee, the Settle-Carlisle closure took something over four years from beginning to end in the early 1980s. It would be impossible for an RUCC, with its unpaid, part-time members and tiny secretariat—most of them have only two or three staff—to read, consider and analyse 22,000 objections—the number which were made on that occasion—let alone to hold the public hearings which were spread over several weeks in several locations and then to prepare its detailed report within the timescales laid down in the Bill.

The Minister might think that the Settle-Carlisle closure was a one-off. I had hoped that it might have been until I heard the comments made by the noble Lord, Lord Tordoff, earlier tonight that the line may be coming under threat again. I am not enamoured of the thought of another four years of consultation over Settle-Carlisle. In his reply to me in Committee, the noble Earl, Lord Howe, said: If a particularly difficult case arises, with a large number of objections to be considered, the RUCC must be resourced accordingly".—[Official Report, 7/7/93; col. 1409.] But it is not just a question of resources. The fixing of a date for a hearing has to suit a whole range of considerations, not least the other commitments of all the parties involved. There is the question of the response time to the summary of objections from the operators—a necessity to enable a proper consideration of the proposal by the committee, and outside the committee's control.

Settle-Carlisle may be a one-off, but we have the smaller closures and closure proceedings happening all the time. There was recently a proposal to close Ditton station. The statutory period for the receipt of objections expired on 5th December; the summary of objections, which numbered 33, was sent to BR on 19th January (that means six weeks, including the period over Christmas and the New Year); BR's response to the summary of objections was received on 8th February (some three weeks later); the heads of information, including response to objections was sent to objectors and members on 25th February (another three weeks); the public hearing was held on 18th March (three weeks after that); the draft report was considered on 10th May (seven weeks later, including the Easter holiday); and the final report was sent on 21st May (two weeks later). That was a total of 24 weeks.

The Minister may argue that it might be possible to reduce the period, but 12 weeks would have been impossible to meet, and that was only a small closure. Not just resources were needed. The response to the summary of objections and the heads of information document must be supplied by an outside party. Members' availability is often difficult. They are part-time members and, for the most part, unpaid. There is a case for extending the amount of time which an RUCC has available to prepare its report. Twenty-six weeks should be sufficient in most cases. Likewise, the total length, if it is doubled from 26 weeks to 52 weeks, should be sufficient for the RUCC and the regulator to cope with cases such as the Settle-Carlisle closure. As regards the larger inquiries, the Secretary of State should be empowered to grant an unlimited extension. Without that more reasonable timescale, there is every prospect that the RUCC arid the regulator will lay themselves open to judicial review if there is any evidence that they have been unable to discharge their duties properly and fully because of a restrictive timetable.

Amendments Nos. 88, 89 and 90 deal with our proposals for the timescale for the closures. Amendment No. 92 is consequential on changes proposed in Schedule 4 to meet the earlier amendments. Amendments Nos. 95, 96 and 98 provide that the franchising director must give no fewer than six weeks' notice on a proposal to close a franchise experimental service. Amendment No. 96 is purely consequential. Amendment No. 98 requires the franchising director to send copies to the appropriate consultative committees of his notice designating services as experimental. Taken together the amendments should ensure that the RUCCs are fully informed and kept abreast of developments relating to the experimental services.

In Committee the noble Earl, Lord Howe, commented that as regards the passenger service, which is hanging in the balance, the public would be entitled to criticise an inability to come to a decision within a year. As was the case tonight, those comments were made late in the debate. I was not sufficiently alert to retort to the noble Earl that the passengers might be delighted if the procedure takes longer because they will still have their train service. I beg to move.

9.30 p.m.

The Earl of Caithness

My Lords, Amendment No. 85 would require RUCCs, in considering whether a proposed closure would cause hardship, to consider the copy documents that the closure procedures set out in the Bill require be sent to them; namely, the notice of proposed closure, the statement of the reasons for the proposal and any objections. The amendment is unnecessary. Of course the RUCCs should consider these documents: that is the reason copies are sent to them. But the Bill need not spell this out; it would be only an unnecessary addition.

Amendment No. 86 would remove the requirement that RUCCs must consider the value for money of any means that they identify for alleviating hardship caused by closure. I do not believe that that should be acceptable to your Lordships. The requirement mirrors the similar duty to have regard to value for money laid on the RUCCs in the generality of their functions by Clause 75(10). As there, the requirement is in the own interests of the RUCCs. Measures to alleviate hardship must be proportionate; it will do nothing for the credibility of the committees' reports to the regulator if unrealistic recommendations are made.

Amendments Nos. 88, 89 and 90 relate to the time limits. I shall deal first with Nos. 88 and 89. The noble Baroness has argued forcefully that the limits allow insufficient time for proper consideration of a closure proposal. But I have to say that I am not convinced that for the great majority of cases, 12 and 26-weeks' allowance for the RUCCs and the regulator is insufficient, particularly since the limits may be extended up to a full year. Most closure cases are fairly small affairs, with relatively few objections. We ought surely to aim to have such cases decided without unnecessary delay.

Amendment No. 90 would remove the 26-week limitation on any further period the Secretary of State may allow the regulator to make his decision. I have to say to the noble Baroness that I found her arguments extremely convincing on that point. There is one consequence of my wish to accept Amendment No. 90 which may lead the noble Baroness to reconsider her position as regards Amendments Nos. 88 and 89. If the regulator is granted a period longer than 26 weeks, then he in turn may grant an extension of the 12-week period in which the RUCCs are allowed to report provided of course that the extended period is no longer than the period that the regulator has for decision. That may be a better balance.

With regard to Amendments Nos. 87, 95, 96, 98, 106 and 92, I found the noble Baroness's arguments totally convincing. I recommend that the House accepts those amendments.

Baroness Stedman

My Lords, I am grateful to the noble Earl. I am somewhat overcome by the acceptance of so many of my amendments in one go but I believe that they improve the Bill.

I am sorry that the noble Earl considers Amendments Nos. 85 and 86 to be unnecessary. I believe that it would have been helpful to write such provision on the face of the Bill. The noble Earl said that many of the closures would be small-scale. The Ditton closure was such a case. Those cases can take rather longer than the timescale allowed. However, we must be grateful for small mercies and I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 86 not moved.]

Baroness Stedman moved Amendment No. 87:

Page 51, line 7, at end insert:

("(3A) Any consultative committee which has prepared a report under subsection (3) (c) above shall send a copy of the report to the Central Committee and may publish the report in any manner which it considers appropriate.").

On Question, amendment agreed to.

[Amendments Nos. 88 and 89 not moved.]

Baroness Stedman moved Amendment No. 90:

Page 51, line 38, leave out ("(not exceeding a further 26 weeks)").

On Question, amendment agreed to.

Clause 41 [Reference to the Secretary of State of decisions of the Regulator concerning proposed closures]:

The Earl of Caithness moved Amendment No. 91:

Page 52, line 28, leave out subsection (4).

On Question, amendment agreed to.

Clause 43 [Variation of closure conditions]:

Baroness Stedman moved Amendment No. 92:

Page 53, line 15, after ("than") insert:

("(a) a condition imposed by the Secretary of State under Schedule 4 to this Act, or

(b)").

On Question, amendment agreed to.

Lord Teviot moved Amendment No. 93:

After Clause 44, insert the following new clause: ("Major Reductions

.—(1) This section applies where any person providing railway passenger services on any line or from any station proposes to effect a major reduction in those services.

(2) Unless the Regulator has certified that the proposed reduction is not a major reduction, the person shall give notice of the proposal to the Franchising Director not less than three months before the date of the major reduction is to take place provided that the person shall not effect the major reduction unless the Regulator so permits in accordance with the provisions of this section.

(3) A notice under subsection (2) above shall be accompanied by a statement of—

1. (a) an assessment of the impact of the major reduction on the existing passengers
2. (b) the date on which the major reduction is to be made, and
3. (c) any alternative transport services which appear to the relevant person to be available.

(4) Where notice is given to the Franchising Director under subsection (2) above, he must send a copy of the notice and the accompanying statement to the Regulator and to every consultative committee, whose area consists of or includes the whole or any part of the services which are the subject of the major reduction.

(5) Upon receipt of the notice, each consultative committee shall—

1. (a) consider whether the major reduction will cause any hardship, having regard to the social and economic needs of the area affected by the proposal and the people living and working therein, and
2. (b) decide in what manner to collect information and opinions on the proposal and, after consultation with the Regulator, decide whether to hold a public hearing, and
3. (c) identify any reasonable means of alleviating any such hardship, and
4. (d) report on these matters to the Regulator within 16 weeks of receipt of the relevant notice and statement.

(6) It shall be for the Regulator to decide whether the proposed major reduction should or should not, be allowed to take effect; and a decision may be given allowing the proposed closure to take effect subject to the compliance with such conditions (if any) as the Regulator may see fit to impose.

(7) The Regulator shall make his decision within 26 weeks of the day on which he receives the notice and statement in accordance with section 35A(3) above.

(8) For the purposes of this section, "major reduction" is defined as an alteration in the level or timing of services which will adversely affect the economic and social needs of the passengers and the area served by those services.").

The noble Lord said: My Lords, Amendment No. 93 focuses on an aspect of the procedures for closure of rail services which was not covered in Committee but which I believe exposes a continuing deficiency in the Bill.

The Minister will know that I support overall the principles of the Bill but I am concerned that it should be adequate to deal with the world as it is likely to be after privatisation. In respect of the procedures for closure of services, the provisions of the Bill essentially maintain the current procedures. That may be adequate for the present but it does not provide sufficient safeguards for the future. I am particularly worried about what may happen in those rural areas which still enjoy the benefits of rail services. Our rural communities need the support of jobs, communications and services such as schools and post offices if they are to thrive. Where they still exist, rail services give that support. Such services may not be profitable when judged against the rigours of market forces. Yet they still perform an important social and economic function in the area concerned. I have in mind such lines as Shrewsbury to Swansea and there are several others in East Anglia and Lincolnshire.

There is a problem as regards the closure provisions in the Bill. The Bill gives protection to services only where they are provided by an operator under a franchise agreement incorporating a commitment to a particular level of service. Otherwise, the franchising director or any other non-franchise operator has no binding obligation and may alter services without consultation. It would be possible for the operator to reschedule a service so that a rural community would no longer he able to use the service to get to work, to the shops or to hospital appointments if the service was unprofitable and the operator could not support its long-term retention at the current level of subsidy. Services may be reduced to a minimal level, there will be fewer passengers and, as a consequence, much less reason for the relevant line or station to be retained. What we would see is not closure of entire lines or stations without consultation, but reduction of services without consultation. The result is the same: closure of lines, but the closure is by stealth.

My amendment would achieve two objectives. First, it would require an operator to notify the regulator of proposed reductions in services. It would then be for the regulator to determine whether a reduction should be regarded as "major" as defined in the amendment; for example, having an adverse effect on the economic and social needs of the areas affected.

It is not my intention that necessary or desirable changes in timetabling of services—for example, at different times of the year—should be subject to unnecessary constraints. That is why the regulator would be free to determine what is and what is not a major reduction. He could do that on receipt of the notice or by informal discussion.

Secondly, my amendment would require the regulator to advise the consultative committees of the area affected by such proposed reductions as it determined to be major. Those committees would then report on the social and economic effects of the proposed major reduction. It would then be for the regulator to take a decision, within six months, as to whether or not to permit the proposed reduction. During that consultation, the operator would not be permitted to change the existing service. If the regulator decided that the major reduction should not take place, it would be for the franchising director to ensure that adequate services were maintained to meet the needs of that area.

The purpose and effect of the amendment are not to set in stone the timetable and range of services, nationwide, for all time. I recognise both that minor changes to timetables should be permitted, without bureaucratic interference, and that there may be circumstances where the regulator determines that a proposed major reduction in service should not be resisted.

To avoid uncertainty and delay, my amendment deliberately makes no provision for appeal against the decision of the regulator. Nevertheless, I wish to see a provision in the Bill which prevents the steady erosion of rural rail services through reductions on which, as the Bill stands, no public consultation is required. I want to see a provision which prevents closures by stealth.

The amendment has the support of the Country Landowners' Association whose membership of 50,000 extends across more than half of rural England and Wales. It also has the support of Transport 2000, of the Central Transport Consultative Committee and of the National Farmers Union, together with that of Rural Voice, which is an umbrella organisation covering the CLA, the NFU, the CPRE and the TGWU rural workers' branch, and others. It is also supported by the Cyclists Group and it is widely supported outside the House.

I hope that my noble friend the Minister will be able to reply favourably. I understand that the possible effects of the Bill on rural areas may have been raised by other noble Lords. Moreover, if my noble friend feels that the amendment is defective and that he can do something about it, I shall quite understand. Perhaps he will be able to bring something forward at a later stage. I beg to move.

Lord Stanley of Alderley

My Lords, as I am sure my noble friend on the Front Bench realises, existing rail links often give much support as regards jobs; and, indeed, they assist services such as post offices and especially schools in rural areas. I am sure that my noble friend appreciates that it is important that such rail links should not be destroyed and that, more importantly, they should not be eroded without consultation. As I understand it, that is what the amendment is designed to achieve. I hope that my noble friend on the Front Bench will be able to give us some assurance that such vital services in the countryside will not suffer a slow death.

9.45 p.m.

Lord Clinton-Davis

My Lords, I, too, wish to associate myself with the purposes behind the amendment which has been proposed by the noble Lord, Lord Teviot. I hope that the Minister will respond to it positively. I do not wish to reiterate the arguments which have been put forward. There is no point in doing that as the arguments were persuasively put. I hope that the Minister will be persuaded by them.

Earl Russell

My Lords, in also supporting this amendment I must assure the noble Earl that I have not instantly purported to be an expert on a Bill which I regret I have not followed as much as I would wish. I speak wearing my hat as spokesman on social security. It is well known that those on benefit are normally under a requirement that they should actively seek work. Actively seeking work requires being able to travel to work. It requires being able to travel to job interviews. Whatever one may say about levels of income support, they are not designed to allow people to run cars. Therefore, where there are closures of public transport services a number of people find it extremely difficult either to remain employed or to become employed. I think that when consultation takes place those who should be consulted should include the Department of Employment and the Department of Social Security for it may be that one of the effects of closures will be to put more and more people onto the benefit rolls and increase the social security budget with consequences which I do not think I need to expatiate upon.

The Earl of Caithness

My Lords, I am grateful to my noble friend Lord Teviot for the clarity with which he introduced the amendment. It is interesting to hear that the noble Lord, Lord Clinton-Davis, and the noble Earl, Lord Russell, are backed by the CLA and the NFU on this issue. That does not happen often. It is a rare event and it is one that should be noted. Of course my noble friend Lord Teviot made a good point when moving the amendment. However, despite that, I have two difficulties with his amendment.

The first concerns the creation of a statutory procedure requiring the regulator's consent for a major reduction in services. The new closure procedures, like the current ones, are applied only where it is proposed to withdraw all passenger services from a station or line. The reason is that we recognise that the discontinuance of all passenger railway services to any place or community is a potentially far-reaching decision that ought to be subject to a formal consent procedure. Anything less than complete withdrawal, however, is essentially a matter of what is an appropriate level of service for a particular line, about which there can legitimately be scope for differing opinion.

I believe that that takes account of some of the points that the noble Earl, Lord Russell, made as there is a closure procedure that comes into operation when a complete closure of line is proposed. However, we are talking about an appropriate level of service. At present, BR is required simply to maintain a level of service comparable generally with that provided in April 1988, for the network as a whole. I recognise that this has meant, at the level of individual lines, that BR is free to reduce services to sometimes risible levels—say, one train a week during the summer—with little or no constraint on its actions, and has led to accusations of closure by stealth. Like my noble friend Lord Teviot, we recognise that that is unsatisfactory. But the answer lies in the franchising system rather than in extending the scope of the closure procedure in the way envisaged by the amendment.

Though the precise level of service will be for the franchisee to determine, the franchising director will specify a minimum level of service in the franchise agreement, to which the train operator will have to adhere. Additionally, we have extended the remit of the consumer committees, so that—unlike now—they will be able to consider levels of service. This will ensure that passengers' interests are fully represented for the first time. Taken together, these measures will, I believe, in future protect against closure by stealth. My noble friend Lord Teviot said that he was greatly concerned about that matter. It is also of great concern to the Government. The present system does not prohibit closure by stealth, but the new system, with a franchising director being able to specify the minimum level of service in a franchise agreement, will go a long way towards blocking up the existing loophole.

My second difficulty concerns subsection (2) of the proposed new clause. It envisages that, if the new statutory procedure is not to apply, the regulator must certify the reduction as not being a major reduction. As I read it, therefore, every timetable change will need to be scrutinised by the regulator. I have to put it to my noble friend Lord Teviot that it is a greatly limiting and onerous provision.

To sum up, there is nothing between what my noble friend Lord Teviot, my noble friend Lord Stanley, the noble Lord, Lord Clinton-Davis, and the noble Earl, Lord Russell, want in this regard. We believe that the aim of my noble friend's very onerous amendment can be achieved in a completely different way through the franchising system and the use of the consumer committees, for the first time, so that we do not have closure by stealth as we have to date.

Lord Teviot

My Lords, I am most grateful to all noble Lords who have taken part in this short debate and my noble friend the Minister. Obviously I should not dream of pressing the amendment. There is a great deal in what has been said to read, digest, take note of and consider. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 [Experimental Railway Passenger Services]:

Viscount Goschen moved Amendment No. 94:

Page 55, line 44, at end insert ("and shall not discontinue that service before the expiry of the notice period.").

The noble Viscount said: In moving Amendment No. 94, it may be for the convenience of the House if I speak also to Amendments Nos. 97, 99, 104, 121 to 136 and 296. All these amendments are concerned with making sure that the regulatory framework which will be put in place under the provisions of the Bill can be effectively policed. I shall briefly describe the main points of the amendments to the House.

Amendment No. 104 is a new clause dealing with exclusion of liability for breach of statutory duty. Our intention is to find an appropriate parallel to Section 3(4) of the Transport Act 1962, which excludes British Rail from any liability enforceable by proceedings before any court arising from its duty to provide railway services under Section 3(1) and (2) to which BR would not otherwise be subject. In broad terms, the duties of the franchising director in respect of securing continuity of service are not to give rise to any liability for breach of statutory duty. However, we are not seeking to exclude proceedings for judicial review in respect of those duties. Similarly, any obligation on an operator not to discontinue services or the operation of a facility without giving due notice is not to be enforceable through proceedings for breach of statutory duty. These obligations will be enforceable by the regulator, using the enforcement powers in the Bill. We are not excluding liability of operators for breach of contract or negligence.

There are a number of amendments to Clauses 45 and 53 to ensure that the regulator will be able to enforce the procedure requiring notice to be given of the discontinuance of any experimental services. In effect, we are bringing the closure of experimental services within the enforcement provisions of the Bill.

However, we want to amend Clauses 53 and 54 so as to take access agreements completely outside the ambit of the enforcement provisions in the Bill. We no longer think that there will be many terms of access agreements which confer a function on or require the doing of anything by or in relation to the regulator. In any event, we consider that the terms of access agreements are matters best left for the parties to settle between themselves by normal contractual means, without recourse to the enforcement provisions of the Bill.

The other amendments in this group are technical or consequential.

These amendments are not controversial, and I commend them to the House. I beg to move.

Lord Clinton-Davis

My Lords, I thank the Minister for that explanation. However, I am still puzzled as to how the situation will work in practice. Let us assume that there is a need for continuation of a service which is threatened or has closed. It is almost worthless to have a remedy against the franchisee in terms of continuity of service. Obviously to be able to hold the franchisee responsible in civil law is of some value. But if the franchisee were unable to continue the service, he may not be worth suing. Therefore one has that problem.

However, I address my remarks to the continuity of service. Let us assume that the breach occurs some three years after the franchise has been granted. Who is expected to pick up the service instantly? The franchisee may be worthless. That is why the breach has occurred. Can British Rail be expected to undertake the duty forthwith? How does it go about recruiting the necessary staff for that purpose? Does it simply take over the staff? There are complications about taking over the staff. Many implications arise in that regard. Perhaps the Minister will address those issues which I believe are a practical difficulty—I raise it only from that point of view—which needs to be resolved. I have raised the matter before but the Minister did not answer the point. I believe he indicated that we might come back to the issue. This is a suitable opportunity.

Viscount Goschen

My Lords, in these amendments we are talking about the question of enforcement and the procedure that is available. Where there is a lack of continuity, the obligation on the operator not to discontinue services or the operational facility without due notice is not to be enforceable through proceedings for breach of statutory duty. However, there are already procedures in the Bill for the situation of insolvency whereby the operator is not in a position to continue the service. The franchising director has the power to step in in the event that a franchisee fails to provide services. I refer the noble Lord to Clauses 28 and 47 of the Bill.

Lord Clinton-Davis

My Lords, before the noble Viscount sits down, perhaps I may say this. That is the very nub of my point. Whatever the reason, there is a duty or power invested in the franchising director to deal with the situation, to restore the service that is threatened or has been terminated. But when that service has been in the hands of the franchisee for some considerable time, how does the franchising director go about the performance of those duties? How does he ensure that there is continuity of service? To whom does he look? Are there not many practical difficulties in recruiting the necessary employees to undertake the tasks of transferring their employment in certain instances to another employer, whether that is British Rail or another franchisee?

In my submission, the Government have never addressed the point in the debates that we have had. When the point was raised in Committee, I gave adequate notice to the Minister that we should wish to return to it. I think there is a compelling responsibility on the part of the Minister at this stage of the Bill to answer the issue.

10 p.m.

Viscount Goschen

My Lords, the noble Lord, Lord Clinton-Davis, raises the valid point of what happens in the situation where the operator is no longer able to continue to run the service. The point that I was trying to make concerned the effect of the amendments and that the problem is not to be dealt with through proceedings for breach of statutory duties specifically. However, in the event, if there is a problem with the operator being unable to run the service, the franchising director may enter into a contract with any other operator, including British Rail, to provide the relevant services. So the franchising director has it in his power. There will be difficulties to overcome, but the franchising director may move in, and there are specific powers in the Bill for him to do so.

Lord Clinton-Davis

My Lords, before the Minister sits down, I am sorry to press him on the issue, but it is important. I am well aware that the franchising director has that power. I know that he has the power to go to another operator and seek to obtain the resources so that there is a continuity of service. I am well aware that one possibility is British Rail. But with respect, the Minister is living in a world of illusion if he believes that that can be done instantly.

Surely, it is common sense that this is a complicated issue. The franchise has been operating for a considerable time. How on earth is it conceivable in many instances to resolve it? Perhaps in certain instances it could be resolved without too much problem, but in many instances one can envisage a situation where it is just not possible. Therefore, in practical terms, it is illusory to believe that this a position that can be resolved with the instant effect that the Government suggest. Will the Minister concede that?

I do not wish to press him any more on the issue, but would he be prepared to write to me on the matter? I believe that the Liberal Democrats would also wish to be involved and that the noble Lord, Lord Tordoff, would like to know about it. Would the Minister undertake to write to us well before Third Reading? Otherwise, we shall have to come back to the matter. It should not embarrass the Government unduly. I believe that it is a valid point to raise at this stage before the Bill leaves the House.

Viscount Goschen

My Lords, I have already said to the noble Lord, Lord Clinton-Davis, that I agree with him that this is not an instant, straightforward issue. However, it is catered for in the Bill. The franchising director has the powers and we shall come to the matter later in our discussion of the Bill. I believe there are amendments down on topics of railway administration orders which are germane to the issue. I do not believe that what we are discussing at the moment is particularly relevant to the amendments under consideration. I commend Amendment No. 94.

Baroness Stedman: My Lords, before the noble Viscount sits down, perhaps I may ask a question. In the Transport Act 1962, I believe that there are exclusions of certain items but I do not recollect that closures were among them. Does this give an opportunity for the franchising director or the operators to ride willy-nilly over any closure procedures which we have just discussed?

Viscount Goschen

No, my Lords, I can reassure the noble Baroness that that is not the case.

On Question, amendment agreed to.

Baroness Stedman moved Amendment No. 95:

Page 55, line 44, at end insert:

("(3A) For the purposes of subsection (2) above, the Franchising Director shall be taken to have given due notice of a proposal if, and only if, after consultation with every consultative committee whose area consists of or includes the whole or any part of the area affected, he has, not less than six weeks before giving effect to the proposal,—

1. (a) published a notice giving details of the proposal in two successive weeks in a local newspaper circulating in the area affected and in two national newspapers and in such other manner as may appear to him appropriate; and
2. (b) sent a copy of that notice to every such consultative committee.").

On Question, amendment agreed to.

Baroness Stedman moved Amendment No. 96:

Page 56, line 1, leave out ("subsections (2) and (3) above, the Franchising Director or") and insert ("subsection (3) above").

On Question, amendment agreed to.

Viscount Goschen moved Amendment No. 97:

Page 56, line 7, leave out ("section") and insert ("Part").

On Question, amendment agreed to.

Baroness Stedman moved Amendment No. 98:

Page 56, line 20, after ("Regulator") insert ("and to every consultative committee whose area consists of or includes the whole or any part of the area affected").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 99:

Page 57, line 20 at end insert:

("()In this Part, "notice period", in relation to the duty of an operator to give due notice of a proposed discontinuance of an experimental passenger service, means the period of six weeks immediately following the fulfilment by the operator of that duty.").

On Question, amendment agreed to.

Clause 46 [Abolition of former closure procedures, exemptions from new procedures and imposition of alternative procedure]:

The Earl of Caithness moved Amendments Nos. 100 to 104:

Page 57, line 29, leave out ("Sections 34 and 35") and insert ("Section 34").

Page 57, line 32, leave out ("those sections are") and insert ("that section is").

Page 57, line 36, leave out ("sections 34 and 35 above do") and insert ("section 34 above does").

Page 58, line 10, leave out ("sections 34 and 35") and insert ("section 34").

After Clause 46, insert the following new clause:

Exclusion of liability for breach of statutory duty

(".—(1) The obligations of the Franchising Director, imposed by or under any provision of this Part—

1. (a) to comply with any closure conditions;
2. (b) to secure compliance with any closure conditions;
3. (c) to secure the provision of any services; or
4. (d) to secure the operation of any additional railway asset; shall not give rise to any form of duty or liability enforceable by civil proceedings for breach of statutory duty.

(2) Subject to section 55 below, the obligations of—

1. (a) any service operator (within the meaning of section 34 above), imposed by or under section 34(1), not to discontinue any railway passenger services;
2. (b) any operator (within the meaning of section 45 above), imposed by or under section 45(3) above, not to discontinue any experimental passenger services; or
3. (c) any operator of an additional railway asset, imposed by or under section 36(1) or 38(1) above, not to discontinue the operation of any additional railway asset;

shall not give rise to any form of duty or liability enforceable by civil proceedings for breach of statutory duty.").

The noble Earl said: My Lords, I beg to move these amendments en bloc. They have all been spoken to before.

On Question, amendments agreed to.

[Amendment No. 105 not moved.]

Schedule 4 [Alternative closure procedure]:

Baroness Stedman moved Amendment No. 106:

Page 151, line 15, at end insert:

("Conditions

.—(1) The Secretary of State may give his consent under paragraph 3(2) (b) above subject to such conditions as he thinks fit.

(2) The Secretary of State may at any time vary or revoke any conditions which are for the time being required to be complied with pursuant to sub-paragraph (1) above.").

On Question, amendment agreed to.

Clause 47 [Performance of the Franchising Director's duties 10 secure the provision of services etc.]:

The Earl of Caithness moved Amendments Nos. 107 to 110:

Page 58, line 21, leave out from second ("of") to ("by") in line 22 and insert ("any additional railway assets, or is empowered by section 28 above to secure the operation of any additional railway assets, he may perform that duty or exercise that power").

Page 58, line 25, leave out from first ("the") to ("in") in line 26 and insert ("additional railway assets").

Page 58, line 36, after ("duty") insert ("or exercising any such power").

Page 58, line 39, after ("duty") insert ("or the exercise of any such power").

The noble Earl said: My Lords, I beg to move these amendments en bloc.

On Question, amendments agreed to.

Clause 49 [Powers of the Franchising Director to form and finance companies and to acquire and dispose of assets]:

The Earl of Caithness moved Amendments Nos. 111 and 112:

Page 59, line 17, after ("be") insert:

("(a)").

Page 59, line 18, at end insert:

("(b) used for the purpose of providing franchised services,

(c) used for the purpose of operating any additional railway asset under a franchise agreement, or

(d) used for the purpose of providing any services or operating any additional railway asset in pursuance of a duty or power to secure the provision of such services or the operation of such an additional railway asset.").

On Question, amendments agreed to.

Clause 50 [Exercise of functions for purpose of encouraging investment in the railways]:

Lord Carmichael of Kelvingrove moved Amendment No. 113:

Page 59, line 32, at end insert:

("() In exercising his functions under this section, the Franchising Director shall have regard to the desirability of promoting the continuity of manufacture of railway rolling stock and other railway equipment in the United Kingdom.").

The noble Lord said: My Lords, I am sorry to keep the House at this hour, but this is a very important amendment, not just for the railways but for the whole railway industry and perhaps for our engineering industry as well. New subsection (1) (a) requires the franchising director to exercise his powers to promote the continued existence of a viable railway manufacturing industry in the United Kingdom.

Noble Lords will be well aware of the warnings given by the Railway Industries Association and others that the order books for rolling stock, signalling and track work will all be exhausted within the next two or three years. Manufacturers are warning that works will have to close permanently in centres such as York with further job losses to add to the thousands of railway manufacturing jobs already lost in these towns. It would be quite bizarre if because of some economic philosophy which has been devalued by the week we said that we had to let our own railway industry run down and find that when we wanted to improve our railway system we had to buy our trains and coaches from Switzerland, Austria or Germany.

At present, York has a flourishing industry. The industry for lighter railway carriages is beginning to build up rather well. One of the things that has helped Rosyth is that it has had a lighter—not mainline—railway creation facility. I should hate it if our rail industry went the way of the old railway industry. I have said often enough, probably to the boredom of some Members of this House, that 39,000 railway engines were made in Springburn, Glasgow, alone; 19,000 of them were exported. Many of them can still be seen in travel films in South America and parts of India. It is a very important industry. It is one of the Last that we have. If we want to expand our railway network, or even maintain it at the present standard, we must keep this industry.

Despite the lack of current orders in the railway manufacturing industry, there are many lines, particularly parts of Network SouthEast, the InterCity West Coast main line and cross-country services where substantial investment is required now in order to ensure adequate services for the future. I know that there has been £150 million put towards new rolling stock. Sadly, as I understand it, none of it is going to the West Coast main line. One of the rumours is that some of the best stock that we have on ScotRail will perhaps be taken down to Network SouthEast in the London area.

In the longer term, the successful expansion of services by regional railways will lead to requirements to increase capacity. That will require not only new trains but new infrastructure schemes such as additional track, re-signalling and electrification. The franchising director will be in a unique position to promote continued development and improvement of services. This amendment requires him to exercise his powers so as to avoid the troughs and peaks of investment that have plagued the British railway industry throughout the past three decades. In that way a viable UK railway manufacturing industry can be maintained.

I believe that that is vital for the future of the railway. Perhaps it even offers the possibility of bringing back a really good engineering industry, such as that which made us the workshop of the world at one time. I beg to move.

Lord Tordoff

My Lords, I have no idea whether this amendment will achieve what it seeks to do. I suspect that it probably will not. I am not sure that it is possible to legislate in this way. The Government should take on board the fact that there could very well be problems in this area. I am sure they will say that once the scheme is up and running there will be increasing demand for good quality rolling stock. That may be true. I hope it is. Whatever I think about the Bill, I want to see a successful railway industry in this country.

However, one has to bear in mind that there may be a period in the interim during which franchisees use any old bit of railway stock that they can get their hands on and the demand for new rolling stock may not be all that great in the short term. We have seen that in relation to bus privatisation. The bus manufacturing industry has had a very rough time in the interim period. One hopes that after the interim period it will pick up. I ask for some assurance from the Government that, whatever mechanism they use, they will try to keep viable the rolling stock manufacturing and the railway engineering industries in this country, so that, if and when—hopefully, when—the upturn comes, we shall have an industry that can develop. The noble Lord, Lord Carmichael of Kelvingrove, is quite right. It could be a focal point for the reinvigoration of the whole engineering industry of this country.

The Earl of Caithness

My Lords, I have sympathy with the desire behind the amendment to maintain a robust UK railway manufacturing industry. It is the Government's belief and mine that the more that is made in the UK on time to the right specification and competitively the better. However, in reply to the noble Lord, Lord Carmichael, the franchising director's primary function is to secure the provision of services. To do that, on occasion he may need to encourage investment to the benefit of manufacturers. But it is not his role to act directly as sponsor to the British railways supply industry. In any case, for the Government to act in a manner which favours British suppliers, as this amendment seems to envisage, would run the risk of falling foul of EC law. I wonder whether the former commissioner might have something to say about that. He was concerned about EC law on an earlier government amendment. I am concerned about EC law on this proposed amendment.

The prospects for railway manufacturing must reflect the level of necessary investment and its affordability. The Government's aim is to open up new areas for private funding. BR's announcement yesterday that it is to acquire Networker trains on operating leases from ABB Transportation is an important step towards a full operating lease market for rolling stock. The Government are also committed to devising proposals for renewal of infrastructure by joint venture with the private sector.

I take up the point made by the noble Lord, Lord Tordoff. One of the great difficulties—the shackling difficulties—that a nationalised industry has to face is the matter of Treasury control. Whatever the noble Lord thinks about the Bill, I am sure he will agree that, if we can bring in the private sector and private sector money, at long last it will not just be the taxpayer who has to pay for every train or every piece of infrastructure.

Let us consider British Airways. It would be madness now to think that the taxpayer had to pay for every single plane of British Airways. One looks at the nationalised airlines in Europe. They are the ones which are losing money. It is the privatised BA that is still making money and that is because it is in the private sector and because of the added access to finance markets.

In so far as it is in the best interests of the railway to maintain a steady flow of orders and thus obtain better prices I am sure that the franchising director will do as the amendment might suggest. However, it would be wrong to require him to have regard to the interests of the industry as such: that is not his brief.

Therefore, in principle, there is nothing between the noble Lord, Lord Carmichael, and the Government. We would like nothing better than to see a strong, healthy and flourishing railway equipment industry in the United Kingdom. However, it would be wrong—and on reflection the noble Lord may agree with me—to put it in the terms of the amendment with a specific duty on the franchising director.

10.15 p.m.

Lord Carmichael of Kelvingrove

My Lords, if the Minister is suggesting that I could frame the amendment differently, I am only too happy to leave to the government, with their much greater resources, the task of finding a way to help the rail industry.

I understand, after consultation, that there are ways in which the EC Commission can aid, or consent to, research in the railway industry. The remarkable work done on the APT—despite what many people say, the fundamental science involved in the study of steel and suspension was extremely advanced—could be a break-through. I understand that consent can be obtained to push forward the frontiers of locomotion, if that is the right way to put it.

I have a feeling also that there must be a way round the problem. I do not want to throw stones at any of our colleagues abroad. Whether or not it is true, the feeling is that other countries, somehow or other, manage to do certain things that we are told in this country are impossible. I wonder therefore whether it is a matter of a will to do it or excuses not to do it.

I shall read the Minister's speech carefully. This is one of the key points in regard to the future of transport and engineering in this country. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Caithness moved Amendments Nos. 114 to 117:

Page 59, line 35, after ("his") insert (", to refrain from exercising such functions,").

Page 59, line 37, leave out subsection (3).

page 59, line 42, leave out (" 18") and insert ("(Access agreements: contracts requiring the approval of the Regulator), (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)").

Page 60, line 2, leave out ("under") and insert (", or the operation of additional railway assets, under or by virtue of").

On Question, amendments agreed to.

Lord Clinton-Davis moved Amendment No. 118:

After Clause 50, insert the following new clause:

("Secretary of State to review adequacy of railway network

.—(1) The Secretary of State shall keep under review the adequacy of the railway network as a whole to meet requirements for the safe and efficient transport of passengers and goods and shall take such steps as he considers necessary to promote investment in new lines, stations, freight depots or other facilities.

(2) In establishing whether or not new railway facilities would he beneficial the Secretary of State shall use methods of analysis of costs, benefits and environmental impacts that are comparable with those used for the evaluation of trunk road schemes.").

The noble Lord said: My Lords, in moving Amendment No. 118 it may be for the convenience of the House to consider at the same time Amendment No. 184. There is a substantial difference of opinion between us as to the principles underlying the Bill. Indeed, we would contest the Government's beliefs, hopes and aspirations that somehow or other, under the new regime, there will be a renaissance of the British railways. I believe, regrettably, that all that will collide with reality. Not only public opinion, but also informed opinion in the railway industry—at least a substantial part of it—is sceptical in regard to the results of the Bill as and when it is enacted.

If the railways are to play a substantial part in the resolution of our industrial and transport problems, which are replete, the key is more investment, both in improving services and in expanding capacity. Somehow or other the appearance that emerges from the Department of Transport and the Minister's speeches is that the Government can reasonably distance themselves from any form of transport strategy other than continuing to increase trunk road and motorway capacity and that the people who will be left to sort out the problems will be the private sector and local government. But I wonder whether that is the total view of the Government themselves.

The Department of the Environment and Ministers in that department have been saying that it is essential that they tackle the issues of pollution and the issues of health which are endangered by pollution. There seem to be question-marks implicit in what they say about the damaging consequences of the current strategies being undertaken by the Government. It is quite clear—I am sure that the Department of the Environment emphasises this to the Department of Transport over and over again—that there are commitments under the United Nations climate change convention to control emissions. The Prime Minister himself afforded this considerable priority at the time of the Rio Summit. In future the burden on a responsible government will be to create a policy framework to guide and influence the development of transport infrastructure and services even though they may not directly control or finance that infrastructure and services.

Amendment No. 118 provides in subsection (1) that the Secretary of State shall have an obligation to keep the performance of the railway network under review and when necessary he should respond by promoting new investment for either freight or passenger traffic or both. Subsection (2) requires the same principles to be used for the evaluation of railway schemes as for roads programmes that are the continuing responsibility of the Secretary of State and local government. Road scheme evaluation is presently based on the technique known as cost-benefit analysis supplemented by environmental assessments that are associated with that. The adoption of the new clause would be consistent with the Government's policy on transport investment by local government. The transport policies and programmes circular for 1993 encourages local authorities to adopt a package approach to investment in highways, public transport, cycling and walking. The principles set out in the new clause, if followed, would achieve the same balance between railways and other forms of transport, particularly roads, at a national level.

The effect of Amendment No. 184 would be to place a burden on the Secretary of State to publish an annual rail statement to be drafted in the light of the contents of the annual reports that the Bill requires the regulator and the franchising director to produce—a matter alluded to in earlier debates. I accept that this is not a new issue but the amendment raises an important question which I hope the Government will not continue to avoid. I refer to the extent to which under the new regime Parliament is able to hold the Secretary of State for Transport to account for the quality and quantity of rail services.

When these issues were raised in Committee we sought to require the Secretary of State to produce a national rail statement. In rejecting the amendment, the Minister said that, a strategy document of the type envisaged … would be inflexible and likely to be out of date before it was implemented. A centrally imposed strategy document would be quite inappropriate for the new privatised railway". He went on to point out that in future the responsibility for infrastructure investment would rest with Railtrack. He said that today. It would have to work with the franchising director and rail operators. He went on to say: As the private sector becomes increasingly involved in railway services it will enter direct negotiations with Railtrack about strategic developments. It is for that reason and the reasons I mentioned earlier that suddenly to bring the Secretary of State back into it will, we believe, do nothing but ossify the situation".—[Official Report, 15/7/93; col. 363.] That is not consonant with the facts of the situation. Even under the Government's proposals the Secretary of State will never be out of it. He will be responsible for the level of resources available to Railtrack. He will set the organisation's objectives. He has to determine the level of resources available to the franchising director and has to issue guidance to him. He is not out of it.

The new clause would ensure that the Secretary of State would be accountable for the implications of his policies. More significantly, it would ensure that the combined impact of his policies would be addressed in the context of the performance of Railtrack and the annual reports produced by the regulator and the franchising director.

In Committee, the Minister suggested that a national rail policy document would somehow or other impose a strait-jacket on the industry. In reality, the strait-jacket will exist in any case through the Government's financial controls. The effect of the new clause would be to force the Government to address those consequences. By referring to the interface between Railtrack, the franchising director and the rail operators, the Minister has helped to make the case for this new clause.

The Bill gives responsibility for different aspects of the railway to a plethora of bodies. Its opponents have argued that, as a result, bureaucracy will increase to the detriment of co-ordination and integration. The new clause has the capacity to ensure that Ministers are held to account for their claims that such difficulties will not arise. It would provide an instrument for dealing with such problems if and when they materialise. As we have said over and over again, it is our contention that those problems are almost bound to arise. I beg to move.

The Earl of Caithness

My Lords, of course, the Secretary of State will need to take a view on a number of aspects of the privatised railway, just as he does on all areas of transport policy. But the amendment envisages far too prominent and active a role for the Secretary of State in what are really detailed investment matters. The people who should take those decisions are the ones who have the most direct experience of the railway, and who will have to pay for the new investment. They will include Railtrack, freight operators, "open access" passenger operators, franchisees and the franchising director.

The Secretary of State is already under a general duty in Clause 4 to exercise his functions under the Bill; for example, to promote the interests of users of railway services, and to promote the use of the network for the carriage of passengers and goods, and the development of that network. We do not think it necessary to burden him with further duties.

For similar reasons, I would ask the House to resist Amendment No. 184. I indicated today in reply to the noble Lord's amendment to the very beginning of the Bill that I was very sceptical about the value of annual reports by the Secretary of State. The terms of the annual report which the noble Lord proposes have not changed my mind. The Secretary of State would become the classic "back-seat driver"—looking over the shoulder of the regulator and the franchising director, offering advice without the benefit of the expert knowledge which they and the other key players will have, and generally trying to second-guess people. To take just one example: surely, the regulator, the franchising director, Railtrack and others will be able to co-operate where desirable without the Secretary of State offering his advice.

There is already provision in the Bill for annual reports by the regulator and the franchising director. Railtrack will also produce an annual forward view of rail investment. It is better to leave such reports to the people and organisations which have specific responsibilities under the new arrangements, and who will know far more about these matters than will the Secretary of State and officials in Marsham Street.

The noble Lord, Lord Clinton-Davis, also raised the question of environmental and pollution controls. It is perfectly right that responsibilities for setting the framework for that remain with the Government, but it is up to the industries to meet whatever agreement is reached by the Government either by themselves or in conjunction with other governments within the European Community or on the world scene. The agreement that was entered into at Rio and to which my right honourable friend the Prime Minister is committed includes changes to the method of operation of the various modes of transport, particularly for all those individuals who use cars. All the Secretary of State has to do is to set the specifications. It is up to the car manufacturers to produce the goods, and then we can continue to drive the cars should we so wish. It is also up to us as individuals to be a great deal more careful about the environment.

10.30 p.m.

Lord Clinton-Davis

My Lords, that is all very well, but what the Government are doing, not just in respect of this industry but in so many other matters, is to try to distance themselves from accountability to the public and Parliament. It goes on and on and on. They set up their quangos (quasi autonomous non-governmental organisations) and their tangos (totally autonomous non-governmental organisations) and they people them with their own folk, some of whom we have established are not all that able. It is a reward for support of the Conservative Party. Even Mr. Horton is known as a distinguished supporter of the Conservative Party. I dare say that had he been a member of the Labour or Liberal Democrat Parties he would not have been anywhere near being chairman of Railtrack. I understand that he needs to make himself rather more accessible to discussions. I can understand why he does not want to, but the whole purpose of what the Government are doing is to render it virtually impossible for Parliament properly to scrutinise what is happening to our transport infrastructure. That is the folly of it all.

The Minister says that the Government are committed to Rio. They are committed in words, it is the policies which are in conflict with those commitments, notably the policies of his own department, which are scandalous and render it virtually impossible for this country to be able to conform to the undertakings given at Rio. He knows that very well. He hears it from his colleagues at the Department of the Environment as well.

I knew that the Minister would not accept the amendment. We have placed our position on record. We believed that we were duty bound to do that. Time will tell whether we or the Government are right. Certainly, the Minister does not know at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51 [Statutory authority to run, or permit others to run, trains etc.]:

Viscount Goschen moved Amendment No. 119:

Leave out Clause 51.

The noble Viscount said: My Lords, it may be for the convenience of the House if I speak also to Amendments Nos. 120, 269, 303 and 306. The purpose of these amendments is to replace the existing Clause 51, which deals with statutory authority and to position it and Clause 52 more appropriately in the miscellaneous and general section of Part III of the Bill, with the necessary consequential amendments. That does not represent a change in policy. Clause 51 was technically deficient, but the principle of that clause has been carried into the replacement clause and remains unchanged. Its purpose is to give new players in the rail way industry as a result of this Bill the defence of statutory authority to actions in nuisance which is currently enjoyed by BR.

The amendments deal with a technical matter. I beg to move.

On Question, amendment agreed to.

Clause 52 [No person to be common carrier by railway]:

The Earl of Caithness moved Amendment No. 120:

Transpose Clause 52 to before Clause 121.

On Question, amendment agreed to.

Clause 53 [Orders for securing compliance]:

The Earl of Caithness moved Amendments Nos. 121 to 130:

Page 61, line 21, leave out from ("made") to the end of line 27.

Page 62, line 3, leave Out from ("operator") to ("and") in line 5.

Page 62, line 22, at end insert:

("() Without prejudice to section (Exclusion of liability for breach of statutory duty) above, nothing in this section or in sections 54 to 56 below shall exclude the availability of any remedy in respect of any contravention or apprehended contravention of a relevant condition or requirement.").

Page 62, line 26, leave out ("a party to an access agreement, a facility owner").

Page 62, line 40, leave out paragraph (b).

Page 63, line 1, leave out paragraph (d).

Page 63, line 4, leave out from ("duty") to the end of line 6 and insert ("under section 34(1), 36(1) or 38(1) above not to discontinue a railway passenger service, or the operation of the whole or any part of a network, station or light maintenance depot, before the date stated by him in accordance with section 34(3), 36(3) or 38(3) above; and

(ii) the duty under section 45(3) above not to discontinue an experimental passenger service before the expiry of the notice period;").

Page 63, line 7, leave out ("party to an access agreement").

Page 63, line 9, leave out ("facility owner").

Page 63, leave out line 16 and insert:

("(b) who proposes to discontinue an experimental passenger service in circumstances such that he is required by section 45 above to give due notice of the proposal").

On Question, amendments agreed to.

Clause 54 [Procedural requirements]:

The Earl of Caithness moved Amendments Nos. 131 to 135:

Page 63, line 45, leave out from first ("relates") to end of line 46.

Page 64, line 4, leave out from first ("relates") to ("or") in line 5.

Page 64, line 9, leave out from ("relates") to ("such") in line 11

Page 64, line 22, leave out from first ("relates") to ("and") in line 23.

Page 64, line 45, leave out from first ("relates") to end of line 46.

On Question, amendments agreed to.

Clause 55 [Validity and effect of orders]:

The Earl of Caithness moved Amendment No. 136:

Page 65, line 36, at end insert:

("() Where a relevant operator to whom a final or provisional order relates has made an application pursuant to subsection (1) above questioning the validity of that order, the making of that application shall not affect—

1. (a) his obligation to comply with the order, or
2. (b) the right which any person may have to bring civil proceedings against him in pursuance of subsection (5) or (7) above.").

On Question, amendment agreed to.

Clause 57 [Meaning and effect of railway administration orders]:

The Earl of Caithness moved Amendment No. 137:

Page 66, line 39, leave out ("or 59") and insert (", 59 or 60").

The noble Earl said: My Lords, with the leave of the House, I shall speak also to Amendments Nos. 142 to 168 and 323.

These amendments are to the railway administration order provisions of the Bill (Clauses 57 to 63 and Schedules 5 and 6), and are largely consequential on amendments made in Committee.

We are now coming to an area of the Bill to which the noble Lord, Lord Clinton-Davis, had moved when he was talking about a previous area of the Bill. The amendments are technical in nature, and I do not believe that your Lordships will find them controversial.

As your Lordships will know, the railway administration provisions were modelled on the Insolvency Act 1986 as applied by the Water Industry Act 1991, neither of which made provision for foreign operators to be subject to special administration. During the Committee stage Clause 63, which deals with foreign and other unregistered companies, was introduced into the Bill. There are a number of further amendments following from that. The most significant introduces a new part to Schedule 5. Its main thrust is to limit the powers of the special railway administrator, in the case of a foreign company, to the business and assets of the company which are situated in Great Britain.

In addition, there are a number of minor amendments aimed at tidying-up definitions and removing unnecessary distinctions between the franchising director and the rail regulator in Schedule 5. Finally, Amendment No. 323 removes the need to consult the Insolvency Rules Committee before making rules for the purposes of the railway administration order procedures. Rules would relate mainly to the provision of information and other procedural matters, and the amendment is precedented in the water Acts.

Schedule 6 makes provision in respect of transfer schemes made pursuant to a railway administration order. The schedule was drawn almost directly from the Water Industry Act where a similar policy goal existed. The two amendments which are being sought here are intended to complete the necessary translation.

The railway administration order provisions of the Bill are aimed squarely at providing for the continued operation of railway services in the event—albeit, in our view, unlikely—that the operator of the services fails financially. I believe that both sides of your Lordships' House should therefore be supportive of the clauses and should welcome these amendments. I beg to move.

Lord Clinton-Davis

My Lords, when I adverted to continuity of services it was not in connection with an insolvency situation specifically but a breach of condition which might have arisen. There are a variety of reasons which enable a question to arise of a lack of continuity or a threat to the continuity of service. Be that as it may.

We are now dealing with railway administration orders. In Committee I expressed anxiety about how they would work. Clauses 53 to 58 and Schedule 5 mirror the administration order and special administrator provisions of Sections 23 to 25 and Schedule 7 to the Water Industry Act 1991. However, there is a vast difference between the privatisation of water and the proposed privatisation of railways. They are totally dissimilar. Basically, the water supply industry remains a monopoly of necessity, albeit privatised, whereas some of the newly-privatised railway undertakings may well be in competition one with another. The whole industry is in competition with other means of transport.

In consequence, there may be a real possibility of one of the new undertakings within the definition of a protected railway company becoming insolvent. After all, the definition of a protected railway company includes light maintenance depots. Surely, it is conceivable and not beyond all the realms of imagination that these may diversify to take in other forms of engineering work and the risks incurred in that way could well increase the chances of insolvency resulting. In hoping again that that will not happen, the Minister is again challenging an almost certain factual result that there will be some insolvencies. I do not hope for that, but there is that prospect and the Minister must face up to facts.

Clause 57 (1) (b) requires the railway administrator to manage the company over which he has been appointed, in a manner which protects the respective interests of the members and creditors of the company". Unfortunately, as regards the remaining provisions not much assists in implementing that particular requirement.

The Minister is saying that there will be a need to maintain the railway service almost at any cost. I do not challenge the noble Earl about the need to ensure that the railway industry continues and that services are not breached. That was an obvious need as regards the water industry in which, in any event, the likelihood of insolvency of a price-regulated monopoly was not very great except, perhaps, when it came to diversification into other areas of activity. Even then, it should be possible to ring-fence such diversification. But maintaining a railway service does not fall into that category at all. The balance between protection of the consumer and the protection of the providers of finance, as well as ordinary consumers, will cause the Government some difficulty.

There can be no doubt at all, because it is implicit in what the Government are asserting, that the provisions of this measure will put creditors in a different position from that which would arise in an ordinary insolvency. That will apply to the providers of finance as well as to creditors. That is specifically asserted. We must deal with that situation. The question is whether the Government have gone about their duties in the correct way.

Paragraph 5(2) empowers the railway administrator, who has disposed of charged property, to pay to the charge-holder an amount equal to: the best price which is reasonably available on a sale which is consistent with the purposes of the railway administration order". Those words were deliberately inserted in substitution for the requirements of Section 15(5) (b) of the Insolvency Act 1986 to pay: the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor". There may well be a great difference between the two. Indeed, if that were not a distinct possibility, there would have been no need for this change to the ordinary provisions of the insolvency legislation.

Section 15 created a useful tool for the new concept of administration introduced by the Insolvency Act 1986 even though it was regarded as draconian by some lenders. It was intended to help the rescue of a business for the benefit of the general body of creditors and perhaps also for shareholders. This proposed amendment certainly tilts the balance even further away from the lender, presumably in order to favour the community rather than the undertaking. I do not dispute that. I agree that if you are going down this route—as I have said before, I think that the whole situation is barmy—the community should be favoured. But has the Minister understood the implications of what he is doing here?

Why did the Government decide to depart from those provisions of the Insolvency Act 1986? Does the Minister dispute the way in which I put the matter?

Paragraph 1 of Schedule 5 applies Sections 11 to 23 and Section 27 of the Insolvency Act 1986, but disapplies Section 24, which requires the administrator's proposals to be approved by a creditors' meeting, and also Section 26 which provides for the appointment of a creditors' committee. But despite all that, the administrator is required to send a statement of his proposals to all creditors—paragraph 9(1) (d). Is not that all completely and utterly cosmetic?

As I have already said, Section 27 of the Insolvency Act 1986 remains in force to the extent that subsection (1) still entitles a creditor or member to apply to the court for relief on the grounds that actual or proposed acts by the administrator are or would be prejudicial to their interests. But paragraph 10 of Schedule 5 introduces an additional power on the Secretary of State or, with his consent, the director of passenger rail franchising or the regulator to apply to the court if powers exercised or proposed to be exercised by the administrator will either not best ensure the achievement of the purposes of the administration order or involve a contravention of any of the conditions of any licence held by the undertaking. Therefore, the interests of the members or creditors and those of the Secretary of State (or the appropriate regulator) could well be in conflict. The Bill—and the Minister will correct me if I am wrong—appears to be absolutely silent as to whose interests the court should regard as paramount. I want an answer on that point.

I have another question for the Minister. Paragraph 6(3) of Schedule 5 to the Bill disentitles creditors to require the holding of a creditors' meeting, as provided in Section 17(3) (a) which an administrator appointed under the Insolvency Act 1986 must hold on the appropriate requisition in order to enable creditors to consider the conduct of the administration. It may be thought that deletion demonstrates that the interests of creditors will always take second place. Is that right? Is that the intention? What protection is to be available for creditors if liabilities are not transferred on a transaction which may produce a smaller return than if the undertaking, or parts of it, were sold on the open market?

The above are important issues and they have simply not been addressed in the discussions that we have had today. have taken an opinion from one of the leading insolvency experts who takes the view that the proposals are unworkable. They are unworkable because they are unclear, and particularly because they do not answer the specific questions that I have just posed.

There are other questions that I should like to ask the Minister, but I think that I have done enough for this evening. I do not suppose for one moment that the Minister will be able to answer those questions without adequate briefing. However, it is essential that he does answer those points. If he is not in a position to do so tonight, I would certainly want an undertaking from him that he will write to me well before Third Reading so that we can, if necessary, return to the matter which, as I said, has not been properly canvassed either in this House or in another place.

10.45 p.m.

The Earl of Caithness

My Lords, I was grateful for the noble Lord's concluding words with which he returned to his normal courteous self. But if the noble Lord, who is a lawyer by trade, had to seek the advice of a top insolvency counsel and then bowls fast ones at me, it is not really surprising for him not to receive the full answer that he would have liked. I know that had he been able to get the information from his advisers, he would have afforded me the usual courtesy of writing to me beforehand so that I would have had the answers at my fingertips.

However, perhaps I may in general reply to the noble Lord. The railway administration order provisions strike a balance between the need to secure continuity of service and the protection of creditors. Paragraph 10(4) of Schedule 5 allows for the court to require measures to be taken for the protection of creditors. If necessary, that could involve the exercise of the Secretary of State's power to pay grant towards the insolvent company.

On the whole question of the solvency problem, I should like to answer the noble Lord in the following terms, especially as he referred to the question of continuity of service. I believe that the noble Lord may be exaggerating the scale of the problem. As my noble friend Lord Goschen has already explained, in such circumstances, the franchising director is under a duty in Clause 28 of the Bill to step in to provide the services in question. He has powers in Clause 47 to enter into agreements with any operator, including BR, to provide the services. The assets needed to operate the service will already be in place as designated franchise assets under the terms of the franchise agreement. Moreover, a service is unlikely to be discontinued overnight. If a franchisee runs into trouble, the franchising director can be expected to be aware of this in advance and will be able to make contingency arrangements. In the event of insolvency, the provisions of Clauses 57 to 63 come into play and will ensure that the services continue to be provided.

The noble Lord raised the question of a company that was providing railway services possibly diversifying and therefore increasing the risk of bankruptcy. That is considering the situation from a negative point of view. I would look at it from a different point of view and say that a company that provided railway services and diversified probably increased its chances of prospering, producing jobs and maintaining a good service. However, whichever way one considers this matter, but particularly from the point of view of the noble Lord, the licensing system would prevent the bankruptcy happening. As a requirement of their licence, operators will be expected to ring-fence their railway operations by keeping them in a separate company. I hope that my comments go a long way towards reassuring the noble Lord. I will, of course, read his comments in the Official Report. The noble Lord has received legal advice from what he considers to be a top level source to the effect that things will not work out as the Government wish. However, we have received advice to the effect that they will work out.

Lord Clinton-Davis

My Lords, before the noble Earl sits down, I must add that I will write to him with the additional questions. I can assure him that the anxiety expressed by the insolvency expert whom I consulted is not unique to him. I hope that the Minister will give me an assurance that if I write to him by tomorrow or the following day I shall receive a response in time for us to table further amendments for Third Reading.

The Earl of Caithness

My Lords, the noble Lord, Lord Clinton-Davis, has had discussions with me for long enough in this House, and in the European Council when he was a Commissioner and I represented the Government, to know that if he writes to me I shall endeavour to reply to him. It might not be a reply that is satisfactory to the noble Lord, but I shall certainly send him the reply that he needs.

On Question, amendment agreed to.

Lord Clinton-Davis moved Amendment No. 138:

Page 66, line 41, leave out ("a person") and insert ("the Board after being").

The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 139, 140 and 141. Clause 57 gives priority to the interests of the shareholders and creditors of a failed railway company. It is clearly necessary to protect the interests of passengers as well. We are attempting to have the British Railways Board specified as the operator who will invariably run services subject to a railway administration order. This makes sense as British Rail will already be responsible for any services for which the private sector had declined to tender. It should, therefore, be uniquely able to step into the void left by a failed franchisee. This amendment will also free the nation from the possibility of another potential "rescue" operator extorting an unacceptably high grant for taking over the service. That is by no means unlikely. British Rail as a state-owned company, will be unable to exert this leverage.

If a railway administration order is made, it will be essential that operation of the services is taken over immediately by a professional and fully certified operator. As drafted, Clause 57 leaves the selection of operator to the discretion of the courts. This is too wide and rather unnecessary as the British Railways Board will be able to secure the management of services in many circumstances envisaged by the Bill unless, of course, it has been totally unable to fulfil those obligations. In that event it is almost certain that no one else would be able to do so.

Amendment No. 141 provides for the franchising director to maintain full services during the period of the railway administration order. There is an obvious danger that the events leading to the making of a railway administration order would simply be a precursor of a reduction or closure of services. It may be that either of those outcomes will in due course be acceptable, but that cannot be judged in the circumstances of the making of an administration order as the need for administration may arise because of financial failure or mismanagement rather than any inherent unprofitability of services.

The amendment requires the franchising director to maintain services at their pre-existing levels until the application for a railway administration order has been determined and any resultant transfers made. It is clearly necessary to protect passengers' interests until formal closure procedures can commence or a new franchise specification is agreed. I beg to move.

The Earl of Caithness

My Lords, I have listened to the noble Lord's words with interest. Perhaps it would assist your Lordships' House if I started by addressing Amendment No. 139. I am sympathetic to the thinking behind that amendment, but I hope that I can reassure the House that it is unnecessary.

The amendment aims to insert a new provision in subsection (1) of the clause to ensure that a railway administration order is aimed at the continued operation of passenger rail services. I have to tell your Lordships that that is precisely the purpose of a railway administration order and is what the clause, when read as a whole, provides for.

The purpose of the special administration regime is to secure the continued, uninterrupted provision of services in the unfortunate and, I believe, unlikely event of a service operator becoming insolvent and therefore being unable to carry on his business. The aim is to secure the transfer of the business, in so far as possible, as a going concern.

To understand how the provisions work it is necessary to follow carefully the cross references within Clause 57. I apologise if this all seems needlessly complex, but I shall attempt to weave my way through the maze and I hope that the noble Lord, Lord Clinton-Davis, will follow me. Thus the purposes of the order in subsection (1) (a), by virtue of subsection (2), are the transfer and continuation of the "relevant activities". These are in turn defined in subsection (6) as, in the case of an operator with a passenger licence, the operation of passenger services, and, in the case of the holder of a station operator's licence, the operation of his station.

Thus, there is no question about the objective of a railway administration order, which is to secure continued operation of services. The provision is so drafted at present that not only passenger services, but also the operation of stations, networks and light maintenance depots is covered. This, I believe, also addresses the amendment in the name of the noble Lord, Lord Carmichael of Kelvingrove, to which the noble Lord, Lord Clinton-Davis, spoke, which seeks to ensure that there is no diminution or cessation of services during the period between the company's insolvency and the transfer of its undertaking. Therefore, neither Amendment No. 139 nor Amendment No. 141 is necessary.

Moving on to the other two amendments, the noble Lord will not be surprised when I tell him that here I have rather less sympathy with his intentions. The amendments would mean that, were a protected railway company to become insolvent, its affairs, business and property would be managed by the BR board pending the transfer of the relevant activities to another company. That is not our policy, and would be a very odd application of the administration procedure.

The railway administration provisions provide for a person appointed by the court to run the insolvent company's business pending transfer to another company. The person appointed by the court will be a licensed insolvency practitioner, well equipped to deal with such matters. He will be under the supervision of the court and governed by the relevant provisions of the Insolvency Act 1986, as modified and applied by the Bill. The administrator will be responsible for transferring the relevant parts of the company's undertaking to one or more other companies. It would be possible for the undertaking to be transferred to the board if that was the most appropriate option, but we do not believe that that will generally be the case.

Lord Clinton-Davis

My Lords, before the Minister sits down—. It does not matter. He will not concede, so I shall merely wind up in this way.

I believe that the Government are putting themselves in a position in which they will render themselves liable to extortionate demands made by people in the private sector to continue a service which the Government demand as necessary, and rightly so. They are exposing themselves to a great risk. The one group of people who will make a large amount of money out of the situation will be the people called in to administer the insolvency. Of that there can be no doubt; it is always the case.

I shall of course listen to what the Minister says. While I reflect on it, I shall endeavour to write to him further with my anxieties and I hope that he will be able to respond to me in sufficient time before Third Reading. I in no way question the Minister's integrity on that. I have known him long enough to know that he will use his best endeavours so to do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 139 to 141 not moved.]

11 p.m.

Schedule 5 [Railway administration orders]:

The Earl of Caithness moved Amendments Nos. 142 to 159:

Page 152, line 9, after ("Schedule") insert:

("(a)").

Page 152, line 11, at end insert ("and

(b) where the company in relation to which the order has been made is a protected railway company which is an unregistered company, as if references in those sections to a company included references to such a company.").

Page 152, line 43, after ("association") insert:

("(i)").

Page 152, line 44, leave out ("to any statutory authority conferred by section 51 of this Act and").

Page 152, line 46, al end insert ("and

(ii) in the case of a company which is an unregistered company, shall be taken also to include a reference to any power conferred by the company's constitution,").

Page 153, line 37, leave out ("where the company is the holder of a passenger licence under Part I of this Act") and insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").

Page 153, leave out lines 40 to 42 and insert:

("(b) where the company is an unregistered company which is not subject to such a requirement as is mentioned in paragraph (a) above, the words "to the Rail Regulator and the Director of Passenger Rail Franchising".").

Page 153, line 47, leave out ("where the company is the holder of a passenger licence under Part I of this Act") and insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").

Page 154, leave out lines 1 to 3 and insert:

("(b) where the company is an unregistered company which is not subject to such a requirement as is mentioned in paragraph (a) above, the words "to the Rail Regulator and the Director of Passenger Rail Franchising".").

Page 154, leave out lines 13 to 18 and insert:

("() to the Rail Regulator;

() to the Director of Passenger Rail Franchising;").

Page 154, line 21, after ("(e)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").

Page 154, leave out lines 33 to 37 and insert:

("() the Rail Regulator;

() the Director of Passenger Rail Franchising;").

Page 154, line 40, after ("(e)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").

Page 155, line 44, leave out from ("Franchising") to ("and") in line 46.

Page 155, line 47, after ("(c)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").

Page 155, line 50, at end insert:

("Particular powers of special railway administrator

. In the application of Schedule 1 to the 1986 Act (which sets out certain powers of the administrator) by virtue of section 14 of that Act, as applied by this Part of this Schedule in relation to a company which is an unregistered company, paragraph 22 shall be omitted.

PART IA

FURTHER MODIFICATIONS OF THE 1986 ACT: APPLICATION IN RELATION TO FOREIGN COMPANIES

Introductory

.—(1) Where a railway administration order has been made in relation to a company which is a foreign company, sections 11 to 23 and 27 of the 1986 Act (as applied by Part I of this Schedule) shall apply in relation to that foreign company with the further modifications set out in the following provisions of this Part of this Schedule.

(2) In this Part of this Schedule, "foreign company" means a company incorporated outside Great Britain.

Effect of order

.—(1) Section 11 of the 1986 Act (effect of administration order), as applied by this Partof this Schedule in relation to a foreign company, shall have effect as follows.

(2) In subsection (1), paragraph (b) shall be omitted;

(3) Subsection (2) shall be omitted.

(4) In subsection (3)—

1. (a) paragraphs (a) and (b) shall be omitted; and
2. (b) in paragraph (d)—
   1. (i) the reference to the commencement or continuation of proceedings shall be taken as a reference to the commencement or continuation of proceedings in Great Britain; and
   2. (ii) the reference to the levying of distress against the company shall be taken as a reference to the levying of distress against the foreign company to the extent of its property in England and Wales;

and any reference to property or goods shall be taken as a reference to property or (as the case may be) goods for the time being situated within Great Britain.

(5) Subsections (4) and (5) shall be omitted.

(6) At the end of that section there shall be added—

"(6) Where a railway administration order is in force in relation to a company which is a foreign company within the meaning of section 63 of the Railways Act 1993—

1. (a) any person appointed to perform functions equivalent to those of an administrative receiver, and
2. (b) if the special railway administrator so requires, any person appointed to perform functions equivalent to those of a receiver,

shall refrain from performing those functions in Great Britain in relation to the foreign company and any of the company's property for the time being situated in Great Britain, during the period for which that order is in force or, in the case of such a person as is mentioned in paragraph (b) above, during so much of that period as falls after the date on which he is required to do so."

Notification of order

. In section 12 of the 1986 Act (notification of order), as applied by this Part of this Schedule in relation to a foreign company, the reference to a statement that the affairs, business and property of the company are being managed by the administrator shall be taken as a reference to a statement that—

1. (a) the affairs and business of the foreign company so far as carried on in Great Britain, and
2. (b) the property of the foreign company so far as that property is for the time being situated within Great Britain,

are being managed by the special railway administrator.

General powers of special railway administrator

.—(1) Section 14 of the 1986 Act (general powers of administrator), as applied by this Part of this Schedule in relation to a foreign company, shall have effect as follows.

(2) In subsection (1) (a), the reference to the affairs, business and property of the company shall be taken as a reference to—

1. (a) the affairs and business of the foreign company so far as carried on in Great Britain, and
2. (b) the property of that company so far as that property is for the time being situated within Great Britain.

(3) Subsection (2) (a) shall be omitted.

(4) In subsection (4)—

1. (a) the reference to any power conferred on the company or its officers shall be taken to include any power conferred on the foreign company or its officers under the law under which the foreign company is incorporated; and
2. (b) any reference (however expressed) to the exercise of any power conferred on the company or its officers shall be taken as a reference to the exercise of that power so far as it relates to—
   1. (i) the affairs and business of the foreign company so far as carried on in Great Britain, or
   2. (ii) the property of that company so far as that property is for the time being situated within Great Britain.

Power to deal with charged property

. In section 15 of the 1986 Act (power of administrator to deal with charged property etc), as applied by this Part of this Schedule in relation to a foreign company, any reference to property or goods shall be taken as a reference to property or (as the case may be) goods for the time being situated within Great Britain.

Duties of special railway administrator

. In section 17 of the 1986 Act (general duties of administrator), as applied by this Part of this Schedule in relation to a foreign company,—

1. (a) in subsection (1), the reference to property shall be taken as a reference to property for the time being situated within Great Britain; and
2. (b) in subsection (2), the reference to the affairs, business and property of the company shall be taken as a reference to—
   1. (i) the affairs and business of the foreign company so far as carried on in Great Britain, and
   2. (ii) the property of that company so far as that property is for the time being situated within Great Britain.

Statement as to company's affairs

. In section 22(1) of the 1986 Act (power of administrator to require certain persons to provide him with a statement as to company's affairs), as applied by this Part of this Schedule in relation to a foreign company, the reference to the affairs of the company shall be taken as a reference to the affairs of the foreign company so far as they are carried on in Great Britain, or relate to property of that company for the time being situated within Great Britain.

Particular powers of special railway administrator

.—(1) The powers conferred on a special railway administrator by virtue of Schedule 1 to the 1986 Act (which sets out certain powers of an administrator), as that Schedule applies by virtue of section 14 of that Act, as applied by this Part of this Schedule in relation to a foreign company, shall be exercisable only in relation to—

1. (a) the affairs and business of that company, so far as carried on in Great Britain; and
2. (b) the property of that company, so far as that property is for the time being situated within Great Britain.

(2) In that Schedule, as it so applies,—

1. (a) without prejudice to sub-paragraph (1) above, references to the property of that company shall be taken as references to that property, so far as that property is for the time being situated within Great Britain; and
2. (b) paragraph 19 shall be omitted.").

Page 156, line 12, after ("58") insert (", 59, 60 or 63").

Page 156, line 13, after ("Part I") insert ("or IA").

On Question, amendments agreed to.

Schedule 6 [Transitional provision on transfer of relevant activities]:

The Earl of Caithness moved Amendments Nos. 160 and 161:

Page 156, leave out lines 36 to 43 and insert:

("(2) In this Schedule—

"the court", in the case of any protected railway company, means the court having jurisdiction to wind up the company;

"other appointee" means any company, other than the existing appointee or the new appointee, which is the holder of a licence under section 8 of this Act and which may be affected by the proposal mentioned in sub-paragraph (1) (b) above;").

Page 158, leave out lines 13 to 31.

On Question, amendments agreed to.

Clause 58 [Railway administration orders made on special petitions]:

The Earl of Caithness moved Amendments Nos. 162 and 163:

Page 68, line 5, leave out ("but for section 59 below").

Page 68, line 9, leave out ("if it did not hold a licence").

On Question, amendments agreed to.

Clause 63 [Application of the railway administration order provisions to unregistered, unlimited or foreign companies]:

The Earl of Caithness moved Amendments Nos. 164 to 168:

Page 72, line 6, leave out subsection (1) and insert:

(1) In the railway administration order provisions of this Act—

"company" means—

1. (a) any company formed and registered under the Companies Act 1985 or any existing company within the meaning given in section 735(1) of that Act, and
2. (b) any unregistered company; and

"unregistered company" has the meaning given in Part V of the 1986 Act.").

Page 72, line 15, leave out ("where the company mentioned in that subsection") and insert ("or subsection (3) of section 59 above where the petition mentioned in the subsection in question relates to a company which").

Page 72, line 30, leave out ("the reference").

Page 72, line 30, after ("subsection") insert:

1. (i) the reference to the commencement or continuation of proceedings shall be taken as a reference to the commencement or continuation of proceedings in Great Britain; and
2. (ii) the reference").

Page 73, line 2, leave Out ("and").

On Question, amendments agreed to.

Clause 64 [Amendments of the Fair Trading Act 1973]:

The Earl of Caithness moved Amendment No. 169:

Page 73, line 15, leave out ("railway services (as defined in section 81 of the Railways Act 1993)") and insert ("such services as are specified in paragraph 5 of Schedule 5 to this Act").

The noble Earl said: My Lords, in moving the amendment, I shall, with the leave of the House, speak to Amendments Nos. 170, 171, 173, 177, 318, 319, 324, 332, 334 and 336. I shall doubtless touch on Amendment No. 172, which is not one of my amendments but is relevant to what we are discussing at present.

These amendments make a number of mainly technical changes to the Bill's competition provisions. They cover three areas: monopoly references by the Director General of Fair Trading, mergers and efficiency scrutinies under Section 11 of the Competition Act.

Amendments Nos. 169, 170 and 173 correct two defects in the treatment of monopoly references. Our broad intention here is that the Director General of Fair Trading should be free to make monopoly references in relation to railway services when those services are transferred to the private sector. Accordingly, Clause 64(1) excludes services provided by a body corporate whose members are appointed by Ministers under an enactment. This description includes British Rail, but does not include Railtrack, which will be a government-owned company, or London Underground, which is not covered since it is a subsidiary of London Regional Transport and its members are not appointed by Ministers.

Amendment No. 170 corrects this by adding references to subsidiaries and to publicly owned railway companies to the end of Clause 64(1). The other two amendments bring the terminology of the Fair Trading Act better into line with that of the Bill.

Mergers are covered in Amendment No. 171. The mergers provisions in Clause 64 were intended to clarify the way merger controls would apply to railway services, in particular to franchised services. After further consideration, we have concluded that subsections (3) to (5) as drafted did not meet that objective. The amendment therefore does two things. It replaces most of Clause 64(3) in order to make technical improvements to the drafting. These provide that a person entering into a franchise agreement is to be regarded as bringing an enterprise under his control, which has the effect of making franchising subject to merger control.

The amendment also deletes Clause 64(4) and (5). These subsections were intended to make detailed provisions applying the market share test more precisely to mergers relating to railway matters. On further reflection, we believe that the subsections go too wide in referring to services between any two points, and they would have the effect of making virtually all mergers relating to railway services potentially liable to merger references. We therefore concluded that it was best just to rely on the general test of a 25 per cent. market share as set out in the Fair Trading Act, without attempting to define this further. However, we realise that this is an area of uncertainty for potential franchisees, in particular bus companies, and the Office of Fair Trading has been commissioned to provide written guidance for potential franchisees. We expect to be able to make this available shortly.

Amendments Nos. 175, 176 and 318 extend efficiency references under Section 11 of the Competition Act 1980 to publicly owned railway companies supplying network or station services. The intention is to enable these references to be made for Railtrack, while it remains in the public sector, as well as to BR. The remaining amendments are all technical or consequential. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, the Minister has included in the group of amendments Amendment No. 172 which is in my name. I should like to speak briefly to it. It concerns the monopoly conditions for bus operators with railway franchises.

Answering a probing amendment during the Committee stage, the Minister acknowledged the problems that the usual Competition Act test (one-quarter of the market in a significant part of the United Kingdom) could cause for bus operators who successfully obtain franchises for local railway services.

One of the main advantages of bus operators winning franchises will be the opportunities that arise to develop integrated feeder bus services that provide more effective competition to cars than either mode could achieve separately. We have that in London with the combination of London Transport and British Rail through-tickets which have greatly increased the efficiency and income of both groups.

If the existing bus services in the area, together with the rail service, would by themselves result in the competition test being exceeded, then the provisions of the Fair Trading Act 1973 would be applied and a monopoly reference could follow. Only the additional services run directly in association with the franchise would be excluded. That compromise would, to a large extent, enable the kind of development that is desirable on environmental grounds, while allowing bus operators to enter the railway market. I shall move the amendment when we reach the correct point.

The Earl of Caithness

My Lords, I understand the noble Lord's wish not to discourage co-ordination of rail and bus services. Let me say first that we have been very encouraged by the interest that the bus industry has shown in franchising. The Government are keen to ensure that sensible proposals which provide benefits to passengers are encouraged, and we quite understand the concerns of bus and coach operators about the uncertainties which merger controls can create. Officials in my department and in the DTI and OFT have been considering what guidance could be given to potential franchisees, specifically bus operators, to indicate how the award of a franchise would be viewed by the competition authorities. Discussions are still in progress, and I shall keep the noble Lord informed of any developments.

I cannot, however, accept that merger law should not apply to rail franchises. As the noble Lord will know, the mere fact that the relevant tests under the Fair Trading Act are satisfied does not mean that a merger will be referred to the Monopolies Commission for investigation, still less that there is any presumption that the merger operates against the public interest. However, there may be circumstances in which there are genuine concerns about the stifling of competition which need to be considered. As the noble Lord knows, the Government are proposing to delete subsections (4) and (5) of Clause 64 because, after detailed consideration, we thought they applied an inappropriately wide test to mergers relating to the supply of rail services. I hope that that goes some way to reassure the noble Lord in this somewhat complicated area.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister. There is a little encouragement in what he says about the department still looking for ways to try to implement the ideas behind the amendment. That is extremely encouraging, I am happy to leave the matter with the Minister. I shall not move Amendment No. 172.

On Question, amendment agreed to.

The Earl of Caithness: moved Amendments Nos. 170 and 171:

Page 73, line 16, leave out from ("by") to end of line 17 and insert:

("(a) a body corporate to which section 16 of this Act applies;

(b) a subsidiary, within the meaning of section 736 of the Companies Act 1985, of any such body corporate; or

(c) a publicly owned railway company, within the meaning of the Railways Act 1993."").

Page 73, leave out from beginning of line 26 to end of line 9 on page 74 and insert (", where a person enters into a franchise agreement as a franchisee, there shall be taken to be brought under his control an enterprise, within the meaning of section 63(2) of that Act, engaged in the supply of the railway services to which the agreement relates.").

On Question, amendments agreed to.

[Amendment No. 172 not moved.]

The Earl of Caithness moved Amendments Nos. 173 and 174:

Page 74, line 14, at end insert:

("(6A) In Schedule 5 to the 1973 Act (goods and services in respect of which the making of a monopoly reference is prohibited or made subject to special restrictions) for paragraph 5 (which relates to the carriage of goods or passengers by railway) there shall be substituted—

"5. Services for the carriage of passengers, or of goods, by railway, network services and station services, within the meaning of Part I of the Railways Act 1993, but excluding the carriage of passengers or goods on shuttle services (within the meaning of the Channel Tunnel Act 1987)."").

Page 74, leave out line 17.

On Question, amendments agreed to.

Clause 65 [Respective functions of the Regulator and the Director General of Fair Trading, and functions of the Monopolies Commission]:

The Earl of Caithness moved Amendments Nos. 175 to 177:

Page 75, line 26, after ("is") insert:

("(i)").

Page 75, line 27, at end insert ("or

(ii) a publicly owned railway company which supplies network services or station services.").

Page 76, leave out line 3.

On Question, amendments agreed to.

Clause 70 [Keeping of register by the Regulator]:

The Earl of Caithness moved Amendments Nos. 178 to 183:

Page 77, line 35, at end insert: ("() every assignment of a licence of which notice is received by the Regulator;").

Page 78, line 6, after ("agreements") insert (", access contracts and installation access contracts").

Page 78, line 9, leave out ("agreement") and insert ("contract or an installation access contract").

Page 78, line 12, at end insert:

("() every general approval given under section 20(3) above which is for the time being in force;").

Page 78, line 46, at end insert:

("(4A) Where an access agreement is entered into or amended, the facility owner or installation owner concerned shall send a copy of the access agreement or amendment to the Regulator not later than 14 days after the date on which the access agreement is entered into or the amendment is made, as the case may be.

(4B) A person who fails to comply with subsection (4A) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.").

Page 79, line 10, at end insert:

("() Any reference in this section to "assignment" shall be construed in Scotland as a reference to assignation.").

On Question, amendments agreed to.

[Amendment No. 184 not moved.]

Clause 74 [General duties of the Central Committee]:

Baroness Stedman moved Amendment No. 185:

Page 81, leave out lines 29 to 35 and insert ("to the provision of railway passenger services or of station services").

The noble Baroness said: My Lords, Clauses 74 and 75 concern the general duties of the central committee and the consultative committees. In moving Amendment No. 185, I should like the House also to consider Amendments Nos. 186 to 188, 316 and 317, 320 to 322, 325, 328 and 329, 331 and 333.

Perhaps I may deal first with my Amendments Nos. 186 and 188. These amendments were tabled at Committee stage and the Minister indicated that he would accept them. But in the flood of amendments being dealt with at speed at that time, I regret that I did not actually move them. I apologise to the Minister and to the House. I have retabled the amendments in the hope that the Minister is still minded to accept them. I am sure that at this late hour the House would not need me to rehearse again the arguments that I used at that time.

In regard to Clauses 74 and 75, if the committees are to enjoy public confidence, they have to be able to represent all the passengers, including those using open access services. To exclude those passengers from the committees' remit would make it impossible to achieve the Government's stated objective of ensuring that none of the benefit of the existing system is lost since the central council and the consultative councils currently represent all the passengers on the national railway network, including those who, by virtue of the Channel Tunnel Act, will use the international trains.

At present passengers perceive and use the railways as an integrated and co-ordinated network, not merely as individual routes. In some instances they will make journeys using a mixture of franchised open access trains, though they may not be able to distinguish between the different types. They must be able to bring to the committees any complaints which arise because of the absence of through-ticketing arrangements, missed connections, poorly co-ordinated timetables, or delays caused by an open access operator's train, a franchise service or vice versa.

It is neither sensible nor logical for services not operated on a franchise basis to be excluded from the committees' remit. No distinction is drawn between the subsidised and unsubsidised services of BR in the present passenger services; and no such exclusion applies in the remits of bodies of the existing privately owned, self-funding but publicly-regulated industries such as civil aviation, gas, electricity, water, telecommunications or broadcasting. It is unlikely to be intelligible or acceptable to passengers generally, or to be workable in practice, given that the track and station sharing, through-ticketing, connectional timetables, etc., will inevitably give rise to situations where the activities of operators providing services under different funding regimes will impact directly on each other.

Therefore the series of amendments that I have put forward are purely tidying up and drafting amendments. Amendments Nos. 185 and 187 have the effect of deleting the few remaining restrictions on consultative committees' considerations of the passenger service provided by British Rail and the franchises and on behalf of the franchising director.

In the same way it is necessary to expand the remit of the London regional passengers' committee in respect of London Transport services. This is done by my amendments to Schedules 11, 12 and 13, Amendments Nos. 316, 317, and 320 to 322. Amendment No. 316 deletes the reference to the role of the consultative committee in respect of the BR board under the 1968 Transport Act. The role of the new committees is now set out in Clauses 74 and 75 which are before us. It also deletes the references to the provision of funding and accommodation for the committee: new provisions are made in Schedules 2 and 3 of the Bill.

Schedules 2 and 3 also cover the remuneration of the chairman, and the provisions of the 1974 Act are deleted by Amendment No. 317 to Schedule 11. Amendment No. 325 to Schedule 12 acts as a saving amendment to ensure that the Channel Tunnel services remain within the committees' remit and consequential repeals to the Transport Act of 1968 in Schedule 13. I hope that the Minister is still feeling in a generous mood and will accept all or some of these amendments. I beg to move.

The Earl of Caithness

My Lords, perhaps I may deal with Amendments Nos. 185 and 187 first. These amendments would require the Central Rail Users' Consultative Committee and the rail users' consultative committees to investigate matters relating to all railway passenger services and station services provided by any operator. This would include open access operators and even the preserved railways.

Those services will be open to market forces and we therefore see no need to extend the remit of the committees to cover them. In order to be competitive these operators will have to provide services which meet passengers' needs at a price that the market will bear. That is consistent with the civil aviation industry and buses outside London which have no statutory consumer representation. Further, it would be quite inappropriate for the statutory consumer bodies to have a duty to comment on the heritage and leisure railways. Therefore, in regard to those two amendments, I recommend to the House that they are not accepted, should the noble Baroness wish to press them.

With regard to her other amendments, Amendments Nos. 186, 188, 316, 317, 320, 321, 322, 325, 328, 329, 331 and 333, I find her case well argued, powerful and totally convincing.

Baroness Stedman

My Lords, my halo will get very tight before this evening is over. I note what the Minister said. Perhaps we ask for too much in taking in the preserved lines and the heritage ones as well. Therefore, I beg leave to withdraw Amendment No. 185.

Amendment, by leave, withdrawn.

Baroness Stedman moved Amendment No. 186:

Page 82, line 6, leave out subsection (4).

On Question, amendment agreed to.

Clause 75 [General duties of consultative committees]:

[Amendment No. 187 not moved.]

Baroness Stedman moved Amendment No. 188:

Page 83, line 43, leave out subsection (3).

On Question, amendment agreed to.

Clause 79 [General restrictions on disclosure of information]:

Viscount Goschen moved Amendment. No. 189:

Page 88, line 23, leave out ("Part") and insert ("Act").

The noble Viscount said: My Lords, I beg to move Amendment No. 189 and will speak to Amendments Nos. 190 to 198 and Amendment No. 231 at the same time. These amendments clarify the scope and extent of Clause 79, which deals with restrictions on the disclosure of information. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 190 to 198:

Page 88, line 33, leave out ("Part") and insert ("Act").

Page 88, leave out line 38.

Page 89, line 20, at end insert:

("() for the purpose of facilitating the carrying out by the Comptroller and Auditor General of any of his functions under any enactment;

() for the purpose of facilitating the carrying out by the International Rail Regulator of any of his functions under any subordinate legislation made for the purpose of implementing the Directive of the Council of the European Communities dated 29th July 1991 on the development of the Community's railways;").

Page 89, line 24, leave out ("Part") and insert ("Act").

Page 89, leave out line 30 and insert:

("(b) the Fair Trading Act 1973;").

Page 89, leave out lines 35 and 36 and insert:

("(g) the Competition Act 1980;").

Page 90, line 12, leave out ("this Part") and insert ("Part I above").

Page 90, line 25, at end insert:

("() In this section—

"the Central Committee" has the same meaning as in Part I above;

"consultative committee" has the same meaning as in Part

I above and includes a reference to the London Regional Passengers' Committee.").

Transpose Clause 79 to after Clause 140.

On Question, amendments agreed to.

Clause 81 [Meaning of "railway services" etc.]:

The Earl of Caithness moved Amendment No. 199:

Page 91, line 15, leave out from ("network") to ("but") in line 16 and insert ("(or of any of the track or other installations comprised in a network)").

The noble Earl said: My Lords, in moving this amendment, with the leave of the House I shall speak also to Amendments Nos. 200, 202, 203, 208 to 211, 213, 214, and 263 to 267. These are technical amendments. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 200:

Page 92, leave out lines 8 to 11 and insert:

("and it is immaterial for the purposes of this subsection and that subsection whether or not the person who provides the service in question also provides or operates a network, or any of the track or other installations comprised in a network, or provides the service on behalf of a person who does so.

() In determining whether any service is a station service, it is immaterial whether or not the person who provides the service also provides or operates a station, or any part of a station, or provides the service on behalf of a person who does so.").

On Question, amendment agreed to.

Clause 82 [Interpretation of Part I]:

The Earl of Caithness moved Amendments Nos. 201 to 214:

Page 92, leave out line 20, and insert:

(""access agreement" means—

1. (a) an access contract entered into pursuant to directions under—
   1. (i) section 16 above,
   2. (ii) section (Access agreements: contracts requiring the approval of the Regulator) above, or
   3. (iii) Schedule (Access agreements: applications for access contracts) to this Act; or
2. (b) an installation access contract entered into pursuant to directions under section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network) or Schedule (Access agreements: applications for access contracts), as applied by that section;

"access contract" has the meaning given by section 16(6) above;

"access option" shall be construed in accordance with section 16(6) above;

"additional railway asset" has the meaning given by section 27(7) above").

Page 92, leave out lines 21 and 22.

Page 92, line 23, leave out ("for giving full effect to the right of any person") and insert ("or expedient for giving full effect to any permission or right which a person may have").

Page 92, line 40, at end insert:

(""experimental passenger service" has the meaning given by section 45(5) above;").

Page 92, line 42, leave out (" 16(10)") and insert (" 16(6)").

Page 93, line 11, at end insert:

(""installation access contract" has the meaning given by section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)(9) above;

"installation owner" has the meaning given by section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)(9) above;").

Page 93, line 14, at end insert:

(""light maintenance" (without more) means—

1. (a) the refuelling, or the cleaning of the exterior, of locomotives or other rolling stock; or
2. (b) the carrying out to locomotives or other rolling stock of maintenance work of a kind which is normally carried out at regular intervals of twelve months or less to prepare the locomotives or other rolling stock for service;

and, for the purposes of paragraph (b) above, "maintenance work" includes the detection and rectification of any faults;").

Page 93, line 16, leave out from beginning to ("also") in line 18 and insert ("is normally used for or in connection with the provision of light maintenance services, whether or not it is").

Page 93, line 32, leave out ("ancillary facilities") and insert ("installations").

Page 93, line 36, leave out ("carrying passengers or goods").

Page 93, leave out line 40 and insert ("any purpose comprised in the operation of that network; and").

Page 93, line 44, at end insert:

(""notice period" has the meaning given by section 45(11) above;").

Page 94, leave out lines 35 to 39 and insert:

(""station" means any land or other property which consists of premises used as, or for the purposes of, or otherwise in connection with, a railway passenger station or railway passenger terminal (including any approaches, forecourt, cycle store or car park), whether or not the land or other property is, or the premises are, also used for other purposes;").

Page 94, line 45, after ("thereon") insert (", whether or not the land or other property is also used for other purposes;").

On Question, amendments agreed to.

Clause 83 [Powers of the Board to form companies]:

The Earl of Caithness moved Amendment No. 215:

Page 95, line 24, leave out from second ("the") to ("sections") in line 26 and insert ("performance by the Franchising Director of his functions under").

On Question, amendment agreed to.

Lord Stanley of Alderley moved Amendment No. 215a:

After Clause 83, insert the following new clause:

("Effect of Act on duties of the Board

. Nothing in this Act shall affect the duties imposed on the Board, any wholly owned subsidiary of the Board, or any companies formed by the Board under this Act to comply with—

1. (a) the requirements of section 68 of the Railway Clauses Consolidation Act 1845 (making and maintenance of works for the accommodation of owners and occupiers of lands adjoining the railway), as if they were therein defined as "the Company";
2. (b) any orders made by the Minister of Agriculture, Fisheries and Food under the Pests Act 1954 designating areas as rabbit clearance areas as if they were therein defined as "the occupier"; and
3. (c) any notice served by the Minister of Agriculture, Fisheries and Food under the Weeds Act 1959 to prevent We spreading of injurious weeds, as if they were therein defined as "the occupier".").

The noble Lord said: My Lords, I tabled this amendment so as to obtain an assurance from the Government as to what will happen to British Railways' present statutory duty to maintain and provide fences and other works along railway lines as laid down at the present time in the 1845 Act. I hope that my noble friend will agree that this will be the responsibility of Railtrack. I hope too that he will be able to assure me that this responsibility will be passed on to whoever takes on Railtrack should it be sold. That responsibility is onerous, not least because of the ruling in the case of British Railways v. Herrington.

Likewise, under the Pests Act 1954 and the Weeds Act 1959 there is a duty on British Rail to control pests and noxious weeds on its land. I hope that those duties too will be the responsibility of Railtrack and any successor.

Perhaps I may mention that the present increase in the rabbit population, particularly on railway property, is causing problems and I fear that it is likely to get worse. Indeed, British Rail have recently paid £6,000 to a landowner in Worcestershire in compensation for rabbit damage. I beg to move.

The Earl of Caithness

My Lords, the statutory duty on BR to provide and maintain fences under Section 68 of the Railway Clauses Consolidation Act 1845 will transfer to Railtrack where operational track transfers to it. Residual BR will retain its responsibilities in respect of non-operational track. I do not foresee circumstances under which the duty could be diluted. The duty could only be altered by order or statute. Any such orders under Section 1 of the Transport and Works Act would be line specific and subject to prior consultation. The same is true for similar duties in legislation which pre-dates the 1845 Act. Similarly, we do not envisage that transfer of Railtrack to the private sector would make any difference.

With regard to the control of pests and noxious weeds, the position is very much the same. Railtrack will inherit responsibilities in respect of land transferred to it. Residual BR will retain responsibility for the land it retains. The Railways Bill does not alter or affect the powers of the Ministry of Agriculture under the Pests Act 1954 and the Weeds Act 1959. I am sorry that my noble friend is having trouble with rabbits. Some people like rabbits.

Lord Stanley of Alderley

My Lords, I do not like rabbits. However, I thank my noble friend for that answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 84 [Powers of the Board to make transfer schemes]:

The Earl of Caithness moved Amendment No. 216:

Page 96, line 23, after first ("of") insert ("effecting or").

The noble Earl said: My Lords, This is a technical amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 217:

Page 96, line 25, leave out ("effecting any transfer contemplated by section 25") and insert ("facilitating the performance by the Franchising Director of his functions under sections 21 to 33").

On Question, amendment agreed to.

Viscount Goschen

My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and. on Question, Motion agreed to.

House adjourned at twenty-two minutes past eleven o'clock.