Railways Bill

HL Deb 14 October 1993 vol 549 cc258-325

3.24 p.m.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, I beg to move that the Report be now received.

Moved, That the Report be now received.—(The Earl of Caithness.)

Lord Clinton-Davis

My Lords, last Tuesday I spoke to the House on a somewhat similar Motion in order to register a protest about the late tabling of amendments and the large number of amendments that were tabled by the Government in relation to pensions. I also referred to the extraordinary late tabling of amendments for the Report stage. There are 54 pages of amendments before us today. Most of them are government amendments which were tabled extremely late in the day.

I said on Tuesday, and I repeat it again, that we are grateful to the Minister for having ensured that a résumé of those amendments was placed in our hands. But it is difficult for us to deal with this number of amendments within a day of the pensions issue, which was most technical and complicated. When the Minister replied previously he apologised to the House for the quantity of amendments. He did not explain why they had been tabled at such a late stage. After all, the Government have had the whole summer right up to the beginning of October. These amendments did not begin to appear until the first week of October.

That is not good enough. It is an abuse of the procedures of this House. It is not fair to noble Lords who wish to participate in the debates in a meaningful way. It is not right that these matters should be dragooned through the House in the way that the Minister intends. I am sure that it is not his personal intention to do so because, strictly speaking, this area of responsibility is nct his. However, he is the Minister present and he must carry the can for his colleagues.

When I first looked at the amendments I almost wanted to give up. It is all very well for the Minister to say that most of them are technical; they still have to be studied. We still have to try to take expert opinion on them because none of us is expert in the technicalities of these matters, including the Minister. Consequently, while I do not propose to press the matter to a Division I believe that it is wholly appropriate to register our protest in the strongest possible terms.

Noble Lords

Hear, hear!

Lord Clinton-Davis

My Lords, I hope that this situation will prove to be a lesson to the House. I hope that the noble Lord the Leader of the House will take it on board. Quite appropriately, the Chief Whip for the Opposition requested more time for the discussions to take place. Those requests were rejected not once but on a number of occasions. But there is adequate time because the new Session will not begin until 18th November. In view of that we are entitled to ask the Minister why further time for discussions was refused. That was not right. I shall not make any more of it now but the lesson that we should learn is that the House should not he taken for granted any longer, as has happened on this occasion.

Lord Simon of Glaisdale

My Lords, the protest of the noble Lord, Lord Clinton-Davis, is abundantly justified because what has happened today is not an isolated occurrence. It has happened again and again, Bill after Bill and Session after Session. It was only a Session or two ago that a Bill which originated in your Lordships' House came back from the other place with amendments, all government amendments, which ran into more pages than did the Bill when it was sent to the other place.

On this occasion there are 336 amendments. Naturally, the opposition parties and government Back-Benchers wish to move amendments. However, it is extraordinary that three-quarters of those 336 amendments are government amendments. I have no doubt that the noble Earl will say, as is always said on these occasions, that many of the amendments are technical. No doubt he will say that many of them are in response to undertakings given in Committee. But that does not cover three-quarters of 336.

We are bound to ask, as this happens time and time again, why it happens. I believe that there are three reasons for it. The first is the general culture of over-government from which we suffer. The second reason is an aspect of that; that is, that we have far too much legislation. Noble Lords who heard the discussion last Thursday can have been left in little doubt that the problem was due to over-legislation.

Over-legislation itself is due to two factors: ambition of Ministers; and the tinkering of administrators trying to improve details of the administration. The other main reason is that we persist in a style of drafting in defiance of the recommendations of the Renton Committee. We persist in trying to draft in detail and trying to cover every envisageable situation instead of, as was recommended, laying down broad general rules for the courts to interpret, which they do without difficulty.

Those being the reasons, we are bound to ask what can be done to prevent the continuation of that deplorable state of affairs. The remedy of over-government and over-legislation must lie in the Future Legislation Committee of the Cabinet. Fortunately the noble Lord, the Leader of the House, is, I apprehend, a member of that committee and I trust that he will use his influence to mitigate the spate of legislation which Ministers desire to further.

As regards the style of drafting, the time has really come when the recommendation of Sir Robert Andrew, an extremely experienced administrator, is recognised. He was asked to report on government legal services. Recognising the mischief to which your Lordships' attention is directed today, he recommended that the parliamentary draftsmen should be responsible to the Law Officers' department. At present they are responsible nominally to the Prime Minister; in practice, of course, they are irresponsible, there being no department capable of telling them to do what the Renton Committee recommended.

Nor is Sir Robert Andrew alone in his view. Very recently there was an admirable report by the Hansard Society, presided over by the noble Lord, Lord Rippon of Hexham, which endorsed that recommendation. So today will not be wasted if those two avenues are explored vigorously with a view to halting the spate of legislation.

3.30 p.m.

Lord Peyton of Yeovil

My Lords, I do not wish to say anything on the general issue or to add in any way to the discomfiture which my noble friend must feel and in which I have a good deal of sympathy for him. But it would be of great help not only to me but also to other noble Lords if my noble friend could give some indication of when he hopes, following from his talks, to be able to table a government amendment dealing with pensions and when that is likely to be discussed, because it is not at all clear from the present groupings.

Lord Stoddart of Swindon

My Lords, I support my noble friend Lord Clinton-Davis and the noble and learned Lord, Lord Simon of Glaisdale. It really is unfair to this House that time and time again, not simply on this Bill but on other Bills, noble Lords are faced with a mass of new amendments which they have not had the time to consider or on which to seek advice. Before the Summer Recess, the Education Bill went night after night after night into the early hours of the next morning. That legislation was ill-prepared and indeed, I fear, ill-digested. The noble and learned Lord, Lord Simon of Glaisdale, is absolutely right. We have far too much legislation and we have legislation which is ill-prepared.

What worries me is that so far we have 300 amendments to this Bill. That means that the Bill was imperfect. That has now been recognised. But how many more amendments need to be made to make it more perfect? The reason for the amendments is that the legislation has not been properly thought out before it is brought before Parliament and the form in which it has been brought forward is not good. In other words, it has not been properly prepared.

When legislation has not been properly thought out and when the implications have not been understood, it causes enormous difficulty and hardship not to Members of Parliament and to Members of your Lordships' House but to the people out there, the people on the ground; for example, the people who went to court and were fined thousands of pounds under the Criminal Justice Act, which had not been properly thought out and, indeed, was so badly thought out that it had to be repealed within six months of coming into operation.

The noble and learned Lord, Lord Simon of Glaisdale, will remember the watches of the night which we both spent on the child support legislation. Again, we challenged the Government that that was ill thought-out legislation. We were pooh-poohed. The Government said, "This is good legislation. We want to catch errant fathers". The agency is now operating under that Act but it is not catching errant fathers. It is catching fathers who have been meeting their obligations; and in some cases, that is being done with the consent of the courts of this land. The people who are getting away with it are the errant fathers whom the legislation was supposed to catch.

This House is right and my noble friend is absolutely right to raise the question so that the Leader of the House will understand what we are talking about and will use his influence, which is considerable, to try to ensure that in future we have well thought-out legislation which is properly prepared, well drafted and means what it says. We should have much less of it and we should have sufficient time at reasonable hours to discuss it properly in both Houses of Parliament.

Lord Annan

My Lords, my noble and learned kinsman Lord Simon of Glaisdale is entirely right in what he says. But I am reminded of the quotation: The fault, dear Brutus, is not in our stars, But in ourselves". We are so zealous in moving amendments that we add to the amount of material which comes back to us in the form of government amendments. That seems to me to be one problem of which we should all be cognisant.

So many amendments come before us with people demanding that something be put on the face of the Bill—indeed, I have heard it time and time again—when, in reality, it is never necessary to do so. I realise that the process depends to some extent on trust between the Opposition and the Government. However, we did not see much trust, for example, on Tuesday last when we discussed the memorandum on pensions. There, again, it was argued that the proposal must be put on the face of the Bill. I wonder whether that fact could be taken into account by the noble Lord the Leader of the House.

Lord Merlyn-Rees

My Lords, perhaps I may refer to that proportion of the problem amendments to which the noble and learned Lord, Lord Simon of Glaisdale, referred. I believe it was said that one-third of them are purely technical amendments. I seem to remember the practice in another place. If they are so technical, there is no point in having a great big argument about them. However, they are very difficult to understand when read out by the Minister concerned on the advice of the legal advisers in his department. Therefore, why not circulate them? That is what we used to do. In that way, people can read them the day before and it speeds up the process. There is nothing political involved.

The Earl of Caithness

My Lords, I am sorry that the noble Lord, Lord Clinton-Davis, felt it necessary to return to the issue solely because we had a very full discussion on exactly the same issue only two days ago. Nothing has altered the situation as I then outlined it to the House. At that time, I indicated that I would be tabling an additional 40 or so amendments for next week's proceedings. I tabled the amendments on Tuesday and they were printed and available to your Lordships yesterday. No further government amendments for the Report stage have been tabled, nor are any in contemplation save that relating to the point made by my noble friend Lord Peyton about the role of British Rail in guaranteeing new pension schemes.

I can tell my noble friend Lord Peyton that the issue will be discussed again on Wednesday. However, exactly when the amendment will be tabled will depend very much on those discussions. It is not until we have had such discussions that we can finalise our thoughts on the amendment. I had in my mind what the amendment would look like but, having had the further discussion during Tuesday's debate, I believe it would be wise to await the outcome of the proposed discussion between my noble friend and my right honourable friend the Secretary of State. As has been my practice, I shall of course circulate to those noble Lords who are interested the amendment and the reasons for it.

All the Government's amendments—and again, I reiterate my apologies to the House for their quantity—were tabled at least one week in advance of their consideration. I believe that that is not an unprecedented state of affairs. Indeed, in my time, I have seen a number of Bills pass through your Lordships' House. While I recognise the concerns that have been expressed, it is only right for me to point out, once again, that almost all of the government amendments are purely of a drafting or technical nature. I must emphasise the fact that I circulated them to the noble Lords, Lord Clinton-Davis, Lord Carmichael of Kelvingrove and Lord Tordoff. Moreover, my officials offered a briefing, of which the noble Lord, Lord Tordoff, took advantage, to explain the very mundane nature of such amendments. If any noble Lord would like a copy of such letters in future, I shall be only too pleased to arrange it.

The Bill before the House is undoubtedly a complicated one. However, we made the utmost effort to ensure that the amendments were tabled in good time. So far as concerns the timing of the Report stage—a point raised, yet again, by the noble Lord, Lord Clinton-Davis—I can only reiterate to the noble Lord that it is a matter for the usual channels. Having heard the noble Lord on that point, I am sure that the House now looks forward to hearing his speech on the first amendment and I look forward to responding to it.

Lord Clinton-Davis

My Lords, I make no apology at all for having iterated the protest today. I am very pleased to have received support from many of your Lordships. While reiterating his apology for the quantity of amendments, I think that the Minister might have apologised for their lateness, but he did not do so. When the noble Earl said that the amendments were tabled on Tuesday and printed yesterday, does he really consider that we should simply take for granted the assertion that they are technical and that they are incapable of improvement? The Government have indicted themselves on so many occasions during the currency of the Bill that they really do owe the House an apology.

I believe that the most important point was made by the noble and learned Lord, Lord Simon of Glaisdale. We hope that this unfortunate precedent will not be repeated. I also hope that the noble Lord the Leader of the House will recognise the concern expressed throughout the House. Having said that, I agree that we should now proceed with the debate.

On Question, Motion agreed to.

3.45 p.m.

Lord Clinton-Davis moved Amendment No. 1: Before Clause 1, insert the following new clause: ("Duty of Secretary of State .—(1) The Secretary of State shall promote the provision of a safe, efficient and comprehensive railway network to meet, in conjunction with other forms of transport, the economic, social and environmental requirements for the transport of passengers and goods in the United Kingdom. (2) In pursuing this objective the Secretary of State shall take appropriate steps to—

1. (a) increase the use made of the railway network;
2. (b) encourage the transfer of suitable traffics from roads;
3. (c) secure participation by private sector organisations together with the British Railways Board and its subsidiary companies in investment in the railway network and the provision of services;
4. (d) promote co-operation between all persons providing railway services and persons providing transport services by other modes so as to achieve a coherent network of transport services throughout the United Kingdom;
5. (e) ensure that value for money is obtained from public expenditure on the railway network and services on it; and
6. (f) ensure that services supported improve the quality and responsiveness of services available to meet customer requirements.

(3) The Secretary of State shall publish from time to time a review of the operation of the railway network and proposals for its further development.").

The noble Lord said: My Lords, we dealt with this issue during the first debate in Committee some time ago. We expressed the view—a view supported by many noble Lords—that there was a failure in the legislation to set out a statement of policy objectives at the very start of the Bill. I recognise that the flavour of the policy is discernible throughout the Bill, but too much of the substance is left to the discretion of the Secretary of State and, indeed, that of his officials.

The overall purpose of the railway industry, which is so critical to our nation's future prosperity, is completely overlooked in the Bill. Therefore, with the proposed new clause, we seek to remedy the situation. Subsection (1) of the amendment accepts the spirit of the White Paper New Opportunities for the Railways and requires the Secretary of State to take a benign and positive interest in promoting safe and efficient rail transport which is well co-ordinated with other modes. We have made that point over and over again, but without effective response from the Government.

The word "promoting" in that context implies no more and no less intervention than the Government already intend. Therefore, the Government should have no difficulty with the objective proposed in view of their commitment which they have stated so often to improve the environment, their adoption of the package approach to transport investment by local authorities and their endorsement of key projects such as the Heathrow and Manchester airport rail links or park-and-ride schemes linked to improved bus services or tramways in many cities.

Subsection (2) of the proposed new clause examines in rather more detail how the Secretary of State may direct the gentle breezes to which the new bureaucracies created by the Bill—and, indeed, there are many—and the private sector will need to respond in steering their own courses around the rocky islets of the new archipelago that the railway network is set to become. It reflects the critical concepts of transferring appropriate traffic from road to rail, for which the Secretary of State has powers to grant aid expanded by the Bill.

We recognise the need to encourage private sector participation. I believe that that is now endorsed by everyone in the House. The only proviso is that we would do it in a different way. Nonetheless, private participation has been accepted as a critical way of proceeding and obtaining the appropriate and necessary investment. We also need to set a framework for sensible co-operation. Several local authorities have done so with the privatised bus industry. Further, we must continually strive for value for money and quality services in return for public support and investment. All those factors are dealt with in subsection (2).

I turn now to subsection (3) which recognises the need for the Secretary of State to account for the success, or otherwise, of his policies and to communicate the Government's future intentions in the form of a review. Ideally, this should be in the form of a paper to be laid before Parliament which is subject to comment by the railway industry and the public. When we last debated this question of overall objectives, a number of your Lordships favoured a clear statement of principles of the type which we have tried to set out in this new clause. The Government have frequently asserted that there is little between the Government and the mover of the amendment on the issue. We have heard that again and again when we have debated a number of amendments. I suggest that the Government Minister might appropriately use that term on this particular occasion in dealing with this amendment.

If we adopted the amendment, it would strengthen the Bill and it would provide greater comfort to those who seriously doubt the wisdom and the practicality of the Government's detailed proposals. There is clearly a need for all this to be set out, because on any showing, whether or not we agree with what the Government are doing, the changes that are being presaged here are of considerable magnitude. For over 160 years railways have been managed as functional entities. Train, track, stations and maintenance depots have operated under one hand, so to speak. Now the Government aim to produce independent management of all these elements. All the essential components of the railway are to be bound together by contractual agreements.

The Government express great confidence that it will all work superbly. That confidence is not based on any historical or current precedent but is simply a hope buttressed by the Government's ideological positions. In my submission, what is much more likely is that the railways will be in for a period of considerable turmoil and uncertainty while this extraordinary experiment, unwanted by the overwhelming majority of people in this country, is enabled to proceed. Who knows whether ignominious collapse is not all too likely eventually? What is clear is that corporate rail users in the tourism and freight industries are holding back on commitment and investment while they wait to see what happens. That is why it is overwhelmingly important that a statement of principles should be set out along the lines that I have already indicated. I beg to move.

Lord Tordoff

My Lords, this is an area that we discussed at some considerable length when we considered one of my amendments in Committee. I dare say we do not need to take quite so much time on it today as we did then. Nevertheless, this is an important matter. One had some hope at that time that by the time the Committee stage had been completed we would have had a clearer idea of what the fundamental purpose of this Bill was. I am no clearer now than I was then. This is not a privatisation Bill at all. It is a strange compendium of ideas which have been strung together, many of which, as we have heard, have been changed in the past few days. New clauses have been introduced, and the whole shape of the Bill changes before our very eyes. I should have thought there was therefore even more reason for the Government to have made a statement somewhere at the beginning of the Bill on precisely what they intend to achieve with this Bill. That is the purpose of Amendment No. 1, which has my support.

Lord Boyd-Carpenter

My Lords, the amendment would have a drastic effect upon the whole operation of the Bill, and I think it is fair to say is so intended. It would be discourteous to describe it as a wrecking amendment; but it is certainly an amendment which would substantially alter the purpose and effect of this Bill, which is an important part of the Government's legislative programme. For that reason, I have no doubt that my noble friend the Minister will find it wholly unacceptable. In support of those propositions, I invite your Lordships' attention to the first subsection of the proposed new clause which states: The Secretary of State shall promote the provision of a safe…railway network". "Promote" is a word that is susceptible of a good many different meanings; but there is a clear intention there to put on the Secretary of State the ultimate obligation for securing that the system which the amendment proposes is operated. It therefore goes right against the privatisation approach which is the background to the Bill, and again it is intended to.

We must face the fact that there is a clear conflict of view between those on the Benches opposite who believe in public ownership and public control, and are struggling now to preserve as much of it as they can under this Bill, and those on this side of the House who take the view that nationalisation of the railways has been a disaster and that it is necessary to modify and amend it considerably and introduce considerable elements of privatisation. That of course is where the clash comes; and that clash is clearly illustrated openly and frankly by the very terms of this amendment.

The only other particular aspect of the amendment to which I invite the attention of your Lordships is subsection (2) (c) of the proposed new clause. There the Secretary of State is given an obligation to, secure participation by private sector organisations together with the British Railways Board". In other words, the British Railways Board would be left largely in control over some element of private support. That again is no doubt a perfectly understandable attempt by noble Lords opposite to salve as much of nationalisation as they can. However, for that very reason, it would seem to some of us, if enacted, to defeat the whole purpose of a Bill which is designed to move our railway system much more into the private sector. I hope therefore that the Minister in his usual courteous way will none the less indicate that this amendment is wholly unacceptable and should be rejected.

Lord Stoddart of Swindon

My Lords, I support the amendment. It is an extremely good one and one which proposes a policy which could be used to assist in the Government's own policy although we are opposed to that policy generally. It is certainly not a wrecking amendment. Let us get that quite clear at the outset.

I also wish to place on record my complete disagreement with the noble Lord, Lord Boyd-Carpenter, that rail nationalisation and the public ownership of the railways has been a disaster. It has not been a disaster. Indeed, British Rail, against a background of great difficulties, has kept a railway system in operation in this country when many people would have liked to see it destroyed and the railways concreted over so that cars and lorries could be used instead. That has been put forward by some people as a serious proposition.

What has been wrong with the railways is not that British Rail has run them badly, but rather the policy of successive governments not to give railways the support which they need, which is desirable and which would have given this country a decent, integrated transport system over a long period of time.

The Beeching cuts damaged the railways. It was the mad rush towards road freight and individual car transport that helped to kill the railways. The Beeching cuts should never have been made in the way they were. We should have decided on our long-term policy on public transport and made proper provision for all types of transport. Instead, we gave great priority to road transport and little priority to rail transport. That was the great mistake. It was not the failure of British Rail. The sooner we and the Government understand that, the better. It may help to make us mend our ways.

My noble friend was correct in underlining that we in the. Labour Party are not opposed—and I am not opposed—to private capital within the railway system. However, what we cannot understand is how the franchising companies are going to run good services on a network which they do not own and maintain. That is my difficulty. I cannot see how franchisees will be able to give a proper service unless they know what type of track there will be, how that track will be maintained and how the signalling service and the stations will operate. Unless they know how those will develop, how on earth can they provide a service? For me, that is the great difficulty.

The amendment proposed by my noble friend and the noble Lord, Lord Tordoff, provides an opportunity, even within the Government's own policy and legislation, to ensure that we have a reasonable transport system with a good railway system and also a good road system.

The Government are to spend £23 billion on roads at a time when they are operating a budget deficit of £50,000 million a year. That appears to me to be madness. Savings could be made in that programme.

Let us consider what is happening in my own part of the country. The Government propose not only to build a 14-lane road alongside the M.25 but are going even further. They are going to build an extra two lanes on the M.4 between Junction 4 and Junction 12—between Heathrow and Reading. That road is congested only at peak periods, for three hours a day. Yet the Government are going to spend money on putting in two extra lanes to accommodate that peak. At the same time the railway service is being cut. That is happening in other parts of the country.

What on earth is the sense of that? One would have thought that logic would demand that the rail service was increased and improved and the money saved on the widening of the M.4. That logic appeals to me. Why on earth does that logic not appeal to the Minister and the Government It is logical to provide better public transport services rather than spending billions of pounds on building roads which will simply attract more traffic and destroy the environment and our countryside, which we must protect.

I wish to make one further point. We have just agreed that lorries will be heavier. They will be 44 tonnes instead of 38 tonnes. They will trundle past my house into the centre of Reading, and past millions of other houses into the centre of towns to deliver goods day and night. They will cause damage to property and the countryside, noise, pollution and so on. Yet in most parts of the country—and this could be provided in other parts—we have the means to take Nods to one place for distribution to the centre of the town—by railway. That is how it used to be done.

If we had a transport policy, we would be able to do those things. It is a great shame that we did not build on the policies introduced by the noble Lord, Lord Peyton, who was a good Minister of Transport. He tried in his own way to deal with the problem by making grants for private sidings. That was a marvellous idea, aimed at trying to get traffic back on to the railways. Unfortunately, the branch lines did not exist to carry the traffic from the privatised sidings to the main line.

There are ways in which we could help all forms of transport. The Government could save on their public borrowing requirement if we only thought out our transport policies, considered them in conjunction with each other and developed them to meet the needs of all travellers, all freight operation and all the people of this country. The amendment would enable us to do that. It is no good hoping, because the Government will not: accept it—in public, anyway—but I wish that they would consider it, at least in private.

Lord Hylton

My Lords, I differ from the noble Lord, Lord Boyd-Carpenter. I do so because it seems to me that the division of opinion, both in your Lordships' House and in the country at large, is not for or against public ownership but is rather for or against an integrated public and private transport system. In my view, such a system should make maximum use of transport in common, for reasons of safety, fuel economy and avoidance of pollution.

What we need is the best possible mix of transport modes. That is why I want to stress the words "in conjunction" which occur in line 2 of the proposed new clause. I hope that the new clause will find favour with your Lordships.

Lord Annan

My Lords, I rise with some diffidence because I do not know why the noble Lord, Lord Tordoff, said that he did not know what the purpose of the Bill was. The purpose of the Bill is to introduce competition into the rail system, but not merely competition. It is also intended to introduce incentives.

Lord Tordoff

My Lords, I am grateful to the noble Lord for giving way. If that is the purpose, perhaps he could point to the place in the Bill where that is stated.

Lord Annan

My Lords, I cannot point to the phrase "furtherment of competition" but it is integral to the whole Bill. Moreover, it is not just competition, it is the provision of incentives which the Government are trying to introduce. That is one of the many reasons why very radical procedures are being advocated by the Government—the detachment of the network (the rail track) from those who operate upon it.

One must recognise that in the past competition among the railways ceased around 1870. From then on, there was no competition between the different rail companies. Certainly in the post-1918 world there was no competition between the GWR, the LNER and the LMS. I believe that the Government have brought the Bill in in an attempt to do that.

There is another point that I would make to the noble Lord, Lord Stoddart of Swindon, whose appeal on behalf of British Rail was moving. I cannot help thinking that the noble Lord left out one issue which brought British Rail great difficulties—the ruthless action of the rail unions. Who can forget the actions by ASLEF during the 1950s and 1960s There were constant strikes, and great inconvenience was caused to passengers. It reached the point where some passengers were so livid with fury that they tried to lynch the wretched drivers of the trains.

Those terrible dis-economies which were brought upon it made British Rail an old spavined, broken-mouthed horse which can no longer operate properly. It needs a radical change in working practices before we can begin to build an efficient rail system. That is why I find it difficult to support the amendment, in particular because one paragraph refers to co-operation between British Rail and other private companies. I regret the amendment which the noble Lord, Lord Peyton, moved with such effect, rather like a picador putting the banderillas into the back of his noble friend on the Front Bench. He succeeded in that amendment. Whether the Government in another place will seek to reverse that decision of this House, I do not know. But it is ridiculous to bring British Rail back into the competition. It is precisely for that reason that I shall not be able to support the amendment before us.

4.15 p.m.

The Earl of Caithness

My Lords, the amendment enables us to begin our Report stage with a wide-ranging debate about the Bill and its relation to government transport policy generally. That is what we did at the opening of Committee stage: and I welcome the debate again today. I noted a difference between what the noble Lords, Lord Annan, and Lord Tordoff, said. It is apparent to me that the more we progressed the Bill through Committee stage, the clearer became the awareness of what the Government were driving at and what their policy was. The more that we discuss the Bill the greater becomes the realisation that the policy is coherent and hangs together.

I say to the noble Lord, Lord Clinton-Davis, that I believe Amendment No. 1 to be unnecessary for this reason. The Railways Bill will itself promote the provision of a safe, efficient and comprehensive network. In conjunction with other forms of transport it will also enable our transport system as a whole to meet the economic, social and environmental needs of the country.

The network will be a safe one. Safety has been paramount in the formulation of our policy. Noble Lords may recall that some time ago the Health and Safety Commission produced a report with 37 recommendations. The Government and the chairman of British Rail welcomed the report and accepted all those recommendations. The new safety regime will ensure that high safety standards can be maintained. Work is now in hand to implement that new regime, including preparation of regulations under the Health and Safety at Work Act.

The railways will be more efficient under our proposals. All the evidence of past privatisations indicates that the private sector is much better than the public sector at delivering the services customers want in an efficient manner. In saying this, I do not wish to denigrate the existing British Rail workforce and management. Most of the blame lies in the nature of BR as a nationalised industry, with its monolithic structure, and restrictions which private sector companies do not face, in particular when it comes to investment.

The network will also be comprehensive. Franchising will not be limited to profitable lines. Indeed, the whole purpose of franchising is to allow the private sector to run services which, on purely commercial criteria, would not be viable. With the continuance of government subsidy through payments to franchisees, there is no reason to expect a reduction in the size of the network. There may be closures where passenger demand no longer makes a service socially necessary. That happens at the moment. But the spectre of a second round of Beeching cuts is nothing more than a scare story.

Turning to the specific steps which the amendment would require the Secretary of State to take, again I believe that the Bill, as it is already, will deliver the results which I am sure all noble Lords would support. Open access will allow new operators to come on to the railway and offer additional services. That will be particularly important in the freight sector where there is a growing amount of interest from operators keen to run their own freight trains.

Clauses 133 and 135 of the Bill already provide for encouraging more freight traffic to switch to rail. That is what the noble Lord, Lord Stoddart of Swindon, has argued for. We have beaten him to it. The provision is in the Bill.

Clause 133 establishes a new grant in respect of track charges for freight flows which would otherwise disappear or could not be attracted to rail, subject to an assessment of the environmental and other benefits. Clause 135 widens the scope of the existing freight facilities grant scheme. The scheme provides financial assistance for capital expenditure on rail-related equipment where there are clear environmental and other benefits. About 10 per cent. of freight traffic on the railway today has benefited from grants under the existing scheme.

We certainly do not oppose co-operation between different modes of transport where that is in the interests of passengers. The fact that an activity is in the private sector does not mean that operators cannot co-operate. There is every reason to think that, for example, a bus operator and a franchisee will integrate their services so as to provide a better service to their passengers because a more attractive service to the passenger will bring more revenue to both operators.

We believe that our proposals will lead to better value for money for the taxpayer. As I said, the private sector should be able to operate more efficiently than the public sector. In time, this should require a lower subsidy to provide a given level of service.

Finally, the private sector is generally more responsive to customers' needs. Anyone who has experienced British Telecom, British Gas and British Airways—to take just three examples—both before and after privatisation, would agree with me. We want to see that same improvement on the railways.

Turning to the last subsection of Amendment No. 1, I do not think it appropriate for the Secretary of State to publish a periodic review of the operation of the network. The Secretary of State will be appointing a rail regulator and a franchising director, each of whom will be required to produce an annual report on their activities during the preceding 12 months. I refer noble Lords to Clauses 72 and 73 for more details of what must be included in those reports. Railtrack will also be producing an annual report dealing with investment in the network.

I must say to the noble Lord, Lord Clinton-Davis, that I cannot see what a periodic report by the Secretary of State reviewing the operation and possible future development of the network would add. It is better to leave such reports to the people and organisations with specific responsibilities under the new arrangements. They will know far more about those matters than will the Secretary of State and officials in Marsham Street.

The noble Lord, Lord Stoddart of Swindon, mentioned the amount of money being spent on roads. He referred to the need for public transport. It is not, I believe, well known that about half the departmental budget at present goes on public transport and half goes on roads. Yet only 10 per cent. of traffic goes by public transport. That includes freight, buses, passenger trains and underground trains. It can therefore be argued that public transport is receiving a disproportionate amount of the departmental budget. I do not complain about that: I do not subscribe to that view. It is right that that amount should go into public transport. However, it is quite wrong to say that nothing is going to public transport. A considerable sum of money is going into public transport.

Lord Clinton-Davis

My Lords, it has been an interesting debate. I cannot envisage the noble Lord, Lord Peyton, as a matador or a toreador, but the image is an interesting one. It is the effect that matters, and the noble Lord has had, and I hope that he will continue to have, considerable effect on the Government during the debates, not simply on franchising so far as concerns British Rail, but on other issues too. We shall await the effect that he has on pension issues.

I noted the distinction between the approach of the Minister and that of the noble Lord, Lord Boyd-Carpenter, who seemed to be helping us to make our case. I accept that it was perhaps not deliberate, but that is what he did.

Lord Boyd-Carpenter

My Lords, perhaps I thought that the noble Lord needed help in making a case because he made a very bad one.

Lord Clinton-Davis

My Lords, the noble Lord may say that we made a very bad case, but the Minister went on to say that it was unnecessary because the Government accept virtually all the principles that we set out. That is an extraordinary state of affairs. However, it is not the noble Lord, Lord Boyd-Carpenter, who is responsible for government policy, although he will never miss an opportunity to support it, whatever its merits.

I wish to turn to what the noble Earl, Lord Caithness, said. He did not accept that this was a wrecking amendment, not at all. What he said was that it was unnecessary. He went on to say that, going right through the principles which we have elaborated on in the amendment, the Government supported virtually all of them. He said that he was quite satisfied that safety would be preserved and that the railways would become more efficient. He asserted that one could take as a precedent past privatisations, but some of us who participated in the debates will recall the noble Earl saying this is not like past privatisations, this is sui generis. That is the situation. Whether the noble Earl is right or wrong about past privatisations, he cannot take any comfort from what has occurred previously.

The Minister says that there will be a comprehensive approach to railway transport. That is the very thing that it will not be, because the Government are destroying the integrity of the current rail network. That is why it is important to make that assertion in the new clause. He says that co-operation is not impossible in the private sector. That is perfectly true, it is not impossible, but it has not worked terribly well in the bus sector. It has not worked well when we come to the provision of timetables or the provision of services which ought to have been integrated and which have been destroyed as regards the bus sector. So that is not a particularly good precedent.

The noble Earl says that the Government will do their best to increase the use made of the railway network arid encourage the transfer of suitable traffic from roads. I remember that the former Secretary of State, Malcolm Rifkind, said that that was his purpose. Why is the Minister not prepared to say so in the Bill? It is not stated anywhere in the Bill in a comprehensive way what is its purpose. We know that the Government support privatisation: of course they do. But if they are not unhappy with what is stated in the principles, why not accept them? Our case is that they are not made on the face of the Bill at all.

On the question of the publication of a review of the operation by the Secretary of State, what has been missed by the Minister is that the regulator, the franchise director, will not be responsible for commenting upon the way in which the proposals will work out in practice in relation to other modes of transport. They will not comment on the question of cohesion or integration with other modes nor on the relationship between road and rail and so on. That is not within their terms of reference. That is why we say that it is extremely important that the Secretary of State should undertake that obligation.

It is quite clear that the noble Earl is not prepared to accept the amendment, therefore we shall test the opinion of the House on the matter.

4.24 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 103: Not-Contents, 135.

Division No. 1
CONTENTS
Addington, L.	Jay of Paddington, B. [Teller.]
Airedale, L.	Jeger, B.
Alport, L.	Jenkins of Putney, L.
Archer of Sandwell, L.	Kagan, L.
Ardwick, L.	Kilbracken, L.
Ashley of Stoke, L.	Lawrence, L.
Auckland, L.	Listowel, E.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Barnett, L.	Lockwood, B.
Birk, B.	Lovell-Davis, L.
Blackstone, B.	Macaulay of Bragar, L.
Boston of Faversham, L.	McCarthy, L.
Bottomley, L.	Mackie of Benshie, L.
Brimelow, L.	McNair, L.
Broadbridge, L.	Mallalieu, B.
Bruce of Donington, L.	Masham of Ilton, B.
Campbell of Eskan, L.	Merlyn-Rees, L.
Carmichael of Kelvingrove, L.	Molloy, L.
Castle of Blackburn, B.	Monkswell, L.
Chester, Bp.	Morris of Castle Morris, L.
Clinton-Davis, L.	Nicol, B.
Cocks of Hartcliffe, L.	Palmer, L.
Dahrendorf, L.	Peston, L.
David, B.	Pitt of Hampstead, L.
Desai, L.	Plant of Highfield, L.
Donaldson of Kingsbridge, L.	Prys-Davies, L.
Donoughue, L.	Rea, L.
Dormand of Easington, L.	Robson of Kiddington, B.
Eatwell, L.	Rochester, L.
Ennals, L.	Sainsbury, L.
Falkender, B.	Sefton of Garston, L.
Fisher of Rednal, B.	Serota, B.
Fitt, L.	Shannon, E.
Foot, L.	Shaughnessy, L.
Gallacher, L.	Shepherd, L.
Gladwyn, L.	Stedman, B.
Gould of Potrnewton, B.	Stoddart of Swindon, L.
Graham of Edmonton, L.	Strabolgi, L.
Halsbury, E.	Taylor of Blackburn, L.
Hanworth, V.	Tenby, V.
Hams of Greenwich, L.	Thomson of Monifieth, L.
Haskel, L.	Tordoff, L. [Teller.]
Hayter, L.	Turner of Camden, B.
Henderson of Brompton, L.	Warnock, B.
Hilton of Eggardon, B.	Waverley, V.
Hirshfield, L.	Wedderburn of Charlton, L.
Hollis of Heigham, B.	White, B.
Howie of Troon, L.	Williams of Elvel, L.
Hylton, L.	Williams of Mostyn, L.
Irvine of Lairg, L.	Wilson of Rievaulx, L.
Jacques, L.	Winchilsea and Nottingham, E.
Jay, L.
NOT-CONTENTS
Addison, V.	Allenby of Megiddo, V.
Aldenham, L.	Annan, L.

Archer of Weston-Super-Mare, L.	Huntly, M.
Arran, E.	Jenkin of Roding, L.
Astor, V.	Killeam, L.
Astor of Hever, L.	Lauderdale, E.
Auckland, L.	Leigh, L.
Belhaven and Stenton, L.	Lindsay, E.
Beloff, L.	Long, V.
Bessborough, E.	Lucas, L.
Blyth, L.	Lucas of Chilworth, L.
Boardman, L.	Lyell, L.
Boyd-Carpenter, L.	Macfarlane of Bearsden, L.
Brabazon of Tara, L.	Mackay of Clashfern, L.
Bridgeman, V.	[Lord Chancellor.]
Brougham and Vaux, L.	Macleod of Borve, B.
Butterworth, L.	Mancroft, L.
Cadman, L.	Marlesford, L.
Caithness, E.	Merrivale, L.
Caldecote, V.	Mersey, V.
Campbell of Alloway, L.	Milverton, L.
Carnegy of Lour, B.	Monk Bretton, L.
Carnock, L.	Mottistone, L.
Carr of Hadley, L.	Mountevans, L.
Chalker of Wallasey, B.	Mountgarret, V.
Charteris of Amisfield, L.	Mowbray and Stourton, L.
Clark of Kempston, L	Moyne, L.
Cockfield, L.	Munster, E.
Colnbrook, L.	Murton of Lindisfarne, L.
Constantine of Stanmore, L.	Nelson, E.
Cornwallis, L.	Norfolk, D.
Cox, B.	Oppenheim-Barnes, B.
Craigmyle, L.	Orkney, E.
Cranborne, V.	Oxfuird, V.
Crathorne, L.	Park of Monmouth, B.
Cullen of Ashbourne, L.	Pender, L.
Cumberlege, B.	Perry of Southwark, B.
Davidson, V.	Peyton of Yeovil, L.
Dean of Harptree, L.	Plummer of St. Marylebone, L.
Denham, L.	Reay, L.
Denton of Wakefield, B.	Renton, L.
Downshire, M.	Rippon of Hexham, L.
Ellenborough, L.	Rodger of Earlsferry, L.
Elles, B.	Rodney, L.
Elliot of Harwood, B.	Romney, E.
Elliott of Morpeth, L.	St. Davids, V.
Elton, L.	Seccombe, B.
Faithfull, B.	Selborne, E.
Ferrers, E.	Sharples, B.
Finsberg, L.	Stanley of Alderley, L.
Flather, B.	Strathclyde, L.
Flowers, L.	Strathcona and Mount Royal, L.
Foley, L.	Strathmore and Kinghorne, E.
Forbes, L.	[Teller.]
Fraser of Carmyllie, L.	Swinfen, L.
Gardner of Parkes, B.	Swinton, E.
Gisborough, L.	Tebbit, L.
Goschen, V.	Terrington, L.
Granard, E.	Teviot, L.
Granville of Eye, L.	Thomas of Gwydir, L.
Greenway, L.	Thurlow, L.
Hailsham of Saint Marylebone, L.	Torrington, V.
Henley, L.	Trumpington, B.
Hesketh, L.	Ullswater, V. [Teller.]
Hives, L.	Vaux of Harrowden, L.
HolmPatrick, L.	Vivian, L.
Hood, V.	Wade of Chorlton, L.
Hooper, B.	Wakeham, L.
Howe, E.	[Lord Privy Seal.]

Resolved in the negative, and amendment disagreed to accordingly.

4.36 p.m.

The Earl of Caithness: moved Amendment No. 2:

After Schedule 3, insert the following new schedule: (SCHEDULE

ACCESS AGREEMENTS: APPLICATIONS FOR ACCESS CONTRACTS

Interpretation

1. In this Schedule—

application for directions means an application for directions under section 16 of this Act:

application for review means an application under paragraph 6 below:

the appointed person means the person appointed under paragraph 8(1) or (2) below in the case of the application for review in question:

the facility owner means the facility owner mentioned in section 16(1) of this Act:

interested person means any person—

1. (a) to whom the facility owner owes obligations, arising after the coming into force of section 16 of this Act, whose performance or observance would be affected by the required access contract: or
2. (b) whose consent is otherwise required by the facility owner, as a result of an obligation or duty arising after the corning into force of that section, before the facility owner may enter into the required access contract:

the original applicant, in relation to an application for review, means the person who made the application for directions to which the application for review relates:

other party—

1. (a) in relation to an application for review made by the original applicant, means the facility owner or any interested person:
2. (b) in relation to an application for review made by the facility owner, means the original applicant or any interested person: and
3. (c) in relation to an application for review made by an interested person, means the original applicant, the facility owner or any other interested person:

the required access contract means the access contract which the applicant seeks to obtain by virtue of the application for directions:

and, subject to that, expressions used in this Schedule and in section 16 of this Act have the same meaning in this Schedule as they have in that section.

Making and withdrawal of application

2.—(1) Any application for directions must be made in writing to the Regulator and must—

1. (a) contain particulars of the required rights:
2. (b) specify the terms which the applicant proposes should be contained in the required access contract: and
3. (c) include any representations which the applicant wishes to make with regard to the required rights or the terms to be contained in the required access contract.

(2) The applicant may, by giving notice in writing to the Regulator, withdraw or suspend the application at any time.

(3) In this paragraph the required rights means the permission to use the railway facility in question which it is sought to obtain by virtue of the application for directions.

Notifications, representations and information

3.—(1) The Regulator shall—

1. (a) send a copy of any application for directions received by him to the facility owner: and
2. (b) invite the facility owner to make written representations to the Regulator within such period (being not less than 21 days from the date of issue of the invitation) as may be specified in the invitation.

(2) The Regulator shall send a copy of any such representations received by him to the applicant and invite him to make further written representations within such period (being not less than 10 days from the date of issue of the invitation) as may be specified in the invitation.

(3) The Regulator may from time to time request or invite further information, clarification or representations from the applicant or the facility owner.

Interested persons

4.—(1) Where the Regulator receives an application for directions, he shall issue a direction to the facility owner requiring him to furnish the name and address of every interested person to the Regulator within such period (being not less than 14 days from the date of issue of that direction) as may be specified in that direction.

(2) Where the name and address of an interested person is furnished pursuant to sub-paragraph (1) above, the Regulator shall invite the interested person to make written representations to him within such period (being not less than 14 days from the date of issue of the invitation) as may be specified in the invitation.

(3) The Regulator shall send a copy of any such representations received by him to the applicant and to the facility owner and invite each of them to make written representations within such period (being not less than 10 days from the date of issue of the invitation) as may be specified in the invitation.

(4) The Regulator may from time to time request or invite further information, clarification or representations from any interested person.

The decision and the directions

5.—(1) The Regulator shall inform the applicant, the facility owner and any interested person of his decision on an application for directions.

(2) If the Regulator decides to give directions to the facility owner requiring him to enter into an access contract—

1. (a) the directions shall specify—
   1. (i) the terms of the access contract: and
   2. (ii) the date by which the access contract is to be entered into: and
2. (b) the Regulator may also give directions to the applicant or the facility owner requiring him to pay compensation of such amount as may be specified in the directions to such interested person as may be so specified.

(3) Subject to the following provisions of this Schedule, any compensation directed to be paid by virtue of sub-paragraph (2) (b) above shall be recoverable as debt due.

(4) The facility owner shall be released from his duty to comply with the directions if the applicant fails to enter into an access contract on the terms required by the directions by the date specified for that purpose in the directions.

Application for review of Regulators decision

6.—(1) If the Regulators decision on an application for directions is to refuse the application, the applicant shall have the right to apply to the Regulator for a review of that decision.

(2) If the Regulators decision on an application for directions is—

1. (a) to give directions to the facility owner requiring him to enter into an access contract, or
2. (b) to give such directions and directions with respect to the payment of compensation to an interested person,

the applicant, the facility owner and any interested person shall each have the right to apply to the Regulator for a review of that decision (whether or not an access contract has been entered into pursuant to the directions).

(3) Any application for review must be made in writing to the Regulator not later than 14 days after the date of issue of the document by means of which the Regulator, pursuant to paragraph 5(1) above, informed the person concerned of his decision on the application for directions.

Position pending decision on review

7.—(1) Where an application for review is made—

1. (a) any directions given on the original application, and
2. (b) any access contract entered into pursuant to any such directions,

shall continue in force unless and until such time as the Regulator gives a decision on the application for review and shall thereafter have effect subject to and in accordance with that decision.

(2) In this paragraph the original application means the application for directions to which the application for review relates.

Appointment of person to consider application for review

8.—(1) Where the Regulator receives an application for review, he shall appoint a person to consider, and to make a written report and recommendations to him with respect to, the application.

(2) In any case where—

1. (a) the appointed person dies before he has completed the performance of his functions in relation to the application for review, or
2. (b) it appears to the Regulator that the appointed person is unable to continue to perform those functions,

the Regulator may appoint another person to perform, or to complete the performance of, those functions in place of that person.

Notifications and representations relating to review

9.—(1) The appointed person shall give notice of the application for review to the other parties and shall invite the applicant for review and the other parties to make written representations to him within such period (being not less than 14 days from the date of issue of the invitation) as may be specified in the invitation.

(2) The appointed person shall send—

1. (a) to the applicant for review, copies of any representations received from the other parties, and
2. (b) to the other parties, copies of any representations received from the applicant for review,

and shall invite the applicant for review and the other parties to make oral representations to him at such time (being not less than 14 days after the date of issue of the invitation) and at such place as may be specified in the invitation.

(3) The appointed person may vary the time or place, or appoint further times and places, at which oral representations may be made.

The Regulator's functions on a review

10.—(1) When the Regulator has considered the appointed persons report and recommendations, he shall decide whether to confirm, vary or revoke his original decision and may—

1. (a) issue directions to the facility owner requiring him to enter into an access contract with the original applicant on such terms, and by such date, as may be specified in the directions:
2. (b) issue to the facility owner and the original applicant directions terminating, as from such date as may be specified for the purpose in the directions, any access contract which has been entered into pursuant to the original decision: or
3. (c) issue to the facility owner, the original applicant or any interested person such directions as the Regulator may think fit for implementing, or otherwise giving full effect to, any variation or revocation of his original decision:

and, where directions are given under paragraph (a) above, the directions that may be given under paragraph (c) above include directions making provision for the event that the original applicant fails to enter into the access contract in question on the terms required by the directions under paragraph (a) above by the date specified for that purpose in those directions.

(2) No directions may be given under sub-paragraph (1) (a) above which could not be given on an application for directions.

(3) Where the Regulator issues directions under sub-paragraph (1) (a) above, he may also give a direction to the original applicant or the facility owner requiring him to pay compensation of such amount as may be specified in the direction to such interested person as may be so specified.

(4) Where the Regulator issues directions under sub-paragraph (1) (b) above, he may also give a direction to the original applicant or the facility owner requiring him to pay to such interested person as may be specified in the direction compensation of such amount as may be so specified in respect of the access contract which has been terminated.

(5) The Regulator may issue a direction to the applicant for review or any other party requiring him to pay the whole, or some part, of the costs incurred in connection with the review by any other person.

(6) Any compensation directed to be paid under sub-paragraph (3) or (4) above, or re-paid under sub-paragraph (1) (c) above, and any costs awarded under sub-paragraph (5) above, shall be recoverable as a debt due.

(7) If the original applicant fails to enter into an access contract on the terms required by directions under paragraph (a) of sub-paragraph (1) above by the date specified for that purpose in those directions, the facility owner shall be released from his duty to comply with those directions or with any other directions given under paragraph (c) of that sub-paragraph as a result of the review in question, except to the extent that the directions make provision for the event of such a failure on the part of the original applicant.

(8) In this paragraph the original decision means the Regulators decision on the application for directions to which the application for review relates.

Effect of directions on facility owner and interested persons

11.—(1) Subject to the foregoing provisions of this Schedule, any directions given on an application for directions or under this Schedule shall be binding on the person to whom they are given, notwithstanding any obligation or duty he may owe to an interested person and whether or not the interested person has had an opportunity to make representations.

(2) No interested person, and no successor to an interested person, shall take any step for the purpose of enforcing or exercising any right he may have against the facility owner in respect of, or in consequence of, the facility owners—

1. (a) entering into an access contract pursuant to directions under section 16 of this Act or this Schedule,
2. (b) performing such a contract in accordance with its terms, or
3. (c) failing to take any step to protect the interests of the interested person in connection with the application for directions, any application for review or the making of the access contract,

whether or not the interested person had, or has had, an opportunity to make representations.

(3) The duty of the facility owner to furnish the Regulator with the name and address of every interested person pursuant to a direction under paragraph 4 above is a duty owed to each interested person and (subject to the defences and incidents applying in actions for breach of statutory duty) any contravention of that duty shall be actionable at the suit of the interested person and the facility owner shall be liable for any loss or damage suffered by the interested person as a result of any access contract which is entered into in consequence of the application for directions.

(4) It shall be a defence in any proceedings brought by virtue of sub-paragraph (3) above for the facility owner to show that he took all reasonable steps, and exercised all due diligence, to avoid contravening the duty in question.

(5) In this paragraph successor, in relation to an interested person, means any person—

1. (a) who is a successor in title to the interested person: or
2. (b) whose rights derive directly or indirectly from the interested person.

Financial provision

12.—(1) Any sums required by the Franchising Director for the payment of compensation or costs pursuant to directions under this Schedule shall be paid by the Secretary of State out of money provided by Parliament.

(2) Any sums received by the Franchising Director under this Schedule shall be paid into the Consolidated Fund.).

The noble Earl said; My Lords, in moving this amendment with the leave of the House I shall speak to Amendments Nos. 22 to 24, 26, 27, 29 to 34, 116, 179 to 182, 201, 205 to 207, 297, 302 and 307.

With these amendments we come to the access provisions in the Bill. Noble Lords will be aware that an important element of our policy is that there should be a right of access for operators to provide the railway services that their customers want. In fact the Bill is intended to provide three different types of rights of access; first, and most importantly, the right of access to track, stations and light maintenance depots which a train operator needs to operate his services: secondly, a right of access for facility owners—that is, owners of track, stations or light maintenance depots—to other facilities which they need to provide their own services: and, thirdly, a right of access for the franchising director so that he can fulfil his duties to secure the operation of services and facilities, for example under the closure provisions.

Rights of access are to be overseen by the regulator. Access contracts will require his agreement and if someone is refused access it will be possible for him to apply to the regulator for directions enabling him to obtain such rights.

That, in a nutshell, is our policy. Translating it into legislative provisions is, however, a complicated and technical matter. It is important to pin down exactly the types of contract that one needs to regulate. For example, it is not our intention that management contracts relating to the operation of a station or a lease of a light maintenance depot should count as an access contract. Unfortunately, the Bill as introduced here was deficient in a number of detailed but important respects. Access rights were not sufficiently closely defined and the effect of the grant of access rights on obligations that facility owners may owe to others was not entirely clear. In addition, the procedures governing application were, on reflection, too cumbersome. To ensure continuity of service it is important that operators and the franchising director should be able to obtain access quickly and efficiently.

I apologise for the length of these amendments. In correcting the detail. and in order that the legislation works as we would like, it has been necessary to replace the existing provisions in the Bill with new ones. We have had to bring forward three new clauses and a new schedule. But I can assure your Lordships that, despite their length, these amendments represent no change in our basic policy on rights of access. The changes they make are essentially technical, to improve the way in which rights of access are defined and can be enforced.

I should like to mention in some detail the proposed new schedule. The schedule would relate to applications for access contracts and sets out the detailed procedural requirements for applications for directions under the new Clause 16. The procedures permit directions to be obtained more quickly than the procedures in the old Clause 18. They also provide safeguards for interested persons, who are persons to whom the facility owners owe obligations. The full definition is in paragraph 1 of the schedule. The schedule provides opportunities for the parties and interested persons to make written representations before the regulator reaches his decision. It also provides for compensation to be paid by either party to interested persons, if the regulator so provides.

If either party or any interested person so wishes, they may request the regulator to review his decision. In this case the regulator shall appoint a person to carry out a review, which provides the opportunity for oral representations. The person appointed must provide a report to the regulator, who then decides whether to confirm his initial decision or to vary or revoke it. A review need not delay the entering of a contract under the original decision, since the person requesting access may still enter the access agreement originally directed, though he may recognise that there is a risk that the contract may be varied or even revoked as a result of the review. That explains in a little more detail some of the principles that I was setting out earlier with regard to our policy.

To summarise, I believe that the procedure in the new schedule usefully provides a quicker procedure for gaining access in disputed cases, while providing sensible safeguards for interested persons. I commend Amendment No. 2 and the subsequent amendments to your Lordships. I beg to move.

Lord Brabazon of Tara

My Lords, I should like briefly to refer to one of my noble friends amendments: namely, Amendment No. 2, the new schedule that is to be inserted after Schedule 3. I refer in particular to paragraphs 6 to 10 of the new schedule where the parties to a proposed agreement and interested persons may apply for a review of the regulators decision to make directions requiring access. I believe that this could have some unfortunate consequences. I believe that the disadvantages are as follows.

First, the amendment would extend the total time required to reach a final decision, thus removing the justification of speeding up the process to which my noble friend referred. Secondly, although I accept that it would be possible for an applicant to enter a contract while the review is in progress, it must surely be unlikely that a train operator would wish to take the risk of starting operations if his access rights could subsequently be taken away from him or made more expensive as a result of the review. Finally, and perhaps most importantly, the review process will introduce a new person into the process, which is already, as my noble friend described it, a complex one, with that extra scope for disagreements and uncertainty.

I believe that the review process is probably unnecessary, given the discretion which the regulator will have in considering proposals for access. The time limits given in the new schedule are minimum periods and it is open to the regulator to set longer periods for representations and responses to them if he believes that that is appropriate. After all the regulator will make decisions of crucial importance to the players in the industry. I believe that he can also be trusted to manage the procedures for applications in a sensible way, particularly given the risk of judicial review if he acts unreasonably.

Therefore I ask my noble friend whether he would agree to reconsider the need for this review process and in particular the need for paragraphs 6 to 10 proposed in the new schedule.

Lord Tordoff

My Lords, to a certain extent that underlines the difficulty that we face at the moment and which was referred to earlier. We are faced with major changes in the wording of the Bill at a very late stage in its progress through this House. A perfectly rational point has been put forward.

There are not many more stages at which the Government can rewrite the Bill still further. Such advice as I have been able to obtain on these new clauses confirms that they are probably purely technical. But we do not know. People who know far more about the industry than I do simply do not understand them. The chances are that they are slightly better than the clauses that were already in the Bill. Beyond that, I have no view at all on the matter and presumably we just have to accept this way of legislating. It seems crazy to me.

4.45 p.m.

Lord Carmichael of Kelvingrove

My Lords, I too find it difficult to obtain sufficient information from the people who, as the noble Lord, Lord Tordoff, said, know a great deal more about running the railways than any of us. I am afraid that what I have been able to obtain is written in longhand. If I find it difficult to interpret all of it, I am sure that the Minister and the House will understand me. There is no doubt about the intentions of the advice that I have been given.

These amendments are confusing. The Government claim that they are largely technical. That has also been said, probably correctly, by other speakers. That may very well be the case.

Access is at the very heart of the Bill. Yet we see very substantial rewriting with important implications to be considered at the penultimate stage of the discussions. As the noble Lord, Lord Tordoff, said, there are not a great many more steps at which we shall be able to right any wrongs that have been created. That is part of the reason for the amendment to which I shall speak more explicitly in a few moments.

The regulator appears to be given powers to give direction for right of use of any type of railway facilities, but the power excludes network services and running stations and depots. Is it appropriate for those important parts of the total railway service to be excluded? Or are there some subtle provisions in this very long amendment put down by the Minister so that the provisions would be written in with closer examination of the amendments?

Passenger transport executives are concerned that they should continue to have the ability to have access for their local services both before and after franchising. It is not clear that the British Railways Board and the franchising director will always be able to deliver that. The new clause in place of Clause 20 does not appear to provide for exceptions under Clause 17. Thus, even exempt facilities or agreements appear to require the regulator's consent to variations. Again, I stress that the amendments are complex. Advisers have had only two days to consider their implications and discuss them among themselves. They found it extremely hard to make as many comments as they would have liked.

I should like to deal with Amendment No. 21, which is the second amendment in the grouping. The importance of access agreements was highlighted by the Opposition in the House in an amendment at Committee stage. That amendment would have required the regulator to have regard to advice issued by the Secretary of State to Railtrack, or any other rail facility owner, when considering an access agreement. The Minister, Lord Caithness, rejected that amendment. He said—and he repeated it today: Our policy is to establish the regulator as an independent person to take decisions on the appropriate charges, and after the interim period we do not want the Secretary of State to have the opportunity to intervene in these types of decisions. A requirement for the regulator to take into account any advice from the Secretary of State … would risk interference with the regulator's independence."—[Official Report, 1/7/93; col. 1056.] The amendment that we have tabled would require the regulator to publish the ground rules that he intends to adopt in this area. That would stimulate a public debate about that aspect of his responsibilities. It would also provide a benchmark against which individual decisions could be scrutinised. This provision could usefully be supplemented by a commitment from the Minister that Railtrack will also publish a similar statement setting out the basis on which it will enter into negotiations with the franchising director and rail operators on independent access agreements.

The way in which the regime established by the Bill operates must, at the end of the day, be subject to full public and parliamentary scrutiny. It is far too important just to be left with no authority from Parliament through a Secretary of State to consider it and have the power to discuss it with the directors. I believe that our amendment would help to ensure that such a scrutiny would be possible and would also be meaningful.

The Earl of Caithness

My Lords, I listened with care to what my noble friend Lord Brabazon of Tara had to say. He said that some of the parts of my proposal would have unfortunate consequences. He was supported by the noble Lord, Lord Tordoff, who said that my noble friend had a rational point.

In putting forward the proposal, the Government were conscious of the need to provide proper safeguards for those affected by the regulator's decisions. That must be achieved whatever the precise mechanism. However, I took careful note of what my noble friend said on that point and the support that he received from the noble Lord, Lord Tordoff. I hope that my noble friend, who agrees with me that these are complicated and technical matters, will allow me to go away and look at the particular point, reading his remarks carefully in the Official Report. I shall come back to him between now and another stage in order to keep him in touch with our thinking on that point.

The noble Lord, Lord Carmichael, spoke to his Amendment No. 21. In doing so, he suggested that the regulator should be required to publish a statement on the factors that he takes into account in deciding whether to approve an access agreement. I do not believe that such a provision is necessary. The reason is that the regulator is already bound by the general duties in Clause 4. So at the broad level those are factors that he will take into account. If the regulator believes that it would be useful to provide informal guidance on the factors that he takes into account, he is free to do so. But the difference between the noble Lord and the Government on this point is that we believe that this is a matter that can safely be left to the discretion of the regulator.

I understand the points raised by both the noble Lord, Lord Carmichael, and the noble Lord, Lord Tordoff. If I can be of help between now and another stage, they know that my door is open.

On Question, amendment agreed to.

Clause 4 [General duties of the Secretary of State and the Regulator]:

Lord Swinfen: moved Amendment No. 3:

Page 4, line 4, at end insert;

("() to ensure the adequate staffing of stations subject to section (Proposals to reduce stuffing at stations) below:).

The noble Lord said; My Lords, Amendment No. 3 is a paving amendment to Amendment No. 105 and I shall therefore speak to both. It is a re-run of an amendment that I moved in your Lordships Committee on 7th July. To recap, of some 2,500 existing British Rail stations, 950 are unstaffed and 200 are partly staffed: of the population of the country there are 6 million people who are disabled, blind or partially sighted and others who have difficulty when travelling by rail, such as the elderly, those with small children and those with learning difficulties. Of those who experience problems using the railways and stations, some cannot read platform numbers or destination boards, use ticket machines, negotiate staircases or carry luggage. In some stations special access ramps are needed, but have not been fitted, and therefore staff need to be available to help travellers in wheelchairs.

Another danger for people with disabilities and other problems is that of hooligans and criminals, as was well expressed in the last debate by the noble Lord, Lord Tordoff, who pointed out that the Suzy Lamplugh Trust was worried about the staffing of stations. At that time we considered also the lack of consultation in the destaffing of stations and I suggested that the situation was likely to become worse after privatisation. In my view the amendment would also benefit women and nervous passengers travelling late in the evening or at night.

When responding, my noble friend Lord Howe said that the Government could see no reason why privatisation should exacerbate destaffing. The House may be aware that British Rail is already restructuring in readiness for privatisation in 1994. What your Lordships may not know is that I hold copies of correspondence indicating examples of destaffing already being activated or planned. I understand that there is now no staff at stations such as Bagshot, Hitchin, Helsby, Uttoxeter, Blyth Bridge, Longton, Stone and Longport. There is also a threat of destaffing on the Birmingham-Leamington line: there is no staff at Poulton-le-Fylde in Lancashire before 8 a.m. when many people are going to work and that could well include disabled people: there is reduced staffing in the afternoon at other stations when disabled people are going home from work.

We can look at what happened to staff in nationalised industries after privatisation. British Gas was privatised in 1986. I understand that its staff has been reduced by 12,000: British Steel has lost nearly 12,000 and British Telecom has lost over 73,000 people. The trend in denationalised industries appears to be a destaffing. I can see no reason why that is not likely to continue in British Rail, and therefore a number of stations are bound to be affected.

In the previous debate my noble friend Lord Howe said that the proposed clause at that time was too inclusive and inflexible. Myself and my advisers have tried to produce a clause that is more flexible and does not prevent change. It merely calls upon the operators to look at ways of preventing hardship and, if considered necessary by the consultation process, ways of modifying their proposals. The regulator will act as arbiter over the process in extreme cases, which we would argue is quite proper and within the spirit of what the Government tell us. If my noble friend on the Front Bench is confident that privatisation will not lead to destaffing at numerous stations, there is nothing to fear from the amendment.

Amendment No. 3, is designed to meet all possible objections. The language is largely borrowed from Clauses 35 and 36 of the Bill as amended in Committee, but the lengthy process of consultation in the event of service closure is abbreviated. In particular, there is no provision for public meetings. It allows for proper consultation with consultative committees and disabled organisations and specifies the procedure which is to he followed. It provides for consultation with the franchising director, but allows the regulator to make the final decision. I beg to move.

Lord Tordoff

My Lords, I support the amendment, to which I have put my name, both in principle and in detail. There is no doubt that a fear exists, to which the noble Lord, Lord Swinfen, rightly pointed, of destaffing of stations. Indeed, it is almost a certainty that if there is to be any increase in efficiency and if the people who are to take up the franchises are to make any money out of them, they will certainly wish to reduce the staff of their operations. That does not necessarily mean that they will reduce the people on the platforms. But there will be pressure on the operators to reduce staff costs because that is one of the few ways in which they can make a profit within the system. If that is not true, perhaps someone can tell me where the profit is to come from which is to entice all those people into the system.

Great anxiety is expressed daily in the newspapers by journalists and the people with whom they speak regarding the hazards that exist on unmanned stations at unsocial times of the day, particularly for women and the elderly. Considerable difficulty exists for people who are physically handicapped, particularly those who are visually handicapped.

Amendment No. 3 is the gentlest of ways to get round the problem of forcing consultation on those who may not be aware of a situation in a specific place at a specific time. It is easy to make sweeping changes. If there is no real feedback from the population locally and from the disabled community regarding what damage may be done by further destaffing at stations, then decisions may be made and, once made, will be difficult to overturn.

I hope that the Government will accept the amendment. It is a late stage of the Bill and safeguards need to be built in. I commend the amendment to the House.

Lord Auckland

My Lords, I hope that the Minister will take cognisance of Amendment No. 3. It concerns not only the wayside stations mentioned by my noble friend Lord Swinfen in his admirable opening speech, but also the stations on Network SouthEast, on which I have travelled since 1954 and which are regularly used. For example, at Ashstead, where my wife and I live, often for the whole day there is virtually no staff present. There is a person in the ticket office but nobody on the platform. At night many people work late, particularly young ladies, and by 10 oclock it is hardly safe for them to venture on their own, especially when there is a common nearby where assaults take place.

I am not necessarily against destaffing at railway stations. It depends on the staffing situation. But there must be someone present, either a porter or somebody else to ensure that safety is maintained not only for disabled people, but for able-bodied people as well. I am informed that at Eastbourne there is one member of staff on the station at night. Eastbourne is a town of some 40,000 to 50,000 people and the station is very widely used. Even in East Sussex assaults have been known to take place. Whatever proposals there are in the Bill for reducing staff, safety is paramount. I think that my noble friend should give an assurance to the House that this matter will be looked into very carefully.

5 p.m.

Baroness Darcy (de Knayth)

My Lords, I give my wholehearted support to the amendment so ably moved by the noble Lord, Lord Swinfen. As he said, it does not compel: it only allows for proper consultation and for the regulator to make the final decisions. As other noble Lords have said, destaffing has important implications not only for disabled people but for the elderly and young mothers with pushchairs, and particularly for blind and partially sighted people and wheelchair users among the disability groups. While very valuable work is being conducted by DPTAC and the disability unit of the Department of Transport in the area of appropriate technology, no amount of technology is ever likely to be able to replace the practical help that disabled people can get from real people.

I should like to give two examples where people-help has been needed by two different groups of disabled people. The first example is a letter dated 27th September of this year from Jill Allen-King, who is president of the National Federation of the Blind of the United Kingdom, to the noble Lord, Lord Swinfen. I quote: I am totally blind and travel with my guide dog. Many platforms have wide gaps between the platform and the train and for this reason I always need assistance to be shown where the smallest gap is so that my dog does not fall between the platform and the train. My first guide dog did fall three times because there was no one there to give assistance. People forget that guide dogs cannot read destination boards or other helpful information that the blind person needs to be told". The second example is from a wheelchair user who is very severely disabled with cerebral palsy. He uses an electric wheelchair. He is aged 27 and does a full-time job. He has been commuting regularly from Woking station to Waterloo over the past five years. He states: The lifts at Woking Station onto Platform 2, where the usual fast trains leave for Waterloo, are often out of action. To get round this problem, I catch a train from Platform 1, which means driving through the town centre to the other side of the station. If there is a long wait involved for the next Platform 1 train, the station master sometimes diverts a train from Platform 2 to Platform 1. Alternatively, the station staff carry me in my wheelchair up and and over two flights of stairs to Platform 2. If the lifts are working, I should be accompanied by one of the station staff. At present, I rely on my mother to drive me to the station and she is often able to help. If my mother were not accompanying me and I got a taxi to the Station, I would have several difficulties if the numbers of staff were to be further reduced. As it would be impossible for me to be lifted onto Platform 2 and very unlikely that a train would be diverted, I could have a very long wait for a suitable train leaving Platform 1. Even if the lifts are working to Platform 2, there would be few staff available to accompany me on the lifts". Noble Lords can see that the station staff for this man are crucial and, as I said, he is doing a full-time job. The Disability Consortium is wholeheartedly behind the amendment. I can also say that the Joint Committee on Mobility for Disabled People, of which I am a member, also gives its full support. The amendment is sensible and very moderate. It only asks that there should be proper consultation before deciding about destaffing and leaves the decision to the regulator. I hope that your Lordships can also give it your support.

Baroness Masham of Ilton

My Lords, I too wholeheartedly support the amendment. We now have a growing population of elderly people, many of whom are confused. I very often travel up and down from Yorkshire by train and I see many, many elderly people asking porters for help. I am also concerned about vandalism—the damage to track and electric cables and the putting of objects on the lines. That is very expensive. Unmanned stations will be an invitation to glue sniffers and drug users to use those facilities for those purposes. People who travel by train often leave their cars at stations. Destaffing is an invitation to an increase in car crime. The Prime Minister and the Government have pledged to do something about the growing problem of crime. I believe that leaving stations unmanned is an invitation to an increase in crime.

My noble kinsman the Minister has done much to help disabled people in terms of their transport problems. He must be thanked for that. But what will be the point of having accessible trains for people using wheelchairs if they cannot get on and off the trains I hope that my noble kinsman will look into this and consider it very carefully.

Lord Rix

My Lords, I rise to support this amendment with a certain degree of embarrassment because on 28th July last the noble Lord, Lord Renton, and I had a very pleasant meeting with the noble Earl regarding this point of the Bill. I received the following letter of assurance from the Department of Transport and the noble Earl on 7th September. It reads: On the destaffing of stations, it is our intention that franchisees should be required to give notice of proposals for destaffing to the relevant rail user consultative committee so that they have an opportunity to consider and comment on the adequacy of the franchisee's proposals. I note your concerns about the problems disabled people can face at destaffed stations. These will need to he taken into account in the context of deciding whether destaffing should go ahead or not. New technology in the field of ticketing and information provision should help to provide practical answers that will work". I accepted in my gullible way the face value of that statement in the letter which I am now told does not go quite far enough. I am told, for instance, that no one on the rail users consultative committee is blind or partially sighted. I am told that other users with disabilities are not represented on the committee. Therefore, it is not fully representative of those who need and require stations to be staffed at all times.

I support the amendment. I do so with a certain degree of embarrassment because I had hoped that the letter I had received from the noble Earl was sufficient. However, it may be that the Government are able to put forward an amendment which would have the same effect as the one put forward by the noble Lord, Lord Swinfen, and others.

Lord Clinton-Davis

My Lords, the proposal of the noble Lord, Lord Swinfen, has commended itself to noble Lords on all sides of the House. It is ground that we covered quite extensively in previous debates. We had hoped that the Government would have responded more emphatically and positively because these are issues which need to be enshrined in the Bill. Assurances that are made outside the Bill have no legal effect and it is simply insufficient to proceed on that basis.

The arguments have been thoroughly canvassed by all those who have spoken and anything I were to add would be repetition which is not helpful. I hope that the Minister will reply emphatically and that he will accept the amendment or, if he is not able to accept the precise wording, that he will give an undertaking to accept the principle and come back with a better worded provision. But it is not enough, From our point of view anyway, for the Minister merely to give assurances that everything will work out and that these matters can be dealt with perfectly well in the informal arrangements that are made or may be made in contracts. It is not enough to proceed on that basis. I hope therefore that, if the Minister is not forthcoming, the noble Lord, Lord Swinfen, will press this matter to a Division.

The Earl of Caithness

My Lords, I have some sympathy with the spirit of these amendments and I can understand the anxieties which have been expressed on this issue. But even after listening carefully to the points that have been made, I believe that this is largely misplaced and that it is inappropriate to incorporate in legislation such a prescriptive and protracted procedure for dealing with staffing at stations.

First, I do not accept that our policy will lead to a reduction of staffing at stations. Franchisees, who will operate the great bulk of stations, will want to provide their customers with better services, not worse. Therefore, I take issue with my noble friend Lord Swinfen on the examples that he gave. A much more realistic and appropriate example to cite would have been the change in the level of service that has been provided since those industries have been privatised—and that has improved substantially. The gasman is coming round very much more quickly within an agreed timescale. I can remember sitting here listening to your Lordships saying that rural telephone boxes would not work after privatisation. They did not work under the old system, but they are now a great deal better under the new privatised system. The level of service has improved. Yes, I agree that overall numbers of staff have decreased, but it is the level of service that is important and that is what we are talking about with the franchisees.

We firmly believe that the franchisees will want to produce a better level of service. After all, that is what they are trying to do. They are trying to provide trains that will be attractive to the people who travel on them. Therefore, they will be as aware as your Lordships that dimly lit, dirty, unstaffed stations do not attract passengers. All your Lordships have said exactly the same and I can only echo those words. Passengers will be the source of franchisees' revenue and profit. Therefore, it must be in the franchisees' interests to make stations attractive places to be. I have no doubt that helpful staff will be an important element in that and will be a factor in developing the potential of stations.

The procedure for regulating the staffing of stations, set out in Amendment No. 105, appears to be based on that used for dealing with closures. I advise my noble friend Lord Swinfen that I do not believe that it would be appropriate to treat those two issues in the same way. Staffing at stations can fluctuate for a variety of operational reasons and changes may have no effect on the services offered to passengers. I do not believe that it would be reasonable to impose such a complex and time-consuming procedure on operators in this case.

A number of your Lordships stressed the importance to the disabled of staffing at stations. We in government, and certainly the Department of Transport, most certainly recognise that. I agree with the noble Baroness, Lady Darcy (de Knayth), that there is no substitute for a willing member of staff when it comes to negotiating a busy station while encumbered with baggage. In some cases, stations may be completely inaccessible for disabled people without help from staff.

My noble friend Lord Swinfen will be aware that the regulator is under a duty under Clause 68 of the Bill to prepare and publish a code of practice for protecting users of stations who are disabled. In doing so, he is obliged to consult the Disabled Persons Transport Advisory Committee. I would imagine that it may well be that this code of practice will have something to say about the staffing of stations to meet the needs of disabled people, and that seems to me the proper place to deal with this issue. We do not disagree with the spirit of what my noble friend Lord Swinfen is trying to do. It is simply a question of the procedure. I believe that consultation and the fact that the regulator is obliged to discuss the matter with the Disabled Persons Transport Advisory Group is the right and proper way forward.

However, I accept that there is also concern about the more widespread implications of reductions in staffing levels at stations, a point which my noble friend Lord Auckland raised. As the noble Lord, Lord Rix, said, we are already addressing that problem. We propose that the Secretary of State, in the guidance and instructions he gives to the franchising director under Clause 5 of the Bill, should include an instruction to the effect that the franchising director should include terms in franchise agreements requiring the franchisee to inform the relevant rail users consultative committee in good time of any plans to reduce staffing levels at a station and to provide information on his proposals for managing the station following such a reduction.

I agree with the noble Lord, Lord Rix, that there is no statutory duty on the RUCCs to have a disabled person on the committee but, as was made plain in Committee by all those who have experience of them, the RUCCs comprise a very good cross-section of people who are aware of the needs of all passengers. I put it to the noble Lord, Lord Rix, that despite the fact that there is no statutory obligation, we can have faith in the RUCCs to pay particular attention to this point. The procedure will enable the RUCCs to monitor the situation for evidence that, contrary to our expectations, franchising leads to reductions in the level of staffing at stations.

Some of your Lordships have made not very complimentary remarks about the present situation. I can assure the House that the situation will be a great deal better in the future than it is at present because British Rail is not subject now to the constraints that will be imposed in the future. There will of course be a franchise agreement specifying the level of service. That does not happen at the moment. The regulator will have a duty under Clause 68, and under Clause 5 the franchising director will discuss the matter with the RUCCs. Therefore, I can assure the House that although none of your Lordships considers the situation at the moment to be satisfactory, the position will be a great deal better in the future.

5.15 p.m.

Lord Clinton-Davis

My Lords, before the noble Earl sits down, perhaps I may ask him whether he agrees that plans appear to have been made by British Rail in advance of privatisation that will unquestionably seriously affect the staffing situation at a number of stations I could list about a dozen. Is it conceivable, in the Ministers view, that once, prior to privatisation, there has been a considerable measure of destaffing, it is at all likely under the new regime that the franchisees will suddenly recruit substantial numbers of additional staff to ensure that the stations are properly staffed. Is it not much more likely that they will accept the present position and say, "Well, this was the situation that British Rail advocated and sought to implement. Why should we be prejudiced as against the position that British Rail has undertaken?"—when British Rail undertook that position in anticipation and support of privatisation?

The Earl of Caithness

My Lords, there is a major difference. Under the present regime, we do not have the controls over British Rail that will be exercised over the franchisees in the future (as set out in the Bill) between the regulator and the franchising director. I repeat to the noble Lord that the present position will be substantially improved upon.

However, I must also advise the noble Lord, Lord Clinton-Davis, that I can see that a franchisee would wish to increase staffing at a station if that would produce a better service and increase the number of passengers because that is what the franchisee needs. Just as, once privatised, the former nationalised industries have paid a great deal more attention to service and have put staff into areas where service matters but where the number of staff was low previously, so I can see the same thing happening with the franchisees. If Clinton-Davis Railways were to find that it was losing passengers because they do not like the station which the noble Lord manages because it is dirty and because there has been vandalism, a point which was mentioned by my noble kinswoman Baroness Masham, I have no doubt that, being a commercial man, the noble Lord would address that problem and might provide extra staff. Therefore, I do believe that there are opportunities for franchisees to increase their staff in order to produce a better service because it is the throughput of passengers—both disabled and ordinary—that matters.

Lord Sefton of Garston

My Lords, the Minister says that he has no control over BR at the moment. Does he accept that the operation of the subsidy by government is the most effective form of control one can have over any organisation

The Earl of Caithness

My Lords, there is of course a subsidy. That will continue in the future. What we hope to bring in, and what will be effective in improving our railway system, is private sector management.

Let me return to points made on the amendment. There is nothing in spirit between my noble friend Lord Swinfen and the Government. I hope that my noble friend has taken on board the serious reservations I have about the cumbersome nature of the procedure proposed. I take account of the points that he has made. I believe that we have already gone a long way towards satisfying him on them.

Lord Sefton of Garston

My Lords, does the Minister accept that the operation of a subsidy by government—the withdrawal or granting of the subsidy—is an effective means of controlling an organisation such as BR

The Earl of Caithness

My Lords, with the leave of the House, perhaps I may reply for a second time to the noble Lord, Lord Sefton of Garston.

Lord Sefton of Garston

My Lords, the Minister did not reply the first time.

The Earl of Caithness

My Lords, I replied the first time, and I shall expand upon that explanation. There is a subsidy to BR, but BR is required to manage the railways in the way that it thinks fit.

Baroness Masham of Ilton

My Lords, before my noble kinsman sits down, he said nothing about safety at stations. I and the noble Lord, Lord Tordoff, feel strongly about that matter. The safety available to passengers will be nil if there are no staff at the stations.

The Earl of Caithness

My Lords, I agree with my noble kinswoman about the importance of safety at stations. It is not a subject we have dismissed. On the whole question of safety, my noble kinswoman will be aware that the HSC put forward 37 recommendations. Each and every one of those recommendations has been accepted by the Government and by the chairman of BR. That new regime is being worked through. Draft orders are being prepared under the health and safety directives. I agree with my noble kinswoman that safety at stations is important. It is something that we need. It can relate partly to staff and partly to the design and operation of stations.

Lord Swinfen

My Lords, the noble Lord, Lord Rix, need not feel in the least embarrassed in supporting the amendment. I welcome his support. He was kind enough to show me the letter he has received from my noble friend the Minister. The letter has no teeth. It contains nothing to indicate any arrangements for modifying or ameliorating the problems that may be caused by the destaffing of stations.

The noble Baroness, Lady Masham, mentioned the difficulties faced by elderly people as a result of stations being destaffed. That problem will increase as the elderly become a growing proportion of the population and increase in number and the workforce reduces. I agree with my noble friend the Minister that it is the level of service that matters.

In an operation such as a railway system, with a vast number of outlets, it is the level of service at each and every one of the outlets that matters. It is that with which I am trying to deal. The amendment makes it clear that only a major reduction in staff will cause the terms of the amendment to come into effect. Staff fluctuations about which my noble friend spoke can be covered by the amendment.

I am delighted by the code of practice for disabled people under Clause 68 but it does not cover mothers with young children, mothers with prams, elderly people with luggage travelling alone and other similar problems. The Government have not answered the problem fully. I should like to test the opinion of the House.

5.25 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to

Their Lordships divided; Contents, 80: Not-Contents, 117.

Division No. 2
CONTENTS
Addington, L.	Bonham-Carter, L.
Airedale, L.	Boston of Faversham, L.
Archer of Sandwell, L.	Bottomley, L.
Ardwick, L.	Brimelow, L.
Ashley of Stoke, L.	Bruce of Donington, L.
Auckland, L.	Carmichael of Kelvingrove, L.
Aylestone, L.	Clinton-Davis, L.
Barnett, L.	Cocks of Hartcliffe, L.
Birk, B	Craigavon, V.
Blackstone, B.	Darcy (de Knayth), B. [Teller.]

David, B.	Lovell-Davis, L.
Desai, L.	McNair, L.
Donoughue, L.	Masham of Ilton, B.
Dormand of Easington, L.	Merlyn-Rees, L.
Eatwell, L.	Monkswell, L.
Enniskillen, E.	Morris of Castle Morris, L.
Falkender, B.	Nicol, B.
Fisher of Rednal, B.	Peston, L.
Gallacher, L.	Pitt of Hampstead, L.
Gladwyn, L.	Plant of Highfield, L.
Gould of Potternewton, L.	Prys-Davies, L.
Graham of Edmonton, L.	Rea, L.
Halsbury, E.	Rix, L.
Hanworth, V.	Russell, E.
Harris of Greenwich, L.	St. John of Bletso, L.
Haskel, L.	Sefton of Garston, L.
Hilton of Eggardon, B.	Serota, B.
Hollis of Heigham, B.	Shepherd, L.
Houghton of Sowerby, L.	Stedman, B.
Howie of Troon, L.	Stoddart of Swindon, L.
Hylton-Foster, B.	Swinfen, L.
Jay, L.	Thomson of Monifieth, L.
Jay of Paddington, B.	Tordoff, L.
Jeger, B.	Turner of Camden, B.
Kagan, L.	Wedderburn of Charlton, L.
Kilbracken, L.	White, B.
Lawrence, L.	Wilberforee, L.
Listowel, E.	Williams of Elvel, L.
Llewelyn-Davies of Hastoe, B.	Williams of Mostyn, L.
Lockwood, B.	Wilson of Rievaulx, L.

NOT-CONTENTS
Addison, V.	Gardner of Parkes, B.
Ailesbury, M.	Gisborough, L.
Aldenham, L.	Goschen, V.
Archer of Weston-Super-Mare, L.	Granard, E.
Arran, E.	Hailsham of Saint Marylebone, L.
Ashbourne, L.	Henley, L.
Astor, V.	Hesketh, L.
Astor of Hever, L.	Hives, L.
Banbury of Southam, L.	HolmPatrick, L.
Beloff, L.	Hood, V.
Birdwood, L.	Hooper, B.
Blake, L.	Howe, E.
Blakenham, V.	Huntly, M.
Blatch, B.	Jenkin of Roding, L.
Boardman, L.	Killearn, L.
Boyd-Carpenter, L.	Lauderdale, E.
Brabazon of Tara, L.	Layton, L.
Bridgeman, V.	Lindsay, E.
Brougham and Vaux, L.	Long, V.
Butterworth, L.	Lucas, L.
Cadman, L.	Lucas of Chilworth, L.
Caithness, E.	Lyell, L.
Campbell of Alloway, L.	Mackay of Clashfern, L.
Carnegy of Lour, B.	[Lord Chancellor.]
Carnock, L.	Marlesford, L.
Chalker of Wallasey, B.	Merrivale, L.
Clark of Kempston, L.	Mersey, V.
Constantine of Stanmore, L.	Milverton, L.
Craigmyle, L.	Monk Bretton, L.
Cranborne, V.	Mottistone, L.
Crathorne, L.	Mountevans, L.
Cumberlege, B.	Mountgarret, V.
Davidson, V.	Mowbray and Stourton, L.
Dean of Harptree, L.	Munster, E.
Denham, L.	Murton of Lindisfarne, L.
Denton of Wakefield, B.	Nelson, E.
Devonport, V.	Norfolk, D.
Downshire, M.	Onslow, E.
Elles, B.	Oppenheim-Barnes, B.
Elliot of Harwood, B.	Oxfuird, V.
Elliott of Morpeth, L.	Park of Monmouth, B.
Elton, L.	Pearson of Rannoch, L.
Ferrers, E.	Pender, L.
Finsberg, L.	Peyton of Yeovil, L.
Flather, B.	Pike, B.
Foley, L.	Pym, L.
Forbes, L.	Reay, L.
Fraser of Carmyllie, L.	Rippon of Hexham, L.

Rodger of Earlsferry, L.	Swinton, E.
Rodney, L.	Teynham, L.
Romney, E.	Thomas of Gwydir, L.
St. Davids, V.	Torrington, V.
Seccombe, B.	Trumpington, B.
Stanley of Alderley, L.	Ullswater, V. [Teller.]
Stewartby, L.	Vaux of Harrowden, L.
Stockton, E.	Vivian, L.
Strathclyde, L.	Wade of Chorlton, L.
Strathcona and Mount Royal, L.	Wakeham, L.
Strathmore and Kinghorne, E.	[Lord Privy Seal.]
[Teller.]	Walker of Worcester, L.

On Question, Whether the said amendment (No. 10) shall be agreed to

5.33 p.m.

The Earl of Caithness: moved Amendment No. 4:

Page 4, line 48, at end insert;

("() The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to promote the award of franchise agreements to companies in which qualifying railway employees have a substantial interest, qualifying railway employees meaning for this purpose persons who are or have been employed in an undertaking which provides or provided the services to which the franchise agreement in question relates at a time before those services begin to be provided under that franchise agreement.").

The noble Earl said: My Lords, this is a simple amendment. It seeks to place a duty on the Secretary of State in exercising his functions under Part I of the Bill to promote the award of franchises to companies in which employees providing the railway services to be franchised have a significant interest.

The House will be aware of the encouraging level of interest shown by BR managers and employees in bidding for franchises for the services they run. Even at this early stage there are already indications that a number of management and employee teams are giving active consideration to preparing bids for their franchises.

The Government wish to encourage such bids, which would, broadly speaking, be the franchising equivalent to management and employee buy-outs. I beg to move.

Lord Clinton-Davis

My Lords, I understand the reasons which have prompted the Government to table this amendment. Apart from the question of the desirability or otherwise of management buy-outs—I believe that in certain instances they are good—in this connection they must be approached with a good deal of caution. Individuals who are likely to invest their fortune in them must have the most careful counselling. However, that is by the way.

As regards this amendment, I wish to raise the possibility that by putting the provision in statutory form, in the way that the Government have, it may have the wrong result from their point of view. I fear that by putting the provision in this statutory form it could run into real difficulties under the European Community's competition rules. This form of management buy-out is being put in an advantageous position—it is intended to do precisely that.

If the Minister has regard to Article 85 of the treaty, he will see that; agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which; (a) directly or indirectly fix purchase or selling prices or any other trading conditions: (b) limit or control production, markets, technical development or investment"— that does not arise— (c) share markets or sources of supply: (d) and this is the point— apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage: (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts". If there is a possibility that I am right in my submission, the effect is that agreements or decisions which can be made in that regard can be prohibitive. The possibilities are that another potential franchisee could take exception to the situation. They could say that they were being prejudiced by reason of the advantage given to the management-employee buy-out position. For all we know that individual or group could come from other countries within the Community: it could come from another state railway.

I raise this issue not in order to create a difficulty for the Government—I do not deny that I tried to do that previously and it is faintly discernible—but because I believe that the Government are running the risk of creating difficulties for themselves. I put that question in the hope that the Minister will have a positive reply.

The Earl of Caithness

My Lords, the lucid words and the helpful nature of the noble Lord, Lord Clinton-Davis, are encouraging when one sits on this side of the Dispatch Box. We have looked at the matter with great care and, of course, I shall yet again look at the points which he raised. All that the amendment does is to tie up the Bill and make it comprehensive throughout, because management buy-outs take their place in Parts II and III of the Bill. I do not believe that the advice that I received has changed since we last dealt with this issue, but if it is different I shall come back to the noble Lord. Of course, no decision has yet been taken as to exactly what preference will be given to a management buy-out.

Lord Clinton-Davis

My Lords, before the Minister sits down, will he tell the House whether he accepts that prima facie there would appear to be the application of dissimilar conditions to equivalent transactions with other trading parties—that is to say, other potential franchisees including those from abroad—thereby placing them at a competitive disadvantage? Is it not also a fact that one of our difficulties regarding management buy-outs, which are so favoured, is that it will not be necessary for this provision so directly to lead towards the conclusion that I have suggested is possible? Will the Minister indicate whether there has been, in any previous privatisation, a precedent on which this could be based so that the possibility of challenge, to which I have referred, could be ruled out? It is a worrying factor and the Minister has not really answered the point. The Minister says that he will look again at the matter but at what stage will he do that? Writing to me about it is of no value at all.

Lord Shepherd

My Lords, perhaps the noble Earl will look at this matter between now and Third Reading. Perhaps he will look at the privatisation of the National Bus Company. Those who were given decisions about management buy-outs or some other party acquiring an interest in the subsidiary companies of the National Bus Company decided, if my memory serves me right, to take a broader view. Decisions were made not solely in terms of those to which my noble friend refers. I do not believe that the National Bus Company dealt with the matter in the way in which it appears to be dealt with in this Bill.

I support the opportunity of buy-outs although I recognise the many difficulties that arise from that. My noble friend raised the question of Community law. I do not believe that the privatisation of the National Bus Company in any way infringed Community law. That matter should be considered. Perhaps the noble Earl will return to this issue or provide an opportunity for it to be dealt with on Third Reading.

The Earl of Caithness

My Lords, with the leave of the House—and I believe that we are stretching the rules of the House on Report—I defer to the noble Lord, Lord Shepherd, on this occasion because he has raised the question of the bus companies. I was responsible for taking that extremely satisfactory piece of legislation through the House. The important point is what preference is given to management buy-outs. In theory the noble Lord, Lord Clinton-Davis, has a point although in practice, it has not been necessary to question how the matter has been dealt with. Therefore, we must wait to see what preference is given. Of course when 1 said that I would look at the matter, it will be between now and the next stage, otherwise the noble Lord would be right to say that it would not be as helpful as it might otherwise be.

Lord Marsh

My Lords, perhaps the Minister will help on this matter because this seems to me to be an extraordinary amendment and not at all on a par—

The Earl of Caithness

My Lords, order.

5.45 p.m.

Lord Carmichael of Kelvingrove: moved Amendment No. 5:

Page 5, line 3, leave out from beginning to (to).

The noble Lord said; My Lords, in moving this amendment, I shall speak also to Amendments Nos. 6 and 7. Clause 4(4) (a) currently requires the regulator to take account of guidance issued by the Secretary of State until 31st December 1996. The effect of the proposed amendments is to delete the time constraint and replace it by a restriction linked to the first round of franchising.

When the Bill was first introduced into another place subsection (4) (a) did not even exist. At that time Ministers saw no scope for any conflict between franchising and open-access competition. However, they were quickly persuaded that that may not be the case, at least during the earlier stages of the franchising process, as they then introduced a provision which these amendments seek to refine. They do not seek to make drastic changes. They merely seek to make refinements.

Knowing that subsection (4) (a) was introduced as an amendment, what happens if Ministers are persuaded that they have made a second error and that the competition must be moderated beyond 1996 Under the provisions of the Bill as drafted, I believe that the answer is nothing. Ministers will be in the hinds of the regulator who, as they have repeatedly stressed, is an independent official with a remit to promote competition.

I am trying to be helpful to the Minister in providing him with an opportunity to continue to issue guidance to the regulator for the duration of the first round of franchising. There would be no obligation to use the provision. If Ministers confidence is well placed, they could withdraw any current guidance on 31st December 1996 and proceed as planned. However, if problems continue to exist, the amendments would allow them to continue to issue guidance to the regulator and protect the interests of the travelling public. If the amendments are rejected and problems emerge, it will be clear where the culpability lies. I hope that the Minister will see that we are trying to be helpful. I beg to move.

The Earl of Caithness

My Lords, I appreciate that the noble Lord is trying to be helpful with this group of amendments. There is a difference between the two sides. I can understand what the noble Lord is saying: namely, that for the duration of the first franchise, the Secretary of State should be allowed to give guidance. We believe that the sooner the regulator is independent and free from the guidance of the Secretary of State on the question of the launch of the new regime, the better. That is why we have limited it to the period up to 31st December 1996.

We do not believe that there is a reason to match the duty of the Secretary of State with the length of the first franchise. On the contrary, we believe that if the independence of the regulator is not to be compromised, the period should be as short as possible consistent with the smooth launching of the new system.

It is a question of judgment on this issue. I can understand why the noble Lord, Lord Carmichael., wants to take one date. I am sure that he will understand why we wish to take another. I am not sure that we shall be able to get much closer.

Lord Carmichael of Kelvingrove

My Lords, I am disappointed with the Ministers reply. I thought that was being helpful. British Railways is an extremely large organisation. It is not a tuppence-hapenny organisation which is to be broken up and franchised I very much doubt whether it can all be done within the time which the Minister has allowed himself. But obviously he will not give way, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 6 and 7 not moved.]

Clause 5 [General duties of the Franchising Director].

The Earl of Caithness moved Amendment No. 8:

Page 6, line 1, after ("to") insert;

("(i)").

The noble Earl said; My Lords, in moving this amendment I shall speak also to Amendments Nos. 9, 11, 39, 43 to 46, 80, 84, 107 to 110 and 117.

This series of amendments brings into the franchising provisions of the Bill the operation of stations, networks or light maintenance depots known collectively, for the purpose of these amendments, as "additional railway assets".

Clause 27 is amended to provide that a franchise agreement may include provision requiring the franchisee to operate or secure the operation of any additional railway asset. Clause 28 will therefore provide additionally, and with the necessary consequential amendments, that where a franchise agreement which includes the operation of additional railway assets comes to an end and the franchising director fails to secure a further franchise agreement, the franchising director will have the power to secure the operation of the additional railway assets in question. At present these clauses relate only to franchised passenger services.

These changes are reflected in a number of consequential amendments. Clause 5 is amended to enable the Secretary of State's guidance and instructions to the franchising director to cover the operation of additional railway assets as well as the provision of services for the carriage of passengers by rail, and to ensure that the franchising director's duty in respect of the economic and efficient use of payments to achieve his objective cover all appropriate payments which he may make, including those in respect of additional railway assets.

There are further consequential amendments to Clause 36 (dealing with closure of networks), Clause 38 (dealing with the closure of stations and light-maintenance depots used in connection with passenger services), Clause 47 (dealing with the franchising directors duties to secure the provision of services) and Clause 50 (the exercise of functions for the purpose of encouraging investment in the railways) to incorporate references to the franchising director securing the operation of additional railway assets under the power given to him by the amendment to Clause 28.

There are, in addition, a number of consequential amendments to Clause 31 which provides for the role of PTEs in franchising and which I shall touch on when we come to the PTE clauses. I beg to move.

The Earl of Caithness: moved Amendment No. 9;

Page 6, line 2, at end insert ("or

(ii) the operation of additional railway assets under or by virtue of any franchise agreement or any provision of sections 28 and 34 to 46 below:").

Lord Clinton-Davis: moved Amendment No. 10;

Page 6, line 6, at end insert;

("(c) to promote the use by persons not resident in the United Kingdom of the rail network, by ensuring there are available for purchase by them documents entitling them to free access to all railway services provided through a franchise agreement.").

The noble Lord said; My Lords, we discussed the issue involved in this amendment previously. However, I am bound to say that I thought the Government's response was less than satisfactory. Therefore, I believe it merits traversing the ground again. We are talking about the use of the BritRail and InterRail tickets. The essential arguments that I wish to adduce—and I shall summarise them—are as follows. First, at present, such tickets are sold abroad through BR International offices the specific purpose is in fact to offer an incentive to use the network of British Rail and to enable tourists to spend their money outside of London. It is a great incentive to tourism. Indeed, that was conceded by the Minister when he said in Committee on 1st July (at col. 1039 of Hansard) that sales of the BritRail pass alone represented £15 million a year.

The Government say, essentially, "Well, we do not have to do anything about this: something will turn up to replace the existing scheme. It will all be organised by the discipline of market forces". Indeed, in Committee, the Minister also said; The Government therefore propose that it should be for the rail operators to develop appropriate arrangements for the future".—(Official Report, 1/7/93; col. 1039.]

In fact, 100,000 BritRail passes were sold in the year 1992–93. I obtained that information from the English Tourist Board Tourist Intelligence Papers, which also state that an estimated 16 per cent. of InterCity's £900 million turnover comes from tourists, and that Britain's 14 tourist boards have calculated the number of nights spent in their regions in 1991 by rail users and found that about £10.275 million were spent by foreign visitors as opposed to £9.12 million UK tourists.

There is still no definite commitment to keep open the overseas sales offices of BR International. It is true that discussions are taking place regarding the possible continuation of BRI as an outlet for all franchisees. That is the situation, as I understand it: but perhaps the Minister will confirm the current position. A definite undertaking from the Government would doubtless be helpful in that regard.

Even if we were in a position to obtain assurances for overseas visitors using BritRail and InterRail tickets, there remains the related issue of "Rail Rover" and "Inclusive Tour" tickets which are sold within the United Kingdom. Rail Rovers provide for unlimited travel in various regions of the country—for example, the East Midlands—while inclusive tour tickets are usually sold through holiday brochures and provide a simplified flat-fare scheme from the prospective holiday makers home region to either a United Kingdom resort or an air or sea port. I understand that negotiations on those schemes are unlikely to succeed, unless there is some government intervention.

When the question of such discretionary fares was discussed at the beginning of the Bill's passage in another place, the Government indicated that, apart from one area where they made some concessions in respect of persons suffering from disability, they had set their face against making any further concessions. However, further concessions have been made. Nevertheless, we still do not regard the situation as being adequate. We believe that there is an overwhelming case in relation to those fares which stimulate tourism to the great advantage of the country. After all, tourism is one of the greatest money earners and one of the greatest sources of support for the balance of payments of any industry in the country. Consequently, we must have careful regard to the effects of the Government's proposals in that connection.

We know that the purpose of the Bill is that the privatisation will break up the network and that there will be competition between one operator and another. That is the principle and basic objective. However, I believe that there is the real risk of breakdowns and failures in that regard. That could have a most dramatic effect on the whole network provision, even if the Minister says that is not the case and dismisses it. I do not believe that he can totally dismiss it because it is an inherent risk in the situation. But even if the Minister says that franchised operators will improve on-train services, how, for example, can the London-Edinburgh franchisee possibly afford to market that service adequately in the United States? It is just not on. However, even if he did so, what answer does the agent give to the client who wants to return to the South of the country via Chester? By doing so, will he in fact advantage his competitors?

I said before that the overseas element in tourism is an enormous moneyspinner for the country. I believe that the Minister will be able to give the House the correct figures. I believe that it generates something like £8 billion or £9 billion a year. That is an enormous amount of money. The benefits at risk in the current situation—and, in my view, they are really at risk—relate to the question of through-ticketing for journeys which involve multiple operators, the cross-validity of tickets where rival operators share tracks, the availability of timetable information, connections at junctions and discounted fares. It is in the relationship of discounted fares that I think the greatest threat to tourism lies.

It seems that about 80 per cent. of all rail journeys, excluding commuting on season tickets, are made using discounted fares of one kind or another. I obtained that information from a document issued by the English Tourist Board. The document was written by Richard Hope, the Consultant Editor of Railway Gazette. In it, Mr. Hope also says; About half of all rail journeys involve two of the BR profit centres, which are being used as models for franchising. Hence 40% of all trips—generally the longer ones—are now made at discounted fares and could in future cost twice as much". That is a very serious potential situation. It is a real risk. In my view, the Government need to go much further in making provision. I suggest that they do so along the lines of the amendment that we are currently debating. I beg to move.

6 p.m.

Lord Boyd-Carpenter

My Lords, I do not quite understand why the noble Lord, Lord Clinton-Davis, thinks it necessary to insert this one particular provision in the duties of the franchising director. I fully share his enthusiasm for the tourist industry. Indeed I was glad to hear his enthusiastic tribute—a view not always taken on the Benches opposite—to the value of our tourist trade. That is a view I fully share. I do not understand, however, why this one particular activity should be tacked on to the duties of the franchising director, leaving all his other profitable activities in the air. That does not seem clear.

Lord Clinton-Davis

Will the noble Lord give way?

Lord Boyd-Carpenter

I shall give way in a moment. It does not seem clear why this particular activity should be picked out. I give way to the noble Lord with pleasure.

Lord Clinton-Davis

I am much obliged to the noble Lord for giving way. Perhaps he will look also at Amendment No. 36, which we shall be debating later, dealing with railcards and the duties of the franchising director in that regard.

Lord Boyd-Carpenter

That does not seem to answer the question at all. Why pick out this particular activity of the franchising director and specify it in this clause when all the other activities are left in the air? The noble Lord has not answered that point.

The Earl of Caithness

My Lords, as the noble Lord, Lord Clinton-Davis, said, this is an identical amendment to the one he moved in Committee. He will not be surprised to hear that the Government' s position has not changed from that which I explained at col. 1039 of the Official Report on 1st July. I said then that the Government are keen to promote the use of the railway, whether by UK residents or incoming visitors, that this is already reflected in the regulator's duties in Clause 4, and that similar objectives are likely to be placed on the franchising director through guidance given to him by the Secretary of State under this clause, but that we saw no need to write into the Bill protection for products like the BritRail pass.

My noble friend Lord Boyd-Carpenter was right to draw attention to the importance of the tourist industry, but given his support for that industry it is interesting to note that he did not see the need to invoke this amendment. In Committee I also said that the Government recognised the value of the railways to the travel trade and to tourism, that marketing rail services to incoming tourists is substantial business, with sales of the BritRail pass alone representing some £15 million a year, and that the Government are confident that such an arrangement, which makes sound commercial sense for BR now, will be equally attractive to future operators.

I can tell the noble Lord that, in earnest of the Government's concern to ensure appropriate arrangements, my right honourable friend the Minister for Public Transport recently met representatives of the business travel trade and will shortly be meeting representatives of the Association of British Travel Agents to discuss these matters.

Although no final decision has yet been taken on the future of British Rail International, I can also assure the noble Lord, Lord Clinton-Davis, that good progress is being made in the development of what might conveniently be called an association of train operators. This would provide a forum, both for operators to develop common arrangements for meeting their obligations with respect to such matters as through ticketing, which is the subject of a later amendment, and also to facilitate collective agreement on matters which they may wish to arrange on a voluntary and commercial basis.

We must give operators freedom to come forward with fresh ideas and not simply seek to enshrine all current arrangements in law, as lawyers are often wont to do. We have given statutory protection in the Bill where we felt it appropriate to do so. However, we do not believe that further amendment is necessary to ensure the continuation of products like the BritRail pass.

Lord Tordoff

My Lords, before the noble Earl sits down, I should point out that he made reference to an association of train operators. Has that association a name yet? Can I offer the name of British Rail to that association?

Lord Clinton-Davis

My Lords, it appears that the Minister will not reply to that comment. The noble Lord, Lord Boyd-Carpenter, has the reputation in this House of supporting the Government through thick and thin. These are thin days for him. It is offensive when he says that we on this side of the House do not care about tourism. Under the Labour government major steps were taken to advance the tourist industry and those steps were successful. That has been the case with all governments. The noble Lord, Lord Boyd-Carpenter, made a rather offensive remark and I hope that he will withdraw it. We are as much concerned as he and his noble friend the Minister to promote tourism. We have done our very best to support it. I give way to the noble Lord.

Lord Boyd-Carpenter

My Lords, I am sorry if the noble Lord regards my remarks as offensive. The last thing I would wish is to be offensive to him. However, I have noticed that the Labour Party is not on the whole so much in favour of various activities which attract tourists as are my noble friends. If the noble Lord is saying that his party has now thought better of it and wishes to support tourist attracting activities, so much the better.

Lord Clinton-Davis

My Lords, there is no basis for what the noble Lord says about the Labour Party. I shall not press the point. It would have been more appropriate, however, if the noble Lord had withdrawn an allegation which has not a scintilla of evidence to back it. Indeed, when I was in another place a Conservative Party supporter wrote to me saying that she found the number of tourists coming to Britain rather offensive as they spoilt the environment of our great city. As a Minister at the time I replied to her explaining that tourism produced billions of pounds in revenue for Britain each year. She then wrote asking why foreign tourists could not simply send the money and stay away. I do not know whether that lady was a Conservative Party member in the former constituency of the noble Lord. The fact is I am disappointed that the Government are not prepared to take on board an amendment of this kind.

We believe there are real potential difficulties in achieving the measure of co-operation which the Government hope for as there is no basis for it. This mysterious association of train operators, whoever it may comprise and however many people it may encompass, is a matter for speculation only. We take the view that it is critical we support the tourist industry through the measures we have proposed. If the noble Lord, Lord Boyd-Carpenter, really cared about that industry, he would follow us into our Lobby. We propose to take the opinion of the House.

6.7 p.m.

Their Lordships divided; Contents, 52: Not-Contents, 110.

Division No. 3
CONTENTS
Airedale, L.	Houghton of Sowerby, L.
Archer of Sandwell, L.	Jay, L.
Ardwick, L.	Jay of Paddington, B.
Ashley of Stoke, L.	Jeger, B.
Birk, B.	Kilbracken, L.
Blackstone, B.	Listowel, E.
Bonham-Carter, L.	Llewelyn-Davies of Hastoe, B.
Bottomley, L.	Longford, E.
Brimelow, L.	Merlyn-Rees, L.
Carmichael of Kelvingrove, L.	Meston, L.
Clinton-Davis, L.	Monkswell, L.
Cocks of Hartcliffe, L.	Morris of Castle Morris, L.
David, B.	Nicol, B.
Donoughue, L.	Pitt of Hampstead, L.
Dormand of Easington, L.	Plant of Highfield, L.
Eatwell, L.	Rea, L.
Fisher of Rednal, B.	Russell, E.
Gallacher, L.	Sefton of Garston, L.
Geraint, L.	Serota, B.
Gould of Potternewton, B.	Stedman, B.
Graham of Edmonton, L. [Teller.]	Stoddart of Swindon, L.
Hanworth, V.	Tordoff, L. [Teller.]
Harris of Greenwich, L.	Turner of Camden, B.
Haskel, L.	White, B.
Hilton of Eggardon, B.	Williams of Elvel, L.
Hollis of Heigham, B.	Williams of Mostyn, L.

NON-CONTENTS
Addison, V.	Craigavon, V.
Aldenham, L.	Craigmyle, L.
Archer of Weston-Super-Mare, L.	Cranborne, V.
Arran, E.	Crathorne, L.
Astor, V.	Cumberlege, B.
Astor of Hever, L.	Davidson, V.
Banbury of Southam, L.	Dean of Harptree, L.
Beloff, L.	Denham, L.
Belstead, L.	Denton of Wakefield, B.
Blatch, B.	Downshire, M.
Boardman, L.	Dudley, E.
Boyd-Carpenter, L.	Dunrossil, V.
Brabazon of Tara, L.	Eden of Winton, L.
Bridgeman, V.	Elles, B.
Brougham and Vaux, L.	Elliot of Harwood, B.
Cadman, L.	Elliott of Morpeth, L.
Caithness, E.	Elton, L.
Campbell of Alloway, L.	Faithfull, B.
Carnegy of Lour, B.	Ferrers, E.
Chalker of Wallasey, B.	Finsberg, L.
Clark of Kempston, L	Flather, B.
Colwyn, L.	Fraser of Carmyllie, L.
Constantine of Stanmore, L.	Gardner of Parkes, B.
Cox, B.	Gisborough, L.

Goschen, V.	Munster, E.
Granard, E.	Murton of Lindisfarne, L.
Hailsham of Saint Marylebone, L.	Nelson, E.
Halsbury, E.	Onslow, E.
Henley, L.	Oppenheim-Barnes, B.
Hives, L.	Orkney, E.
HolmPatrick, L.	Oxfuird, V.
Hood, V.	Reay, L.
Hooper, B.	Rees, L.
Howe, E.	Rippon of Hexham, L.
Huntly, M.	Rodger of Earlsferry, L.
Jeffreys, L.	Romney, E.
Jenkin of Roding, L.	St. Davids, V.
Killearn, L.	Seccombe, B.
Kinnoull, E.	Stanley of Alderley, L.
Lauderdale, E.	Stewartby, L.
Leigh, L.	Stockton, E.
Lindsay, E.	Strathclyde, L.
Long, V.	Strathcona and Mount Royal, L.
Lucas, L.	Strathmore and Kinghorne, E.
Lucas of Chilworth, L.	[Teller.]
Lyell, L.	Swinfen, L.
McColl of Dulwich, L.	Swinton, E.
Mackay of Clashfern, L.	Teviot, L.
[Lord Chancellor.]	Thomas of Gwydir, L.
Macleod of Borve, B.	Torrington, V.
Marlesford, L.	Trumpington, B.
Merrivale, L.	Ullswater, V. [Teller.]
Mersey, V.	Vaux of Harrowden, L.
Milverton, L.	Vivian, L.
Monk Bretton, L.	Wakeham, L.
Mottistone, L.	[Lord Privy Seal.]
Mowbray and Stourton, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.15 p.m.

The Earl of Caithness moved Amendment No. 11:

Page 6, line 17, leave out (" 36, 38") and insert (" 39").

On Question, amendment agreed to.

Lord Carmichael of Kelvingrove moved Amendment No. 12:

Page 6, line 20, at end insert:

("() The guidance referred to in section 5(1) (a) above shall include, amongst other things, instructions as to the way in which the Franchising Director shall—

1. (a) consider tenders submitted under section 24 below;
2. (b) publish the results of that process.").

The noble Lord said: My Lords, I believe that this amendment could be helpful to the Government. The purpose of the amendment is to include a provision that the results of the tendering process detailed in Clause 24 should be published.

This is an important process. The Government must realise from what has been said how large the British railways industry is. Therefore the public should be able to understand how the tendering process is conducted. If the amendment were accepted, the guidance referred to in Clause 5(1) (a) would allow the public and the House to understand why the tendering was done in a particular way and why some companies were granted a franchise and others were not. I beg to move.

The Earl of Caithness

My Lords, I believe that I can go a long way to meet the point made by the noble Lord, Lord Carmichael of Kelvingrove. I am happy to give the noble Lord an assurance that the instructions and guidance that the Secretary of State will give to the franchising director under Clause 5(1) (a) will include guidance as to how he should consider tenders for passenger franchises.

Your Lordships will have seen the draft objectives, which we first made available in February and which are in the Library. That draft said: You will need to ensure that your activities in granting franchises comply with the requirements of EC legislation pertaining to railways and, in particular, to the payment of subsidy, pursuant to your status as a competent authority under EC Regulation 1191/69". It went on to say: It will be your task to develop criteria for short-listing bidders for franchises and then making the final selection. These criteria should be submitted to me for approval for publication". We are now actively considering whether we should give more specific instructions.

I believe that we should leave it to the franchising director finally to decide the criteria against which he will evaluate bids and whether he should publish such criteria in advance. Similarly, I think that he should be given flexibility to decide how he should publish the results of franchise competitions. I am sure that he will wish to be as open as possible.

I believe that what I have said goes a long way to easing the anxieties of the noble Lord, Lord Carmichael.

Lord Carmichael of Kelvingrove

My Lords, I am very pleased with the Minister's reply. He said that the franchising director would be given the freedom to decide how he would publish the results. Does that mean that the Government would expect him to publish the results of the different tenders he had received in some way after the decision had been made, although perhaps the detail would have to be trimmed for commercial reasons?

The Earl of Caithness

My Lords, to clear up that point, the draft guidance which is already in the Library contains these words: These criteria should be submitted to me for approval for publication". As I said, we are actively considering whether we should give more specific instructions. I shall take into account what the noble Lord has just said.

Lord Carmichael of Kelvingrove

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 [Prohibition on unauthorised operators of railway assets]:

Lord Clinton-Davis moved Amendment No. 13:

Page 6, line 32, at end insert:

("() A person shall not be eligible to receive a licence for the operation of a service for the carriage of passengers or goods by railway if he owns, controls or leases any of the track upon which the service will operate.").

The noble Lord said: My Lords, in moving Amendment No. 13, it may be for the convenience of the House if I speak also to Amendment No. 40.

We seek to test the Government's determination to separate train operations from the management of infrastructure. It appears that the main element of the government strategy since the White Paper last year has been to establish the Railtrack authority separately from the operations of passenger and freight trains. The only variation from this philosophy has been the Isle of Wight passenger service, which is to be a vertically integrated franchise embracing trains and track and certain freight-only lines which may be sold to or managed by the freight train operators.

As we have said on many previous occasions—the Minister has to concede it—the existence of Railtrack is critical to the whole philosophy of the Bill. For that very reason, we sought at Committee stage to write that new company specifically into the legislation. However, the Government, for their own reasons, which are still far from clear to me, strongly resist it.

The amendments that we moved were critically important. But, oddly enough, the Government themselves have amended the Bill when they removed the prohibition on vertical integration. Clause 6 of the Bill as published in January made provisions which, for reasons best known to the Government, ultimately seem not to have prevailed. At Committee stage in another place, at col. 389 of the Official Report of 23rd February 1993, the Government asserted that the changes that they undertook were of no great significance. Whatever may have motivated the Government's change of heart—I believe that the Minister has to explain it—it is odd that Railtrack should still merit no mention in the Bill.

Since the Parliamentary Recess began, there have been some rumours. Whether they are true I do not know. Perhaps the Minister will be able to comment also on that issue. The rumours are that the Government are considering another change of approach. We shall have to find out from the Minister whether that is right. The announcement of a single franchise for services in East Anglia embracing those currently operated by the InterCity and Regional Railways divisions of British Rail places the Government on a course whereby vertical integration could take on a certain inevitability in such instances.

In our submission there are serious potential consequences for the safety regime. The Health and Safety Executive has proposed that Railtrack is to be the safety validation authority for all train operators. If Railtrack is removed from the scene, who will undertake the safety validation? That question has been posed already in relation to the vertically integrated Isle of Wight franchise. At col. 537 of the Official Report of 19th July 1993, the Government stated that, Railtrack will validate the safety case of the Isle of Wight. As that is a small, self-contained operation, Railtrack will keep the freehold of the infrastructure".

If Railtrack retains the freehold of the track in vertically integrated operations, it will be unable physically to prevent a non-validated operator from running trains. The scope for mishap on the Isle of Wight is mercifully limited. But, for example, what of the London to Norwich main line?

These are probing amendments to find out how seriously the Government are still committed to the concept of a track authority.

Amendment No. 40 requires the Secretary of State to include in the guidance to the franchising director instructions on the way in which the franchising process is conducted. The purpose is to ensure that the rules of franchising are publicly available and enable justice to be seen to be done.

Amendment No. 40 relates to an amendment that I moved at Committee stage which would have imposed statutory duties on the franchising director in relation to the invitation of bids for franchisers, the selection of the successful franchisee, and the publication of the reasons for the franchising director's choice. We sought to justify that amendment on the grounds that the Bill provides no detail as to how the franchising process is to be conducted. There is no reference to safeguards either for the public or for prospective franchisees. Little if any restraint is placed on the franchising director. That seems to me to be in stark contrast to the position of transport authorities which are responsible for tendered bus services under the provisions of the Transport Act 1985.

The Minister rejected that earlier amendment on a number of grounds. He stated that it would not be appropriate to impose a statutory duty on the franchising director as to the way in which bids are invited because he would in any case wish to encourage competition. I refer to col. 1148 of Hansard of 5th July 1993.

On the question of publication of the franchising director's reasons for selecting a particular franchisee, the Minister stated at col. 1148: The franchising director's progress in granting franchises and holding competitions will be covered in public reports, and, indeed, the provisions of the franchise agreements he enters into will, subject to the necessary protection offered by Clause 65(4), be open to public scrutiny as part of the franchising director's register. I am sure that Members of the Committee will understand that no tender competition can ever be held wholly in the public domain. Matters must be considered and discussed which are commercially confidential to those concerned".

However, the Minister did not explain why the same qualifications do not apply in the case of bus tendering. Why is there a difference of approach? Under the 1985 Act, transport authorities are in a position in relation to subsidised bus services which is precisely similar to that of the franchising director in relation to rail services. The only significant difference is that bus tendering is carried out at a route rather than a network level. But the constraints proposed in the Committee stage amendments apply equally to bus tendering.

I discerned some glimmer of hope when the Minister stated at Committee stage at col. 1147 of the Official Report of 5th July 1993: In so far as we want to guide the tendering process, we can do so through the objectives and guidance which the Secretary of State will set for the franchising director".

I invited the Minister to see whether there was any room for compromise between himself and myself on the subject. The amendment that I now put forward seems to me to provide that room for compromise. It simply takes the Minister's commitment one stage further. Rather than relying on the Government considering the use of the Secretary of State's guidance to the franchising director to deal with the way in which the franchising process is conducted, it requires them to do so. If Ministers are not prepared to allow the rules to be written on to the face of the Bill it is essential that they are required to issue guidance on the subject. The amendment simply achieves that objective. I beg to move.

The Earl of Caithness

My Lords, I am grateful for the way in which, the noble Lord explained the amendments. When I studied them I found them rather confusing; and the way in which I had interpreted the meaning was very different from the noble Lord's explanation of his interpretation of the amendments. Obviously I shall read the Official Report with great care to see exactly what he said, but I start by saying that I believe the noble Lord to be mistaken. Clause 6 has never prohibited vertically integrated operations. It has always been the case that the Government wish to allow for vertical integration in certain cases. The purpose of the licensing amendments moved in another place was simply to direct them more squarely at the person who actually has control—that is to say, the operator—rather than at the owner of a rail facility.

I had interpreted the two amendments to require the prevention of vertically integrated franchises. I could not understand why the noble Lord wished to do that. Although the Government's view has always been and remains that it would not be desirable for the franchising director to let vertically integrated franchises for the majority of, passenger services—and that is why Railtrack is to be the national track authority—there are certain circumstances where it might be appropriate. For example, where a part of the network is operationally discrete, then a vertically integrated franchise may be the most sensible arrangement for the provision of services. The noble Lord mentioned the Isle of Wight and it is also the example that I was going to use. The Secretary of State has already announced his intention that this particular franchise should be let on a vertically integrated basis.

So we seek, in the main, to have a national track authority to be known at the moment as Railtrack, but necessarily to preserve that bit of flexibility in case a vertically integrated franchise is the right way forward. We must also allow the franchising director to have the appropriate flexibility, but he will need to secure the consent of the Secretary of State before letting a vertically integrated franchise. If the franchising director needs that flexibility, we must resist Amendment No. 40.

Amendment No. 13 would go much wider than franchised services. There are a number of examples of passenger or goods train operators who control tracks and who may require a licence. We propose to license London Underground Limited in respect of the lines where both it and BR operate services. Many freight operators may control short lengths of track within private sidings or short freight spurs. Thus Amendment No. 13 also does not commend itself to the Government. Having said that, I shall, of course, read what the noble Lord said with regard to the other points which he raised.

Lord Clinton-Davis

My Lords, I am grateful to the Minister. I was only seeking to probe the Government's intentions and what he had to say validated that purpose. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.30 p.m.

Clause 7 [Exemptions from section 6]:

The Earl of Caithness moved Amendment No. 14:

Page 7, line 42, leave out subsection (6) and insert:

("(6) If any condition (the "broken condition") of a licence exemption is not complied with—

1. (a) the Secretary of State, in the case of a licence exemption under subsection (1) above, or
2. (b) the Regulator, in the case of a licence exemption under subsection (3) above,

may give to any relevant person a direction declaring that the licence exemption is revoked, so far as relating to that person, to such extent and as from such date as may be specified in the direction.

(6A) For the purposes of subsection (6) above—

"condition", in relation to a licence exemption, means any condition subject to compliance with which the licence exemption was granted;

"relevant person", in the case of any licence exemption, means a person who has the benefit of the licence exemption and who—

1. (a) is a person who failed to comply with the broken condition or with respect to whom the broken condition is not complied with; or
2. (b) is the operator of any of the railway assets in relation to which the broken condition is not complied with.").

The noble Earl said: My Lords, I beg to move Amendment No. 14 and, with the leave of the House, to speak to Amendment No. 28. The amendments are very similarly worded. They deal with breaches of conditions on exemptions contained in licence exemptions and facility exemptions granted by the Secretary of State or the regulator. Amendment No. 14 deals with licence exemptions, and Amendment No. 28 deals with facility exemptions.

The amendments provide that, if any condition of a licence exemption or a facility exemption is not complied with, then the grantor of the exemption in question can revoke the exemption so far as it relates to the relevant person. The relevant person can be the person who has the benefit of the licence and who has either failed to comply with the condition or who is the operator of the railway asset or the owner of the facility in relation to which the condition was not complied with.

To give an example of the situation with which this amendment is intended to deal, it is possible that a licence exemption might contain a condition that the number of passengers carried per day on the trains operated by the exempted person should not be greater than a certain number. Such a condition could be broken through no fault of that person, and Clause 7(6) as drafted is not effective in this case as the person who has the benefit of the exemption cannot be said to have failed to comply with the condition. A similar situation could arise in the case of Clause 17, where, for example, a facility exemption might be conditional upon a station not being used by more than a certain number of persons per day.

The amendments correct this by providing that a licence exemption or a facility exemption may he revoked where a condition of the exemption has been broken through no fault on the part of the person who has the benefit of the exemption. Similar provisions already exist in Clause 22(6) and (7), which deal with franchising exemptions, and these amendments bring the three clauses into line. I beg to move.

On Question, amendment agreed to.

[Amendment No. 15 not moved.]

Clause 9 [Conditions of licences: general]:

Lord Carmichael of Kelvingrove moved Amendment No. 16:

Page 11, line 15, at end insert:

("() A station licence shall require the operator to manage any stations covered by the licence in such a manner as to give priority to—

1. (a) the safe and efficient operation of passenger railway services;
2. (b) the comfort and convenience of passengers using the station;
3. (c) the efficient sale of tickets;
4. (d) the provision of comprehensive information on rail and other public transport services.").

The noble Lord said: My Lords, the purpose of this amendment is to look at the whole question of commercialising railway stations. The proposal was recently announced by the Secretary of State for Transport when he said that the larger stations had to be separately enfranchised. We have no objection to that as long as the conditions which are laid out in the amendment, or similar conditions, are acceptable. The conditions are that great care should be taken to maintain, the safe and efficient operation of passenger railway services; … the comfort and convenience of passengers, the efficient sale of tickets", and the provision of information as a priority to passengers in the station. The ability of passengers to obtain rail information should not in any way be reduced because of the commercial nature of the station or its commercial functions.

I believe that already in some of the big examples British Rail has been commercialising the stations; obviously, Liverpool Street and Victoria stations come to mind, and Charing Cross station has been much improved. However, in other parts of the country, stations have been made much more sociable and acceptable and they are much nicer places because of the franchising of individual parts. We would not wish to stop that, but we wish to ensure that the main purpose of the station—the benefit of the travelling public—should always be the first priority. I hope that the Minister will find a way of accepting the amendment.

I have enumerated four conditions in the amendment and I can see that perhaps it needs to be much more loosely worded in order to avoid the difficulties that could arise as regards the ways in which passengers could be inconvenienced. Those difficulties need to be overcome. However, in the spirit of the amendment, I hope that the Minister will accept that stations are principally for passengers and will seek a way to ensure that whatever happens to stations, the priority will always be the travelling public. I beg to move.

Lord Tordoff

My Lords, I am sure that the Government will not accept this amendment, but I hope that they can give reassurance on the problem that lies behind it. One fears that commercial considerations unrelated to the travelling public may take over in some places where property owners may feel that the best way of using a station is purely for shopping malls with the ticket offices tucked out of sight because they are not as attractive. I believe that some reassurance is needed.

The Earl of Caithness

My Lords, before dealing with the amendment in detail, perhaps this may be an opportunity for me to take the House through our policy as regards stations. It has now been published and is much clearer than it was at Committee stage.

Under our proposals, station freeholds will transfer from British Rail to Railtrack from next April, thus preserving their primary purpose of serving passengers and train operators. Railtrack will be asked to examine and develop options for involving the private sector in the larger stations as soon as possible, including sale on very long leases, possibly up to 125 years. The majority of stations have and will be leased to franchisees for the term of their franchise agreement. It is to this element of the policy that some of your Lordships' amendments are directed. We believe that our proposals will provide new opportunities for stations and benefits to passengers and operators while maintaining the necessary safeguards through station access agreements and station operators' licences. The proposals will allow private sector finance and expertise to realise the development and commercial trading potential and help to provide a more attractive environment for passengers. I return to what I said earlier; namely, their primary purpose is to serve passengers and train operators.

I do not know whether there is any difference between what the noble Lord, Lord Carmichael of Kelvingrove, wants and what the Government want. Indeed, when the noble Lord moved his amendment, I agreed with virtually everything that he said. But I also say to him that even though I did that, I believe his amendment to be unnecessary—

Lord Finsberg

My Lords, before my noble friend leaves that point, he made one reference to the long leases and spoke of perhaps up to 125 years. I wonder whether he would have another look at that term. The advice that I had many years ago in the department was that one had moved from 99 years, past 125, to 150. Will he at least look at the matter to see whether the apple in it might be 150 rather than 125?

The Earl of Caithness

My Lords, I shall deal with that; but at the moment my right honourable friend the Secretary of State has decided on a figure of 125 years. I remember that in my former job as a surveyor between 99, 125 and 150 one was talking of a fairly long distance. But of course I will look into the point that my noble friend raises.

Coming back to—

Lord Clinton-Davis

My Lords, the noble Earl will have the benefit, after he has been in office for 125 or 150 years, to come back to the House and tell us how successful the measure has been. All that is as fanciful as is the operation of the whole of this Bill.

The Earl of Caithness

My Lords, I am delighted to be part of a Government that is to be in power for another 125 years. That cheers me up enormously. Life takes on a much rosier hue. We can get on with doing more good things for the country.

Let us return to the amendment of the noble Lord, Lord Carmichael. As currently drafted, Clause 9 sets out conditions which may he included in licences generally. This amendment would require specific conditions to be included in a station licence. But the regulator, who will issue licences, is already required by Clause 4 to promote such matters as are suggested in the amendment.

It is of course quite likely that conditions of this kind would be included in a station licence. But because of the regulator's general duties set out in Clause 4, we believe that there is no need for this provision on the face of the Bill.

That brings me to the point of the noble Lord, Lord Tordoff. We are agreed in principle. We are going to get there. We shall do it by a slightly different route.

Lord Carmichael of Kelvingrove

My Lords, I can do no more than agree with the noble Earl. Like everyone else, I was quite amused at the idea of 150 years when very few of the railway stations are more than 100 years old. wonder what sort of travel we shall have in 150 years' time? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 [Conditions of licences: activities carried on by virtue of a licence exemption]:

6.45 p.m.

The Earl of Caithness moved Amendment No. 17:

Page 11, line 27, after ("person") insert ("("the licensee")").

The noble Earl said: My Lords, in moving this amendment, with the leave of the House, I shall speak to Amendments Nos. 18 and 20. These are all technical amendments.

With Amendments Nos. 17 and 18, we wish to make it clear that it is for the grantor of the licence to decide whether any licence condition should also apply to an operator's licence-exempt activities in the light of the restrictions on such conditions set out in Clause 10(2). Amendment No. 20 to Clause 15 corrects defective drafting. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 18:

Page 11, line 28, leave out from ("that,") to ("necessarily") in line 29 and insert ("in the opinion of the person granting the licence, the condition must, in consequence of the licensee's carrying on of a mixed activity,").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 19:

After Clause 10, insert the following new clause:

Assignment of licences

(".—(1) A licence shall be capable of being assigned, but only if it includes a condition authorising assignment.

(2) A licence shall not be capable of being assigned except with the consent of that one of the relevant authorities who is specified for the purpose in the licence.

(3) The "relevant authorities" for the purposes of this section are—

1. (a) the Secretary of State; and
2. (b) the Regulator.

(4) Any consent under subsection (2) above may be given subject to compliance with such conditions as the person giving the consent thinks fit to impose, which may include conditions modifying, or requiring or otherwise providing for the making of modifications to, the conditions of the licence

(5) A licence may include conditions which must be complied with before the licence can be assigned.

(6) An assignment, or purported assignment, of a licence shall be void—

1. (a) if the licence is not capable of assignment;
2. (b) if the assignment, or purported assignment, is in breach of a condition of the licence; or
3. (c) if there has, before the assignment or purported assignment, been a contravention of a condition subject to compliance with which the consent required by subsection (2) above is given.

(7) A licence shall not be capable of being assigned under or by virtue of any other provision of this Act, other than paragraph 4 of Schedule 6 to this Act.

(8) In this section "assignment" includes any farm of transfer and cognate expressions shall be construed accordingly.

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

The noble Earl said: My Lords, in moving this amendment, with the leave of the House, I shall speak to Amendments Nos. 178 and 183.

This new clause allows a licence to be assigned—that is to say, transferred from one person to another—so long as certain conditions are met. It is not our intention that licences should generally be capable of being assigned, but there may be limited circumstances in which it would be a useful option. For example, an operator might wish to transfer his licence to his subsidiary. If the licence is not assignable, the operator would need to surrender his existing licence and the subsidiary would need to apply for a new one, using the procedures set out in Clause 8. Assignment would allow an essentially technical adjustment to be made more easily.

There will, however—this is an important point—be strict controls over assignment. A licence will be assignable only if it contains a condition authorising assignment and even then only with the consent of either the Secretary of State or the regulator. In deciding whether or not to authorise assignment, the Secretary of State or the regulator will apply the same considerations as he would if considering a licence application and he would be subject to his duties under Clause 4 of the Bill. It will be possible for the Secretary of State or the regulator to attach conditions to any consent to assignment. So there will be strong safeguards against abuse. I am sure that the House will welcome that assurance. These amendments add useful flexibility to the licensing provisions and in certain circumstances can save operators time and effort. I commend them to the House.

On Question, amendment agreed to.

Clause 15 [Modification by order under other enactments]:

The Earl of Caithness moved Amendment No. 20:

Page 17, line 10, leave out ("the railway service in question;") and insert ("railway services;").

On Question, amendment agreed to.

Clause 16 [Facility owners to permit use of railway facilities by other persons]:

[Amendment No. 21 not moved.]

The Earl of Caithness moved Amendment No. 22:

Leave out Clause 16 and insert the following new clause: Access agreements: directions requiring facility owners to enter into contracts for the use of their railway facilities

(".—(1) The Regulator may, on the application of any person, give directions to a facility owner requiring him to enter into an access contract with the applicant for the purpose specified in subsection (2) below; but no such directions shall be given if and to the extent that—

1. (a) the facility owner's railway facility is, by virtue of section 17 below, an exempt facility;
2. (b) performance of the access contract, if entered into, would affect any other person's rights under an access agreement or an international railway access contract; or
3. (c) as a result of an obligation or duty owed by the facility owner which arose before the coming into force of this section, the consent of some other person is required by the facility owner before he may enter into the access contract.

(2) The purpose for which directions may be given is that of enabling the beneficiary to obtain (whether for himself alone or for himself and, so far as may be applicable, associates of his)—

1. (a) from a facility owner whose railway facility is track, permission to use that track for the purpose of the operation of trains on that track by the beneficiary;
2. (b) from a facility owner whose railway facility is a station, permission to use that station for or in connection with the operation of trains by the beneficiary;
3. (c) from a facility owner whose railway facility is a light maintenance depot, permission to use that light maintenance depot for the purpose of obtaining light maintenance services for or in connection with the operation of trains by the beneficiary, whether the facility owner is to provide those services himself or to secure their provision by another;
4. (d) from any facility owner, permission to use the facility owner's railway facility for the purpose of stabling, or otherwise temporarily holding, rolling stock in connection with the operation of trains on any track by the beneficiary; or
5. (e) from any facility owner, permission to use the facility owner's railway facility for or in connection with the operation of a network, station or light maintenance depot by the beneficiary;

but this subsection is subject to the limitations imposed by subsection (3) below.

(3) In subsection (2) above—

1. (a) paragraph (a) does not extend to obtaining permission to use track for the purpose of providing network services on that track;
2. (b) paragraph (b) does not extend to obtaining permission to use a station for the purpose of operating that station;
3. (c) paragraph (c) does not extend to obtaining permission to use a light maintenance depot for the purpose of enabling the beneficiary to carry out light maintenance;
4. (d) if and to the extent that the railway facility mentioned in paragraph (e) is track, that paragraph does not extend to obtaining permission to use that track for the purpose—
   1. (i) of providing network services on that track, or
   2. (ii) of operating any network in which that track is comprised,
   except where the purpose for which directions are sought is to enable the beneficiary to operate on behalf of the Franchising Director a network in which the track in question is comprised;
314
5. (e) if and to the extent that the railway facility mentioned in that paragraph is a station, that paragraph does not extend to obtaining permission to use that station for the purpose—
   1. (i) of providing station services at that station, or
   2. (ii) of operating that station,
   except where the purpose for which directions are sought is to enable the beneficiary to operate the station on behalf of the Franchising Director;
6. (f) if and to the extent that the railway facility mentioned in that paragraph is a light maintenance depot, that paragraph does not extend to obtaining permission to use that light maintenance depot for the purpose—
   1. (i) of carrying out light maintenance at that light maintenance depot, or
   2. (ii) of operating that light maintenance depot,
   except where the purpose for which directions are sought is to enable the beneficiary to operate the light maintenance depot on behalf of the Franchising Director.

(4) Any reference in this section to a person operating a network, station or light maintenance depot "on behalf of the Franchising Director" is a reference to his operating the network, station or light maintenance depot in pursuance of any agreement or other arrangements made by the Franchising Director for the purpose of performing a duty imposed upon him, or exercising a power conferred upon him, under or by virtue of this Part to secure the operation of that network, station or light maintenance depot.

(5) Nothing in this section authorises the Regulator to give directions to any person requiring him to grant a lease of the whole or any part of a railway facility.

(6) In this Part—

"access contract" means—

1. (a) a contract under which—
   1. (i) a person (whether or not the applicant), and
   2. (ii) so far as may be appropriate, any associate of that person,
   obtains permission from a facility owner to use the facility owner's railway facility; or
2. (b) a contract conferring an option, whether exercisable by the applicant or some other person, to require a facility owner to secure that—
   1. (i) a person (whether or not the applicant or that other), and
   2. (ii) so far as may be appropriate, any associate of that person,
   obtains permission from the facility owner to use his railway facility;

and any reference to an "access option" is a reference to an option falling within paragraph (b) above;

"facility owner" means any person—

1. (a) who has an estate or interest in, or right over, a railway facility; and
2. (b) whose permission to use that railway facility is

needed by another before that other may use it; and any reference to a facility owner's railway facility is a reference to the railway facility by reference to which he is a facility owner.

91/440/EEC

(7) In this section—

"the applicant" means the person making the application for directions;

"associate", in relation to any person, includes—

1. (a) any servant, agent or independent contractor of his;
2. (b) any passenger of his;
3. (c) any person engaged in the provision of goods or services to or for him; and
4. (d) any other person who deals or has business with him;

"the beneficiary" means the person mentioned in paragraph (a) (i) or, as the case may be, paragraph (b) (i) of the definition of "access contract" in subsection (6) above, according to the description of access contract in question;

"directions" means directions under this section;

"the Directive" means the Directive of the Council of the European Communities dated 29th July 1991 on the development of the Community's railways;

"implementing regulation" means a provision contained in subordinate legislation made for the purpose of implementing the Directive;

"international railway access contract" means an access contract entered into as a result of—

1. (a) an application made under an implementing regulation by an international grouping to an infrastructure manager for access and transit rights, or for transit rights, for the provision of international services between the member States where the undertakings constituting the international grouping are established; or
2. (b) an application made under an implementing regulation by a railway undertaking established, or to be established, in a member State other than the United Kingdom to an infrastructure manager for the grant of access for the purpose of the operation of international combined transport goods services;

and expressions used in paragraph (a) or (b) above and in the Directive have the same meaning in that paragraph as they have in the Directive;

"lease" includes an underlease or sublease and an agreement for a lease, underlease or sublease.

(8) Any reference in this section to obtaining permission to use a railway facility includes—

1. (a) a reference to obtaining, in connection with any such permission, power to obtain the provision of ancillary services relating to that railway facility, whether the facility owner in question is to provide those services himself or to secure their provision by another; and
2. (b) a reference to obtaining permission—
   1. (i) to enter upon the facility land, with or without vehicles,
   2. (ii) o bring things on to that land and keep them there,
   3. (iii) to carry out works on that land, and
   4. (iv) to use and maintain any things kept, or buildings or other works constructed, on that land (whether by the beneficiary or another) or any amenities situated on that land,
   "facility land" meaning in this paragraph the land which constitutes the railway facility in question;

and, in subsection (2) (c) above, the reference to obtaining permission to use a light maintenance depot includes a reference to obtaining power to obtain light maintenance services at that light maintenance depot., whether the facility owner is to provide those services himself or to secure their provision by another.

(9) Any reference in this section to a railway facility includes a reference to a part of a railway facility.

(10) Schedule (Access agreements: applications for access contracts) to this Act shall have effect with respect to applications for directions.

(11) Any sums required for the making by the Franchising Director of payments in respect of an access contract entered into pursuant to directions under this section or Schedule (Access agreements: applications for access contracts) to this Act shall, if the access contract is one—

1. (a) in relation to which the Franchising Director is the person who made the application under this section, or
2. (b) under which an access option is exercisable by the Franchising Director,

be paid by the Secretary of State out of money provided by Parliament.").

The noble Earl said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 23 and 24:

After Clause 16, insert the following new clause:

Access agreements: contracts requiring the approval of the Regulator

(" .—(1) A facility owner shall not enter into an access contract to which this section applies unless—

1. (a) he does so pursuant to directions under section 16 above or Schedule (Access agreements: applications for access contracts) to this Act; or
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2. (b) the Regulator has approved the terms of the access contract and the facility owner enters into the contract pursuant to directions under this section;

and any access contract to which this section applies which is entered into otherwise than in compliance with paragraph (a) or (b) above shall be void.

(2) The access contracts to which this section applies are those order which the beneficiary obtains, or, in the case of an access ontract conferring an access option, may obtain, (whether for himself alone or for himself and associates of his)—

1. (a) from a facility owner whose railway facility is track, permission to use that track for the purpose of the operation of trains on that track by the beneficiary;
2. (b) from a facility owner whose railway facility is a station, permission to use that station, for or in connection with the operation of trains by the beneficiary;
3. (c) from a facility owner whose railway facility is a light maintenance depot, permission to use that light maintenance depot for the purpose of obtaining light maintenance services for or in connection with the operation of trains by the beneficiary, whether the facility owner is to provide those services himself or to secure their provision by another;
4. (d) from any facility owner, permission to use the facility owner's railway facility for the purpose of stabling, or otherwise temporarily holding, rolling stock in connection with the operation of trains on any track by the beneficiary; or
5. (e) from any facility owner, permission to use the facility owner's railway facility for or in connection with the operation of a network, station or light maintenance depot by the beneficiary;

but this subsection is subject to subsections (3) and (4) below.

(3) This section does not apply to an access contract—

1. (a) if and to the extent that the railway facility to which the access contract relates is, by virtue of section 17 below, an exempt facility; or
2. (b) if and to the extent that the access contract is an international railway access contract.

(4) In subsection (2) above—

1. (a) paragraph (a) does not extend to permission to use track for the purpose of providing network services on that track;
2. (b) paragraph (b) does not extend to permission to use a station for the purpose of operating that station;
3. (c) paragraph (c) does not extend to permission to use a light maintenance depot for the purpose of enabling the beneficiary to carry out light maintenance;
4. (d) if and to the extent that the railway facility mentioned in paragraph (e) is track, that paragraph does not extend to obtaining permission to use that track for the purpose—
   1. (i) of providing network services on that track, or
   2. (ii) of operating any network in which that track is comprised,
   unless the purpose of entering into the access contract is to enable the beneficiary to operate on behalf of the Franchising Director a network in which the track in question is comprised;
5. (e) if and to the extent that the railway facility mentioned in that paragraph is a station, that paragraph does not extend to obtaining permission to use that station for the purpose—
   1. (i) of providing station services at that station, or
   2. (ii) of operating that station,
   unless the purpose of entering into the access contract is to enable the beneficiary to operate the station on behalf of the Franchising Director;
6. (f) if and to the extent that the railway facility mentioned in that paragraph is a light maintenance depot, that paragraph does not extend to obtaining permission to use that light maintenance depot for the purpose—
   1. (i) of carrying out light maintenance at that light maintenance depot, or
   2. (ii) of operating that light maintenance depot, unless the purpose of entering into the access contract is to enable the beneficiary to operate the light maintenance depot on behalf of the Franchising Director.

(5) In any case where—

1. (a) a facility owner and another person (the "other party") have agreed the terms on which they propose to enter into an access contract to which this section applies, but
2. (b) the circumstances are such that, by virtue of subsection (1) (b) above, those terms must be approved, and directions must be given, by the Regulator before the facility owner may enter into the proposed access contract,

it shall be for the facility owner to submit the proposed access contract to the Regulator for approval of its terms.

(6) If, on the submission of a proposed access contract pursuant to subsection (5) above, the Regulator approves its terms, he shall issue directions to the facility owner—

1. (a) requiring him to enter into the proposed access contract within such period as may be specified for the purpose in the directions; but
2. (b) releasing him from his duty to do so if the other party fails to enter into the proposed access contract within such period as may be specified for the purpose in the directions;

and the Regulator shall send a copy of the directions to the other party.

(7) If, on the submission of a proposed access contract pursuant to subsection (5) above, the Regulator does not consider it appropriate to approve its terms without modification (or to reject it), he may, after consultation with the facility owner and the other party, issue directions to the facility owner—

1. (a) approving the terms of the proposed access contract, but subject to such modifications as may be specified in the directions; and
2. (b) requiring the facility owner to enter into the proposed access contract on those terms, as so modified; but
3. (c) releasing him from his duty to do so if either—

1. (i) the facility owner gives the Regulator notice of objection before the expiration of the period of fourteen days beginning with the day after that on which the directions are issued; or
2. (ii) the other party fails to enter into the proposed access contract, on the terms as modified under this subsection, before the date specified for the purpose in the directions;

and the Regulator shall send a copy of the directions to the other party.

(8) In this section, "associate", "the beneficiary", "international railway access contract" and "lease" have the same meaning as they have in section 16 above.

(9) The following provisions of section 16 above, that is to say—

1. (a) subsection (4),
2. (b) subsection (8) (a) and (b), and
3. (c) subsection (9),

apply for the purposes of this section as they apply for the purposes of that section; and the words following paragraph (b) of subsection (8) of that section apply in relation to subsection (2) (c) of this section as they apply in relation to subsection (2) (c) of that section.

(10) This section shall not prevent a facility owner from granting a lease of any land which consists of or includes the whole or any part of his railway facility.

(11) Any sums required for the making by the Franchising Director of payments in respect of an access contract entered into pursuant to directions under this section shall, if the access contract is one—

1. (a) to which the Franchising Director is a party, but in relation to which he is not the facility owner, or
2. (b) under which the Franchising Director is the person by whom an access option is exercisable,

be paid by the Secretary of State out of money provided by Parliament.").

After Clause 16, insert the following new clause:

Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network

(".—(1) The Regulator may, on the application of any person, give directions to an installation owner requiring him to enter into an installation access contract with the applicant for the purpose of enabling the beneficiary to obtain (whether for himself alone or for himself and, so far as may be applicable, associates of his) permission to use the installation owner's network installation for the purpose of operating, on behalf of the Franchising Director, the network in which the network installation is comprised.

(2) Directions shall not be given under subsection (1) above in the case of any network installation if and to the extent that, as a result of an obligation or duty owed by the installation owner which arose before the coming into force of this section, the consent of some other person is required by the installation owner before he may enter into the installation access contract.

(3) An installation owner shall not enter into an installation access contract to which this subsection applies unless—

1. (a) he does so pursuant to directions under subsection (1) above or Schedule (Access agreements: applications for access contracts) to this Act, as applied by this section; or
2. (b) the Regulator has approved the terms of the installation access contract and the installation owner enters into the contract pursuant to directions given by virtue of subsection (5) below;

and any installation access contract to which this subsection applies which is entered into otherwise than in compliance with paragraph (a) or (b) above shall be void.

(4) The installation access contracts to which subsection (3) above applies are those under which the beneficiary obtains (whether for himself alone or for himself and associates of his) from an installation owner permission to use the installation owner's network installation for the purpose of operating, on behalf of the Franchising Director, the network in which the network installation is comprised.

(5) Subsections (5) to (7) of section (Access agreements: contracts requiring the approval of the Regulator) above shall apply in relation to installation access contracts to which subsection (3) of this section applies as they apply in relation to access contracts to which that section applies, but with the following modifications, that is to say—

1. (a) for any reference to a facility owner there shall be substituted a reference to an installation owner;
2. (b) for any reference to an access contract to which that section applies there shall be substituted a reference to an installation access contract to which subsection (3) above applies;
3. (c) for the reference to subsection (1) (b) of that section there shall be substituted a reference to subsection (3) (b) of this section.

(6) Nothing in this section—

1. (a) authorises the Regulator to give directions to an installation owner requiring him to grant a lease of the whole or any part of his network installation; or
2. (b) prevents an installation owner from granting a lease of any land which consists of or includes the whole or any part of his network installation.

(7) Any reference in this section to a person operating a network "on behalf of the Franchising Director" is a reference to his operating the network in pursuance of any agreement or other arrangements made by the Franchising Director for the purpose of performing a duty imposed upon him, or exercising a power conferred upon him, under or by virtue of this Part to secure the operation of that network.

(8) Any reference in this section to obtaining permission to use a network installation includes—

1. (a) a reference to obtaining, in connection with any such permission, power to obtain the provision of ancillary services relating to that network installation, whether the installation owner in question is to provide those services himself or to secure their provision by another; and
2. (b) a reference to obtaining permission—
   1. (i) to enter upon the installation land, with or without vehicles,
   2. (ii) to bring things on to that land and keep them there,
   3. (iii) to carry out works on that land, and
   4. (iv) to use and maintain any things kept, or buildings or other works constructed, on that land (whether by the beneficiary or another) or any amenities situated on that land;

and in paragraph (b) above "installation land" means the land which constitutes the network installation in question.

(9) In this Part—

"installation access contract" means a contract under which—

1. (a) a person, (whether or not the applicant), and
2. (b) so far as may be appropriate, any associate of that person,

obtains permission from an installation owner to use the installation owner's network installation;

"installation owner" means any person—

1. (a) who has, an estate or interest in, or right over, a network installation; and
2. (b) whose permission to use that network installation

is needed by another before that other may use it; and any reference to an installation owner's network installation is a reference to the network installation by reference to which he is an installation owner.

(10) In this section—

"ancillary service." means any service which is necessary or expedient for giving full effect to any permission or right which a person may have to use a network installation;

"the applicant" means the person making the application for directions under subsection (1) above;

"associate" has the meaning given by section 16(7) above; "the beneficiary" means the person mentioned in paragraph (a) of the definition of "installation access contract" in subsection (9) above;

"lease" includes an underlease or sublease and an agreement for a lease, underlease or sublease;

"network installation" means any installation (other than track) which comprised in a network.

(11) Any reference in this section to a network installation includes a reference to a part of a network installation.

(12) Schedule (Access agreements: applications for access contracts) to this Act shall have effect with respect to applications for directions under subsection (1) above as it has effect with respect to applications for directions under section 16 above, but with the following modifications, that is to say—

1. (a) for any reference to an access contract, there shall be substituted a reference to an installation access contract;
2. (b) any reference to an application for directions under section 16 above shall be taken as a reference to an application for directions under subsection (1) above;
3. (c) for any reference to the facility owner, there shall be substituted a reference to the installation owner mentioned in subsection (1) above;
4. (d) for any reference to section 16 above (but not to any specific provision of that section) there shall be substituted a reference to this section.

(13) There shall be paid by the Secretary of State out of money provided by Parliament any sums required for the making by the Franchising Director of payments in respect of—

1. (a) an installation access contract—
   1. (i) which is entered into pursuant to directions under subsection (1) above or Schedule (Access agreements: applications for access contracts) to this Act, as applied by this section; and
   2. (ii) in relation to which the Franchising Director is the person who made the application under this section; and
2. (b) an installation access contract—
   1. (i) which is entered into pursuant to directions given by virtue of subsection (5) above; and
   2. (ii) to which the Franchising Director is a party, but in relation to which he is not the installation owner.").

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

On Question, amendments agreed to.

[Amendment No. 25 not moved.]

Clause 17 [Exemption of railway facilities from section 16]:

The Earl of Caithness moved Amendments Nos. 26 and 27:

Page 19, line 17, leave out ("section 16(1) to (5)") and insert ("sections 16 and (Access agreements: contracts requiring the approval of the Regulator)").

Page 19, line 31, leave out ("section 16(1) to (5)") and insert ("sections 16 and (Access agreements: contracts requiring the approval of the Regulator)").

The noble Earl said: My Lords, these amendments were spoken to with Amendment No. 2. I beg to move.

On Question, amendments agreed to.

The Earl of Caithness moved Amendment No. 28:

Page 20, line 5, leave out subsection (6) and insert:

("(6) If any condition (the "broken condition") of a facility exemption is not complied with—

1. (a) the Secretary of State, in the case of a facility exemption under subsection (1) above, or
2. (b) the Regulator, in the case of a facility exemption under subsection (3) above,

may give to any relevant person a direction declaring that the facility exemption is revoked, so far as relating to that person, to such extent and as from such date as may be specified in the direction.

(6A) For the purposes of subsection (6) above—

"condition", in relation to a facility exemption, means any condition subject to compliance with which the facility exemption was granted;

"relevant person", in the case of any facility exemption, means a person who has the benefit of the facility exemption and who—

1. (a) is a person who failed to comply with the broken condition or with respect to whom the broken condition is not complied with; or
2. (b) is the facility owner in the case of the railway facility in relation to which the broken condition is not complied with.").

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 29 and 30:

Page 20, line 21, leave out ("section 16(1) to (5)") and insert ("sections 16 and (Access agreements: contracts requiring the approval of the Regulator)").

Page 20, line 39, leave out ("section 16(1) to (5)") and insert ("sections 16 and (Access agreements: contracts requiring the approval of the Regulator)").

The noble Earl said: My Lords, these amendments were spoken to with Amendment No. 2. I beg to move. On Question, amendments agreed to.

Clause 18 [Acquisition of rights to use the railway facilities of others]:

The Earl of Caithness moved Amendment No. 31:

Leave out Clause 18.

The noble Earl said: My Lords, this amendment was also spoken to with Amendment No. 2. I beg to move. On Question, amendment agreed to.

Clause 19 [Model clauses for access agreements]:

The Earl of Caithness moved Amendments Nos. 32 and 33:

Page 22, line 3, leave out ("agreements") and insert ("contracts").

Page 22, line 11, leave out ("agreements") and insert ("contracts").

The noble Earl said: My Lords, these amendments were spoken to with Amendment No. 2. I beg to move. On Question, amendments agreed to.

Clause 20 [Amendment of access agreements]:

The Earl of Caithness moved Amendment No. 34:

Leave out Clause 20 and insert the following new clause: Amendment of access agreements

(" .—(1) Any amendment, or purported amendment, of an access agreement shall be void unless the amendment—

1. (a) has been approved by the Regulator, or
321
2. (b) is made pursuant to Schedule (Access agreements: applications for access contracts) to this Act.

(2) The Regulator may, for the purposes of subsection (1) above, give the parties to any particular access agreement his general approval to the making to that access agreement of amendments of a description specified in the approval; and any approval so given shall not be revoked.

(3) The Regulator may, for the purposes of subsection (1) above, give his general approval to the making to access agreements, or to access agreements of a particular class or description, of amendments of a description specified in the approval.

(4) Where the Regulator gives or revokes a general approval under subsection (3) above, he shall publish the approval or revocation (as the case may be) in such manner as he considers appropriate.

(5) The revocation of a general approval given under subsection (3) above shall not affect the continuing validity of any amendment made in accordance with, and before the revocation of, that approval.

(6) The Regulator shall not have power to direct or otherwise require amendments to be made to an access agreement, except as provided by Schedule (Access agreements: applications for access contracts) to this Act.").

The noble Earl said: My Lords, this amendment was spoken to with Amendment No. 2. I beg to move.

On Question, amendment agreed to.

Clause 25 [Transfer of franchise assets and shares]:

Viscount Goschen: moved Amendment No. 35:

Page 27, line 10, at end insert:

("(4A) Any transaction which is entered into in contravention of subsection (3) or (4) above shall be void.").

The noble Viscount said: My Lords, in moving Amendment No. 35 it may be for the convenience of the House if I speak to Amendments Nos. 37, 38, 47, 111, 112, 114, 215 and 217 at the same time.

This series of amendments seeks to clarify various miscellaneous issues in respect of the franchising provisions and the franchising director's powers and functions.

First, Amendment No. 35 to Clause 25 makes clear that any transaction entered into in contravention of the prohibitions in Clause 25 subsections (3) and (4) should be void. The prohibitions concern transactions involving the transfer or discharge of liabilities connected with franchise assets without the consent of the franchising director and any action taken by a franchisee without the consent of the franchising director that would lead to the wholly owned subsidiary which is providing the services as franchise operator ceasing to be a wholly owned subsidiary.

Amendments Nos. 37 and 38 are to Clause 27. As Clause 27(1) is currently drafted, the conditions that may be included in franchise agreements with respect to payments—either premiums by the franchisee under Clause 27(1) (a) or subsidy by the franchising director under Clause 27(1) (b)—are alternatives. However, there may be circumstances where the franchising director wants to negotiate a franchise agreement that provides for changing circumstances. Amendments Nos. 37 and 38 provide that flexibility by making clear that the conditions in Clause 27(1) (a) and (1) (b) are not alternatives and that a franchise agreement could include either or both.

Amendment No. 47 makes clear that a lease under Clause 29 can create a tenancy of a property of which only a part may constitute or be comprised in a network, station or light maintenance depot.

Amendments Nos. 111 and 112 to Clause 49 make clear that the franchising director may acquire or dispose of assets whether or not they are designated as franchise assets. He or his wholly owned company will be able to acquire or dispose of any property, rights or liabilities which have been or are intended to be used for providing franchised services or for operating any additional railway assets under a franchise agreement or in pursuance of a duty or power to provide services or operate additional railway assets.

Amendment No. 114 to Clause 50 enables the franchising director to enter into an agreement under Clause 50(2), for the purposes of encouraging railway investment, in which he undertakes not to exercise his franchising functions.

Finally, Amendments Nos. 215 and 217 clarify the purposes for which the board may exercise its powers to form companies or make transfer schemes under Clauses 83 and 84 respectively, in respect of facilitating the franchising director's functions.

These amendments are clarificatory in nature and do not raise any new issues of substance. I beg to move.

Lord Stanley of Alderley

My Lords, I believe that this is the correct moment to ask my noble friend about two matters of which I have given him notice in writing. The first refers to termination of franchised contracts. I am concerned that a private operator trading profitably at the termination of a franchise will have no rights to continue or gain from the efficient operation apart from the profit that has been generated during the currency of that franchise. I hope that my noble friend can give me some guidance on this matter.

The second point that I wish to raise concerns better access to information. I believe that a great deal more information could be made available now from current accounts and other information held by British Rail. It is doubtful that the information to be released following the shadow exercise that I understand is happening on certain routes planned for next year will be more useful in commercial terms. I have in mind two aspects, one being details of management structure and the members of staff being employed. The other is the revenue that is being generated. That is of course in relation to each franchise as it is offered.

I realise that my noble friend may not be in a position to answer the last two points. If he cannot do so, I wonder whether he could possibly give me an undertaking to write to me before Third Reading.

Viscount Goschen

My Lords, in response to my noble friend Lord Stanley, the first point is that a potential franchisee will not be submitting bids for a franchise with the expectation that he will lose it at the next round. The incumbent franchisee will be in a strong position when the franchise comes to an end and is again up for tender. The franchisee will, of course, be drawing profits from his activities during the term of the franchise, and good performance against the performance specification would stand him in good stead to win on renewal. We are considering whether contracts might be structured to provide for a "roll-over" extension, subject to satisfactory performance by the franchisee.

However, we cannot award franchises in perpetuity. The concept of franchising is based on providing competition for a market where it would not otherwise be possible to generate competition within a market.

My noble friend also raised the question of early release of performance information. We need to be careful about the performance information provided to prospective franchisees. First, privatisation will bring about a very different system of charging for track use, new charges for rolling stock, and a new industry structure. We must be careful not to provide historic data in a misleading form. Secondly, we need to ensure that the information is provided fairly to all bidders. We do not want a constant stream of callers at BR's door now, while restructuring must be the priority. Shadow running will provide a financial and operational record tinder the new regime for the service groups to be franchised which will provide reliable information and which can be provided to prospective franchisees from 1994.

I can also reassure my noble friend Lord Stanley that the information will cover the management structure and the revenue of the service to be franchised.

On Question, amendment agreed to.

Clause 26 [Fares and approved discount fare schemes]:

Lord Clinton-Davis moved Amendment No. 36:

Page 28, line 47, at end insert:

("() Where the Franchising Director regards a discount fare scheme as "approved", it shall be a condition of the approval that a franchise operator shall not for the relevant period levy a fee upon passengers for access to the scheme greater by the relevant amount than that levied by the Board or subsidiaries of the Board for a comparable scheme at the date upon which this Act was passed.

() In this section "the relevant period" means the period beginning with the date of the discount fare scheme coming into effect and ending on the third anniversary of the discount fare scheme coming into effect.

() In this section, "the relevant amount" means the annual percentage increase in the Retail Price Index published in each December during the relevant period.").

The noble Lord said: My Lords, this amendment is designed to protect from unduly high levels of price increase those railcard schemes which the Government are prepared to ensure will be retained—namely, young person's, senior citizen's and disabled person's railcard schemes.

The Government's new clause, Clause 26, essentially seeks to provide that discount travel schemes are created for those three groups. But the franchising director, while empowered to limit the overall level of fares, has no power to regulate the fee charged for the purpose of any of the three types of railcard. At present the senior citizen's and young person's railcard each cost £16; a disabled person's railcard costs £14. This amendment would effectively prevent any significant increase in the price of those facilities prior to the full franchising of the services. We believe that protection needs to be given in that transitional period.

I anticipate that the Government will say that that would interfere with the free play of market forces and that they have committed themselves to those matters. But it is right to say that, while they may protest about market forces being the determinant factor, they have committed themselves to such interference by pledging to continue with discounted schemes by giving the franchising director the power to regulate fares.

Indeed, the argument about market forces was put forward by the Minister's colleague in another place before the Government were prepared to concede these issues. He said that market forces were quite capable of governing these matters and there was no reason for any additional protection. Therefore the other concessions need not be given at all. Then the Government changed course.

We believe that the proposal that we now make is very modest. We are deeply concerned about the ground being set for these measures prior to the franchising exercise coming into operation. The difficulty is that, if substantial increases in charges take place between now and then, they will be accepted as the norm. It is very unlikely that the new regime would decide to go back to cheaper fares.

It is interesting to note—I was not able to read the entire article—the headline in tonight's Evening Standard, saying that the Government had brought pressure to bear on British Rail to ensure that the projected increases in fares, and various concessionary fares in particular, were not to take place on the scale previously announced by British Rail. The Minister says, "We do not interfere with British Rail". However, if that story is true—it would be interesting to know from the Minister whether or not it is—it is clear that the Government became extremely alarmed regarding the projected increases and decided to intervene. I wait to hear what the Minister says about the matter.

It is a modest amendment. I hope that the Minister will be positive about it. I beg to move.

The Earl of Caithness

My Lords, I regret to say that I have not yet had the benefit of reading today's Evening Standard. That is an advantage which the noble Lord has over me. All I can say is that I recall in the Recess there were scares regarding alleged leaks from British Rail in regard to fares with which I had to deal on one or two occasions. All the evidence seems to be that it is a good Recess story and has been for many years. However, at the end of the day the fares were considerably lower than those which the press and other people were bandying about during the Recess. It would not surprise me if this case were not similar. However, I have not read the Evening Standard and I am not in a position to comment on what the noble Lord said.

I understand the motives of the noble Lord, Lord Clinton-Davis, in tabling the amendment. Of course, we all want to see that young, elderly and disabled people have proper access to discounted tickets at a reasonable: price. However, I do not believe that the amendment is a necessary or desirable way of achieving that outcome.

We have said that the disabled person's card will. provide broadly the same benefits as the current BR scheme, and the franchising director will ensure that that is the case. In considering whether to approve schemes for young and elderly people the franchising director will also ensure that their interests are taken into account. No restriction is therefore necessary.

In addition, the proposed restriction on the access price for discount schemes would be inflexible and could prevent new schemes being introduced to the advantage of passengers. Elderly people, for example, might be happy to pay a higher access charge if that meant that the discount were larger or that other services such as coaches or leisure services were added to the benefits of the card. We are keen to encourage innovation which the private sector can introduce and which will provide products which passengers want. We believe that the amendment will stand in the way of the development of new and better products.

Lord Clinton-Davis

My Lords, that is a rather surprising reply. This is an area where British Rail were extremely successful in the innovations that they introduced. It is difficult to think of a better system that is likely to prevail under the new regime. Our anxieties are that the franchising director may say that he has inherited a situation where there have been substantially increased charges in regard to discounted fares and therefore implicitly he will not interfere with that position. That represents a real danger.

This is clearly not the time to press the matter to a vote. We shall reflect on what the Minister said. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Goschen

My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begins again not before eight o'clock.

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