Railway Passenger Franchise Bids (Hansard, 17 July 1995)

§ The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)
No, my Lords. Under the Railways Act these are matters for the franchising director.

§ Lord Peyton of Yeovil
My Lords, does my noble friend accept that I am able on this occasion to restrain my gratitude for that Answer, even though it was hardly surprising? Why is that the case? This information must be readily available and would be useful and interesting in order to make it possible to follow the processes of thought of the franchising director, or perhaps he is affected by coyness on this subject.

§ Viscount Goschen
My Lords, I understand from the franchising director that, as part of his assessment of passenger franchising bids, he will be making a comparison between the bids and the cost of BR continuing to run the service, and therefore an instruction would not be necessary. The second part of my noble friend's Question concerns publication. The franchising director is unlikely to be able to publish the results of his comparison because much of the material involved would by its very nature be commercially sensitive.

§ Lord Clinton-Davis
My Lords, does not what has happened as regards the blocking of British Rail's application for a franchise indicate quite clearly that there is no accountability to Parliament on this issue; and that what the franchising director has done is quite 5 flagrantly to breach the will of Parliament, which was to enable British Rail to enter freely into applications for franchises which he is now evidently denying?

§ Viscount Goschen
No, my Lords, I vehemently do not agree with the noble Lord, Lord Clinton-Davis. Parliament, through the consideration of the Railways Bill as it then was, gave this responsibility to the franchising director. The question of whether or not British Rail should be allowed to bid for franchises is not something on which Ministers can instruct the franchising director. Indeed they are specifically excluded from being able to do so.

§ Lord Clinton-Davis
My Lords, is it not clear that what the franchising director is now doing is to accept the Government's original arguments which were designed to disentitle British Rail from entering the franchising stakes? Is not Mr. Roger Salmon completely denying the will of Parliament in relation to the blocking of the franchise applications that British Rail has made, and is that not an absolute disgrace?

§ Viscount Goschen
No, my Lords, it is not. During consideration of the Bill, British Rail was permitted to bid for franchises. However, the franchising director was given discretion to decide whether or not British Rail should be allowed to bid for specific franchises. The franchising director has exercised his discretion. That is not against the will of Parliament.

§ Lord Marsh
My Lords, in the light of the very large sums of money involved in these transactions and the allocation of the franchises, and the enormous impact which this could have on the travelling public, is the Minister really saying that the public or Parliament will never be allowed to know whether the bids of those allocated franchises were better, worse, more expensive or cheaper than those which would have been made if the Government had taken the advice of this House and allowed British Rail at least to have its bid considered?

§ Viscount Goschen
My Lords, the processes are firmly laid down within the Act. I have indicated that the Franchising Director has discretion. I am sure that the noble Lord will accept that this is a commercial bidding procedure and it would not, therefore, be appropriate to publish information on a commercial procedure.

§ Lord Monkswell
My Lords, bearing in mind that the ITV franchises were allocated on an open bid basis and we learnt how much the individual companies had bid to secure the franchises, can the Minister explain why in this instance the situation should be different? Is it because in this instance the public are disbursing rather than receiving money?

§ Viscount Goschen
My Lords, we have procedures laid down within the Act for the allocation of franchises. Under the Act, that responsibility is given to the franchising director. The franchising director is exercising his responsibility in the way he feels is best to secure value for money and to secure franchises in the proper way. He has statutory responsibility under Section 5 of the Act. He also has objectives, instructions 6 and guidance from the Secretary of State. He is operating within those objectives, instructions and guidance.

§ Baroness Thomas of Walliswood
My Lords, is the Minister aware that some of us feel a good deal of doubt that, even supposing British Rail were able to compete for the franchises, the OPRAF staff would be able to understand the value of the different bids? Is the Minister aware that the officials in that office seem not to understand the importance of a network approach to providing rail services and that, when the importance of that network approach is pointed out to them, they ask the consultees—namely, local authorities which have no access to the relevant data—to provide details as to what parts of the network and which connecting stations are the most important? Under those circumstances, would OPRAF even be able to make a judgment as to the value of one bid against another were British Rail enabled to bid?

§ Viscount Goschen
Yes, my Lords, of course it would. That is what the office has been specifically set up to do. There is no point in having a consultation exercise if one does not listen to the consultees.

§ Lord Peyton of Yeovil
My Lords, will my noble friend convey to his right honourable friends the concern that Parliament ought to be in a position to understand what influenced a decision which in itself could have serious repercussions for the taxpayer? Since my noble friend has mentioned commercial confidentiality, will he ask British Rail whether it would have any objection to the information being published?

§ Viscount Goschen
My Lords, it is not only British Rail which is involved in the process but all those other parties which are bidding. My noble friend requests that the process be made public. I have explained why the franchising director is unlikely to publish the information, on the grounds that he feels that the information is commercially sensitive.

§ Lord Eatwell
My Lords, the Minister said just now in an answer that the franchising director operated under the instructions and guidance of the Secretary of State. Will he tell the House whether the Secretary of State has provided any instructions and guidance with respect to allowing BR bids?

§ Viscount Goschen
My Lords, as I explained to the House, under the Act the Secretary of State and Ministers are specifically prohibited from issuing instructions to the Franchising Director about whether or not British Rail should he allowed to bid for a certain franchise.

§ Lord Harris of Greenwich
My Lords, perhaps I may return to a question asked by the noble Lord, Lord Peyton of Yeovil. He asked a direct question. If British Rail indicated that it was prepared for the information it had submitted to be made public, would that information be made public? Is the answer yes or no?

§ Viscount Goschen
My Lords, I have taken great pains to explain that this is a matter for the franchising director. The Act gives a specific role to the franchising director. There would be no point in having this set-up if Ministers immediately overruled every decision. This 7 procedure has been laid down by Parliament and that role and those duties have been given to the franchising director. There is the ability for the Secretary of State to offer objectives, instructions and guidance under certain circumstances and on certain matters. Those objectives, instructions and guidance have been given firmly, have been published and reside in the Library of the House.

§ Lord Mackie of Benshie
My Lords, does the Minister not realise that his noble friend is trying to prove the purity of the Government's motives and that all he is asking for is that these figures be published?

§ Viscount Goschen
My Lords, of course I understand that my noble friend asks his Question with the best possible motives. It just happens that we do not necessarily agree with him.