§ 2.45
§ Baroness Scott of Needham Market asked Her Majesty's Government:
§ Whether they will explain the role of the Office of Fair Trading in the rail franchising process.
§ Lord Davies of OldhamMy Lords, the award of a rail franchise constitutes an acquisition of control by virtue of Section 66(3) of the Railways Act 1993 as amended, for the purposes of the merger provisions of the Enterprise Act 2002. The Office of Fair Trading has a duty under the Enterprise Act to refer certain mergers to the Competition Commission if it believes that the arrangements in question have resulted, or may be expected to result, in a substantial lessening of competition.
§ Baroness Scott of Needham MarketMy Lords, I am grateful to the noble Lord for that reply but, with regard to the rail franchise in Scotland, does he share my concern that the competition authorities left it until very late in the franchising process before deciding that there might in principle be a conflict regarding the same company operating the bus and the rail franchise? Does not the noble Lord agree that clarification in that area needs to be sought urgently to bring a little more stability into what is already a very difficult industry?
§ Lord Davies of OldhamMy Lords, I agree with the noble Baroness that we want to see movement on this decision as expeditiously as possible. However, she will recognise that it is not a matter for Ministers but for the properly constituted authorities which will note the point that she has made so volubly today.
§ Lord BradshawMy Lords, how does the Minister's last answer sit with the Government's intention to promote co-ordinated transport? If transport operators are not allowed to co-operate with each other on services, fares and co-ordination of bus and rail, what does their policy amount to?
§ Lord Davies of OldhamMy Lords, the noble Lord has highlighted an important principle of the Government's transport policy. We want to see greater integration of such activities. However, that does not mean that we necessarily want to see one company 551 running all rail and bus services in an area as that would lead to obvious dangers so far as the fare-paying and travelling public are concerned.
§ Baroness Carnegy of LourMy Lords, in relation to the supplementary question of the noble Baroness, Lady Scott, did I understand her to suggest that the people who run the railway line are in competition with the people who run the trains? The idea in Scotland is that they should work together. I do not see that there is any objection to that. Do the Government agree with me on that?
§ Lord Davies of OldhamMy Lords, I do not think that is the issue regarding competition. A potential situation has been identified in which a company with substantial bus interests would take over the Scot Rail franchise. That is the nub of the problem. The relationship between the companies that own the rolling stock and the trains and Network Rail, which owns the rail track, is a different matter altogether.
§ Earl AttleeMy Lords, how many organisations are involved in controlling and regulating the rail industry?
§ Lord Davies of OldhamMy Lords, there are several and the co-ordination is not all that we should like, which is why the Secretary of State has indicated that he wants a review carried out over the next five months. By June we should be in a position to produce a rationalised system of regulation and control for the railways.
§ The Earl of Mar and KellieMy Lords, is not the most relevant form of competition that between public transport and the private motor car? Should not the OFT be focussing on that rather than the rail passenger franchising process?
§ Lord Davies of OldhamMy Lords, the OFT has a limited role which relates to competition between companies. I do not believe that the noble Lord is indicating that particular companies present problems relating to car traffic, however large they may be regarding hire cars and so on. So that issue is not quite four-square with this issue, which is about a bus company and a rail franchise.