Network Rail (Hansard, 27 October 2004)

§ Lord Davies of Oldham
My Lords, Network Rail's corporate governance is a matter for Network Rail to determine. However, the company has already announced a number of proposals. These include adding to the skills base at board level by the appointment of two additional non-executive directors. Network Rail is currently discussing these appointments with train operators and the Rail Passengers Council.

§ Lord Bradshaw
My Lords, I thank the Minister for that reply, which is partially encouraging, because I am most concerned that the interests of users of the railway and the train operating companies should be forcefully represented on the board of that company. Does he not agree with me that otherwise it is likely that the Government's objective of Network Rail spending less and running trains more punctually will be met by the simple methods of timetabling fewer trains and allowing themselves even longer engineering occupations, thereby making the railway less attractive to the users?

§ Lord Davies of Oldham
My Lords, I am glad that my initial reply brought some consolation to the noble Lord. It is a better performance than I have managed in the past in response to his Questions. The noble Lord is right that Network Rail has a very important role. It is absolutely essential that train-operating companies have their part to play on the board—that is the proposal being made. Network Rail cannot fulfil its objectives without close liaison with the passenger-travelling public. I seek to give further reassurance on the proposals.

§ Lord Marsh
My Lords, does the Minister not agree that it is much more than a question of whether you have a couple more non-executive directors on the board? Given the unsatisfactory operating results of the railway since privatisation, and the enormous cost to the taxpayer of that fragmented structure, is this not a good opportunity, with an election coming up, to pop something in the manifesto and at least look at the idea of bringing Network Rail back into public ownership?

§ Lord Davies of Oldham
My Lords, clearly the noble Lord seeks to tempt me. I assure him that there will be a number of measures in the manifesto which, I hope, will meet with his approval and that of the wider public. I emphasise that the Secretary of State's announcement has changed the situation in the past few months. Network Rail now has a new job: it will be the single point of accountability to the Government for rail performance. There will be a straight relationship between government and Network Rail. The Government will set the broad objectives and parameters that Network Rail must meet. Network Rail will be the body responsible for ensuring that the train-operating companies meet those requirements. That will bring in areas of clarity and a specified commitment of accountability, which we have left in the past. I agree with the noble Lord that it is overdue.

§ Lord Sheldon
My Lords, is not the real problem the division of responsibility between the operating 1283 companies and those responsible for the maintenance of the track? That was a consequence of the break-up of British Rail. How does my noble friend anticipate dealing with that problem?

§ Lord Davies of Oldham
My Lords, it certainly was an acute problem. The new relationship guarantees that Network Rail will work more closely with train operators to drive up performance. It will be responsible for directing network services and restoring services to normal after any disruption. Those will be specific responsibilities of Network Rail, which will be directly accountable to government.

§ Viscount Astor
My Lords, as the Strategic Rail Authority is ultimately responsible for the financial risk that falls on Network Rail, is it responsible for appointing directors of Network Rail? Is it the Secretary of State, or does Network Rail have the power to appoint its own directors without reference to anybody else?

§ Lord Davies of Oldham
My Lords, Network Rail retains responsibility for appointing its own directors, but signals have been sent to it regarding the necessity for improved responsibility and accountability in the new arrangements. We now have Network Rail in a position where it can take into account the operations of the train-operating companies more adequately. Its responsibility directly to government will be defined in a contract between government and Network Rail.

§ Lord Tunnicliffe
My Lords, does my noble friend agree that much of the concerns being expressed will be addressed by the Office of Rail Regulation as set out in its recent document entitled Implementing The Future of Rail: ORR's Role and Proposed Work Programme, particularly its commitment to review Network Rail's governance, the role and support for Network Rail members, the reward package for Network Rail senior executives and the nature of the binding contract between Network Rail and the Government?

§ Lord Davies of Oldham
My Lords, I am grateful for that contribution from my noble friend, which brings a third party into the issue; namely, the Office of Rail Regulation. We are concerned that members of Network Rail shall have independent access to the Office of Rail Regulation so that it is fully aware of the analysis of rail performance. We will then have a better informed operation for Network Rail. Of course, the Office of Rail Regulation stands there as an independent analyst of rail performance.

§ The Earl of Mar and Kellie
My Lords, the Minister will be well aware of the very welcome intention to devolve Network Rail's activities in Scotland to the Scottish Parliament. Is there an intention to create a separate Network Rail board in Scotland? Would that also happen in Wales and the regions?

§ Lord Davies of Oldham
My Lords, there is no proposal to do that at present. But in these proposals 1284 there is a clear recognition that Network Rail will need to be in closer contact with the operations of the train operating companies and, of course, with their passengers. That relationship will often be mediated through representative bodies that are able to bring pressure to bear on the quality of services for which Network Rail will have responsibility.

Lord Berkeley
My Lords, is my noble friend aware that Network Rail's budget this year—

Noble Lords
This side.

§ Viscount Goschen
My Lords, the Minister talks about signals being sent to Network Rail. Who sends those signals and under what format are they sent?

§ Lord Davies of Oldham
My Lords, let us be clear. The Secretary of State has issued a White Paper indicating the change in relationships and the way in which Network Rail is expected to operate in the future. He has made abundantly clear that it is very necessary that the relationship between Network Rail and the train operating companies needs to be improved, as well as the issue of the fare-paying public—the passengers of the services. That is the Secretary of State acting properly, responsive to the community, to guarantee that we improve rail services which need of course to be improved.