Sitting of 14 October 1993

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Chester.): The LORD CHANCELLOR on the Woolsack.

Courts: Sign Language Facilities
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
Whether they will take steps to ensure that deaf people who need qualified sign language interpreters in courts are provided with them.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the parties to court proceedings normally attend court with any interpreter they may require. In cases of difficulty the courts will facilitate access to lists of interpreters held by the police or social services. Specifically for deaf people, there is a central booking service provided by the Royal National Institute for the Deaf communication support units. My department has recently distributed details to circuit offices.
Lord Ashley of Stoke: My Lords, I am grateful to the noble and learned Lord for that Answer. Nevertheless, there have been cases of totally deaf people having difficulty finding interpreters. Is the noble and learned Lord aware that there are only 92 qualified interpreters in Britain, most of whom have full-time jobs and that that means that if a deaf person is unable to find an interpreter, he or she will not get justice? What can the noble and learned Lord do about that, please?
The Lord Chancellor: My Lords, there is nothing that cannot be improved, and I hope that this service can be improved. A working party has been set up under the auspices of the Nuffield Foundation with the support of a number of government departments. It is seeking to enhance the present interpreters' service in the courts by ensuring that all interpreters who are used there have a minimum standard level of qualification in their chosen language or in sign language and some training in court procedures. The project is seeking also to define some independent service provider to be identified as responsible for keeping and updating the register of interpreters on a regular basis. Precisely who that independent service provider shall be is a difficult question, but the project is considering that. I believe that the result will be improvements in the service to which the noble Lord refers.
Lord Hailsham of Saint Marylebone: My Lords, while everyone will agree with the desirability of what the noble Lord, Lord Ashley, suggests, and will appreciate my noble and learned friend's difficulties in complying with it, is there not some means available to the Government of enhancing the probability that parties or witnesses who might need the services of an
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interpreter should give prior notice of their requirement because the number of interpreters is likely to remain woefully small?
The Lord Chancellor: My Lords, my noble and learned friend is right that it is difficult to get an adequate number of interpreters. That is one of the factors that the project is examining. Generally speaking, those who make the arrangements are usually able to tell in advance what the requirements will be. Therefore, it is comparatively rare for a court itself to have to participate in making such arrangements although that does happen from time to time. I believe that it would be an improvement if a single independent service were identified as the resource for interpreters. That is the nature of the work in hand.

Long-term Unemployment
3.4 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What is the total number of long-term unemployed at the latest available date; and what has been its average monthly cost to the Exchequer for the last 12 months.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Henley): My Lords, in July 1993, the number of claimants unemployed for over one year in the United Kingdom was 1,081,165. In Great Britain the average annual cost of a long-term unemployed person, in terms, of income support, is just under £3,000. This figure does not include other income-related benefits.
Lord Dormand of Easington: My Lords, does the Minister accept that those figures show an appalling and tragic waste of human and financial resources? As the Government are in their 15th year in office, will they now stop blaming that situation on the world recession? When will the Government begin to realise the devastation that is caused to families by long-term unemployment? As the so-called "recovery" in the economy is now petering out, what do the Government propose to do to stimulate the manufacturing and building industries and other sections of the economy to bring about sustained growth in employment in order that long-term unemployment can be abolished?
Lord Henley: My Lords, of course we recognise the seriousness of the position for the long-term unemployed and every one is an individual tragedy. However, I had thought that the noble Lord might take the opportunity at least to welcome today's main figures for unemployment, which show yet another decrease of some 14,000, which easily cancels out the two very small increases that we have had during the past two months.
Obviously, we recognise the seriousness of the position for the long-term unemployed and I should stress that most unemployed come off the register pretty quickly. Some two-thirds come off within six months. That is why most of the Department of Employment's

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programmes are targeted on those who are unemployed for over six months or over a year. As regards the long term, obviously the Government cannot simply wave a magic wand and create jobs willy-nilly like that. What we need to do is to ensure that we have low inflation, low interest rates and a deregulated labour market that will create the right conditions for growth. In the end, it will be growth that will create jobs.
The Earl of Lauderdale: My Lords, can my noble friend give the House the comparable figures for Germany, France and Italy?
Lord Henley: My Lords, I can say that they are going up in all those countries. That is what is quite so remarkable about our own figures in the United Kingdom because, against that trend, as I have just announced, unemployment figures have come down and unemployment has now sunk below the European average.
Lord Mason of Barnsley: My Lords, is the Minister aware that his Government have been nasty and cruel to the coalminers? Since that appalling Statement last October by the Department of Trade and Industry, 22,500 relatively young coalminers have been declared redundant, cast on the industrial scrapheap in areas of high and long-term unemployment. May I ask the Minister specifically what future he, as a Minister, sees for those men?
Lord Henley: My Lords, every job loss is an individual tragedy for that individual, but we have provided help and we have offered help to coalminers through the training and enterprise councils, and we shall continue to do so. As I said earlier, most of the unemployed come off the register pretty quickly. Some two-thirds of the unemployed come off within six months. I hope that the same can be true of most of the coalminers who, sadly, lose their jobs.
Lord Molloy: My Lords, is the noble Lord aware that, like millions of people, including the families and relatives of the unemployed throughout the country, what we are finding most distressing is the number of people under 40 who are saying that they are living through the most appalling times in their lives? Although we welcome the news this morning that unemployment is being reduced, that was followed by the news that a number of large organisations are packing in altogether, thus creating another couple of thousand unemployed. If those organisations are connected in any way to government departments, will the Minister see whether they can be helped so that we can prevent some of the increases in unemployment which were announced this morning?
Lord Henley: My Lords, I am grateful that the noble Lord welcomes the fall in the unemployment figures. As regards the announcement of other job losses, as I said, every announcement of a job loss is a tragedy. I do not know to which ones he was specifically referring. My understanding is that the announcement of 1,000 job losses at Prestwick was an exaggeration and that the figure is more of the order of 400 to 500. However,
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somehow the press always like to exaggerate the bad news while ignoring the good news. On this occasion, I think that all noble Lords ought to welcome the good news of a further fall in the unemployment figures, which have been brought down by 84,000 this year.
Baroness Robson of Kiddington: My Lords, how many of the welcome fall of 14,000 in the number of unemployed people are long-term unemployed? Or are they mostly people who are just changing jobs?
Lord Henley: My Lords, I cannot give a breakdown of the figure. As I said, I was announcing the monthly unemployment figures. Figures for the long-term unemployed come out quarterly. The most recent figures that I announced to the noble Lord, Lord Dormand of Easington, came out in July. The noble Baroness will have to wait until next month to see whether there was a fall in the number of long-term unemployed in the last quarter. The figure for the last quarter which I announced in July showed the smallest increase for some time. However, obviously, long-term unemployment will continue to rise after unemployment begins to fall. We already have a lower proportion of long-term unemployed compared with the total number of unemployed of our European partners.
Lord Hailsham of Saint Marylebone: My Lords, we are talking about long-term unemployment in this Question. It is obvious that increasing and sustained demand is the only permanent cure for long-term unemployment, so is it not a trifle disingenuous to discount the worldwide recession for a country such as ours, which is so dependent upon its exports? Would it not be a good thing if we were a little more intellectually honest about this question?
Lord Henley: My Lords, I should not want to discount the recession. We are managing on this occasion to buck the trend. We are seeing a fall in unemployment levels and a slow-down in the growth of long-term unemployment against most of our European colleagues, who are still seeing major growth in those fields.
Baroness Turner of Camden: My Lords, perhaps I may refer to the figures that the Minister quoted in response to the Question put by my noble friend. In respect of claimant unemployment rates by age for July, I see to my horror that although male unemployment is at 14 per cent. unemployment for the age range 20 to 24 is at 20.5 per cent. In view of current concerns about the social effects of that, should not the Government be paying a great deal of attention to that area?
Lord Henley: My Lords, I agree with the noble Baroness that the matter is extremely serious. I can give her the assurance that we consider it to be extremely serious. That is why, as well as the long-term unemployed, young people and youth training receive priority in the various programmes that my department runs.
Lord Dormand of Easington: My Lords, perhaps I may make it clear to the Minister that I welcome the fall in unemployment. My Question, as he is aware, relates

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to long-term unemployment, a matter which I have raised many times in the House. As a result of his comment, I had intended asking the question that the noble Baroness, Lady Robson, asked. As he does not have the information, I wonder whether he will write to me about it, because it is obviously of considerable importance. My final point is that, however much we welcome the reductions, they are small. For two years now we have had chronic unemployment, and the long term seems to suggest that it is not improving.
Lord Henley: My Lords, I am grateful to the noble Lord for his welcome. I look forward to further Questions from him as we see further falls—I hope somewhat larger—in the coming months. As regards the long-term unemployed, as I say, those figures come out quarterly. He will have to wait until next month for the figures for the long-term unemployed. I shall not offer to write to the noble Lord, but if he will bear with me I shall give him those figures in a month's time.
Lord Mason of Barnsley: My Lords, with great respect, I hope that the Minister will educate the noble and learned Lord, Lord Hailsham, on the facts of the matter. Does he not understand that there are individual policies by HMG, as distinct from the problem caused by world trade; that we import 12 million tonnes of coal a year (equivalent to the loss of 12,000 miners' jobs); and that we import electricity from France (equivalent to the closure of five pits and a further 5,000 jobs)? So 17,000 jobs have been lost in Britain in coal mining alone as a result of HMG's policies.
Lord Henley: My Lords, of course the individual policies of Her Majesty's Government make a difference. That is why, as I said, this Government are bucking the trend: we are seeing a fall in unemployment while most of our European colleagues are seeing an increase in unemployment.
Lord Boyd-Carpenter: My Lords, is it not a mistake to suggest that the fact that British coal costs more than foreign coal is the responsibility of the British Government rather than that of the mining industry?
Lord Henley: My Lords, my noble friend is absolutely correct.
Lord Bruce of Donington: My Lords, the Minister referred to the presentation next month of the quarterly figures. Will he give the House an assurance that the process of an adjustment of the figures referred to by Mr. Alan Clark in his work as "fiddling" in the Department of Employment will not apply on this next occasion?
Lord Henley: My Lords, I do not recognise the term used by the noble Lord, nor do I accept the implied criticism that we have been doctoring figures in any way. I do not remember the noble Lord or others complaining about the figures when unemployment was increasing.

Organophosphorus Pesticides: Protection
3.16 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
Whether they will state the source and date of the scientific data upon which paragraphs 3, 8 and 12 of Guidance Note MS 17 from the Health and Safety Executive were based, and whether this information was contained in versions of the note prior to October 1987.
Lord Henley: My Lords, the acute effect of organophosphorus poisoning mentioned in paragraphs 3 and 12 of MS 17 is well known and included in standard toxicological and pharmacological textbooks. Paragraph 8 is supported by HSE's extensive knowledge and experience of occupational health in manufacture and use of organophosphates and in information provided by manufacturers. The 1987 publication of MS 17 followed a 1980 edition. There are no changes of substance between the relevant paragraphs in the two versions.
The Countess of Mar: My Lords, I thank the Minister for his Answer. Noble Lords should know that the guidance note is entitled Biological monitoring of workers exposed to organophosphorus pesticides. Paragraph 3 states:
"However, acute and subacute exposure to OP pesticides can produce harmful effects in man, and repeated exposure at lower doses may cause insidious cumulative toxicity".
Paragraph 8 states:
"OP formulations based on organic solvents are liable to penetrate protective clothing unless contamination is washed off promptly".
Paragraph 12 is similar. I have just two questions to ask the Minister. First, if that information was known in 1980, why was it not disseminated freely to all people likely to be exposed to organophosphorus pesticides—farmers, doctors and everyone else—instead of being available only to environmental health officers and people working in similar situations? Secondly, why has the House been misled consistently by being told that provided the recommended protective clothing is worn there is no evidence of damage to human health?
Lord Henley: My Lords, I do not believe that the House has been misled. The noble Countess implies that there is some contradiction between the advice given over the years by the Ministry of Agriculture, Fisheries and Food to farmers, including sheep fanners, and that made available in the document to which she refers, which is not a document designed for sheep farmers. I do not accept that there is any contradiction between the advice offered by MAFF and that offered by the HSE, but I am of course aware, as is the noble Countess, that allegations to that effect have been made. The noble Countess will be aware that my right honourable friend the Minister of Agriculture, Fisheries and Food, who rejects that claim firmly, has agreed that such matters may be put before the Veterinary Products Committee which meets, I think, on the 21st of this month. It will then be considering the future availability of organophosphorus sheep dips. That is the right forum in

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which to discuss these matters. I am not sure that it would be a highly productive operation for the noble Countess and I to argue science across the Floor of the House.
Baroness Nicol: My Lords, will the Minister give an assurance that when the result from that committee is known the Government will act quickly upon it? Will he give an assurance that the matter will be taken seriously?
Lord Henley: My Lords, my advice is that the findings of the Veterinary Products Committee are made public. So I am sure that it will be open to the noble Baroness, the noble Countess and others to apply all due pressure on the Government to act appropriately, according to whatever they decide. I do not want to second-guess the decisions of an expert committee which exists to advise Ministers in another department.
Baroness Turner of Camden: My Lords, the note indicates that substantial risks are involved in handling these substances and also that in recent years there has been a rapid increase in the production of OP pesticides. Are the Government satisfied that the monitoring arrangements are sufficient to protect workers? As the effects of the substance are regarded as an industrial disease, will the Minister tell the House how many cases there have been since the OP was first put into operation?
Lord Henley: My Lords, we are satisfied that the monitoring arrangements are satisfactory. It is an appropriate matter for the Veterinary Products Committee to consider and to come forward with expert advice for Ministers to consider and to act upon. On 18th May my noble friend Lord Howe stated that 474 cases had been reported to the Veterinary Medicines Directorate. Perhaps I may refer the noble Baroness to the Answer which he gave on that date, which appears at col. 1642 of the Official Report.
Earl Baldwin of Bewdley: My Lords, will the Minister take steps, perhaps through his colleagues, to ensure that in the light of all this the medical profession is made aware of the effects of long-term low dose exposure to environmental toxins of all kinds?
Lord Henley: My Lords, I am sure that my noble friends in the Department of Health will take note of what the noble Earl says and perhaps the appropriate advice can be circulated to the medical profession.
Lord Williams of Elvel: My Lords, does the Minister recognise that not only does the use of organophosphates in sheep dips have a serious effect on a number of farmers—the evidence has been clearly established—but also on the environment. As they enter our waters and streams so those waters and streams become polluted. That is a serious matter. I am glad that the Minister is treating it as such. Will he assure me that he will look at the environmental effects of the use of organophosphates in addition to their effects on human beings?
Lord Henley: My Lords, as regards the effect on human beings, we understand that people can be damaged by their use and that is the point of issuing the advice. However, we do not believe that people will be injured or harmed in any way if they follow the instructions provided by the manufacturer. As regards any environmental pollution, I would not wish to respond to the noble Lord's question at this stage, other than to say that I shall pass on his comments to the appropriate department. I am sure that if it is thought necessary it will take the appropriate action.
The Countess of Mar: My Lords, is it not incumbent on the Health and Safety Executive to make sure that everyone using toxins, in addition to being told to take protective measures, is aware of the reasons why those protective measures should be taken?
Lord Henley: My Lords, yes, that is one of the functions of the HSE. As the noble Countess will know, that is one of the reasons why MAFF has provided detailed guidance. In addition, the Health and Safety Executive provides various leaflets which are freely available. MAFF wrote to all registered sheep farmers and the HSE publishes a document which I can provide for the noble Countess entitled Sheep Dipping: Protect Your Health. It gives all the appropriate guidance.

Business
Viscount Ullswater: My Lords, it may be for the convenience of the House to know that the Report stage of the Railways Bill will be adjourned at about 7 p.m. for about one hour and that during the adjournment the Suppression of Terrorism Act 1978 (Application of Provisions) (India) Order 1993 will be taken.

Railways Bill
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

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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
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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

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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
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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

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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 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—

(a) increase the use made of the railway network;

(b) encourage the transfer of suitable traffics from roads;

(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;

(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;

(e) ensure that value for money is obtained from public expenditure on the railway network and services on it; and

(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

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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
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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.

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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
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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,

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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
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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.

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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.

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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.

274

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 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—

(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

(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—

(a) in relation to an application for review made by the original applicant, means the facility owner or any interested person:

(b) in relation to an application for review made by the facility owner, means the original applicant or any interested person: and

(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—

(a) contain particulars of the required rights:

(b) specify the terms which the applicant proposes should be contained in the required access contract: and

(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—

(a) send a copy of any application for directions received by him to the facility owner: and

(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—

(a) the directions shall specify—

(i) the terms of the access contract: and

(ii) the date by which the access contract is to be entered into: and

(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—

(a) to give directions to the facility owner requiring him to enter into an access contract, or

(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—

(a) any directions given on the original application, and

(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—

(a) the appointed person dies before he has completed the performance of his functions in relation to the application for review, or

(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—

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

(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—

(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:

(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

(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—

(a) entering into an access contract pursuant to directions under section 16 of this Act or this Schedule,

(b) performing such a contract in accordance with its terms, or

(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—

(a) who is a successor in title to the interested person: or

(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

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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
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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

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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
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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

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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 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
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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.

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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".
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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

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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
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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

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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
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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

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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.]

292

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.

293

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 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
294
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 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
296
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 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 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 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

299
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
300
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.

301
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
302
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.

303

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 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 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—

(a) consider tenders submitted under section 24 below;

(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
304
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 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

305
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
306
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

307
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
308
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 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—

(a) the Secretary of State, in the case of a licence exemption under subsection (1) above, or

(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—

(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

(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

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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 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—

(a) the safe and efficient operation of passenger railway services;

(b) the comfort and convenience of passengers using the station;

(c) the efficient sale of tickets;

(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

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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 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 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 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—

(a) the Secretary of State; and

(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—

(a) if the licence is not capable of assignment;

(b) if the assignment, or purported assignment, is in breach of a condition of the licence; or

(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 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 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—

(a) the facility owner's railway facility is, by virtue of section 17 below, an exempt facility;

(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

(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)—

(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;

(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;

(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;

(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

(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—

(a) paragraph (a) does not extend to obtaining permission to use track for the purpose of providing network services on that track;

(b) paragraph (b) does not extend to obtaining permission to use a station for the purpose of operating that station;

(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;

(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—

(i) of providing network services on that track, or

(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;

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(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—

(i) of providing station services at that station, or

(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;

(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—

(i) of carrying out light maintenance at that light maintenance depot, or

(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—

(a) a contract under which—

(i) a person (whether or not the applicant), and

(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

(b) a contract conferring an option, whether exercisable by the applicant or some other person, to require a facility owner to secure that—

(i) a person (whether or not the applicant or that other), and

(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—

(a) who has an estate or interest in, or right over, a railway facility; and

(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—

(a) any servant, agent or independent contractor of his;

(b) any passenger of his;

(c) any person engaged in the provision of goods or services to or for him; and

(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—

(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

(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—

(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

(b) a reference to obtaining permission—

(i) to enter upon the facility land, with or without vehicles,

(ii) o bring things on to that land and keep them there,

(iii) to carry out works on that land, and

(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—

(a) in relation to which the Franchising Director is the person who made the application under this section, or

(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 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—

(a) he does so pursuant to directions under section 16 above or Schedule (Access agreements: applications for access contracts) to this Act; or

316

(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)—

(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;

(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;

(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;

(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

(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—

(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

(b) if and to the extent that the access contract is an international railway access contract.

(4) In subsection (2) above—

(a) paragraph (a) does not extend to permission to use track for the purpose of providing network services on that track;

(b) paragraph (b) does not extend to permission to use a station for the purpose of operating that station;

(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;

(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—

(i) of providing network services on that track, or

(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;

(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—

(i) of providing station services at that station, or

(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;

(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—

(i) of carrying out light maintenance at that light maintenance depot, or

(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—

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(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

(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—

(a) requiring him to enter into the proposed access contract within such period as may be specified for the purpose in the directions; but

(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—

(a) approving the terms of the proposed access contract, but subject to such modifications as may be specified in the directions; and

(b) requiring the facility owner to enter into the proposed access contract on those terms, as so modified; but

(c) releasing him from his duty to do so if either—

(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

(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—

(a) subsection (4),

(b) subsection (8) (a) and (b), and

(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—

(a) to which the Franchising Director is a party, but in relation to which he is not the facility owner, or

(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
318
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—

(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

(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—

(a) for any reference to a facility owner there shall be substituted a reference to an installation owner;

(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;

(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—

(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

(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—

(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

(b) a reference to obtaining permission—

(i) to enter upon the installation land, with or without vehicles,

(ii) to bring things on to that land and keep them there,

(iii) to carry out works on that land, and

(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—

(a) a person, (whether or not the applicant), and

(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—

(a) who has, an estate or interest in, or right over, a network installation; and

(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—

(a) for any reference to an access contract, there shall be substituted a reference to an installation access contract;

(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;

(c) for any reference to the facility owner, there shall be substituted a reference to the installation owner mentioned in subsection (1) above;

(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—

(a) an installation access contract—

(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

(ii) in relation to which the Franchising Director is the person who made the application under this section; and

(b) an installation access contract—

(i) which is entered into pursuant to directions given by virtue of subsection (5) above; and

(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 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 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—

(a) the Secretary of State, in the case of a facility exemption under subsection (1) above, or

(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—

(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

(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 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 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 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 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—

(a) has been approved by the Regulator, or

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(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 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

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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 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

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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.

Suppression of Terrorism Act 1978 (Application of Provisions) (India) Order 1993
7.4 p.m.
The Minister of State, Home Office (Earl Ferrers)The Minister of State, Home Office (Earl Ferrers) rose to move, That the draft order laid before the House on 9th July be approved [37th Report from the Joint Committee].
The noble Earl said: My Lords, the order which is before your Lordships will enable the United Kingdom to ratify the extradition treaty which we concluded with India just over a year ago—in September 1992. The United Kingdom has had extradition arrangements with India for more than a century. Under a Commonwealth scheme we are able to extradite suspected or convicted offenders both between the United Kingdom and India, and to and from almost all other Commonwealth countries.
This new extradition treaty will prevent suspected or convicted terrorists from trying to avoid extradition by
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arguing that their offences, if they appear on the list which is contained in the treaty, were political and therefore that they were outside the scope of extradition.
That "political defence" has been a traditional feature of many extradition arrangements but, in recent years, there has been a growing recognition that it is not always appropriate to retain it. This will now bring our arrangements with India into line with those with almost all Western European states and with the United States of America.
The offences which are listed in the treaty are serious offences and they are those which are most likely to be terrorist related. They include crimes such as the hijacking of aircraft, hostage taking, causing explosions, murder and manslaughter. The treaty does not affect any other safeguard for the fugitive. It applies to suspected or convicted offenders regardless of their nationality. It is not directed at any particular group of people but at individuals who conspire, attempt or undertake terrorist crimes.
It may be helpful to your Lordships if I explain briefly the procedures and the principles which govern—and which will continue to govern—decisions about extradition to India. Every request is considered on its merits and in strict accordance with the provisions of the Extradition Act 1989. Offences under military law will continue to be outside the scope of extradition unless they are also offences under the general criminal law of both countries. Following the return of a suspected or convicted offender, the Indian authorities will continue to be unable to add on any new charges for offences which were not disclosed by the same set of facts as the extradition offence, unless the Secretary of State has given his consent.
All requests to this country will be scrutinised, twice by Ministers and at least once by the courts. The Secretary of State has ultimate discretion over a decision to extradite a fugitive. He will continue to be obliged by the Extradition Act 1989 to refuse to extradite anyone whose return appears to have been sought for the purpose of prosecution or punishment on account of race, religion, nationality or political opinions, or whose treatment on their return might be prejudiced by any of those reasons.
The Secretary of State must also refuse to return a fugitive if it would be unjust or oppressive to return the person because the offence is trivial; if the offence was committed a long time ago; where there is reason to believe that the accusation has not been made in good faith in the interests of justice; or if, for any other reason, it would be unjust or oppressive to return that person. No one will be surrendered unless the Indian authorities have satisfied both the courts and the Secretary of State that there is a proper crime to be dealt with. The innocent, and genuine political refugees, have nothing to fear.
I know that there is concern about returning terrorists—or anyone else—to India because of anxiety about the human rights situation in that country. The Indian Government are, though, in no doubt about the importance which we attach to human rights. We have been encouraged by the establishment of an independent human rights commission by presidential ordinance on

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29th September, although it will need retrospective approval by the Indian Parliament. The Indian Government also announced recently that certain international human rights organisations will be permitted to visit India. They are in discussion with Amnesty International and with the International Committee of the Red Cross regarding their visits to India.
The second new feature of the treaty, and this order, is the extension of United Kingdom jurisdiction over certain of the more serious offences, which are listed in Schedule 1 to the 1978 Suppression of Terrorism Act, when they have been committed, or have been attempted, in India so that they can now be prosecuted in this country.
This would be an alternative to extradition. It would, for example, enable the prosecution in the United Kingdom of someone who is alleged to have caused an explosion in India with intent to endanger life if, for some reason, extradition were not possible and if all the requirements of evidence of our system could be met. This new jurisdiction will also enable us, in due course, to ensure that our courts are able to enforce the orders of the Indian courts which confiscate terrorists' funds.
It will also become an offence in the United Kingdom to conspire or to incite in this country to commit such serious crimes of violence in India. Just as it is unacceptable that those who commit serious crimes of this nature in India should be allowed to avoid being tried in that country, so we should not allow those who are in this country to organise from here the commission of those crimes in India. We must ensure that they face justice here. Any such charge would, of course, have to be substantiated by sufficient evidence for our courts.
This treaty, in many respects, represents nothing more than an endorsement of the current state of affairs. It shows, though, that we will, together with the Indian Government, take the steps which are necessary to fight terrorism.
The Indian Government have recently completed their own procedures for making the necessary legislative arrangements to enable ratification of the treaty. This order will come into force on the day on which we exchange instruments of ratification. I commend the order to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 9th July be approved [37th Report from the Joint Committee].—(Earl Ferrers.)
Lord Rea: My Lords, as we have come to expect, the noble Earl has given us a crisp and clear account of the order before the House and the Government's reasons for making it. While none of us could disagree with the need to discourage and punish terrorists and to counter terrorism and its effects wherever we can and would back measures to prevent it, there are reasons why some of us fear that this order may lead not to less but perhaps to more human suffering.
I feel somewhat diffident in the pole position, as it were, in the debate after the noble Earl's introduction. I rather hoped to come further down the batting order, particularly since we have such very distinguished speakers with deep personal knowledge of India and of
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the law. Here I include the noble and learned Lord, Lord Howe, with his vast experience in the Foreign Office coupled with his legal expertise.
This order was debated in the House of Commons on 21st July for one-and-a-half-hours. During that time there were nine speeches and 17 interjections. Apart from the two government Ministers, all but one of the speeches and all but one of the interjections opposed the order. Opposition came from all sides of the House. Conservative speakers were against the order eight to four, and those from other parties all opposed it. Nevertheless, as so often happens in both Houses, the order was approved. Those against the order won the argument but lost the vote. There are government supporters in the woodwork in both Houses.
I do not deny that there are violent and destructive acts going on in India today, particularly in Jammu and Kashmir and in the Punjab. Here I should perhaps qualify my inclusion of Kashmir as being in India or a part of India. India is there de facto rather than de jure. Many Kashmiris would reject Indian jurisdiction. Historically, the Indian army was called into Kashmir by the Maharaja in 1947 to help restore order and repel incursions and its future was to be subject to a United Nations supervised plebiscite as proposed by a United Nations commission for India and Pakistan in 1948 and agreed by both India and Pakistan. That plebiscite has never been held. The Simla agreement in 1972 between India and Pakistan in no way supersedes the United Nations agreement which proposed that the future of Kashmir should be settled by plebiscite.
Of course there is no time here to give full details of the current human rights violations in Kashmir and Jammu. Suffice it to say that there is now virtually a state of civil war in that country with up to 500,000 Indian troops involved, sometimes over-reacting brutally if they are attacked. There are plenty of eye witness accounts of extra-judicial killings, rape and torture. As has been said before—the noble Earl, Lord Ferrers, referred to it—Amnesty International has not yet been allowed to make an impartial report on the human rights situation in India, particularly in Kashmir and Jammu. Of course excesses have occurred on both sides but the balance tips heavily, the evidence suggests, against the Indian army, which is effectively an army of occupation. Many independence activists have fled the country. It is they more than any others who fear the operation of this order.
The exemption from the political character of an offence plea, which the order contains, includes not only murder and other normal terrorist offences but also rather vaguer offences such as conspiracy to commit an offence—a charge which might allow anyone active in an independence movement to be arrested. While I have the highest regard for the Indian democratic constitution and its judicial system, which is much the best in Asia, my fear and that of many exiled Kashmiris and others is that they might be held for an indefinite period without trial, as many are now in Kashmir, and that because of the tensions and bitterness in many parts of India they might be found guilty on perhaps fabricated evidence. After all, that has happened here.

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My hope is that the Government will withdraw the order until they are satisfied that the human rights situation in India has been rectified and the civil conflict in Kashmir is over, preferably after the plebiscite which that country was promised in 1948.
Lord Meston: My Lords, I too wish to thank the noble Earl for his explanation of the order. I wish to speak only briefly in the absence of noble friends far more knowledgeable than I about the current problems in India and terrorism in that country.
First, I would wish to question the necessity for the order. As with any measure it is sensible to ask how would matters proceed without it. Having read and reread the debates in another place as well as briefing material and the statutory provisions now in place, it is by no means clear to me what the order will add to the existing arrangements under which there has been a minimal number of extraditions to India in the past 25 years or so.
Secondly, I wish to question how the Government propose to ensure that those extradited are treated properly on their return. The basic principles of the 1978 Act and the treaty underlying it should ensure, as the noble Earl explained, that we respond only to a bona fide request to extradite. There are rigorous safeguards in this country and the merits of individual cases can be tested in the courts, but safeguards in this country cannot dictate that safeguards are in place in the country to which the person is to be dispatched.
The reality is that people are at risk of extradition into the unknown and, at worst, into the long-running turmoil of Kashmir, to which reference has been made. Frankly, there is little or no comfort to be derived from the fact that the Indian legal system—and particularly that in Kashmir—is based on our own. If only some of the reports from Kashmir are true, there is a wide gap between the theory and practice of human and constitutional rights. Therefore, I ask whether the Government propose to monitor the treatment of individuals who are extradited.
The fact is that from this distance most of us have no real means of knowing whether the reports of repression, torture and detention without trial are true or exaggerated, and it is precisely because we do not know that the Government should be cautious. It is not only a question of monitoring individual cases. It is also necessary to have hard evidence of the human rights situation in general. It is, frankly, little use for the Indian Government to suggest that Amnesty International and other organisations exaggerate or are misinformed if those organisations (and others, such as the Red Cross) do not have access to areas such as Kashmir.
I know that the Government have recognised that problem because, in the debate in another place on 21st July, the Minister said in his concluding remarks:
"I hope, and I shall certainly press, that it will not be too long before Amnesty International and other human rights organisations may be able to visit Kashmir and all parts of India to carry out investigations that they may legitimately seek to follow".
—[Official Report, Commons, 21/7/93; col. 469.]
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I ask the noble Earl how that has progressed and, if it has not progressed, whether the Government will continue to press for it as was suggested in that debate in July.
The whole question of approving an order such as this turns on the message that is sent out. Of course, we send out the message that we deplore terrorism and no one, least of all the Indian Government, should think otherwise, but we must be careful not to send out a message that we condone any abuse of human rights. It is because of the relative ignorance of what is going on in certain parts of India that I would suggest that the balance comes down against approval of this order. However, it is probably idle to think that we can this evening prevent the order being approved. Therefore, I hope that the Government will make it clear that they reserve the right to revoke the order if they are not satisfied about the treatment of individuals or about human rights in general.
7.24 p.m.
Lord Templeman: My Lords, my qualification for participating in this debate is that I have considerable experience of India in general and the administration of justice in particular. As an officer in the Indian army between 1941 and 1946, I travelled extensively throughout India and what is now Pakistan and learned much about the difficulties of maintaining law and order in the face of organised provocation and intimidation and the wildest rumours spread by terrorists about the conduct of the police and the army.
During the past 10 years, I have travelled widely in India and have been welcomed by its statesmen and politicians and by its judges from the Chief Justice downwards. I have discussed with them the main problems of law in modern society—both in India and in the United Kingdom.
Human rights have always been upheld by judicial decisions in India. The judges are fiercely independent. The Chief Justice and the other justices in the Supreme Court have protected human rights with a series of outstanding judgments which have secured worldwide recognition and respect. I repudiate the suggestion of the noble Lord, Lord Meston, that the safeguards built into the order that we are now discussing will not be honoured and obeyed by the Indian judicial system just as their safeguards will be obeyed by us when terrorists are returned to this country.
All over the world democratic societies are threatened by violence which is practiced and exploited by secessionists, terrorists, fundamentalists and criminals, particularly drug traffickers. India has paid sorely for upholding democracy and the rule of law. Mahatma Gandhi was cut down by a Hindu extremist. Indira Gandhi was shot down by her own bodyguard, inflamed by Sikh extremists. Rajiv Gandhi was shot by a fanatic from Tamil Nadu. During the past 10 years in the Punjab, 12,000 civilians and 1,700 police have been murdered by terrorists. In Kashmir over the past four years, 5,500 people have been killed by terrorists. There have been 1,500 cases of arson and 2,500 bomb attacks. It is those figures which should be remembered when

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noble Lords plead the cause of Kashmir. In Kashmir, human rights are threatened but they are threatened by terrorists, not by the Indian army or the Indian police.
The excuse of this order has been used to raise again the political questions concerning Kashmir. Kashmir is a difficult political problem. It has been a source of dispute between Pakistan and India for many years. The difficulties have largely been caused because of the fundamentalist regime in Pakistan. Now that that regime has changed, I hope that relations between the two countries will enable the Kashmir problem to be solved. It does not help in discussing this order to harp upon the alleged misdeeds of the army and the police in the face of the known facts about the civil war which is being waged by terrorists in Kashmir itself.
In the face of that onslaught the Indian authorities have succeeded in maintaining democracy and the rule of law. There are persons awaiting trial and there are detainees. They are all subject to the safeguards which are embodied in Article 22 of the constitution of the Republic of India. Under that article, a detainee must be informed of the grounds for his detention. The detention must not exceed three months without a report from an advisory board consisting of three High Court judges or persons qualified to be High Court judges. Fundamental rights are guaranteed and entrenched in the constitution. The writ of hàbeas corpus cannot be suspended. There is complete freedom of the press throughout India. Indian democracy, almost alone among the large and poor nations, is durable and mature despite all the economic and social difficulties which have been encountered.
The attack on fundamental rights and freedoms comes not from the government or the police or security forces of India, but from terrorists, fundamentalists, secessionists and criminals who attack democracy and seek to achieve their aims by murder, intimidation and by propaganda attacks on the conduct of the armed forces and the police.
The determined actions of the Government of India against terrorism in the Punjab have met with success. Elections have been held to the State Legislative Assembly and, despite the efforts of terrorists to murder people who were willing to go to the polls, there was a turnout of about 70 per cent. Even in Kashmir, the government have been successful in initiating and sustaining a dialogue with a number of groups in the state and hope that, in the not too distant future, elections can safely be held.
Over the past two years, India has launched an ambitious programme of economic liberalisation which not only brings India into the global and economic mainstream, but provides opportunities for more intensive economic collaboration between India and the developed countries of the West, particularly the United Kingdom.
As a developing country with urgent problems and socio-economic disparities within the country to address, India is keen to wipe out the scourge of terrorism as early as possible so that it can divert its scarce resources to the more important problems of
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development. Britain's old and close relationship with India enables us to assist in that process by passing this order.
The extradition treaty and the accompanying agreement which led to the order, which have been placed before the House, provide a joint Indo-British strategy to deal with terrorism and with those who smuggle narcotics who are a menace to both countries. The achievement of that strategy owes much to the efforts of Mr. Hurd in the other place and of the High Commissioner for India, Dr. L.M. Singhvi. Both he and the present President of India, who was over here last year, have impeccable records in upholding the rule of law and human rights. They have both worked for those objects and written about them. They have both obtained international recognition. It is fitting that this order should be passed while they are both in office. I hope that it will be passed without any dissent.
7.30 p.m.
Lord Howe of Aberavon: My Lords, perhaps I may join in thanking my noble friend for his lucid and compact exposition of the substance of our debate tonight, and apologise for the fact that I may have to leave before the debate is concluded because of a long-standing prior engagement.
Perhaps I may thank the noble Lord, Lord Rea, for his unjustified tribute to my own double-barrelled wisdom in this matter, because it pales into insignificance compared with the experience of which the noble and learned Lord, Lord Templeman, has just spoken. I join him in extending a warm welcome to the treaty. I look forward to its early ratification. I believe that it tackles sensibly and successfully a topic to which I devoted a good deal of time during most of my years at the Foreign Office in close partnership with my opposite numbers from India.
The treaty, when ratified, will carry two clear messages. First, it will be a clear demonstration of the importance which both the Indian and British Governments attach to the fight against international terrorism: alas, both countries have far too many reasons for that! Secondly, it will underline the message to terrorists that there is no safe haven for them in either of our two countries. I know that for some time it was argued, as did the noble Lord, Lord Meston, this evening, that there might strictly be no need for such a treaty, at least in terms of national law. I have to confess that for some time that argument commended itself to me. But having looked at it as the argument has developed, one must conclude that there are solid, sensible reasons for the treaty. I was struck by an ambiguity in what the noble Lord was saying when he said that the treaty adds nothing to the present state of affairs, but then went on to ask the question: "But how can Her Majesty's Government be assured as to the safety of those who are extradited?" That question arises ex hypothesi if his first point is answered as he wishes. I believe that his argument falters a little—but that is a rather disrespectful comment to make en passant.
The good reasons for the treaty are that it is desirable to make the position clear beyond doubt in international

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law. Secondly, it is valuable to have it made so clear that suspect terrorists cannot seek to avoid extradition merely by arguing that their offences are political. It makes it quite clear that there is nothing defensibly "political" about the key list of serious offences that are characteristic of terrorists which my noble friend rehearsed. Thirdly, there is the broader message that both our countries stand shoulder to shoulder in our determination not to be overcome by men or women who seek to use violence as a political weapon.
I am glad also to welcome the parallel agreement on the confiscation of criminal funds and assets, including those relating to terrorist organisations and crimes.
Let me say a word about the important question of human rights. It is an inevitable and legitimate question for societies such as our own that are struggling with the uneven balance between, on the one hand, the forces and agencies of government charged with the uncomfortable duty of upholding the rule of law—all of whose decisions are open to challenge, open to appeal, open to debate—and, on the other hand, terrorists who are subject to no such constraints: they act as self-appointed prosecutors, self-appointed judges, self-appointed jury and self-appointed executioners. There is no court of appeal from their verdict, no reprieve from their sentences, and nowhere has that grisly truth been more brutally underlined than in India, as the noble and learned Lord, Lord Templeman, pointed out.
Even so—or perhaps all the more so—of course it is right for us to be continually concerned about human rights in both our countries. We in this country, quite apart from our own legal system, are subject to the healthy surveillance of the European Commission and the European Court of Human Rights. I say "healthy", but I go on to say that it is sometimes tiresome, because legal surveillance can be, and is inescapably sometimes, tiresome for administrators. I join with those who welcome the Indian Government's actions to establish an independent human rights commission. I agree with the noble Lords, Lord Rea and Lord Meston, that we shall want to study its working with close and anxious attention, interest and sympathy.
I endorse the tribute paid by the noble and learned Lord, Lord Templeman, to the integrity and vigilance of the Indian judicial system. I remember—if I may be anecdotal for a second—on a visit to India some years ago becoming engaged in a discussion with a distinguished Indian lawyer/politician who was about to assume responsibility for the administration of direct rule in a part of India. I do not want to be more personal than that. He was a lawyer and politician of great distinction. The topic upon which he immediately embarked upon discussion with me was Lord Atkin's dissenting judgment in Liversedge v. Anderson.
I thought what a miracle it is that we have here a marriage and an interchange of legal systems so that this man who is about to embark upon the exercise of authoritarian powers is drawn instinctively to begin discussing one of the world's leading cases about the rights and obligations of the judiciary to oversee the
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executive. That for me is a spontaneous insight into what the noble and learned Lord, Lord Templeman, was speaking about.
In establishing the right balance here, we should pay great attention to the words of General Richard Clutterbuck in his book Future of Political Violence—a rather unalluring title when one comes to think about it. He said;
"The ultimate civil right, however, is the right to live. A violent minority, whatever its politics, has no right to kill, and no claim to such a right must ever be allowed to override the right of the majority to live in peace. One of the arts of governing a liberal society is to ensure that the public understands and approves of the measures which are necessary to preserve this principle. A basis for that approval is to establish clearly that the government stands for stability, and the rule of law, while the terrorists stand for disruption and the rule of fear".
Perhaps I may add just one more general word prompted by my impressions on a brief visit to Bombay and Delhi earlier this year when I had the pleasure of seeing again two old friends. The first was the present governor of Maharashtra, Dr. Alexander, the previous high commissioner, and the second my former opposite number, once Foreign Minister and now Prime Minister, Narasimha Rao, both of them bearing with courage and calm authority the responsibility of their present high offices. I should like to take the opportunity of extending to both of them on behalf, I hope, of the whole House, and to the people of India, our profound sympathy for the consequences of the recent hideous earthquake around Latur.
From that visit I gained two impressions. The first echoed a point made by the noble and learned Lord, Lord Templeman, of the real determination, spread very widely throughout society, to press ahead with the important liberalisation of the Indian economy. That is nothing but good not just for the people of India but for the economy of the wider world. I was glad to hear from all sides the word "irreversible" being applied to those changes. I was also glad to see those changes being strongly supported by India's Prime Minister as well as by our own Prime Minister in the Indian-British partnership initiative. It has their joint blessing.
Finally and more widely, I was delighted to find that relations between our two countries, where there are already so many family and personal links, are probably better, healthier and stronger today than at any time in the near half century since independence. I rejoice in that and I am confident that the treaty will consolidate that most desirable relationship.
7.40 p.m.
Lord Desai: My Lords, distinguished speakers, including the noble and learned Lords, Lord Templeman and Lord Howe, have spoken on this issue. I rise to speak not as a lawyer and nor shall I speak on the economic reform on which I could speak. I wish to speak merely on the order before us.
It is important to say, first, that like this country India obeys the rule of law. No society is perfect. In every society one can find several shortcomings in respect of the guarantee of human rights and so forth. However, I still say that on balance if I were to be tried in any country in the world I would rather be tried in this country or in India. The law's delays are well known,

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but one can he pretty sure that if a person is brought before a court of law it will act independently and free of any political pressure.
I am aware that a number of criticisms have been made. Normally I am more critical than laudatory of societies. I welcome the appointment of the independent Human Rights Commission and the invitation to Amnesty International and the Red Cross to go to India. I agree with the noble Lord, Lord Meston, and my noble friend Lord Rea that we should keep an eye on these issues. But it is not difficult to keep an eye on what is happening in India. One can read magazines and newspapers if one wants to find out what is happening in India. It is not a great secret. One can read Indian magazines and newspapers, which are critical of India, and our newspapers. Therefore, one is not talking about a society which is dark and unbeknown to us believing that something might happen without our finding out. I bet almost anything that in India the press is even more unruly than it is here. It is hardly likely to be muzzled.
I was heartened by some of the safeguards which the noble Earl mentioned in his opening remarks as regards extradition cases and I am pleased about that. I say to my noble friend Lord Rea that I do not want to become involved in the question of Kashmir because one could be here all night. It is a kind of Schleswig-Holstein question of the 20th century on which one could speak for a long time. However, it is not simple analogy in the Indian context to talk about the national liberation movement in individual Indian provinces. The sub-continent has been divided twice with tragic consequences; once between India and Pakistan and then between Pakistan and Bangladesh. There is a strong belief among people in India and in Pakistan that what they have now as an entity and as a nation they would rather fight hard to preserve than to see disappear or dissolve.
One has only to think about Yugoslavia to know that not all nationalisms are equally good or just. Some nationalisms are quite evil. While I do not wish to comment on particular nationalisms I say only that the example of Punjab is interesting because by resilience against what is clearly a fundamentalist terrorist movement the Indian Government have been able to turn the tide around and restart the democratic process in Punjab. I make the same comment about Kashmir. There have been many elections in Kashmir and I have no doubt that elections there will resume as soon as the situation is back under control. While no society is perfect. I am on balance more for this treaty than against it.
7.45 p.m.
Lord Slynn of Hadley: My Lords, some years ago a Justice of the Supreme Court of India gave me a copy of a book which he had written. He wrote my name in it and added the words, "whose country has given India its most precious possession; the rule of law". After the intervening years, arid after much contact with Indian judges and barristers here and in India and at international conferences, I know that the judiciary and the Bar of India are dedicated in a remarkable way to the maintenance of the rule of law and to the protection of
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human rights. I have no doubt that in the present context the Bar and the Bench will be resolute in the conditions prevailing in India to ensure that the fundamental rights guaranteed by the Indian constitution, to which my noble and learned friend Lord Templeman has referred, will be respected. Equally, I have no doubt that they will ensure that the provisions of the extradition treaty are complied with and that in due course the Protection of Human Rights Ordinance of 1993 will be given full effect.
When considering whether the order should be adopted, it is important to remember that the high standards maintained by the Supreme Court of India and other judges are well known throughout the world. The judgments are frequently cited and referred to in our own courts. Only in July of this year the Judicial Committee of the Privy Council in a vitally important appeal was referred to a number of judgments of the Indian courts which were of great assistance and, if I may be allowed to say so, of the very highest judicial and jurisprudential quality.
The courts of India have contributed greatly to the development of the jurisprudence of the common law and not least in the sphere of human rights. But extradition for the trial of an extraditable offence is a two-way process with safeguards on both sides. The House can and no doubt will be no less confident that the British courts will ensure that the strict terms of the treaty are complied with on an application for extradition and that the grounds for the refusal of extradition will be scrupulously examined. The Appellate Committee of your Lordships' House recently made it plain that improper methods adopted outside the United Kingdom for bringing a person before our own courts other than by extradition procedures will not be tolerated. They will be no less astute to ensure that persons are not improperly extradited.
The noble Lords, Lord Meston and Lord Rea, referred us to the situation on the ground. Nobody underestimates the problems. But we are not dealing with action on the ground in a state of armed or violent conflict. We are concerned to consider arrangements for a serious trial by a responsible judiciary for an extraditable offence.
I accept that it may be necessary to keep under review the operation of this treaty. But that is true of all extradition arrangements in both directions. It seems to me that the protection of human rights, which is so important, is not undermined by support for the order moved by the noble Earl.
In the light of the appalling acts of terrorism perpetrated in India and of the importance for all governments of the fight against international terrorism, I believe that the Government are fully justified in applying the 1978 Act to India.
Baroness Flather: My Lords, I too would like to say a few words in support of this extremely important draft order. I believe that it is another manifestation of the fact that the relationship between India and the United Kingdom has never been better. That was admirably demonstrated by the fact that the Prime Minister was a guest at the Republic Day celebrations this year.

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I was disappointed to hear the noble Lord, Lord Rea, give such credence to India's record on human rights as put forward by Kashmiri sympathisers and dissidents. He did not say whether he had looked at the other side of the coin. I feel that it is important to inform oneself about the actions of the terrorists as well to inform oneself about the actions of the Indian Government. I hope that noble Lords will follow their own independent judgments rather than the views expressed in the debate in another place.
In the UK we are no strangers to terrorism. Every terrorist claims persecution for political conviction and every terrorist alleges atrocities and human rights abuses by the police forces concerned. We are seeing a re-run of all that in the IRA extradition case in the US courts at this very moment.
India is the only developing country which has, over the past four decades, established and consistently maintained a democratic structure on the Westminster model and a legal and constitutional tradition inherited directly from this country which upholds the rule of law and personal freedoms. It is worth remembering those basic facts.
In response to the allegations of violation of human rights, the Indian Government have announced that they will permit delegations from foreign human rights organisations, including Amnesty, to visit India. A delegation from the International Commission of Jurists, led by a British QC, recently visited Kashmir. Also, the Indian Government have established an independent national human rights commission incorporating suggestions from both home and abroad. I believe that we should welcome all those efforts to strengthen the legal safeguards.
As we have heard, the extradition treaty has every legal safeguard already built into it to ensure that individuals whose extradition is sought receive a fair hearing in a court of law in this country before they are extradited. There would be further opportunity for a proper trial in a court of law in India. Eminent and noble and learned Lords have said that they intend to keep the treaty under review.
The United Kingdom-India extradition treaty is a most important demonstration of the political will to co-operate between India and the UK. I hope that it will receive your Lordships' fullest support.
Lord Plant of Highfield: My Lords, I approach consideration of the order with four general principles in mind. The first is complete rejection of terrorism in pursuit of political ends and a recognition that terrorism must be discouraged by practical, international co-operation. Secondly, I recognise the vital role which extradition agreements can play in deterring international terrorism. As the noble and learned Lord, Lord Howe of Aberavon, said, if the terrorist knows that the number of havens safe from the reach of the judicial process is diminishing he may be deterred from such activities.
The third principle is no less important. Many of those who may be extradited under a treaty, whether it is the one to be brought into force under this order or any other, may only be suspected of terrorist activities.
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Therefore, it is vitally important that, before concluding an extradition arrangement with another state or, as in the present case, extending the provisions of an Act to another country, the Government should be convinced that there are reasonable grounds for believing that in general the suspect, on being extradited, will receive a fair trial according to the due process of law and will not be subject to an abuse of human rights or racial or religious discrimination in that judicial process.
Finally, I believe that the case for the extension of the provisions of the 1978 Act to India should be made out so that it is clear why those provisions are needed and why the current arrangements which apply to India and other Commonwealth countries are thought no longer to be satisfactory.
My worries about the order arise in respect of those last two considerations: due process of law and the protection of the rights of extradited subjects on the one hand; and the extent to which there has been a clearly demonstrated need for the extension of the provisions of the Act on the other.
I take that last point first. In the debate on the order in another place on 21st July, two general arguments were advanced by the Government to justify the extension of the Act to India. First, they said that ratification of the treaty signed in 1992 embodying the general principles of the 1978 Act was necessary because it would tighten the definition of a political offence. The 1978 Act and the 1992 treaty exclude specifically hijacking, hostage taking, murder, manslaughter and serious physical assault from the category of political offences. I am certain, and I am sure my noble friends concur, that in that respect the Government are on very strong ground. I am sure that my noble friends agree also that the actions of the kind mentioned, which are excluded from the category of political offences by the Act, should indeed be excluded. Therefore, there is a strong case on that ground for extending the Act to India.
However, the point was made in another place that the extension of the provisions to India seems unnecessary in practice given that the Home Office Minister in the debate in another place conceded that there had been no complaints from the Government of India about the operation of the existing arrangements which would be changed by the order. Secondly, since 1978, as the noble Lord, Lord Meston, pointed out, very few applications for extradition have been received from the Indian Government.
Therefore, critics of the order will argue that whatever its theoretical advantages in excluding certain kinds of abhorrent action from the category of political offences, there is no clearly demonstrated practical need for the order. I am unconvinced by that criticism. Since 1978 the terrorist situation in India has deteriorated and also the links between terrorism and drug trafficking have become more obvious generally in the international community. Also, of course, there is the emergence of a concerted international action to tackle problems of terrorism. Therefore, I believe there is a good case for saying that the order is needed. I am sympathetic to the idea of extending the provisions of the 1978 Act to India.

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My main misgivings about the extension of the provisions of the 1978 Act rest entirely upon the third of my general principles; namely, that since extradited persons are likely in many cases to be only suspects, the Government should be assured of the physical security and protection of the rights of those individuals and the right to a fair trial. That principle should apply not only to India but to any other state to which we extend the provisions of the 1978 Act.
I am sure that many noble Lords who have long admired the achievements and durability of the secular democracy in India, as I have, will have been troubled by some of the events to which noble Lords have drawn attention. They were the subject of some impassioned, if not rather hysterical, debate in another place.
I shall not rehearse the points made in tonight's debate. Claims have been made about specific incidents. As the noble Lord, Lord Meston, pointed out, it is very difficult from such a distance to come to a judgment about the evidence. Indeed, there is a conflict of evidence. It would be most difficult, given our resources, to take the advice of the noble Baroness, Lady Flather, and undertake our own investigation.
It is the situation in Jammu and Kashmir which gives the most cause for concern, as several noble Lords mentioned. The special laws in force in those areas limit, it is argued by critics of the Indian Government, the legal safeguards of suspects and those charged with offences and give the security forces too much leeway and discretion in pursuing their duties. Indeed, the Prime Minister of India himself seemed to concede at least part of that case when he said, addressing the Indian police on 17th February, as cited in a speech in another place, that,
"excesses are not to be committed, especially in custody".
It is greatly to the credit of Mr. Rao and the quality of Indian democracy that he should be so forthright. The fact remains that the special legislation is there, and such excesses and potential violations of rights may be thought—at least, by some people—to be happening. As I said, it is difficult to make judgments from this distance.
The establishment of an autonomous and statutory human rights commission is a welcome development. But doubts remain. In the debate in another place the Minister made the point that the Government of India have decided to allow certain human rights groups to visit India to see for themselves how the safeguards operate in various areas of the country. I wonder whether the noble Earl can say whether such visits have now been arranged; secondly, whether they will cover the areas of Jammu, Kashmir and the Punjab; and, thirdly, when such visits might take place. If such visits are imminent and the independence of the investigations has been guaranteed, that would, I believe, go a long way towards alleviating the misgivings which have been expressed in both Houses of Parliament and which must be taken seriously as the order embodies a very serious step on behalf of the Government.
Overall, I feel inclined to support the order, but I need a considerable degree of reassurance. I say that because I feel troubled by the claims that have been made. I am in no real position to adjudicate upon them. I wish to
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raise a final point. It concerns the relationship between the order and financial support in this country within communities from the sub-continent to finance activities which the Government of India regard as subversive. Obviously, the idea of raising money in this country to finance terrorism in India is wholly unacceptable and should fall within the Act. I find the activities of Noraid in the USA equally deplorable. Nevertheless, there is a line to be drawn between raising money to support terrorism and raising money to support political ideas and aspirations that the Indian Government may find subversive. In a free society, we should rightly proscribe the former but allow the latter.
Is the Minister confident that the order and its effects are compatible with that difference between financing terrorism and financing political activity—a difference which is quite difficult to define but one which, in my view, is fundamental? Subject to the expression of those worries and those qualifications, I am prepared to support the order laid before the House.
Earl Ferrers: My Lords, I am grateful to your Lordships for the views which have been expressed this evening. I believe it is right to say that there is, in general, agreement on the fact that the order is necessary. Indeed, some noble Lords expressed concerns and anxieties in that respect. I believe that the noble Lord, Lord Rea, expressed the greatest disquiet. I shall try to put his mind relatively at rest. All the order does is to prevent suspected or convicted terrorists from trying to avoid extradition by saying that the offences were political. The noble Lord, Lord Rea, pointed out that, after all, conspiracy to commit an offence is caught. Well, yes, it is. Furthermore, if I may say so, so it should be.
We are talking about terrorism and the disasters which it can bring. If a person is suspected of causing terrorism, then it is right that he should not be able to shelter behind that provision (which some people have been able to do until now) and say, "Don't send me home, because what I have done is political".
The noble Lord, Lord Plant, was also worried about that aspect. He said that if suspects were sent back, the Home Secretary must be satisfied that they would receive a fair trial. Of course, my right honourable friend must satisfy himself in that regard; indeed, he would satisfy himself over any extradition that a person would not be sent back unless he was to receive a fair trial. That is also the case with anyone who is suspected of terrorism. However, the real point is that a person should not be able to shelter behind such a provision and say, "It was an act of terrorism; you must not send me back because it had political connotations".
I thought that the speech of the noble and learned Lord, Lord Templeman, really justified the order in its entirety. He referred to his own experiences and vast knowledge of India. He explained and reminded us of how many Indians and officials have been killed by terrorists. Despite that, and the awful "onslaught" as he put it, the Indian Government have maintained law and order. I believe that that is a considerable achievement on their part. I should like to add my commendation to that of the noble and learned Lord for the way in which

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they conducted themselves in very difficult times and against very difficult odds. That is the reason why I feel—and here I agree with the noble and learned Lord—that we ought to support the order.
Similarly, the noble and learned Lord, Lord Slynn of Hadley, was so right to refer to the fact that India as a whole has always held the highest standards of justice and jurisprudence. That has been upheld by the judges and by the courts—again, under very difficult circumstances. It is right that my right honourable friend the Home Secretary should be satisfied that, if he is to send anyone back to India, the same high standards of justice and jurisprudence should obtain.
Several noble Lords referred to civil rights. They are, of course, of enormous importance. If I may say so, I thought that the quotation used by my noble friend Lord Howe from General Clutterbuck—when he said that the ultimate civil right was the right to live—was very apt. We do get worked up, and rightly so, about civil rights. It is correct that, throughout the world, we should do our best to ensure the right to live. One of the greatest deterrents to that is the effect of terrorism.
The noble Lord, Lord Plant, asked what was wrong with the present system and why the order was necessary. It is not a question of there being anything wrong with the present system, other than the fact that it is important to bring arrangements up to the proper modern anti-terrorist standards that are applied to much of Western Europe and to the USA. It is right that they should also be applied to India.
The noble Lord, Lord Rea, was concerned about the inclusion of conspiracy offences. As I explained to him, my right honourable friend will satisfy himself as regards the right to a fair trial for anyone who is extradited. The noble Lords, Lord Meston and Lord Plant, asked how the Government can ensure proper treatment of those returned to India.
The treaty and the order in no way change the obligation on the Secretary of State to refuse extradition if it appears that a person might be prejudiced because of his race, religion or his political opinions. The Indian Government are in no doubt about the seriousness with which we take this obligation. The noble Lord, Lord Meston, asked whether we would monitor the treatment of those returned. I believe my noble friend Lord Howe of Aberavon said this matter should be constantly looked at. I can assure both noble Lords that the Government will continue to take a close interest in what happens to those people.
The noble Lords, Lord Meston and Lord Plant, asked why there has been a treaty when there have been so few extraditions to India so far. The fact that there have not been many extraditions so far is no argument for not making sure that the arrangements which we have are fully in place to deal with any circumstances which may arise. It is correct that the arrangements should be fully in place.
The noble Lords, Lord Meston and Lord Plant, asked about human rights. I was grateful to the noble Lord, Lord Plant, for giving me notice that he wished to refer to this matter. The noble Lord, Lord Meston, mentioned specifically Amnesty International. We welcomed the
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Indian Government's announcement in July that certain international human rights organisations will be permitted to visit India. The recent visit of a delegation from the International Commission of Jurists to Kashmir in mid-August this year is an important indication that this policy is being put into effect. I understand the Indian Government are now in discussion with Amnesty International regarding visits. We should continue to encourage the Indian Government to allow access for Amnesty International and other independent human rights organisations to Kashmir and to other areas of India. As I have said, the International Commission of Jurists has visited Kashmir and the Indian Government are discussing further visits.
The noble Lord, Lord Plant, also mentioned the difference between financing terrorism and financing political activity. I can assure the noble Lord that there is nothing in this treaty and order which is directed at genuine, non-violent political activity. I am grateful for the support that noble Lords have given. That is important support not just in terms of the order but also for the British Government and for the Indian Government. We can feel that both Britain and India are working together against the dire effects of terrorism. I beg to move.
On Question, Motion agreed to.

Railways Bill
8.12 p.m.
Consideration of amendments on Report resumed.
Clause 27 [Other terms and conditions of franchise agreements]:
Viscount Goschen Viscount Goschen moved Amendments Nos. 37 to 39:
Page 29, line 10, leave out ("either—
(a) on conditions requiring") and insert ("on conditions requiring—
(a)").
Page 29, line 15, leave out ("on conditions requiring").
Page 29, line 18, at end insert:
("(1A) A franchise agreement may include provision requiring the franchisee—

(a) to operate any additional railway asset; or

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

The noble Viscount said: My Lords, these amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
[Amendment No. 40 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 41:
Page 29, line 32, at end insert:
("() A franchise agreement shall require the franchisee to permit passengers, without additional charge, to use services provided by him between any two places upon presentation of a ticket issued by another franchisee for travel between the same two places.").
The noble Lord said: My Lords, in moving Amendment No. 41, I wish to speak also to Amendment No. 42. The purpose of Amendment No. 41 is to seek to safeguard the present arrangements for interavailability of tickets on parallel routes or routes shared by more

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than one operator. It was the noble Lord, Lord Mountevans, who raised this issue when we discussed it in Committee and this very full Chamber will recall that debate vividly.
The matter I am discussing is exemplified by a number of examples of which I shall mention one or two. For example, parallel routes between Glasgow and London are operated by InterCity ECML and InterCity WCML. The routes between Birmingham and London are operated by InterCity Great Western, InterCity WCML and NSE Thames and Chiltern. The routes between Glasgow and Edinburgh are operated by InterCity ECML and Regional Railways ScotRail. I could cite many other examples but I shall not do so.
Then there are shared routes, for example the route between Gatwick and London which is operated by InterCity Gatwick Express, Network SouthEast Thameslink, Network SouthEast South London and Sussex Coast. The route between Ipswich and London is operated by Network SouthEast Great Eastern and InterCity Anglia. This situation is replicated in a number of areas as regards both parallel and shared routes. There seems to me to be considerable scope for the confusion of passengers, the embarrassment of staff and even perhaps an increase in prosecutions for perceived fare-dodging if the present interavailability of tickets is not maintained.
The Minister has said before—he has repeated the argument in another context this evening—that it will all work out all right because it is hoped that similar agreements will be negotiated in the future and the Government accept, or take the view that the regulator or the franchising director will already have some limited powers to require mutual acceptance of tickets. But their belief, as I understand it—I refer to what the Minister said at col. 1051 of the Official Report on 1st July when we debated these issues—is the following. The Minister stated that the Government envisage these powers only being used for "high frequency commuter flows".
In my submission, that policy represents an attempt by the Government to avoid outright rebellion by already much-concerned commuters using services, for example, from the south of London, who may arrive at a number of different terminals. It fails to address the problem of the long distance traveller whose original train may have been cancelled or delayed and who finds that the next train to the same destination is to take a different route. That matter must be addressed. Nothing the Government have said so far in these debates can allay the anxieties which commuters already have. I believe that the Government's proposals as they stand at the moment represent a return to the bad old days before nationalisation when few agreements on interavailability of tickets existed. I take the view—this is the view of the Opposition—that interavailability is an important concept, and it has been developed because we have a single railway authority. We want to preserve this interavailability in the interests of passengers as a whole.
I am also addressing Amendment No. 42 which concerns the integrity of InterCity. We are anxious to protect, so far as we can, the benefits of having a single
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operator of long distance express services. When we discussed this matter in Committee, we sought to provide either for the franchising director to hand over the InterCity business to a single franchisee, or for the franchising director to require operators of InterCity services to co-ordinate their activities, or for him to require operators of any two designated services to co-ordinate their activities. I believe a number of noble Lords who took part in that debate wanted to see InterCity continuing to exist in some form. Perhaps they questioned our enthusiasm for common liveries of trains, uniforms of staff and other such matters. However, the amendment we have now introduced is not mandatory: it is a discretionary amendment which enables the franchising director to exercise an option of letting a single franchise or, if he does not feel this can be justified, simply requiring a measure of co-ordination and the preservation of certain network benefits.
The Government have previously indicated that they are not prepared to enable that discretion to be exercised. We would like to have further and better particulars from the Government as to why that is so and why this discretionary element should not be inserted into the powers of the franchising director.
Perhaps I may now turn to the principal arguments on which we rely to justify the position. InterCity is profitable. It has been profitable for five years in succession. Indeed, the remarkable thing about InterCity is that it is the only long-distance railway network in the world which is profitable. The structure under which it operates permits highly profitable routes such as the East Coast mainline to cross-subsidise non-profitable routes. The most clear example of a non-profitable route in that respect is the West Coast mainline. The benefit which accrues to the public as well as to the public sector borrowing requirement is that there is no need to offer a public subsidy, or at least the need is mitigated if not completely avoided, in such circumstances.
If one breaks up the network, as the Government propose, then without any shadow of a doubt private franchisees will cream off the profits from the lucrative routes and the PSO grant will have to be applied to loss-making InterCity services. That would be the first time that that had arisen for a number of years.
What accounts for the success of InterCity? It is an undoubted success. An essential ingredient has been the unified management that it enjoys. However, in anticipation of the franchising upon which the Government are insisting we already see fragmentation of that unified management. North and south directors replace the single business director. I believe that to he a wasteful duplication of management and I believe that we need to try to retain the unified network which has been so advantageous not only to British Rail but: to the country's transport policy as a whole.
The second measure which has accounted for the success of InterCity is that it has established a reputation for high standards of service: air-conditioned coaches, very good catering facilities on board, senior conductors trained in customer service as well as operational duties, speed and reliability.
If InterCity is dealt with along the lines that the Government propose, I believe that in countries where

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InterCity has been seen as a service worth emulating and copying—Germany, the Netherlands and Australia—we shall simply be a laughing stock. Why do away with something which has a proven record of great success? Why do away with something which is admired by railway managers around the world? It is an ideological pursuit on the part of the Government.
The option expressed in our amendment of co-ordinating separate successor franchisees has precedent to support it, namely, the grouping of independent television companies on Channel 3. Those companies operate separate regional franchises but are happy to co-operate on programme scheduling and marketing. There are obvious parallels to be drawn. I hope that the Government will not simply rely on ideological commitments but will recognise that there is a practical case, which I have sought to make out this evening, which has to be answered. Although I do not suppose that it will come to anything, my hope is that the Government will accept the amendments. I beg to move.
The Earl of Caithness: My Lords, I am grateful to the noble Lord, Lord Clinton-Davis for his full and detailed explanation. As your Lordships will remember from earlier discussions, these amendments have a somewhat familiar ring about them and I hesitate simply to rehearse the arguments which I gave for resisting similar amendments at Committee stage, good as they were. They are on the record, at cols. 1167 to 1168 of Hansard for 5th July. However, let me summarize the position.
Perhaps I may speak first to Amendment No. 42. We do not want to constrain franchisees' decisions on what colour they should paint their trains or what uniforms their staff should wear. We surely can leave the private sector to decide how best to present its product in the market-place. I can understand some people's fondness for the InterCity brand, but rather than take steps to protect a national system—for example, by franchising InterCity as one unit—we see advantage in more local loyalties being fostered. However, we agree that the marketing image of the "InterCity" brand is slightly different from that of "BR", and we are therefore prepared to consider proposals under which the brand might be made available to franchisees who wish to use it.
Franchising will proceed gradually, and on the basis of the BR timetable immediately prior to franchising. Therefore necessary connecting services can be safeguarded. There will continue to be a national timetable. We have already given commitments on that. Local timetables will be a matter for operators, who will be keen to publicise their services. But the franchising director can impose requirements if he considers it appropriate to ensure the orderly provision of information. We propose that requirements as to through-ticketing will be contained in licences. Nothing more, we believe, is needed in the Bill in these areas.
We cannot accept a universal requirement for the mutual acceptance of tickets, or "inter-availability", as Amendment No. 41 seeks. I remind the noble Lord,
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Lord Clinton-Davis, that that is not the case now. Many discounted tickets, for example, carry restrictions on the time of travel or the use of particular trains. The Secretary of State's guidance to the franchising director will include reference to the provision of inter-availability. There are undoubtedly instances where it will be sensible for inter-availability to be preserved. The franchising director will have powers to require it. But there will also be cases where passengers are more likely to benefit from competitive service provision if operators are not unduly tied to restrictive obligations. Therefore, we believe that it is right that inter-availability should be decided on a franchise-by-franchise basis.
Discounted fares have already been discussed under the previous amendment, Amendment No. 36, and I reiterated the Government's position on those. We do not wish to be unnecessarily prescriptive, and apart from the schemes which are already protected under Clause 26 we believe that operators should have commercial freedom to introduce their own marketing initiatives. There is no reason why they should not be as effective as BR, if not more so, in attracting additional patronage to the railway.
For those reasons I have to resist the noble Lord's desire to circumscribe operators' every movement with a multiplicity of obligations and restrictions. We want to achieve an altogether lighter touch which will encourage the private sector to come forward and run railway services in a competitive environment with only the necessary level of control to secure effective franchising within the framework of the powers already in the Bill.
The noble Lord, Lord Clinton-Davis, paid tribute to InterCity and many of the services which it runs and the efficiency with which they are run. I too would like to pay tribute to a great many of the InterCity services. They provide an excellent service. We believe that with the private sector taking over the management of those services in various parts of the country we can produce an even better service.
8.30 p.m.
Lord Tordoff: My Lords, before the noble Earl sits down, can he give us any reassurance on the subject of common timetabling? It is contained within one of the amendments. It is an area about which people are worried. I received the composite InterCity timetable by courtesy of British Rail. It is a publication which it has helpfully sent me over the past few years. I was somewhat shocked to read something that perhaps I should have known; namely, that it is the last timetable that I shall receive from British Rail with the various InterCity timetables in it. From April next year there will be no general InterCity timetable. There will have to be several timetables for each of the routes which InterCity—in whatever form it exists—will run.
It is that kind of issue which worries people intensely. Not all journeys are straightforward. During the summer I journeyed from my home in Taunton to stay with my noble friend Lord Mackie of Benshie in Kirriemuir. I was able to go by train all the way to

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Dundee. I am not sure whether I shall find sufficient timetables to ensure all those connections this time next year.
The Earl of Caithness: My Lords, I understand the point that the noble Lord makes. I am delighted that he went from one beautiful part of the country to another even more beautiful area. I hope that he enjoyed himself very much.
We have already given commitments to a national timetable. I believe that a great many of the anxieties of people will not be well founded. The noble Lord and I have had discussions on previous Bills when he has rightly raised anxieties. Of course people who are used to one system are worried about a change. I think that in the great majority of cases the system to which we have moved has turned out to be better and the people who have used those specific services have found that many of their fears have disappeared. It does not mean that those fears were wrong in the first instance. It is a natural human instinct to have those fears. I take the noble Lord's point. That is why a national timetable is so important.
Lord Clinton-Davis: My Lords, the difficulty is that the Government rely on conjecture and hope but they are interfering with an internationally esteemed, proven success. Against that background it simply makes no sense to deal with the situation along the lines that the Government propose. It is all very well to state that local loyalties need to be fostered. At one time the Prime Minister was much taken with the idea of going back to the four railway lines which were in the private, heavily subsidised sector until nationalisation. He based that on a form of local loyalty. It was meaningless. It has to be said that the Government have not taken up that suggestion made by their own Prime Minister.
It is one thing to say that the Government have made certain commitments. It is quite another to translate those commitments into practice. The Government have no precedent upon which they can base the commitment. The railways privatisation is a totally different privatisation. It has had little encouragement from the private sector to date. There is overwhelming public anxiety, which the Government seek to ignore. They can pass off the debate at the Conservative Party Conference without qualms. But they know of their own knowledge, and Members in another place know from their own constituencies, that there is massive worry about the whole question of privatisation, but about InterCity in particular. Why interfere with such a proven success?
The question of inter-availability is one of the most important issues that confronts us as these unnecessary changes are being contemplated. We may wish to return to the issue at a further stage of the Bill. We shall have to assess the priorities which have to be dealt with at that stage.
To say that the Government wish to apply a lighter touch is, with respect to the Minister, absolutely meaningless. It is nonsense. What the country demands is inter-availability and the running of a service that is a success. Those are issues which are felt to be very much in jeopardy.
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With regard to common timetabling, the Minister says, "We have made a commitment. That should satisfy everybody". Government commitments have been made before and have been dishonoured on a massive scale. Therefore I am not much influenced by what the Minister says in that regard.
I urge the noble Lord, Lord Tordoff, to preserve the timetable to which he referred. It will soon have an antique value and will be able to enhance his already substantial earnings from attending this place. Therefore it is a document to be preserved. Having said all that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 42 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 43:
Page 29, line 38, at end insert:
("(7) In this Part, "additional railway asset" means any network, station or light maintenance depot, and any reference to an additional railway asset includes a reference to any part of an additional railway asset.").
On Question, amendment agreed to.
Clause 28 [Failure to secure subsequent franchise agreement]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 44 to 46:
Page 30, line 2, at end insert:
("(1A) In any case where—

(a) a franchise agreement which includes provision in respect of the operation of any additional railway assets is terminated or otherwise comes to an end, but

(b) no further franchise agreement has been entered into which makes provision in respect of the operation of the additional railway assets formerly operated under or by virtue of that franchise agreement, or

(c) such further franchise agreement as has been entered into in respect of the operation of those additional railway assets makes provision in respect of the operation of some but not all of those additional railway assets,

the Franchising Director shall, subject to subsection (3) below, have the power to secure the operation of any additional railway asset with respect to the operation of which no further franchise agreement has been entered into, until such time as it again begins to be operated under or by virtue of a franchise agreement.").
Page 30, line 14, leave out from ("question") to ("of") in line 15 and insert ("in any case falling within any of paragraphs (a) to (d) of subsection (2)").
Page 30, line 16, at end insert:
("(3) The Franchising Director's power under subsection (1A) above to secure the operation of any additional railway asset shall come to an end—

(a) where the Franchising Director publishes a notice under subsection (4) of section 37 or 39 below in respect of the additional railway asset in question, on the date mentioned in paragraph (b) of the subsection in question;

(b) where the Franchising Director discontinues the operation of the additional railway asset in question in circumstances in which he is entitled to do so without notice under or by virtue of subsection (2) of section 37 or 39, on the date on which that discontinuance takes place;

(c) where the operator of the additional railway asset in question gives notice to the Franchising Director in respect of that additional railway asset under section 36 or 38 below, on the date specified by the operator pursuant to subsection (3) (b) of the section in question; or

(d) where the operator of the additional railway asset in question discontinues the operation of that additional railway asset in circumstances in which he is entitled to

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do so without notice under or by virtue of subsection (1) or (2) of section 36 or 38, on the date on which that discontinuance takes place.").

On Question, amendments agreed to.
Clause 29 [Leases granted in pursuance of franchise agreements: no security of tenure]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 47:
Page 30, line 24, at end insert ("(whether in whole or in part)").
On Question, amendment agreed to.
Clause 30 [Power of Passenger Transport Executives to enter into agreements with wholly owned subsidiaries of the Board]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 48:
Page 31, line 23, leave out ("section") and insert ("sections (Re-negotiation of section 20(2) agreements as a result of this Act) and").
The noble Earl said: My Lords, in moving Amendment No. 48, I shall, with the leave of the House, speak to Amendments Nos. 50, 51, 52 to 57 and 300, which also stand in my name. With the permission of the noble Lord, Lord Clinton-Davis, I shall in the process touch upon his Amendment No. 49. I know that the noble Lord, Lord Carmichael, will wish to speak more fully to that amendment in a moment.
These amendments relate to the involvement of PTAs and PTEs in the future railway and are mainly to Clauses 31 and 33 of the Bill, which make provision regarding PTEs and for the amendment of the 1968 Transport Act. There is also a new clause to provide for the renegotiation of Section 20 agreements in the run up to franchising. The remainder of the amendments are entirely consequential upon the amendments which were made to Clause 27 and which provide for the franchising director to secure the operation of "additional railway assets".
I shall deal first with the government amendments to Clause 31. Amendments Nos. 53 and 54 together permit a PTE to specify the minimum level of quality with respect to the operation of a station which the franchising director intends to secure under a franchising agreement relating to services in the passenger transport area. Amendment No. 56 provides for the franchising director and a PTE to enter into agreements concerning the terms of franchise agreements to which the PTE is a party. The subsection is transposed from Clause 50.
I turn briefly to the amendment which stands in the name of the noble Lord, Lord Carmichael. That amendment also seems to be intended to secure that PTEs continue to invest in the railway. I hope that I can reassure the noble Lord that it is our fervent desire that this should continue to be possible, and I would draw the noble Lord's attention to Clause 50, which deals with the encouragement of railway investment.
Moving on to government Amendment No. 58, this amends subsection (12) and replaces the existing subsection (13) of Clause 31 with a new subsection (13) which provides for a PTE and the franchising director to enter into an agreement relating to the provision of services in a PTE area where the franchising director is under a duty to secure those services pursuant to Clause
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28. This is the case where a franchise has ended and, for whatever reason, the competition to re-let the franchise has not secured a successor franchisee. The new subsection also provides for the PTE to pay the franchising director for securing the provision of such services. The Secretary of State has powers to direct the PTE to make payments in the case of default of agreement.
Subsection (13A) in Amendment No. 58 sets out the provisions which may be included in an agreement made between the franchising director and the PTE made pursuant to subsection (13) of Clause 31. Subsection (13B) limits the scope of the Secretary of State's powers of direction in the case of a dispute arising between the franchising director and a PTE concerning the making of payments by the PTE under the new subsection (13). He will now only be able to direct the PTE to make payments in respect of services making calls at more than one station in the PTE area or additional railway assets operated for the purposes of supplying those services, and only during the "relevant period", defined as the financial year in which the direction is given, the year before and the year after.
I believe that your Lordships will welcome this amendment, which remedies the previous situation under which the Secretary of State's powers were rather too widely drawn. We also propose to amend subsection (15) of Clause 31 so that if a PTE considers it desirable to enter into a franchising agreement expeditiously, the PTE will be able to apply to the Secretary of State for directions as well as the franchising director.
Moving on to Clause 33, we seek further modification to Section 10 of the 1968 Act, which sets out PTEs' powers, in order to enable them to enter into agreements with infrastructure operators and owners concerning maintenance, development and staffing, and with owners of rolling stock in connection with the terms on which rolling stock is to be let on hire.
The remaining Amendments Nos. 52, 57, 59, 62 and 63 are consequential upon the amendments which have been made to Clause 27 which provide for the franchising director to secure the operation of additional railway assets.
Finally, Amendments Nos. 48, 50, 51, 65, 66 and 300 deal with the treatment in the run-up to the franchising of existing agreements between the British Rail board and the passenger transport executives under Section 20(2) of the 1968 Transport Act. Amendment No. 300 also makes further provision with regard to enforcement.
The existing Section 20(2) agreements will no longer be appropriate after 1st April 1994 when Railtrack is established and the new charging regime commences. New or amended Section 20(2) agreements will therefore need to be in place before 1st April 1994.
The amendments do a number of things to facilitate this process, the emphasis being on the PTEs and BR or its wholly-owned subsidiaries discussing and agreeing the necessary changes. First, a duty is placed on BR or any wholly-owned subsidiary, the PTAs and the PTEs to co-operate in the re-negotiation and amendment of existing Section 20(2) agreements. The Secretary of State will be able to serve notice on the parties

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specifying the date by which agreement should be reached on the new or amended Section 20(2) agreements. In the event of a dispute as to the terms of the new or amended agreements, either party may refer the dispute to the Secretary of State. In the event of such a referral, or if BR and the PTEs fail to agree on amendments or sign a new agreement by the date he has set, the Secretary of State will be able to give such directions to the board or its wholly-owned subsidiary, or the PTE requiring them to make such amendments to the existing Section 20(2) agreements as are determined by him, and to enter into new Section 20(2) agreements on such terms as are determined by him, by such date as he may specify in the directions.
These provisions are similar to those already in the Bill to deal with disputes which may arise between the PTEs and the franchising director in respect of franchise agreements. I should like to stress that we hope and expect the PTAs, PTEs and BR to agree on the necessary changes among themselves without the Secretary of State being required to intervene.
We recognise the excellent work done by the PTEs in promoting public transport in metropolitan areas and are eager to see this continue in the future. Our amendments are necessary for the furtherance of this aim and I commend them to your Lordships' House.
Having given that very full explanation, I hope that it will solve some of the problems and allay some of the anxieties that the noble Lord, Lord Carmichael, might have. I beg to move.
8.45 p.m.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for his full explanation. I think, however, it is important to put on record something about the work of the PTAs and PTEs. As the Minister will know, one of the more progressive and important ones happens to be in the area in which I live, so I experience it frequently. There is no question but that the PTAs and the PTEs have led the way in the development of commuter rail services in the UK. They used their powers under Section 20 of what I consider to be the great Transport Act of 1968. Much can be done now, but in 1968 that: legislation was very progressive, believe me. The structure was set up under that Act. PTAs and PTEs recast timetables to improve regularity and reliability, they opened new stations and upgraded others. Only in the past month or six weeks, in the Strathclyde PTA, five stations were reopened and there are five to come within the next month or so. The interesting point about these stations is that the local papers showed pictures of them taken from the railway bridge after they had been opened and the stations were crowded with commuters who previously took their cars into the centre of the city or waited for buses. The suburban areas now have a good railway service and the PTEs did a great deal to improve rolling stock and for the electrification of the railway line.
The lead of the PTAs and the PTEs has been followed by the regional and other principal rail networks. Network SouthEast partly used the PTEs as an example
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and even the Secretary of State for Transport in the other place stressed that he wished PTAs and PTEs to remain active after the Bill is enacted.
Obviously, however, there are points about which we were a little worried. Some of the assurances given by the Minister in his Amendment No. 50 are reassuring, but I should like to emphasise that there are certain amendments that we would like. For example, we would like a minimum period of at least three months before the renegotiation of agreements between the PTEs and the franchisees. We would like the Secretary of State to have the powers under subsection (3) restricted to imposing terms only for matters still in dispute. As the Minister said in his speech, we hope that there will be general agreement. There will be problems, but we hope that ultimately they will be amicably settled. We would not want the power of the Secretary of State to be used unnecessarily.
On the matter referred to under subsection (4) of the new clause in Amendment No. 50, the Secretary of State should be required to consult and take account of the views of the other parties before giving directions. Where the other party is a PTE, the PTA should also be asked for its views because, after all, it is the body which will pick up the bill. Consideration should be extended only to those matters which are actually in dispute.
Similarly, subsection (5) should require consultation, taking account of the views of all the parties. The Secretary of State must allow a reasonable time for that. I know that "reasonable" is not a good legal word, but in an area of life where people are dependent on transport to get them to work and leisure activities, they will be annoyed and the local press and media will be annoyed if "reasonable" is not properly and reasonably interpreted. Subsection (6) must provide for ale PTA to be consulted and for its views to be taken into account before an agreement is imposed.
In view of the importance of the agreements to our major conurbations, it is also reasonable to ask that the Secretary of State submit any agreement that he proposes to impose to parliamentary scrutiny, by use of a statutory instrument to be approved on a positive resolution.
Finally, the Government should take note of the fact that the amendments are incomplete. Clause 140 requires amending for the British Railways Board in the same terms as are proposed for the PTEs, as they too can be subject to directions under the new clause now; or is it their intention simply to use the powers to use the PTEs and PTAs on the right side?
I hope that I have not asked too many questions of the Minister. I imagine that he may have all the answers ready. But if he has not, perhaps he will let me know later. In general, I approve of the amendments that he has made and the assurances that we have had so far on the PTAs and PTEs.
Lord Teviot: My Lords, briefly, I should like to join the two noble Lords in tributes to the PTAs and PTEs; and also to thank my noble friend for his Amendment No. 60, which was the point that I raised in Committee.
The Earl of Caithness: My Lords, perhaps I may deal first with the point made by my noble friend Lord

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Teviot. I am delighted to have met my noble friend's anxiety on this particular point, and to know that he is satisfied.
Earlier, when I was speaking to a large number of other amendments, I should have mentioned Amendment No. 51. There has been a misprint on the Marshalled List. In the last line it says:
"a section 20(2) agreement".
It means that there is one agreement too many. The word "agreement" should be deleted after "section 20(2)". I do not know whether it makes any difference. It just makes it absolutely clear that we are all talking about the same type of amendment.
Perhaps I may deal now with the point raised by the noble Lord, Lord Carmichael of Kelvingrove. He talked about subsection (2), allowing a minimum period of at least three months for renegotiation of agreements. I understand that anxiety; but I should like to assure the noble Lord that the Secretary of State will not set impossibly tight deadlines. The emphasis is firmly on achieving workable contracts.
The noble Lord also raised anxieties under subsections (3), (4), (5) and (6). Again, I understand those. But I assure the noble Lord that it is fully intended by the Secretary of State that he should exercise his power only in the direction in respect of areas of dispute. He obviously' does not want to go further than that. As to the important point of consultation, the Secretary of State will need to weigh the merits of the case before deciding what directions he should give. That will require consultation with all the parties in dispute. I hope that the noble Lord's anxieties are allayed on that front.
Turning to the other points, I understand the emphasis placed on the agreements. But it will also be important that the agreements are entered into swiftly. I put it to the noble Lord that placing draft agreements before Parliament would cause delay. It is our sincere wish that the parties involved will be able to enter into agreement rather than have the matter referred to the Secretary of State.
With regard to Clause 140, the clause makes it clear that:
"It shall be the duty of any person to whom a direction is given under this Act to comply with and give effect to that direction".
So the board will be under a duty to comply. Subsequent provisions are without prejudice the generality of this provision. It was thought necessary to refer to PTEs in the clause in order to remove any doubt that there may have been that the compliance with the direction by PTEs should take precedence over the performance of their duties under the 1968 Act.
I hope that I have covered the points that the noble Lord, Lord Carmichael, has raised. However, if he wishes to discuss anything with me between now and another stage on this issue, I shall be only too pleased to find time to do so.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for making that rather rash decision. I believe that the Minister's hat is in the right place on this, and I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 50:
After Clause 30, insert the following new clause:
Re-negotiation of section 20(2) agreements as a result of this Act
(" .—(1) It shall be the duty of the Board and of every Passenger Transport Authority and every Passenger Transport Executive to co-operate with each other with a view to reaching agreement about—

(a) the changes that need to be made to existing section 20(2) agreements as a result of the provisions of this Act or anything done or to be done pursuant to any such provision;

(b) whether those changes can best be made by amending the existing section 20(2) agreements or by terminating those agreements and entering into new section 20(2) agreements in their place; and

(c) the amendments that need to be made to the existing section 20(2) agreements or, as the case may be, the provisions that need to be contained in the new section 20(2) agreements.

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

(a) to have reached agreement on the matters specified in paragraphs (a) to (c) of subsection (1) above, so far as relating to the existing section 20(2) agreement with which they are concerned; and

(b) to have made to that existing section 20(2) agreement the amendments mentioned in paragraph (c) of that subsection or, as the case may be, to have entered into a new section 20(2) agreement, containing the provisions mentioned in that paragraph, in place of the existing section 20(2) agreement.

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

(a) to make to the existing section 20(2) agreement in question amendments determined by him and specified in the directions, or

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

by such date as may be specified in the directions.
(4) The Board or any Passenger Transport Executive may refer to the Secretary of State any dispute which arises in the course of negotiations concerning the matters specified in paragraphs (a) to (c) of subsection (1) above; and on any such reference the Secretary of State may give such directions as he thinks fit to the Board and to the Passenger Transport Executive in question.
(5) Without prejudice to the generality of the directions that may be given on a reference under subsection (4) above, the Secretary of State may, on any such reference, give directions to the Board and to the Passenger Transport Executive in question requiring the Board and that Executive—

(a) to make to the existing section 20(2) agreement in question amendments determined by him and specified in the directions; or

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

by such date as may be specified in the directions.
(6) Where the Secretary of State gives directions under this section with respect to the amendments that are to be made to an existing section 20(2) agreement or the terms on which a new section 20(2) agreement is to be entered into, any requirement for the consent of the Passenger Transport Authority in question to be obtained to the making of those amendments or that agreement shall be dispensed with.
(7) This section shall apply in relation to any section 20(2) agreement which has been amended or entered into pursuant to

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this section as it applies in relation to an existing section 20(2) agreement, and "existing section 20(2) agreement" shall be construed accordingly.
(8) In this section—
"section 20(2) agreement" means an agreement made between the Board and a Passenger Transport Executive pursuant to section 20(2) (b) of the Transport Act 1968 (whether or not the agreement has been amended or entered into pursuant to this section);
"existing section 20(2) agreement", subject to subsection (7) above, means a section 20(2) agreement entered into before the coming into force of this section;
"new section 20(2) agreement" means a section 20(2) agreement made at or after the coming into force of this section;
and any reference to the Board includes a reference to a wholly owned subsidiary of the Board.".
On Question, amendment agreed to.
Clause 31 [Passenger Transport Authorities and Executives: franchising]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 51 to 65:
Page 31, line 40, leave out from ("under") to ("agreement")") in line 42 and insert ("a section 20(2) agreement").
Page 32, line 25, leave out ("intention") and insert ("intentions—
(za) with respect to the inclusion, in any franchise agreement contemplated by that subsection, of provisions relating to the operation of any additional railway assets wholly or partly within the area in question, and")
Page 32, line 47, leave out ("and").
Page 33, line 3, at end insert:
("(d) may specify the minimum level of quality with respect to the operation of any station (but not any other additional railway asset) which may be required by any such franchise agreement as is mentioned in subsection (5) (za) above.").
Page 33, line 18, leave out ("are included among the services which are to be provided under") and insert ("are provided for in").
Page 33, line 25, at end insert:
("(9A) The Franchising Director and any Passenger Transport Executive may enter into agreements with each other as to the terms on which franchise agreements to which the Executive is a party are to be entered into.").
Page 33, line 42, after (" agreement") insert ("or
(aa) a franchise agreement requires the operation of any additional railway assets as mentioned in paragraph (za) of that subsection").
Page 33, line 47, leave out from beginning to end of line 10 on page 34, and insert ("or the operation of the additional railway assets, and
(c) payments by way of grant in respect of the provision of the PTA services or the operation of the additional railway assets fall to be made by the Franchising Director pursuant to conditions contained in the franchise agreement by virtue of section 27(1) (b) above,
the Passenger Transport Executive shall pay to the Franchising Director, at or before the time at which any such payment as is mentioned in paragraph (c) above is made, a sum equal to the amount of that payment.
(13) Where, pursuant to section 28 above, the Franchising Director is under a duty to secure the provision of any services for the carriage of passengers by railway, or is empowered to secure the operation of any additional railway assets, within the passenger transport area of a Passenger Transport Executive, the Executive—

(a) shall have power to enter into agreements with the Franchising Director with respect to the securing by him of—

(i) the provision of any of the services in question, or

(ii) the operation of any of the additional railway assets in question,

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until such time as they are again provided under a franchise agreement;

(b) shall make to the Franchising Director in respect of—

(i) the provision of any of the services in question whose provision he secures pursuant to section 28 above, and

(ii) the operation of any of the additional railway assets in question whose operation he secures pursuant to section 28 above,

payments of such amounts, and at such times, as may be agreed between the Executive and the Franchising Director or, in default of agreement, of such amounts and at such times as the Secretary of State may direct; but

(c) shall not have power to enter into agreements with the Board or any wholly owned subsidiary of the Board for—

(i) the provision of any of the services in question, or

(ii) the operation of any of the additional railway assets in question.

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

(a) the services for the carriage of passengers by railway which the Passenger Transport Authority for the passenger transport area in question considers it appropriate to secure to meet any public transport requirements within that area,

(b) the minimum level of quality to which any such services are to be provided,

(c) the fares to be charged to persons using any such services, or

(d) the minimum level of quality to which the operation of any station (but not of any other additional railway asset) is to be secured under sub-paragraph (ii) of that paragraph.

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

(a) any service—

(i) which is provided under an agreement entered into by the Franchising Director pursuant to his duty under section 28 above, and

(ii) which under the terms of that: agreement is required to involve calls at more than one station within the passenger transport area of the Executive, or

(b) any additional railway asset which is operated under an agreement entered into by the Franchising Director pursuant to his power under that section,

"call" meaning for this purpose any stop at a station for the purpose of allowing passengers to board or leave the train (including the stops at the stations at the beginning and end of any journey to which the service relates).").
Page 34, line 18, at end insert (", or in respect of any such services and any additional railway asset.").
Page 34, line 29, leave out ("and
(b)") and insert ("or
(b) if a Passenger Transport Executive for arty passenger transport area considers it desirable to do so for the purpose of securing expeditiously that a franchise agreement is entered into in respect of services for the carriage of passengers by railway within that passenger transport area, the Executive may apply to the Secretary of State for directions under this subsection;
and").
Page 34, line 34, after ("above,") insert ("but subject to subsection (16A) below,").
Page 34, line 42, after ("of") insert:
("(i)").
Page 34, line 44, at end insert ("or
(ii) the operation under or by virtue of a franchise agreement of additional railway assets wholly or partly within their passenger transport area,").
Page 34, line 52, at end insert:
("(16A) The Secretary of State shall not give a direction under subsection (16) (c) above requiring a Passenger Transport Executive to make payments in respect of the provision under a franchise agreement of services for the carriage of passengers by railway, or the operation under or by virtue of a franchise agreement of additional railway assets, except in respect of—

(a) such of those services as are required by the terms of the franchise agreement—

(i) to be provided during the relevant period in the case of that direction, and

(ii) to involve calls at more than one station within the passenger transport area of the Executive, or

(b) such of those additional railway assets as are required by or under the terms of the franchise agreement to be operated during the relevant period in the case of that direction,

"call" having the same meaning in this subsection as it has in subsection (13B) above.
(16B) For the purposes of subsection (16A) above, the "relevant period", in the case of any direction, is the period which is made up of—

(a) the financial year in which the direction is given,

(b) the financial year immediately preceding that in which the direction is given, and

(c) the financial year immediately following that in which the direction is given,

"financial year" meaning for this purpose the period of twelve months ending with 31st March.").
Page 35, line 2, at end insert:
(""section 20(2) agreement" has the same meaning as in section (Re-negotiation of section 20(2) agreements as a result of this Act) above.").
On Question, amendments agreed to.
Clause 32 [Termination and variation of section 20(2) agreements by the Franchising Director]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 66:
Page 36, line 14, leave out ("31") and insert ("(Re-negotiation of section 20(2) agreements as a result of this Act)").
On Question, amendment agreed to.
Clause 33 [Miscellaneous amendments of the Transport Act 1968]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 67 to 72:
Page 36, line 16, leave out ("(viii)") and insert ("(vi) there shall be inserted—
"(via) with the approval of the Authority, to enter into and carry out agreements with any person who is the operator of, or who has an estate or interest in, or right over, a network, station or light maintenance depot or some part of a network, station or light maintenance depot, in connection with the building, replacement, redevelopment, refurbishment, repair, maintenance, operation or staffing of the network, station or light maintenance depot or any part thereof;".
(1A) After paragraph (viii) of that subsection").
Page 36, line 18, leave out ("railway").
Page 36, line 20, after ("franchisee), insert ("or the franchise operator").
Page 36, line 22, leave out ("railway").
Page 36, line 30, at end insert:
("(viiic) with the approval of the Authority, to enter into and carry out agreements with the owner of any locomotive or other rolling stock concerning the persons to whom, or the terms on which, the locomotive or other rolling stock may be let on hire;".").
Page 36, line 38, leave out from ("23A.") to end of line 43 and insert:
("(1) For the purposes of sections 10, 15 and 20 of this Act—
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(a) "light maintenance depot", "locomotive", "network", "railway passenger services", "rolling stock" and "station" have the meaning given in section 82(1) of the Railways Act 1993; and

(b) "operator" has the meaning given in section 6(2) of that Act.").

On Question, amendments agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 73:
After Clause 33, insert the following new clause:
("Consultation between Franchising Director and local authorities
. The Franchising Director when specifying or amending franchises shall consult with local authorities about the pattern and quality of services and about any changes proposed within the terms of franchise agreements to those services provided by operators and shall take account of the formally adopted plans and policies of local authorities and include in franchises any agreements made between local authorities and British Rail and its successors.").
The noble Lord said: I rise to move this amendment, which is in the name of the noble Lord, Lord Peyton, and myself. The noble Lord, Lord Peyton, sends his apologies for not being able to be in his place at this time due to a long-standing previous engagement. He has already previously offered his apologies to the Minister. It will be for the convenience of the House if we speak also to Amendments Nos. 74 and 298.
We have just gone to considerable trouble to look at the affairs of the PTAs and PTEs. No account is taken in the Bill of the established role of the non-metropolitan authorities in the fields of strategic planning and transport support. We have heard a eulogy for the PTAs and PTEs. I intend slightly to echo that in relation to the non-metropolitan authorities.
It overlooks the fact that many authorities, particularly shire counties and the Scottish regions, make a significant financial contribution to the enhancement of the infrastructure of the country and, in a number of cases, support services for social reasons. So the need to protect the environment is a key factor in the local authorities' approach to rail planning. It is also a significant factor, it must be said, in the Government's approach.
The trouble is that the Bill centralises the planning framework for future rail networks by concentrating responsibility in the hands of the franchising director. So this clause aims to ensure that in undertaking the franchising process, the director takes into account local authority views and objectives.
During discussions in another place, Mr. Roger Freeman recognised the role of the non-metropolitan authorities but said that he preferred to deal with them in the Secretary of State's directions to the franchising director.
The Minister's receptiveness to the principle is appreciated. Nevertheless, we believe that it remains important that the role of the local authorities is specified within the Bill in the same way as it was necessary to specify the position of the PTAs and PTEs.
Perhaps I may spend a moment or two at this late hour of night on what they do. The capital grants from local authorities are generally in the context of partnership schemes with British Rail and/or private sector interests. They range from quite minor schemes

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such as environmental improvements and provision of disabled access at stations, to quite large scale projects of new station constructions and electrification schemes.
The list is extensive, and goes all the way across the country from North Yorkshire, Cheshire, Humberside, Gloucestershire, right the way up to Lothian and Grampian. I suppose that the refurbishment of the country's most famous viaduct is perhaps the most well known of these items—namely, the Ribblehead viaduct on the Settle to Carlisle line. One is saddened to hear suggestions that that line is under threat again, although that is not directly anything to do with this Bill—or is it, my Lords?
Cheshire County Council, in partnership with British Rail arid the Merseyside PTA are funding the present work to bring the Mersey Rail Wirral Electric services to their natural termini at Chester and Ellesmere Port. In the South Wales valleys the services have been reinvigorated and extended with line reopenings. One of the most hopeful signs in public transport in recent years has been the reopening of these small branch lines, and many of them have been assisted by non-metropolitan authorities.
With the electrification of the East Coast mainline to Edinburgh, the wires were extended over the short branch to North Berwick with a grant from Lothian Regional Council. Derbyshire, Nottingham and Leicestershire are finding funds to invest in the reopening of the Ivanhoe and Robin Hood lines. So, despite the existence of PSO grants, there have been in recent years numerous examples of county councils coming in with revenue support to prevent cuts in services, especially at weekends and in the evenings, which would have had unacceptable social disadvantages. Many of them have been extremely useful in maintaining services for a limited period while demand picked up again and the services became economically viable.
All these things involve significant injections of local authority funds to BR. Stations can cost around half a million pounds and electrification schemes require investments of several millions. So we are not talking about trivial matters at all.
So it is unfortunate that the Bill as drafted does not appear to give any recognition to the funding role of local authorities outside the metropolitan areas. We believe that it is vitally important that there is a recognition of that role and that that recognition should be in the Bill, the local authorities being given a formal relationship with the director franchising the franchise holders and the track authority.
This is special pleading but it is justified special pleading on behalf of people who have made a great contribution to maintaining public transport services in the country. As I said before, Ministers have shown some sympathy with this view. In front of me I have a letter dated 4th October from Mr. Roger Freeman to the secretary of the Shires PTC Consortium, in which he sets out at some length the guidance and instructions for a franchising director about consultation with local authorities. It is fine so far as it goes until one reaches a sentence which states:
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"These arrangements must be implemented in such a way as to place the minimum burden on franchisees. I would expect local authorities to consult you before formally adopting plans and policies dealing with the role of passenger rail services in their areas".
There are two points to consider about that. First the phrase,
"place the minimum burden on franchisees",
seems to me to be a weasel way of saying, "find any excuse you can not to". Secondly, the consultation seems to me to be a one-way process. It ought to be the responsibility of the franchising director to consult with the local authorities as well.
The fear is reinforced by a meeting that took place in July in the Isle of Man, at which the franchising director gave what I see is described as a "depressing" address to the conference, depressing from the local authorities' point of view because he indicated that he saw their needs as being met through discussions with the franchise holder after the franchise had been let. That would clearly mean that they would he faced with negotiating for service enhancements with an effective monopoly operator.
So there is real worry within the shire counties and the other non-metropolitan authorities as to the "tone" that is coming out of the franchising director. I believe that noble Lords would not want that situation to continue. It seems to me that the best way round this difficulty is to put something on the face of the Bill—if not this measure then something that the Government themselves might suggest. I beg to move.
9 p.m.
Lord Stanley of Alderley: My Lords, the only point that I should like to make to my noble friend is that it is particularly unfortunate that the Government, for better or worse—very much for worse so far as I am concerned—have given the impression that the views of the shire counties and rural interests as such are of little importance and the franchising director has no need to consider their problems. I am sure that that is not the case. It is a matter of public relations and not getting the message across. I should be most grateful if my noble friend on the Front Bench could try to put this matter right and indicate that these interests are very much thought about and considered by the Government.
Lord Carmichael of Kelvingrove: My Lords, I understand that Amendment No. 74 is to be taken with this one. I shall be very brief. The noble Lord, Lord Tordoff, made most of the points that I wished to make. I have a very long brief, which the Minister will be glad to know I have no intention of reading out word for word. I simply say that it was the brief which the noble Lord, Lord Peyton of Yeovil, was furnished with by people in the West Country—in fact the Somerset County Council. I did not discuss the matter specifically with the noble Lord, Lord Tordoff, but I believe that had the noble Lord, Lord Peyton, been present, he would certainly have spoken on this matter with his incredible facility for words. Having said that, I await the Minister's reply rather than going in detail into the brief.
The Earl of Caithness: My Lords, the noble Lord, Lord Tordoff, moved Amendment No. 73. The noble

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Lord, Lord Carmichael, spoke to his Amendment No. 74. Perhaps the House will permit me to speak also to my Amendment No. 298, which is grouped with those amendments.
First, I confirm what the noble Lord, Lord Tordoff, said, in that my noble friend Lord Peyton indeed told me how sorry he was not to be able to be here at this stage of our proceedings. He was concerned about this issue but I hope that I shall be able to allay his anxieties in his absence.
Let me say to my noble friend Lord Stanley of Alderley that his impression is completely mistaken. The Government believe that many local authorities do a great deal to promote the use of public transport in their areas. We want to see that good work continue. Therefore we are keen both to see sensible arrangements made to provide consultation with local authorities under the new structure that we propose for the privatised railway and to ensure that local authorities continue to invest in railway assets which benefit the local people. That is a fairly unequivocal statement of support and I am glad that my noble friend nods his head. Perhaps he could take the PR message, if that is how he would like to describe it, out to the counties and tell them.
Perhaps I may start by dealing with Amendment No. 298. That amendment to Clause 134 amends Section 56 of the 1968 Transport Act and will enable non-metropolitan local authorities to enter into agreements with the franchising director regarding the exercise by him of his franchising functions. The purpose of the amendment is to encourage investment in the railway by such local authorities in the same way as Clause 50, now amended, is intended to encourage investment in the railways by PTEs.
I do not believe that that should be at all contentious. We all wish to see continued investment in the railways. The amendment enables local authorities to co-ordinate the strategic planning of investment decisions with the franchising director, who will generally be the supporter of the services using the facilities which the local authorities help to fund. That, I hope, goes a long way towards meeting the concerns of the noble Lord, Lord Tordoff. As the House will have realised, there are different legislative procedures for PTAs and PTEs, but it is important that local authorities continue to help railways as they have done in the past.
I turn to Amendments Nos. 73 and 74. I have to say that I am not persuaded of the need to amend the Railways Bill to provide for statutory consultation with local authorities. Under Clause 5 of the Bill, the Secretary of State is able to set the franchising director objectives and give him instructions and guidance. We therefore propose to include in the next draft of the franchising director's objectives, instructions and guidance a section which will require the franchising director to consult appropriate representatives of local government about the pattern of services and the quality of services to be provided through franchising.
The franchising director will be required to agree practical arrangements which will provide for effective mutual communication between local authorities and
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franchisees, and to include within franchise agreements a requirement for franchisees to take reasonable steps to keep the local authorities for the areas served by franchised services informed of significant intended changes to the pattern of franchised services.
We expect that local authorities will wish to consult the franchising director before formally adopting plans and policies dealing with the role of passenger rail services in their areas. As to the inclusion in the franchise agreement of agreements entered into by local authorities and BR, as the noble Lord is proposing, it is our intention that franchisees will take on those local authority services under separate agreement with the local authorities concerned. I believe that these requirements will provide for the degree of consultation that noble Lords are seeking without placing undue burdens on either the franchising director or the franchisee.
Lord Tordoff: My Lords, I am grateful to the Minister both for Amendment No. 298, which puts these matters on to the face of the Bill for the first time, and also for the way in which he responded to Amendment No. 73. I dare say that the local authorities would have preferred it to have been written in tablets of stone on the Bill itself.
Obviously, one will need to look with great care at what the Minister said. However, as I heard it, the message goes out loud and clear to the franchising director that he has a responsibility, and that he will be told he has a responsibility, to consult properly and to take into account the non-metropolitan local authority rail activities. For that I am extremely grateful. I hope that it is satisfactory also to the local authorities. Doubtless, if any amendments are needed to improve the situation at a later stage, we can discuss the matter at that time. Meanwhile, I thank the Minister and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 74 not moved.]
Clause 35 [Proposals to discontinue franchised etc. passenger services]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 75:
Page 39, line 24, leave out from beginning to ("Where") in line 19 on page 40 and insert:
(".—(1) This section applies in any case where—

(a) any railway passenger services on any line or from any station are provided on behalf of the Franchising Director and he proposes to discontinue those services, or

(b) any railway passenger services on any line or from any station are provided in satisfaction of requirements imposed by a franchise agreement, but—

(i) the person so providing those services intends not to continue to provide them when the requirement so to provide them comes to an end, and

(ii) the Franchising Director proposes that they should then be discontinued;

and any reference in this section to a closure is a reference to a discontinuance falling within paragraph (a) or (b) above.
(2) If in a case to which this section applies—

(a) the closure is certified by the Regulator as being a minor closure,

(b) the closure in question is one in respect of which, in consequence of the application of section 46(6) below, neither section 34 above nor Schedule 4 to this Act is to apply,

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(c) the closure is one in respect of which neither of the conditions in subsection (3) below is satisfied, and any requirement imposed by a franchise agreement to provide the services in question has come to an end, or

(d) the services in question fall within any of paragraphs (a) to (c) of subsection (3A) below,

the Franchising Director may discontinue the services in question, notwithstanding any duty imposed on him by or under this Part to secure their provision, and subsections (4) and (5) below shall not apply in relation to the closure.
(3) The conditions mentioned in subsection (2) (c) above are—

(a) that all the railway passenger services on the line or from the station in question are provided on behalf of the Franchising Director and he proposes to discontinue all such services on that line or from that station; or

(b) that all the railway passenger services on the line or from the station in question are provided in satisfaction of requirements imposed by a franchise agreement, and—

(i) the person so providing those services intends not to continue providing them when the requirement so to provide them comes to an end, and

(ii) the Franchising Director proposes that all such services on that line or from that station should then be discontinued.

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

(a) which involve travel through the Channel Tunnel;

(b) which are provided otherwise than as regular scheduled services for that line or for that station, as the case may be;

(c) which are designated, or which are of a class or description designated, by order under section 46(2) below as services in relation to which section 34 above is not to have effect; or

(d) which are experimental passenger services, within the meaning of section 45 below, or which are provided on an experimental basis, for the purposes of section 56A of the Transport Act 1962;

and this section shall not have effect in relation to any services falling within paragraph (d) above.
(4) Subject to subsection (2) above,").
The noble Earl said: My Lords, with the leave of the House, in moving Amendment No. 75 I shall speak also to Amendments Nos. 76 to 79, 81 to 83, 91, 100 to 103, 204 and 212. I need not detain the House too long. The amendments tie up a few loose ends and are clarificatory or consequential amendments. I shall mention the reasons for the more important of the group of amendments.
Amendment No. 75 re-casts Clause 35 to enable it to work properly. Clause 28, as amended, gives the franchising director a duty to secure the provision of services in certain circumstances (for example, failure to let a franchise) as do the closure clauses in circumstances when an operator discontinues a service unless and until consent to closure is obtained.
Under Clause 35 as drafted, where the franchising director is securing the provision of services pursuant to such a ditty, he can only close them where they are the totality of services on that route. He could not, for example, reduce service levels to match falling demand unless he withdrew all services and invoked the closure procedure. The amendment corrects that by making the clause apply in all cases where the franchising director proposes to close a franchised service or a service which he is under a duty to provide. It sets out the cases to which we want the closure procedure to apply and then lists the cases where the closure procedure is disapplied.
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The approach is similar to that taken in Clause 37 dealing with the closure of networks operated on behalf of the franchising director.
Government Amendments Nos. 77 and 82 introduce the concept of "multiple" and "single track" railways, and provide that removing part of a multiple track railway shall not be subject to the closure procedure, provided at least a single track remains. The idea is to ensure that, for example, if a redundant passing loop is removed, or tracks no longer used following signalling modernisation, then no part of the new closure procedure is triggered. That would mirror the position under the existing closure procedures.
The remainder of the amendments are clarificatory or consequential. I beg to move.
9.15 p.m.
Lord Brabazon of Tara: My Lords, while we are on the subject of closures—we have reached that stage of the Bill—I shall briefly return to the issue which I raised at Committee stage, which was the potential impact of closures on freight services, an issue on which I was glad to have the support of the noble Lord, Lord Ewing of Kirkford. I am most grateful to my noble friend for having discussed this matter with me. I am also grateful to my right honourable friend the Minister for Public Transport, Mr. Roger Freeman, for having written to me on this subject on 4th October of this year. His letter to me goes some way to helping with this situation.
The Government propose that, with the agreement of Bob Horton, the director of Railtrack, they will reactivate Section 54 of the Transport Act 1962, which allows for a notification procedure in respect of goods services closures. I am quoting from Mr. Roger Freeman's letter in this instance. The letter goes on to say that the procedure would involve making orders or directions under Section 54 of the Transport Act and consequently amendments to this Bill are not required. Therefore, I have had to take the opportunity to raise the subject now.
The letter says that the procedure would require the network operator to give written notice of his intention to discontinue the line, first, to the regulator; secondly, to any operator of services for the carriage of goods by rail currently using the line; and, thirdly, to the operators of any private siding on the line. I should like to ask my noble friend to expand on one of those items—the reference to the current operators of services. That is fine as far as it goes, but what about any potential future or new operator or alternative operator of a service who might consider that he could run a service for the carriage of freight on the line?
The letter goes on to say that the notice should give the reasons for the closure and that it should be given not less than three months before the discontinuance of the line is intended to take effect. Is three months long enough to allow someone who might be interested in operating a service or taking over a line to assess the market, to draw up a business plan with financial backing, to negotiate with Railtrack and to complete the transaction? I believe that longer might be required. On the other hand, if my noble friend can tell me that one would need to give only an indication within those three

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months that one might wish to operate such a service and that that would perhaps halt the procedure or stop it so that someone could go ahead, that would be most helpful.
I am grateful for the letter from Mr. Freeman. I am grateful for what it contains. I should be glad if my noble friend could give me some help in the two matters which I have now raised.
The Earl of Caithness: My Lords, I am grateful for my noble friend's welcome for the letter that my right honourable friend the Minister for Public Transport sent to him. It is another example of how, when a good point is made, the Government are certainly prepared to listen, to consider those representations objectively and to take them into account as necessary.
My noble friend raised a number of quite technical points. Perhaps he will permit me on this occasion to take them away for consideration and then come back to him. On reflection, I may be able to answer them now.
In order to meet the concerns which were raised by my noble friend, the Government decided to reactivate the existing provision in Section 54 of the Transport Act 1962. We shall use what is currently Clause 148 of the Bill to bring Section 54 into line with a future railway. We shall then issue a direction under Section 54 requiring licensed network operators—in the freight context, that means Railtrack—to give the three months' advance notification of proposed freight-only closures or minor closures which affect the operation of freight. We believe that this three-month breathing space will allow freight operators to discuss alternative arrangements with Railtrack—for example, with a view to purchasing the line. During that period we shall expect Railtrack to ensure that any lines covered by a closure proposal are kept in serviceable condition.
I should add that our decision to adopt this policy is not determined by any concern about the future prospects for the rail-freight industry, but is rather designed to address the specific points put to us by the freight interests. I can also advise the House that I know that Mr. Horton at Railtrack is keen to preserve and develop the freight element of the business. If my noble friend Lord Brabazon will permit me to look at the detail of what he said, I shall come back to him before another stage.
On Question, amendment agreed to.
Clause 36 [Notification of proposals to close operational passenger networks]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 76 to 80:
Page 41, line 28, a, beginning insert ("Subject to subsection (1A) below").
Page 41, line 44, at end insert:
("(1A) This section does not apply if and to the extent that the proposal mentioned in subsection (1) above is a proposal to discontinue the operation of part of a multiple track railway between any two places, where the circumstances are such that the railway line in question will continue to be at least a single track railway between those two places.").
Page 43, line 33, leave out ("ancillary facilities") and insert ("installations").
Page 43, line 46, at end insert:
(""multiple track railway" means a railway line between any two places which consists of two or more continuous sets of track taking the same route between those two places;
"single track railway" means a railway line between any two places which consists of one continuous set of track between the two places.").
Page 44, line 4, at end insert:
("and those whose operation he is for the time being securing in pursuance of his power under section 28 above.").
The noble Earl said: My Lords, I have spoken to these amendments previously. I beg to move.
On Question, amendments agreed to.
Clause 37 [Proposals to close passenger networks operated on behalf of the Franchising Director]:
The Earl of Caithness The Earl of Caithness moved Amendments No. 81 to 83:
Page 44, line 14, at end insert:
("() the closure is one to which subsection (2A) below applies;").
Page 44, line 26 at end insert:
("(2A) This subsection applies to a closure if and to the extent that it is the closure of part of a multiple track railway running between any two places, where the circumstances are such that the railway line in question will continue to be at least a single track railway between those two places.").
Page 45, line 42, leave out ("has the same meaning as it has") and insert (""multiple track railway" and "single track railway" have the same meaning as they have").
On Question, amendments agreed to.
Clause 38 [Notification of proposals to close railway facilities used in connection with passenger services]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 84:
Page 48, line 24, at end insert:
("and those whose operation he is for the time being securing in pursuance of his power under section 28 above.").
On Question, amendment agreed to.
Clause 40 [Notification to, and functions of the Regulator and the relevant consultative committees]:
Baroness Stedman Baroness Stedman moved Amendment No. 85:
Page 50, leave out lines 41 and 42 and insert:
("(3) Every consultative committee to which copies of documents have been sent in accordance with subsection (1) above shall consider—

(a) the notices and statements sent to it in accordance with subsection (1) above; and

(b) every objection sent to it in accordance with subsection (2) above,

and shall—").
The noble Baroness said: My Lords, first, I should like to thank the Minister for the correspondence that we have had during the Recess and for the words that I have had with his officials concerning this group of amendments, in which I hope that I may be rather more successful than at an earlier stage. In speaking to Amendment No. 85, I should like to refer also to Amendments Nos. 86, 87, 88, 89, 90, 92, 95, 96, 98 and 106.
This group of amendments deals with Clauses 40 to 45 and with the proposed closure procedures. The amendments aim to ensure that there is meaningful consultation with railway users' consultative committees in the affected areas and that the central transport consultative committee is also brought in at an early stage.
Amendments Nos. 85 and 86 provide that the consultative committees must consider the relevant documents and objections that are sent to them. I am sure that the Minister appreciates that consultation with rail users' consultative committees will ensure that there is user-input into the decision-making before the closure of the experimental service is put into effect. It is important that the consultative committee should makes its input at this stage because, once the franchising director has published his notice, closure takes place in a very short space of time.
Amendment No. 87 provides that the RUCC's report to the regulator on any hardship that might result from a proposed closure shall also be sent to the central consultative committee. The amendment also allows the railway users' committees to publish those reports as they consider appropriate. These amendments would put on the face of the Bill what is currently long-established practice.
Amendments Nos. 88, 89 and 90 deal with the timescale for the closures. I make no apology for returning to the timescale at this stage of the Bill. We had a discussion on this in Committee, when the Government felt that the timescale was adequate. But the imposition of timescales within which the RUCC and the regulator are to complete their stages of the closure procedure is an entirely new concept. The present legislation lays down nothing specific, except that the Secretary of State may, if he considers that the TUCC closure report has been unreasonably delayed, consent to the proposed closure without awaiting the report under the Transport Act 1962.
I have no objection, in principle, to the imposition of timescales, but they must be reasonable and practicable. A period of 12 weeks for the preparation by the RUCC of its report is unrealistic for a major closure proposal which may attract many thousands of objectors. Even if the regulator allows the RUCC more time, the whole process is governed by the period of 26 weeks, extendable to 52 weeks with the consent of the Secretary of State. There must be more flexibility to extend those time limits.
As we said in Committee, the Settle-Carlisle closure took something over four years from beginning to end in the early 1980s. It would be impossible for an RUCC, with its unpaid, part-time members and tiny secretariat—most of them have only two or three staff—to read, consider and analyse 22,000 objections—the number which were made on that occasion—let alone to hold the public hearings which were spread over several weeks in several locations and then to prepare its detailed report within the timescales laid down in the Bill.
The Minister might think that the Settle-Carlisle closure was a one-off. I had hoped that it might have been until I heard the comments made by the noble Lord, Lord Tordoff, earlier tonight that the line may be coming under threat again. I am not enamoured of the thought of another four years of consultation over Settle-Carlisle. In his reply to me in Committee, the noble Earl, Lord Howe, said:
"If a particularly difficult case arises, with a large number of objections to be considered, the RUCC must be resourced accordingly".—[Official Report, 7/7/93; col. 1409.]
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But it is not just a question of resources. The fixing of a date for a hearing has to suit a whole range of considerations, not least the other commitments of all the parties involved. There is the question of the response time to the summary of objections from the operators—a necessity to enable a proper consideration of the proposal by the committee, and outside the committee's control.
Settle-Carlisle may be a one-off, but we have the smaller closures and closure proceedings happening all the time. There was recently a proposal to close Ditton station. The statutory period for the receipt of objections expired on 5th December; the summary of objections, which numbered 33, was sent to BR on 19th January (that means six weeks, including the period over Christmas and the New Year); BR's response to the summary of objections was received on 8th February (some three weeks later); the heads of information, including response to objections was sent to objectors and members on 25th February (another three weeks); the public hearing was held on 18th March (three weeks after that); the draft report was considered on 10th May (seven weeks later, including the Easter holiday); and the final report was sent on 21st May (two weeks later). That was a total of 24 weeks.
The Minister may argue that it might be possible to reduce the period, but 12 weeks would have been impossible to meet, and that was only a small closure. Not just resources were needed. The response to the summary of objections and the heads of information document must be supplied by an outside party. Members' availability is often difficult. They are part-time members and, for the most part, unpaid. There is a case for extending the amount of time which an RUCC has available to prepare its report. Twenty-six weeks should be sufficient in most cases. Likewise, the total length, if it is doubled from 26 weeks to 52 weeks, should be sufficient for the RUCC and the regulator to cope with cases such as the Settle-Carlisle closure. As regards the larger inquiries, the Secretary of State should be empowered to grant an unlimited extension. Without that more reasonable timescale, there is every prospect that the RUCC arid the regulator will lay themselves open to judicial review if there is any evidence that they have been unable to discharge their duties properly and fully because of a restrictive timetable.
Amendments Nos. 88, 89 and 90 deal with our proposals for the timescale for the closures. Amendment No. 92 is consequential on changes proposed in Schedule 4 to meet the earlier amendments. Amendments Nos. 95, 96 and 98 provide that the franchising director must give no fewer than six weeks' notice on a proposal to close a franchise experimental service. Amendment No. 96 is purely consequential. Amendment No. 98 requires the franchising director to send copies to the appropriate consultative committees of his notice designating services as experimental. Taken together the amendments should ensure that the RUCCs are fully informed and kept abreast of developments relating to the experimental services.
In Committee the noble Earl, Lord Howe, commented that as regards the passenger service, which

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is hanging in the balance, the public would be entitled to criticise an inability to come to a decision within a year. As was the case tonight, those comments were made late in the debate. I was not sufficiently alert to retort to the noble Earl that the passengers might be delighted if the procedure takes longer because they will still have their train service. I beg to move.
9.30 p.m.
The Earl of Caithness: My Lords, Amendment No. 85 would require RUCCs, in considering whether a proposed closure would cause hardship, to consider the copy documents that the closure procedures set out in the Bill require be sent to them; namely, the notice of proposed closure, the statement of the reasons for the proposal and any objections. The amendment is unnecessary. Of course the RUCCs should consider these documents: that is the reason copies are sent to them. But the Bill need not spell this out; it would be only an unnecessary addition.
Amendment No. 86 would remove the requirement that RUCCs must consider the value for money of any means that they identify for alleviating hardship caused by closure. I do not believe that that should be acceptable to your Lordships. The requirement mirrors the similar duty to have regard to value for money laid on the RUCCs in the generality of their functions by Clause 75(10). As there, the requirement is in the own interests of the RUCCs. Measures to alleviate hardship must be proportionate; it will do nothing for the credibility of the committees' reports to the regulator if unrealistic recommendations are made.
Amendments Nos. 88, 89 and 90 relate to the time limits. I shall deal first with Nos. 88 and 89. The noble Baroness has argued forcefully that the limits allow insufficient time for proper consideration of a closure proposal. But I have to say that I am not convinced that for the great majority of cases, 12 and 26-weeks' allowance for the RUCCs and the regulator is insufficient, particularly since the limits may be extended up to a full year. Most closure cases are fairly small affairs, with relatively few objections. We ought surely to aim to have such cases decided without unnecessary delay.
Amendment No. 90 would remove the 26-week limitation on any further period the Secretary of State may allow the regulator to make his decision. I have to say to the noble Baroness that I found her arguments extremely convincing on that point. There is one consequence of my wish to accept Amendment No. 90 which may lead the noble Baroness to reconsider her position as regards Amendments Nos. 88 and 89. If the regulator is granted a period longer than 26 weeks, then he in turn may grant an extension of the 12-week period in which the RUCCs are allowed to report provided of course that the extended period is no longer than the period that the regulator has for decision. That may be a better balance.
With regard to Amendments Nos. 87, 95, 96, 98, 106 and 92, I found the noble Baroness's arguments totally convincing. I recommend that the House accepts those amendments.
Baroness Stedman: My Lords, I am grateful to the noble Earl. I am somewhat overcome by the acceptance of so many of my amendments in one go but I believe that they improve the Bill.
I am sorry that the noble Earl considers Amendments Nos. 85 and 86 to be unnecessary. I believe that it would have been helpful to write such provision on the face of the Bill. The noble Earl said that many of the closures would be small-scale. The Ditton closure was such a case. Those cases can take rather longer than the timescale allowed. However, we must be grateful for small mercies and I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 86 not moved.]
Baroness Stedman Baroness Stedman moved Amendment No. 87:
Page 51, line 7, at end insert:
("(3A) Any consultative committee which has prepared a report under subsection (3) (c) above shall send a copy of the report to the Central Committee and may publish the report in any manner which it considers appropriate.").
On Question, amendment agreed to.
[Amendments Nos. 88 and 89 not moved.]
Baroness Stedman Baroness Stedman moved Amendment No. 90:
Page 51, line 38, leave out ("(not exceeding a further 26 weeks)").
On Question, amendment agreed to.
Clause 41 [Reference to the Secretary of State of decisions of the Regulator concerning proposed closures]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 91:
Page 52, line 28, leave out subsection (4).
On Question, amendment agreed to.
Clause 43 [Variation of closure conditions]:
Baroness Stedman Baroness Stedman moved Amendment No. 92:
Page 53, line 15, after ("than") insert:
("(a) a condition imposed by the Secretary of State under Schedule 4 to this Act, or
(b)").
On Question, amendment agreed to.
Lord Teviot Lord Teviot moved Amendment No. 93:
After Clause 44, insert the following new clause: ("Major Reductions
.—(1) This section applies where any person providing railway passenger services on any line or from any station proposes to effect a major reduction in those services.
(2) Unless the Regulator has certified that the proposed reduction is not a major reduction, the person shall give notice of the proposal to the Franchising Director not less than three months before the date of the major reduction is to take place provided that the person shall not effect the major reduction unless the Regulator so permits in accordance with the provisions of this section.
(3) A notice under subsection (2) above shall be accompanied by a statement of—

(a) an assessment of the impact of the major reduction on the existing passengers

(b) the date on which the major reduction is to be made, and

(c) any alternative transport services which appear to the relevant person to be available.

(4) Where notice is given to the Franchising Director under subsection (2) above, he must send a copy of the notice and the accompanying statement to the Regulator and to every

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consultative committee, whose area consists of or includes the whole or any part of the services which are the subject of the major reduction.
(5) Upon receipt of the notice, each consultative committee shall—

(a) consider whether the major reduction will cause any hardship, having regard to the social and economic needs of the area affected by the proposal and the people living and working therein, and

(b) decide in what manner to collect information and opinions on the proposal and, after consultation with the Regulator, decide whether to hold a public hearing, and

(c) identify any reasonable means of alleviating any such hardship, and

(d) report on these matters to the Regulator within 16 weeks of receipt of the relevant notice and statement.

(6) It shall be for the Regulator to decide whether the proposed major reduction should or should not, be allowed to take effect; and a decision may be given allowing the proposed closure to take effect subject to the compliance with such conditions (if any) as the Regulator may see fit to impose.
(7) The Regulator shall make his decision within 26 weeks of the day on which he receives the notice and statement in accordance with section 35A(3) above.
(8) For the purposes of this section, "major reduction" is defined as an alteration in the level or timing of services which will adversely affect the economic and social needs of the passengers and the area served by those services.").
The noble Lord said: My Lords, Amendment No. 93 focuses on an aspect of the procedures for closure of rail services which was not covered in Committee but which I believe exposes a continuing deficiency in the Bill.
The Minister will know that I support overall the principles of the Bill but I am concerned that it should be adequate to deal with the world as it is likely to be after privatisation. In respect of the procedures for closure of services, the provisions of the Bill essentially maintain the current procedures. That may be adequate for the present but it does not provide sufficient safeguards for the future. I am particularly worried about what may happen in those rural areas which still enjoy the benefits of rail services. Our rural communities need the support of jobs, communications and services such as schools and post offices if they are to thrive. Where they still exist, rail services give that support. Such services may not be profitable when judged against the rigours of market forces. Yet they still perform an important social and economic function in the area concerned. I have in mind such lines as Shrewsbury to Swansea and there are several others in East Anglia and Lincolnshire.
There is a problem as regards the closure provisions in the Bill. The Bill gives protection to services only where they are provided by an operator under a franchise agreement incorporating a commitment to a particular level of service. Otherwise, the franchising director or any other non-franchise operator has no binding obligation and may alter services without consultation. It would be possible for the operator to reschedule a service so that a rural community would no longer he able to use the service to get to work, to the shops or to hospital appointments if the service was unprofitable and the operator could not support its long-term retention at the current level of subsidy. Services may be reduced to a minimal level, there will be fewer passengers and, as a consequence, much less reason for the relevant line or station to be retained. What we would see is not closure of entire lines or
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stations without consultation, but reduction of services without consultation. The result is the same: closure of lines, but the closure is by stealth.
My amendment would achieve two objectives. First, it would require an operator to notify the regulator of proposed reductions in services. It would then be for the regulator to determine whether a reduction should be regarded as "major" as defined in the amendment; for example, having an adverse effect on the economic and social needs of the areas affected.
It is not my intention that necessary or desirable changes in timetabling of services—for example, at different times of the year—should be subject to unnecessary constraints. That is why the regulator would be free to determine what is and what is not a major reduction. He could do that on receipt of the notice or by informal discussion.
Secondly, my amendment would require the regulator to advise the consultative committees of the area affected by such proposed reductions as it determined to be major. Those committees would then report on the social and economic effects of the proposed major reduction. It would then be for the regulator to take a decision, within six months, as to whether or not to permit the proposed reduction. During that consultation, the operator would not be permitted to change the existing service. If the regulator decided that the major reduction should not take place, it would be for the franchising director to ensure that adequate services were maintained to meet the needs of that area.
The purpose and effect of the amendment are not to set in stone the timetable and range of services, nationwide, for all time. I recognise both that minor changes to timetables should be permitted, without bureaucratic interference, and that there may be circumstances where the regulator determines that a proposed major reduction in service should not be resisted.
To avoid uncertainty and delay, my amendment deliberately makes no provision for appeal against the decision of the regulator. Nevertheless, I wish to see a provision in the Bill which prevents the steady erosion of rural rail services through reductions on which, as the Bill stands, no public consultation is required. I want to see a provision which prevents closures by stealth.
The amendment has the support of the Country Landowners' Association whose membership of 50,000 extends across more than half of rural England and Wales. It also has the support of Transport 2000, of the Central Transport Consultative Committee and of the National Farmers Union, together with that of Rural Voice, which is an umbrella organisation covering the CLA, the NFU, the CPRE and the TGWU rural workers' branch, and others. It is also supported by the Cyclists Group and it is widely supported outside the House.
I hope that my noble friend the Minister will be able to reply favourably. I understand that the possible effects of the Bill on rural areas may have been raised by other noble Lords. Moreover, if my noble friend feels that the amendment is defective and that he can do

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something about it, I shall quite understand. Perhaps he will be able to bring something forward at a later stage. I beg to move.
Lord Stanley of Alderley: My Lords, as I am sure my noble friend on the Front Bench realises, existing rail links often give much support as regards jobs; and, indeed, they assist services such as post offices and especially schools in rural areas. I am sure that my noble friend appreciates that it is important that such rail links should not be destroyed and that, more importantly, they should not be eroded without consultation. As I understand it, that is what the amendment is designed to achieve. I hope that my noble friend on the Front Bench will be able to give us some assurance that such vital services in the countryside will not suffer a slow death.
9.45 p.m.
Lord Clinton-Davis: My Lords, I, too, wish to associate myself with the purposes behind the amendment which has been proposed by the noble Lord, Lord Teviot. I hope that the Minister will respond to it positively. I do not wish to reiterate the arguments which have been put forward. There is no point in doing that as the arguments were persuasively put. I hope that the Minister will be persuaded by them.
Earl Russell: My Lords, in also supporting this amendment I must assure the noble Earl that I have not instantly purported to be an expert on a Bill which I regret I have not followed as much as I would wish. I speak wearing my hat as spokesman on social security. It is well known that those on benefit are normally under a requirement that they should actively seek work. Actively seeking work requires being able to travel to work. It requires being able to travel to job interviews. Whatever one may say about levels of income support, they are not designed to allow people to run cars. Therefore, where there are closures of public transport services a number of people find it extremely difficult either to remain employed or to become employed. I think that when consultation takes place those who should be consulted should include the Department of Employment and the Department of Social Security for it may be that one of the effects of closures will be to put more and more people onto the benefit rolls and increase the social security budget with consequences which I do not think I need to expatiate upon.
The Earl of Caithness: My Lords, I am grateful to my noble friend Lord Teviot for the clarity with which he introduced the amendment. It is interesting to hear that the noble Lord, Lord Clinton-Davis, and the noble Earl, Lord Russell, are backed by the CLA and the NFU on this issue. That does not happen often. It is a rare event and it is one that should be noted. Of course my noble friend Lord Teviot made a good point when moving the amendment. However, despite that, I have two difficulties with his amendment.
The first concerns the creation of a statutory procedure requiring the regulator's consent for a major reduction in services. The new closure procedures, like the current ones, are applied only where it is proposed
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to withdraw all passenger services from a station or line. The reason is that we recognise that the discontinuance of all passenger railway services to any place or community is a potentially far-reaching decision that ought to be subject to a formal consent procedure. Anything less than complete withdrawal, however, is essentially a matter of what is an appropriate level of service for a particular line, about which there can legitimately be scope for differing opinion.
I believe that that takes account of some of the points that the noble Earl, Lord Russell, made as there is a closure procedure that comes into operation when a complete closure of line is proposed. However, we are talking about an appropriate level of service. At present, BR is required simply to maintain a level of service comparable generally with that provided in April 1988, for the network as a whole. I recognise that this has meant, at the level of individual lines, that BR is free to reduce services to sometimes risible levels—say, one train a week during the summer—with little or no constraint on its actions, and has led to accusations of closure by stealth. Like my noble friend Lord Teviot, we recognise that that is unsatisfactory. But the answer lies in the franchising system rather than in extending the scope of the closure procedure in the way envisaged by the amendment.
Though the precise level of service will be for the franchisee to determine, the franchising director will specify a minimum level of service in the franchise agreement, to which the train operator will have to adhere. Additionally, we have extended the remit of the consumer committees, so that—unlike now—they will be able to consider levels of service. This will ensure that passengers' interests are fully represented for the first time. Taken together, these measures will, I believe, in future protect against closure by stealth. My noble friend Lord Teviot said that he was greatly concerned about that matter. It is also of great concern to the Government. The present system does not prohibit closure by stealth, but the new system, with a franchising director being able to specify the minimum level of service in a franchise agreement, will go a long way towards blocking up the existing loophole.
My second difficulty concerns subsection (2) of the proposed new clause. It envisages that, if the new statutory procedure is not to apply, the regulator must certify the reduction as not being a major reduction. As I read it, therefore, every timetable change will need to be scrutinised by the regulator. I have to put it to my noble friend Lord Teviot that it is a greatly limiting and onerous provision.
To sum up, there is nothing between what my noble friend Lord Teviot, my noble friend Lord Stanley, the noble Lord, Lord Clinton-Davis, and the noble Earl, Lord Russell, want in this regard. We believe that the aim of my noble friend's very onerous amendment can be achieved in a completely different way through the franchising system and the use of the consumer committees, for the first time, so that we do not have closure by stealth as we have to date.
Lord Teviot: My Lords, I am most grateful to all noble Lords who have taken part in this short debate and

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my noble friend the Minister. Obviously I should not dream of pressing the amendment. There is a great deal in what has been said to read, digest, take note of and consider. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 45 [Experimental Railway Passenger Services]:
Viscount Goschen Viscount Goschen moved Amendment No. 94:
Page 55, line 44, at end insert ("and shall not discontinue that service before the expiry of the notice period.").
The noble Viscount said: In moving Amendment No. 94, it may be for the convenience of the House if I speak also to Amendments Nos. 97, 99, 104, 121 to 136 and 296. All these amendments are concerned with making sure that the regulatory framework which will be put in place under the provisions of the Bill can be effectively policed. I shall briefly describe the main points of the amendments to the House.
Amendment No. 104 is a new clause dealing with exclusion of liability for breach of statutory duty. Our intention is to find an appropriate parallel to Section 3(4) of the Transport Act 1962, which excludes British Rail from any liability enforceable by proceedings before any court arising from its duty to provide railway services under Section 3(1) and (2) to which BR would not otherwise be subject. In broad terms, the duties of the franchising director in respect of securing continuity of service are not to give rise to any liability for breach of statutory duty. However, we are not seeking to exclude proceedings for judicial review in respect of those duties. Similarly, any obligation on an operator not to discontinue services or the operation of a facility without giving due notice is not to be enforceable through proceedings for breach of statutory duty. These obligations will be enforceable by the regulator, using the enforcement powers in the Bill. We are not excluding liability of operators for breach of contract or negligence.
There are a number of amendments to Clauses 45 and 53 to ensure that the regulator will be able to enforce the procedure requiring notice to be given of the discontinuance of any experimental services. In effect, we are bringing the closure of experimental services within the enforcement provisions of the Bill.
However, we want to amend Clauses 53 and 54 so as to take access agreements completely outside the ambit of the enforcement provisions in the Bill. We no longer think that there will be many terms of access agreements which confer a function on or require the doing of anything by or in relation to the regulator. In any event, we consider that the terms of access agreements are matters best left for the parties to settle between themselves by normal contractual means, without recourse to the enforcement provisions of the Bill.
The other amendments in this group are technical or consequential.
These amendments are not controversial, and I commend them to the House. I beg to move.
Lord Clinton-Davis: My Lords, I thank the Minister for that explanation. However, I am still puzzled as to how the situation will work in practice. Let us assume
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that there is a need for continuation of a service which is threatened or has closed. It is almost worthless to have a remedy against the franchisee in terms of continuity of service. Obviously to be able to hold the franchisee responsible in civil law is of some value. But if the franchisee were unable to continue the service, he may not be worth suing. Therefore one has that problem.
However, I address my remarks to the continuity of service. Let us assume that the breach occurs some three years after the franchise has been granted. Who is expected to pick up the service instantly? The franchisee may be worthless. That is why the breach has occurred. Can British Rail be expected to undertake the duty forthwith? How does it go about recruiting the necessary staff for that purpose? Does it simply take over the staff? There are complications about taking over the staff. Many implications arise in that regard. Perhaps the Minister will address those issues which I believe are a practical difficulty—I raise it only from that point of view—which needs to be resolved. I have raised the matter before but the Minister did not answer the point. I believe he indicated that we might come back to the issue. This is a suitable opportunity.
Viscount Goschen: My Lords, in these amendments we are talking about the question of enforcement and the procedure that is available. Where there is a lack of continuity, the obligation on the operator not to discontinue services or the operational facility without due notice is not to be enforceable through proceedings for breach of statutory duty. However, there are already procedures in the Bill for the situation of insolvency whereby the operator is not in a position to continue the service. The franchising director has the power to step in in the event that a franchisee fails to provide services. I refer the noble Lord to Clauses 28 and 47 of the Bill.
Lord Clinton-Davis: My Lords, before the noble Viscount sits down, perhaps I may say this. That is the very nub of my point. Whatever the reason, there is a duty or power invested in the franchising director to deal with the situation, to restore the service that is threatened or has been terminated. But when that service has been in the hands of the franchisee for some considerable time, how does the franchising director go about the performance of those duties? How does he ensure that there is continuity of service? To whom does he look? Are there not many practical difficulties in recruiting the necessary employees to undertake the tasks of transferring their employment in certain instances to another employer, whether that is British Rail or another franchisee?
In my submission, the Government have never addressed the point in the debates that we have had. When the point was raised in Committee, I gave adequate notice to the Minister that we should wish to return to it. I think there is a compelling responsibility on the part of the Minister at this stage of the Bill to answer the issue.
10 p.m.
Viscount Goschen: My Lords, the noble Lord, Lord Clinton-Davis, raises the valid point of what happens in the situation where the operator is no longer able to

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continue to run the service. The point that I was trying to make concerned the effect of the amendments and that the problem is not to be dealt with through proceedings for breach of statutory duties specifically. However, in the event, if there is a problem with the operator being unable to run the service, the franchising director may enter into a contract with any other operator, including British Rail, to provide the relevant services. So the franchising director has it in his power. There will be difficulties to overcome, but the franchising director may move in, and there are specific powers in the Bill for him to do so.
Lord Clinton-Davis: My Lords, before the Minister sits down, I am sorry to press him on the issue, but it is important. I am well aware that the franchising director has that power. I know that he has the power to go to another operator and seek to obtain the resources so that there is a continuity of service. I am well aware that one possibility is British Rail. But with respect, the Minister is living in a world of illusion if he believes that that can be done instantly.
Surely, it is common sense that this is a complicated issue. The franchise has been operating for a considerable time. How on earth is it conceivable in many instances to resolve it? Perhaps in certain instances it could be resolved without too much problem, but in many instances one can envisage a situation where it is just not possible. Therefore, in practical terms, it is illusory to believe that this a position that can be resolved with the instant effect that the Government suggest. Will the Minister concede that?
I do not wish to press him any more on the issue, but would he be prepared to write to me on the matter? I believe that the Liberal Democrats would also wish to be involved and that the noble Lord, Lord Tordoff, would like to know about it. Would the Minister undertake to write to us well before Third Reading? Otherwise, we shall have to come back to the matter. It should not embarrass the Government unduly. I believe that it is a valid point to raise at this stage before the Bill leaves the House.
Viscount Goschen: My Lords, I have already said to the noble Lord, Lord Clinton-Davis, that I agree with him that this is not an instant, straightforward issue. However, it is catered for in the Bill. The franchising director has the powers and we shall come to the matter later in our discussion of the Bill. I believe there are amendments down on topics of railway administration orders which are germane to the issue. I do not believe that what we are discussing at the moment is particularly relevant to the amendments under consideration. I commend Amendment No. 94.
Baroness Stedman: My Lords, before the noble Viscount sits down, perhaps I may ask a question. In the Transport Act 1962, I believe that there are exclusions of certain items but I do not recollect that closures were among them. Does this give an opportunity for the
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franchising director or the operators to ride willy-nilly over any closure procedures which we have just discussed?
Viscount Goschen: No, my Lords, I can reassure the noble Baroness that that is not the case.
On Question, amendment agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 95:
Page 55, line 44, at end insert:
("(3A) For the purposes of subsection (2) above, the Franchising Director shall be taken to have given due notice of a proposal if, and only if, after consultation with every consultative committee whose area consists of or includes the whole or any part of the area affected, he has, not less than six weeks before giving effect to the proposal,—

(a) published a notice giving details of the proposal in two successive weeks in a local newspaper circulating in the area affected and in two national newspapers and in such other manner as may appear to him appropriate; and

(b) sent a copy of that notice to every such consultative committee.").

On Question, amendment agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 96:
Page 56, line 1, leave out ("subsections (2) and (3) above, the Franchising Director or") and insert ("subsection (3) above").
On Question, amendment agreed to.
Viscount Goschen Viscount Goschen moved Amendment No. 97:
Page 56, line 7, leave out ("section") and insert ("Part").
On Question, amendment agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 98:
Page 56, line 20, after ("Regulator") insert ("and to every consultative committee whose area consists of or includes the whole or any part of the area affected").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 99:
Page 57, line 20 at end insert:
("()In this Part, "notice period", in relation to the duty of an operator to give due notice of a proposed discontinuance of an experimental passenger service, means the period of six weeks immediately following the fulfilment by the operator of that duty.").
On Question, amendment agreed to.
Clause 46 [Abolition of former closure procedures, exemptions from new procedures and imposition of alternative procedure]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 100 to 104:
Page 57, line 29, leave out ("Sections 34 and 35") and insert ("Section 34").
Page 57, line 32, leave out ("those sections are") and insert ("that section is").
Page 57, line 36, leave out ("sections 34 and 35 above do") and insert ("section 34 above does").
Page 58, line 10, leave out ("sections 34 and 35") and insert ("section 34").
After Clause 46, insert the following new clause:
Exclusion of liability for breach of statutory duty
(".—(1) The obligations of the Franchising Director, imposed by or under any provision of this Part—

(a) to comply with any closure conditions;

(b) to secure compliance with any closure conditions;

(c) to secure the provision of any services; or

(d) to secure the operation of any additional railway asset; shall not give rise to any form of duty or liability enforceable by civil proceedings for breach of statutory duty.

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

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(a) any service operator (within the meaning of section 34 above), imposed by or under section 34(1), not to discontinue any railway passenger services;

(b) any operator (within the meaning of section 45 above), imposed by or under section 45(3) above, not to discontinue any experimental passenger services; or

(c) any operator of an additional railway asset, imposed by or under section 36(1) or 38(1) above, not to discontinue the operation of any additional railway asset;

shall not give rise to any form of duty or liability enforceable by civil proceedings for breach of statutory duty.").
The noble Earl said: My Lords, I beg to move these amendments en bloc. They have all been spoken to before.
On Question, amendments agreed to.
[Amendment No. 105 not moved.]
Schedule 4 [Alternative closure procedure]:
Baroness Stedman Baroness Stedman moved Amendment No. 106:
Page 151, line 15, at end insert:
("Conditions
.—(1) The Secretary of State may give his consent under paragraph 3(2) (b) above subject to such conditions as he thinks fit.
(2) The Secretary of State may at any time vary or revoke any conditions which are for the time being required to be complied with pursuant to sub-paragraph (1) above.").
On Question, amendment agreed to.
Clause 47 [Performance of the Franchising Director's duties 10 secure the provision of services etc.]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 107 to 110:
Page 58, line 21, leave out from second ("of") to ("by") in line 22 and insert ("any additional railway assets, or is empowered by section 28 above to secure the operation of any additional railway assets, he may perform that duty or exercise that power").
Page 58, line 25, leave out from first ("the") to ("in") in line 26 and insert ("additional railway assets").
Page 58, line 36, after ("duty") insert ("or exercising any such power").
Page 58, line 39, after ("duty") insert ("or the exercise of any such power").
The noble Earl said The noble Earl said: My Lords, I beg to move these amendments en bloc.
On Question, amendments agreed to.
Clause 49 [Powers of the Franchising Director to form and finance companies and to acquire and dispose of assets]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 111 and 112:
Page 59, line 17, after ("be") insert:
("(a)").
Page 59, line 18, at end insert:
("(b) used for the purpose of providing franchised services,
(c) used for the purpose of operating any additional railway asset under a franchise agreement, or
(d) used for the purpose of providing any services or operating any additional railway asset in pursuance of a duty or power to secure the provision of such services or the operation of such an additional railway asset.").
On Question, amendments agreed to.
Clause 50 [Exercise of functions for purpose of encouraging investment in the railways]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 113:
Page 59, line 32, at end insert:
("() In exercising his functions under this section, the Franchising Director shall have regard to the desirability of promoting the continuity of manufacture of railway rolling stock and other railway equipment in the United Kingdom.").
The noble Lord said: My Lords, I am sorry to keep the House at this hour, but this is a very important amendment, not just for the railways but for the whole railway industry and perhaps for our engineering industry as well. New subsection (1) (a) requires the franchising director to exercise his powers to promote the continued existence of a viable railway manufacturing industry in the United Kingdom.
Noble Lords will be well aware of the warnings given by the Railway Industries Association and others that the order books for rolling stock, signalling and track work will all be exhausted within the next two or three years. Manufacturers are warning that works will have to close permanently in centres such as York with further job losses to add to the thousands of railway manufacturing jobs already lost in these towns. It would be quite bizarre if because of some economic philosophy which has been devalued by the week we said that we had to let our own railway industry run down and find that when we wanted to improve our railway system we had to buy our trains and coaches from Switzerland, Austria or Germany.
At present, York has a flourishing industry. The industry for lighter railway carriages is beginning to build up rather well. One of the things that has helped Rosyth is that it has had a lighter—not mainline—railway creation facility. I should hate it if our rail industry went the way of the old railway industry. I have said often enough, probably to the boredom of some Members of this House, that 39,000 railway engines were made in Springburn, Glasgow, alone; 19,000 of them were exported. Many of them can still be seen in travel films in South America and parts of India. It is a very important industry. It is one of the Last that we have. If we want to expand our railway network, or even maintain it at the present standard, we must keep this industry.
Despite the lack of current orders in the railway manufacturing industry, there are many lines, particularly parts of Network SouthEast, the InterCity West Coast main line and cross-country services where substantial investment is required now in order to ensure adequate services for the future. I know that there has been £150 million put towards new rolling stock. Sadly, as I understand it, none of it is going to the West Coast main line. One of the rumours is that some of the best stock that we have on ScotRail will perhaps be taken down to Network SouthEast in the London area.
In the longer term, the successful expansion of services by regional railways will lead to requirements to increase capacity. That will require not only new trains but new infrastructure schemes such as additional track, re-signalling and electrification. The franchising director will be in a unique position to promote continued development and improvement of services. This amendment requires him to exercise his powers so as to avoid the troughs and peaks of investment that have plagued the British railway industry throughout the past three decades. In that way a viable UK railway manufacturing industry can be maintained.
I believe that that is vital for the future of the railway. Perhaps it even offers the possibility of bringing back a really good engineering industry, such as that which made us the workshop of the world at one time. I beg to move.
Lord Tordoff: My Lords, I have no idea whether this amendment will achieve what it seeks to do. I suspect that it probably will not. I am not sure that it is possible to legislate in this way. The Government should take on board the fact that there could very well be problems in this area. I am sure they will say that once the scheme is up and running there will be increasing demand for good quality rolling stock. That may be true. I hope it is. Whatever I think about the Bill, I want to see a successful railway industry in this country.
However, one has to bear in mind that there may be a period in the interim during which franchisees use any old bit of railway stock that they can get their hands on and the demand for new rolling stock may not be all that great in the short term. We have seen that in relation to bus privatisation. The bus manufacturing industry has had a very rough time in the interim period. One hopes that after the interim period it will pick up. I ask for some assurance from the Government that, whatever mechanism they use, they will try to keep viable the rolling stock manufacturing and the railway engineering industries in this country, so that, if and when—hopefully, when—the upturn comes, we shall have an industry that can develop. The noble Lord, Lord Carmichael of Kelvingrove, is quite right. It could be a focal point for the reinvigoration of the whole engineering industry of this country.
The Earl of Caithness: My Lords, I have sympathy with the desire behind the amendment to maintain a robust UK railway manufacturing industry. It is the Government's belief and mine that the more that is made in the UK on time to the right specification and competitively the better. However, in reply to the noble Lord, Lord Carmichael, the franchising director's primary function is to secure the provision of services. To do that, on occasion he may need to encourage investment to the benefit of manufacturers. But it is not his role to act directly as sponsor to the British railways supply industry. In any case, for the Government to act in a manner which favours British suppliers, as this amendment seems to envisage, would run the risk of falling foul of EC law. I wonder whether the former commissioner might have something to say about that. He was concerned about EC law on an earlier government amendment. I am concerned about EC law on this proposed amendment.
The prospects for railway manufacturing must reflect the level of necessary investment and its affordability. The Government's aim is to open up new areas for private funding. BR's announcement yesterday that it is to acquire Networker trains on operating leases from ABB Transportation is an important step towards a full operating lease market for rolling stock. The
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Government are also committed to devising proposals for renewal of infrastructure by joint venture with the private sector.
I take up the point made by the noble Lord, Lord Tordoff. One of the great difficulties—the shackling difficulties—that a nationalised industry has to face is the matter of Treasury control. Whatever the noble Lord thinks about the Bill, I am sure he will agree that, if we can bring in the private sector and private sector money, at long last it will not just be the taxpayer who has to pay for every train or every piece of infrastructure.
Let us consider British Airways. It would be madness now to think that the taxpayer had to pay for every single plane of British Airways. One looks at the nationalised airlines in Europe. They are the ones which are losing money. It is the privatised BA that is still making money and that is because it is in the private sector and because of the added access to finance markets.
In so far as it is in the best interests of the railway to maintain a steady flow of orders and thus obtain better prices I am sure that the franchising director will do as the amendment might suggest. However, it would be wrong to require him to have regard to the interests of the industry as such: that is not his brief.
Therefore, in principle, there is nothing between the noble Lord, Lord Carmichael, and the Government. We would like nothing better than to see a strong, healthy and flourishing railway equipment industry in the United Kingdom. However, it would be wrong—and on reflection the noble Lord may agree with me—to put it in the terms of the amendment with a specific duty on the franchising director.
10.15 p.m.
Lord Carmichael of Kelvingrove: My Lords, if the Minister is suggesting that I could frame the amendment differently, I am only too happy to leave to the government, with their much greater resources, the task of finding a way to help the rail industry.
I understand, after consultation, that there are ways in which the EC Commission can aid, or consent to, research in the railway industry. The remarkable work done on the APT—despite what many people say, the fundamental science involved in the study of steel and suspension was extremely advanced—could be a break-through. I understand that consent can be obtained to push forward the frontiers of locomotion, if that is the right way to put it.
I have a feeling also that there must be a way round the problem. I do not want to throw stones at any of our colleagues abroad. Whether or not it is true, the feeling is that other countries, somehow or other, manage to do certain things that we are told in this country are impossible. I wonder therefore whether it is a matter of a will to do it or excuses not to do it.
I shall read the Minister's speech carefully. This is one of the key points in regard to the future of transport and engineering in this country. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 114 to 117:
Page 59, line 35, after ("his") insert (", to refrain from exercising such functions,").
Page 59, line 37, leave out subsection (3).
page 59, line 42, leave out (" 18") and insert ("(Access agreements: contracts requiring the approval of the Regulator), (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)").
Page 60, line 2, leave out ("under") and insert (", or the operation of additional railway assets, under or by virtue of").
On Question, amendments agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 118:
After Clause 50, insert the following new clause:
("Secretary of State to review adequacy of railway network
.—(1) The Secretary of State shall keep under review the adequacy of the railway network as a whole to meet requirements for the safe and efficient transport of passengers and goods and shall take such steps as he considers necessary to promote investment in new lines, stations, freight depots or other facilities.
(2) In establishing whether or not new railway facilities would he beneficial the Secretary of State shall use methods of analysis of costs, benefits and environmental impacts that are comparable with those used for the evaluation of trunk road schemes.").
The noble Lord said: My Lords, in moving Amendment No. 118 it may be for the convenience of the House to consider at the same time Amendment No. 184. There is a substantial difference of opinion between us as to the principles underlying the Bill. Indeed, we would contest the Government's beliefs, hopes and aspirations that somehow or other, under the new regime, there will be a renaissance of the British railways. I believe, regrettably, that all that will collide with reality. Not only public opinion, but also informed opinion in the railway industry—at least a substantial part of it—is sceptical in regard to the results of the Bill as and when it is enacted.
If the railways are to play a substantial part in the resolution of our industrial and transport problems, which are replete, the key is more investment, both in improving services and in expanding capacity. Somehow or other the appearance that emerges from the Department of Transport and the Minister's speeches is that the Government can reasonably distance themselves from any form of transport strategy other than continuing to increase trunk road and motorway capacity and that the people who will be left to sort out the problems will be the private sector and local government. But I wonder whether that is the total view of the Government themselves.
The Department of the Environment and Ministers in that department have been saying that it is essential that they tackle the issues of pollution and the issues of health which are endangered by pollution. There seem to be question-marks implicit in what they say about the damaging consequences of the current strategies being undertaken by the Government. It is quite clear—I am sure that the Department of the Environment emphasises this to the Department of Transport over and over again—that there are commitments under the United Nations climate change convention to control emissions. The Prime Minister himself afforded this considerable priority at the time of the Rio Summit. In future the burden on a responsible government will be to create a policy framework to guide and influence the
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development of transport infrastructure and services even though they may not directly control or finance that infrastructure and services.
Amendment No. 118 provides in subsection (1) that the Secretary of State shall have an obligation to keep the performance of the railway network under review and when necessary he should respond by promoting new investment for either freight or passenger traffic or both. Subsection (2) requires the same principles to be used for the evaluation of railway schemes as for roads programmes that are the continuing responsibility of the Secretary of State and local government. Road scheme evaluation is presently based on the technique known as cost-benefit analysis supplemented by environmental assessments that are associated with that. The adoption of the new clause would be consistent with the Government's policy on transport investment by local government. The transport policies and programmes circular for 1993 encourages local authorities to adopt a package approach to investment in highways, public transport, cycling and walking. The principles set out in the new clause, if followed, would achieve the same balance between railways and other forms of transport, particularly roads, at a national level.
The effect of Amendment No. 184 would be to place a burden on the Secretary of State to publish an annual rail statement to be drafted in the light of the contents of the annual reports that the Bill requires the regulator and the franchising director to produce—a matter alluded to in earlier debates. I accept that this is not a new issue but the amendment raises an important question which I hope the Government will not continue to avoid. I refer to the extent to which under the new regime Parliament is able to hold the Secretary of State for Transport to account for the quality and quantity of rail services.
When these issues were raised in Committee we sought to require the Secretary of State to produce a national rail statement. In rejecting the amendment, the Minister said that,
"a strategy document of the type envisaged … would be inflexible and likely to be out of date before it was implemented. A centrally imposed strategy document would be quite inappropriate for the new privatised railway".
He went on to point out that in future the responsibility for infrastructure investment would rest with Railtrack. He said that today. It would have to work with the franchising director and rail operators. He went on to say:
"As the private sector becomes increasingly involved in railway services it will enter direct negotiations with Railtrack about strategic developments. It is for that reason and the reasons I mentioned earlier that suddenly to bring the Secretary of State back into it will, we believe, do nothing but ossify the situation".—[Official Report, 15/7/93; col. 363.]
That is not consonant with the facts of the situation. Even under the Government's proposals the Secretary of State will never be out of it. He will be responsible for the level of resources available to Railtrack. He will set the organisation's objectives. He has to determine the level of resources available to the franchising director and has to issue guidance to him. He is not out of it.
The new clause would ensure that the Secretary of State would be accountable for the implications of his policies. More significantly, it would ensure that the

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combined impact of his policies would be addressed in the context of the performance of Railtrack and the annual reports produced by the regulator and the franchising director.
In Committee, the Minister suggested that a national rail policy document would somehow or other impose a strait-jacket on the industry. In reality, the strait-jacket will exist in any case through the Government's financial controls. The effect of the new clause would be to force the Government to address those consequences. By referring to the interface between Railtrack, the franchising director and the rail operators, the Minister has helped to make the case for this new clause.
The Bill gives responsibility for different aspects of the railway to a plethora of bodies. Its opponents have argued that, as a result, bureaucracy will increase to the detriment of co-ordination and integration. The new clause has the capacity to ensure that Ministers are held to account for their claims that such difficulties will not arise. It would provide an instrument for dealing with such problems if and when they materialise. As we have said over and over again, it is our contention that those problems are almost bound to arise. I beg to move.
The Earl of Caithness: My Lords, of course, the Secretary of State will need to take a view on a number of aspects of the privatised railway, just as he does on all areas of transport policy. But the amendment envisages far too prominent and active a role for the Secretary of State in what are really detailed investment matters. The people who should take those decisions are the ones who have the most direct experience of the railway, and who will have to pay for the new investment. They will include Railtrack, freight operators, "open access" passenger operators, franchisees and the franchising director.
The Secretary of State is already under a general duty in Clause 4 to exercise his functions under the Bill; for example, to promote the interests of users of railway services, and to promote the use of the network for the carriage of passengers and goods, and the development of that network. We do not think it necessary to burden him with further duties.
For similar reasons, I would ask the House to resist Amendment No. 184. I indicated today in reply to the noble Lord's amendment to the very beginning of the Bill that I was very sceptical about the value of annual reports by the Secretary of State. The terms of the annual report which the noble Lord proposes have not changed my mind. The Secretary of State would become the classic "back-seat driver"—looking over the shoulder of the regulator and the franchising director, offering advice without the benefit of the expert knowledge which they and the other key players will have, and generally trying to second-guess people. To take just one example: surely, the regulator, the franchising director, Railtrack and others will be able to co-operate where desirable without the Secretary of State offering his advice.
There is already provision in the Bill for annual reports by the regulator and the franchising director. Railtrack will also produce an annual forward view of
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rail investment. It is better to leave such reports to the people and organisations which have specific responsibilities under the new arrangements, and who will know far more about these matters than will the Secretary of State and officials in Marsham Street.
The noble Lord, Lord Clinton-Davis, also raised the question of environmental and pollution controls. It is perfectly right that responsibilities for setting the framework for that remain with the Government, but it is up to the industries to meet whatever agreement is reached by the Government either by themselves or in conjunction with other governments within the European Community or on the world scene. The agreement that was entered into at Rio and to which my right honourable friend the Prime Minister is committed includes changes to the method of operation of the various modes of transport, particularly for all those individuals who use cars. All the Secretary of State has to do is to set the specifications. It is up to the car manufacturers to produce the goods, and then we can continue to drive the cars should we so wish. It is also up to us as individuals to be a great deal more careful about the environment.
10.30 p.m.
Lord Clinton-Davis: My Lords, that is all very well, but what the Government are doing, not just in respect of this industry but in so many other matters, is to try to distance themselves from accountability to the public and Parliament. It goes on and on and on. They set up their quangos (quasi autonomous non-governmental organisations) and their tangos (totally autonomous non-governmental organisations) and they people them with their own folk, some of whom we have established are not all that able. It is a reward for support of the Conservative Party. Even Mr. Horton is known as a distinguished supporter of the Conservative Party. I dare say that had he been a member of the Labour or Liberal Democrat Parties he would not have been anywhere near being chairman of Railtrack. I understand that he needs to make himself rather more accessible to discussions. I can understand why he does not want to, but the whole purpose of what the Government are doing is to render it virtually impossible for Parliament properly to scrutinise what is happening to our transport infrastructure. That is the folly of it all.
The Minister says that the Government are committed to Rio. They are committed in words, it is the policies which are in conflict with those commitments, notably the policies of his own department, which are scandalous and render it virtually impossible for this country to be able to conform to the undertakings given at Rio. He knows that very well. He hears it from his colleagues at the Department of the Environment as well.
I knew that the Minister would not accept the amendment. We have placed our position on record. We believed that we were duty bound to do that. Time will tell whether we or the Government are right. Certainly, the Minister does not know at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 [Statutory authority to run, or permit others to run, trains etc.]:
Viscount Goschen Viscount Goschen moved Amendment No. 119:
Leave out Clause 51.
The noble Viscount said The noble Viscount said: My Lords, it may be for the convenience of the House if I speak also to Amendments Nos. 120, 269, 303 and 306. The purpose of these amendments is to replace the existing Clause 51, which deals with statutory authority and to position it and Clause 52 more appropriately in the miscellaneous and general section of Part III of the Bill, with the necessary consequential amendments. That does not represent a change in policy. Clause 51 was technically deficient, but the principle of that clause has been carried into the replacement clause and remains unchanged. Its purpose is to give new players in the rail way industry as a result of this Bill the defence of statutory authority to actions in nuisance which is currently enjoyed by BR.
The amendments deal with a technical matter. I beg to move.
On Question, amendment agreed to.
Clause 52 [No person to be common carrier by railway]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 120:
Transpose Clause 52 to before Clause 121.
On Question, amendment agreed to.
Clause 53 [Orders for securing compliance]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 121 to 130:
Page 61, line 21, leave out from ("made") to the end of line 27.
Page 62, line 3, leave Out from ("operator") to ("and") in line 5.
Page 62, line 22, at end insert:
("() Without prejudice to section (Exclusion of liability for breach of statutory duty) above, nothing in this section or in sections 54 to 56 below shall exclude the availability of any remedy in respect of any contravention or apprehended contravention of a relevant condition or requirement.").
Page 62, line 26, leave out ("a party to an access agreement, a facility owner").
Page 62, line 40, leave out paragraph (b).
Page 63, line 1, leave out paragraph (d).
Page 63, line 4, leave out from ("duty") to the end of line 6 and insert ("under section 34(1), 36(1) or 38(1) above not to discontinue a railway passenger service, or the operation of the whole or any part of a network, station or light maintenance depot, before the date stated by him in accordance with section 34(3), 36(3) or 38(3) above; and
(ii) the duty under section 45(3) above not to discontinue an experimental passenger service before the expiry of the notice period;").
Page 63, line 7, leave out ("party to an access agreement").
Page 63, line 9, leave out ("facility owner").
Page 63, leave out line 16 and insert:
("(b) who proposes to discontinue an experimental passenger service in circumstances such that he is required by section 45 above to give due notice of the proposal").
On Question, amendments agreed to.
Clause 54 [Procedural requirements]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 131 to 135:
Page 63, line 45, leave out from first ("relates") to end of line 46.
Page 64, line 4, leave out from first ("relates") to ("or") in line 5.
Page 64, line 9, leave out from ("relates") to ("such") in line 11
Page 64, line 22, leave out from first ("relates") to ("and") in line 23.
Page 64, line 45, leave out from first ("relates") to end of line 46.
On Question, amendments agreed to.
Clause 55 [Validity and effect of orders]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 136:
Page 65, line 36, at end insert:
("() Where a relevant operator to whom a final or provisional order relates has made an application pursuant to subsection (1) above questioning the validity of that order, the making of that application shall not affect—

(a) his obligation to comply with the order, or

(b) the right which any person may have to bring civil proceedings against him in pursuance of subsection (5) or (7) above.").

On Question, amendment agreed to.
Clause 57 [Meaning and effect of railway administration orders]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 137:
Page 66, line 39, leave out ("or 59") and insert (", 59 or 60").
The noble Earl said: My Lords, with the leave of the House, I shall speak also to Amendments Nos. 142 to 168 and 323.
These amendments are to the railway administration order provisions of the Bill (Clauses 57 to 63 and Schedules 5 and 6), and are largely consequential on amendments made in Committee.
We are now coming to an area of the Bill to which the noble Lord, Lord Clinton-Davis, had moved when he was talking about a previous area of the Bill. The amendments are technical in nature, and I do not believe that your Lordships will find them controversial.
As your Lordships will know, the railway administration provisions were modelled on the Insolvency Act 1986 as applied by the Water Industry Act 1991, neither of which made provision for foreign operators to be subject to special administration. During the Committee stage Clause 63, which deals with foreign and other unregistered companies, was introduced into the Bill. There are a number of further amendments following from that. The most significant introduces a new part to Schedule 5. Its main thrust is to limit the powers of the special railway administrator, in the case of a foreign company, to the business and assets of the company which are situated in Great Britain.
In addition, there are a number of minor amendments aimed at tidying-up definitions and removing unnecessary distinctions between the franchising director and the rail regulator in Schedule 5. Finally, Amendment No. 323 removes the need to consult the Insolvency Rules Committee before making rules for the purposes of the railway administration order procedures. Rules would relate mainly to the provision of information and other procedural matters, and the amendment is precedented in the water Acts.
Schedule 6 makes provision in respect of transfer schemes made pursuant to a railway administration

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order. The schedule was drawn almost directly from the Water Industry Act where a similar policy goal existed. The two amendments which are being sought here are intended to complete the necessary translation.
The railway administration order provisions of the Bill are aimed squarely at providing for the continued operation of railway services in the event—albeit, in our view, unlikely—that the operator of the services fails financially. I believe that both sides of your Lordships' House should therefore be supportive of the clauses and should welcome these amendments. I beg to move.
Lord Clinton-Davis: My Lords, when I adverted to continuity of services it was not in connection with an insolvency situation specifically but a breach of condition which might have arisen. There are a variety of reasons which enable a question to arise of a lack of continuity or a threat to the continuity of service. Be that as it may.
We are now dealing with railway administration orders. In Committee I expressed anxiety about how they would work. Clauses 53 to 58 and Schedule 5 mirror the administration order and special administrator provisions of Sections 23 to 25 and Schedule 7 to the Water Industry Act 1991. However, there is a vast difference between the privatisation of water and the proposed privatisation of railways. They are totally dissimilar. Basically, the water supply industry remains a monopoly of necessity, albeit privatised, whereas some of the newly-privatised railway undertakings may well be in competition one with another. The whole industry is in competition with other means of transport.
In consequence, there may be a real possibility of one of the new undertakings within the definition of a protected railway company becoming insolvent. After all, the definition of a protected railway company includes light maintenance depots. Surely, it is conceivable and not beyond all the realms of imagination that these may diversify to take in other forms of engineering work and the risks incurred in that way could well increase the chances of insolvency resulting. In hoping again that that will not happen, the Minister is again challenging an almost certain factual result that there will be some insolvencies. I do not hope for that, but there is that prospect and the Minister must face up to facts.
Clause 57 (1) (b) requires the railway administrator to manage the company over which he has been appointed,
"in a manner which protects the respective interests of the members and creditors of the company".
Unfortunately, as regards the remaining provisions not much assists in implementing that particular requirement.
The Minister is saying that there will be a need to maintain the railway service almost at any cost. I do not challenge the noble Earl about the need to ensure that the railway industry continues and that services are not breached. That was an obvious need as regards the water industry in which, in any event, the likelihood of insolvency of a price-regulated monopoly was not very great except, perhaps, when it came to diversification into other areas of activity. Even then, it should be
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possible to ring-fence such diversification. But maintaining a railway service does not fall into that category at all. The balance between protection of the consumer and the protection of the providers of finance, as well as ordinary consumers, will cause the Government some difficulty.
There can be no doubt at all, because it is implicit in what the Government are asserting, that the provisions of this measure will put creditors in a different position from that which would arise in an ordinary insolvency. That will apply to the providers of finance as well as to creditors. That is specifically asserted. We must deal with that situation. The question is whether the Government have gone about their duties in the correct way.
Paragraph 5(2) empowers the railway administrator, who has disposed of charged property, to pay to the charge-holder an amount equal to:
"the best price which is reasonably available on a sale which is consistent with the purposes of the railway administration order".
Those words were deliberately inserted in substitution for the requirements of Section 15(5) (b) of the Insolvency Act 1986 to pay:
"the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor".
There may well be a great difference between the two. Indeed, if that were not a distinct possibility, there would have been no need for this change to the ordinary provisions of the insolvency legislation.
Section 15 created a useful tool for the new concept of administration introduced by the Insolvency Act 1986 even though it was regarded as draconian by some lenders. It was intended to help the rescue of a business for the benefit of the general body of creditors and perhaps also for shareholders. This proposed amendment certainly tilts the balance even further away from the lender, presumably in order to favour the community rather than the undertaking. I do not dispute that. I agree that if you are going down this route—as I have said before, I think that the whole situation is barmy—the community should be favoured. But has the Minister understood the implications of what he is doing here?
Why did the Government decide to depart from those provisions of the Insolvency Act 1986? Does the Minister dispute the way in which I put the matter?
Paragraph 1 of Schedule 5 applies Sections 11 to 23 and Section 27 of the Insolvency Act 1986, but disapplies Section 24, which requires the administrator's proposals to be approved by a creditors' meeting, and also Section 26 which provides for the appointment of a creditors' committee. But despite all that, the administrator is required to send a statement of his proposals to all creditors—paragraph 9(1) (d). Is not that all completely and utterly cosmetic?
As I have already said, Section 27 of the Insolvency Act 1986 remains in force to the extent that subsection (1) still entitles a creditor or member to apply to the court for relief on the grounds that actual or proposed acts by the administrator are or would be prejudicial to their interests. But paragraph 10 of Schedule 5 introduces an additional power on the Secretary of State or, with his consent, the director of passenger rail franchising or the regulator to apply to the court if powers exercised or proposed to be exercised by the

391
administrator will either not best ensure the achievement of the purposes of the administration order or involve a contravention of any of the conditions of any licence held by the undertaking. Therefore, the interests of the members or creditors and those of the Secretary of State (or the appropriate regulator) could well be in conflict. The Bill—and the Minister will correct me if I am wrong—appears to be absolutely silent as to whose interests the court should regard as paramount. I want an answer on that point.
I have another question for the Minister. Paragraph 6(3) of Schedule 5 to the Bill disentitles creditors to require the holding of a creditors' meeting, as provided in Section 17(3) (a) which an administrator appointed under the Insolvency Act 1986 must hold on the appropriate requisition in order to enable creditors to consider the conduct of the administration. It may be thought that deletion demonstrates that the interests of creditors will always take second place. Is that right? Is that the intention? What protection is to be available for creditors if liabilities are not transferred on a transaction which may produce a smaller return than if the undertaking, or parts of it, were sold on the open market?
The above are important issues and they have simply not been addressed in the discussions that we have had today. have taken an opinion from one of the leading insolvency experts who takes the view that the proposals are unworkable. They are unworkable because they are unclear, and particularly because they do not answer the specific questions that I have just posed.
There are other questions that I should like to ask the Minister, but I think that I have done enough for this evening. I do not suppose for one moment that the Minister will be able to answer those questions without adequate briefing. However, it is essential that he does answer those points. If he is not in a position to do so tonight, I would certainly want an undertaking from him that he will write to me well before Third Reading so that we can, if necessary, return to the matter which, as I said, has not been properly canvassed either in this House or in another place.
10.45 p.m.
The Earl of Caithness: My Lords, I was grateful for the noble Lord's concluding words with which he returned to his normal courteous self. But if the noble Lord, who is a lawyer by trade, had to seek the advice of a top insolvency counsel and then bowls fast ones at me, it is not really surprising for him not to receive the full answer that he would have liked. I know that had he been able to get the information from his advisers, he would have afforded me the usual courtesy of writing to me beforehand so that I would have had the answers at my fingertips.
However, perhaps I may in general reply to the noble Lord. The railway administration order provisions strike a balance between the need to secure continuity of service and the protection of creditors. Paragraph 10(4) of Schedule 5 allows for the court to require measures to be taken for the protection of creditors. If necessary,
392
that could involve the exercise of the Secretary of State's power to pay grant towards the insolvent company.
On the whole question of the solvency problem, I should like to answer the noble Lord in the following terms, especially as he referred to the question of continuity of service. I believe that the noble Lord may be exaggerating the scale of the problem. As my noble friend Lord Goschen has already explained, in such circumstances, the franchising director is under a duty in Clause 28 of the Bill to step in to provide the services in question. He has powers in Clause 47 to enter into agreements with any operator, including BR, to provide the services. The assets needed to operate the service will already be in place as designated franchise assets under the terms of the franchise agreement. Moreover, a service is unlikely to be discontinued overnight. If a franchisee runs into trouble, the franchising director can be expected to be aware of this in advance and will be able to make contingency arrangements. In the event of insolvency, the provisions of Clauses 57 to 63 come into play and will ensure that the services continue to be provided.
The noble Lord raised the question of a company that was providing railway services possibly diversifying and therefore increasing the risk of bankruptcy. That is considering the situation from a negative point of view. I would look at it from a different point of view and say that a company that provided railway services and diversified probably increased its chances of prospering, producing jobs and maintaining a good service. However, whichever way one considers this matter, but particularly from the point of view of the noble Lord, the licensing system would prevent the bankruptcy happening. As a requirement of their licence, operators will be expected to ring-fence their railway operations by keeping them in a separate company. I hope that my comments go a long way towards reassuring the noble Lord. I will, of course, read his comments in the Official Report. The noble Lord has received legal advice from what he considers to be a top level source to the effect that things will not work out as the Government wish. However, we have received advice to the effect that they will work out.
Lord Clinton-Davis: My Lords, before the noble Earl sits down, I must add that I will write to him with the additional questions. I can assure him that the anxiety expressed by the insolvency expert whom I consulted is not unique to him. I hope that the Minister will give me an assurance that if I write to him by tomorrow or the following day I shall receive a response in time for us to table further amendments for Third Reading.
The Earl of Caithness: My Lords, the noble Lord, Lord Clinton-Davis, has had discussions with me for long enough in this House, and in the European Council when he was a Commissioner and I represented the Government, to know that if he writes to me I shall endeavour to reply to him. It might not be a reply that is satisfactory to the noble Lord, but I shall certainly send him the reply that he needs.
On Question, amendment agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 138:
Page 66, line 41, leave out ("a person") and insert ("the Board after being").
The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 139, 140 and 141. Clause 57 gives priority to the interests of the shareholders and creditors of a failed railway company. It is clearly necessary to protect the interests of passengers as well. We are attempting to have the British Railways Board specified as the operator who will invariably run services subject to a railway administration order. This makes sense as British Rail will already be responsible for any services for which the private sector had declined to tender. It should, therefore, be uniquely able to step into the void left by a failed franchisee. This amendment will also free the nation from the possibility of another potential "rescue" operator extorting an unacceptably high grant for taking over the service. That is by no means unlikely. British Rail as a state-owned company, will be unable to exert this leverage.
If a railway administration order is made, it will be essential that operation of the services is taken over immediately by a professional and fully certified operator. As drafted, Clause 57 leaves the selection of operator to the discretion of the courts. This is too wide and rather unnecessary as the British Railways Board will be able to secure the management of services in many circumstances envisaged by the Bill unless, of course, it has been totally unable to fulfil those obligations. In that event it is almost certain that no one else would be able to do so.
Amendment No. 141 provides for the franchising director to maintain full services during the period of the railway administration order. There is an obvious danger that the events leading to the making of a railway administration order would simply be a precursor of a reduction or closure of services. It may be that either of those outcomes will in due course be acceptable, but that cannot be judged in the circumstances of the making of an administration order as the need for administration may arise because of financial failure or mismanagement rather than any inherent unprofitability of services.
The amendment requires the franchising director to maintain services at their pre-existing levels until the application for a railway administration order has been determined and any resultant transfers made. It is clearly necessary to protect passengers' interests until formal closure procedures can commence or a new franchise specification is agreed. I beg to move.
The Earl of Caithness: My Lords, I have listened to the noble Lord's words with interest. Perhaps it would assist your Lordships' House if I started by addressing Amendment No. 139. I am sympathetic to the thinking behind that amendment, but I hope that I can reassure the House that it is unnecessary.
The amendment aims to insert a new provision in subsection (1) of the clause to ensure that a railway administration order is aimed at the continued operation of passenger rail services. I have to tell your Lordships
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that that is precisely the purpose of a railway administration order and is what the clause, when read as a whole, provides for.
The purpose of the special administration regime is to secure the continued, uninterrupted provision of services in the unfortunate and, I believe, unlikely event of a service operator becoming insolvent and therefore being unable to carry on his business. The aim is to secure the transfer of the business, in so far as possible, as a going concern.
To understand how the provisions work it is necessary to follow carefully the cross references within Clause 57. I apologise if this all seems needlessly complex, but I shall attempt to weave my way through the maze and I hope that the noble Lord, Lord Clinton-Davis, will follow me. Thus the purposes of the order in subsection (1) (a), by virtue of subsection (2), are the transfer and continuation of the "relevant activities". These are in turn defined in subsection (6) as, in the case of an operator with a passenger licence, the operation of passenger services, and, in the case of the holder of a station operator's licence, the operation of his station.
Thus, there is no question about the objective of a railway administration order, which is to secure continued operation of services. The provision is so drafted at present that not only passenger services, but also the operation of stations, networks and light maintenance depots is covered. This, I believe, also addresses the amendment in the name of the noble Lord, Lord Carmichael of Kelvingrove, to which the noble Lord, Lord Clinton-Davis, spoke, which seeks to ensure that there is no diminution or cessation of services during the period between the company's insolvency and the transfer of its undertaking. Therefore, neither Amendment No. 139 nor Amendment No. 141 is necessary.
Moving on to the other two amendments, the noble Lord will not be surprised when I tell him that here I have rather less sympathy with his intentions. The amendments would mean that, were a protected railway company to become insolvent, its affairs, business and property would be managed by the BR board pending the transfer of the relevant activities to another company. That is not our policy, and would be a very odd application of the administration procedure.
The railway administration provisions provide for a person appointed by the court to run the insolvent company's business pending transfer to another company. The person appointed by the court will be a licensed insolvency practitioner, well equipped to deal with such matters. He will be under the supervision of the court and governed by the relevant provisions of the Insolvency Act 1986, as modified and applied by the Bill. The administrator will be responsible for transferring the relevant parts of the company's undertaking to one or more other companies. It would be possible for the undertaking to be transferred to the board if that was the most appropriate option, but we do not believe that that will generally be the case.
Lord Clinton-Davis: My Lords, before the Minister sits down—. It does not matter. He will not concede, so I shall merely wind up in this way.
I believe that the Government are putting themselves in a position in which they will render themselves liable to extortionate demands made by people in the private sector to continue a service which the Government demand as necessary, and rightly so. They are exposing themselves to a great risk. The one group of people who will make a large amount of money out of the situation will be the people called in to administer the insolvency. Of that there can be no doubt; it is always the case.
I shall of course listen to what the Minister says. While I reflect on it, I shall endeavour to write to him further with my anxieties and I hope that he will be able to respond to me in sufficient time before Third Reading. I in no way question the Minister's integrity on that. I have known him long enough to know that he will use his best endeavours so to do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 139 to 141 not moved.]
11 p.m.
Schedule 5 [Railway administration orders]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 142 to 159:
Page 152, line 9, after ("Schedule") insert:
("(a)").
Page 152, line 11, at end insert ("and
(b) where the company in relation to which the order has been made is a protected railway company which is an unregistered company, as if references in those sections to a company included references to such a company.").
Page 152, line 43, after ("association") insert:
("(i)").
Page 152, line 44, leave out ("to any statutory authority conferred by section 51 of this Act and").
Page 152, line 46, al end insert ("and
(ii) in the case of a company which is an unregistered company, shall be taken also to include a reference to any power conferred by the company's constitution,").
Page 153, line 37, leave out ("where the company is the holder of a passenger licence under Part I of this Act") and insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").
Page 153, leave out lines 40 to 42 and insert:
("(b) where the company is an unregistered company which is not subject to such a requirement as is mentioned in paragraph (a) above, the words "to the Rail Regulator and the Director of Passenger Rail Franchising".").
Page 153, line 47, leave out ("where the company is the holder of a passenger licence under Part I of this Act") and insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").
Page 154, leave out lines 1 to 3 and insert:
("(b) where the company is an unregistered company which is not subject to such a requirement as is mentioned in paragraph (a) above, the words "to the Rail Regulator and the Director of Passenger Rail Franchising".").
Page 154, leave out lines 13 to 18 and insert:
("() to the Rail Regulator;
() to the Director of Passenger Rail Franchising;").
Page 154, line 21, after ("(e)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").
Page 154, leave out lines 33 to 37 and insert:
("() the Rail Regulator;
() the Director of Passenger Rail Franchising;").
Page 154, line 40, after ("(e)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").
Page 155, line 44, leave out from ("Franchising") to ("and") in line 46.
Page 155, line 47, after ("(c)") insert ("except where the company is an unregistered company which is not subject to a requirement imposed under or by virtue of section 691(1) or 718 of the Companies Act 1985 to deliver any documents to the registrar of companies,").
Page 155, line 50, at end insert:
("Particular powers of special railway administrator
. In the application of Schedule 1 to the 1986 Act (which sets out certain powers of the administrator) by virtue of section 14 of that Act, as applied by this Part of this Schedule in relation to a company which is an unregistered company, paragraph 22 shall be omitted.
PART IA
FURTHER MODIFICATIONS OF THE 1986 ACT: APPLICATION IN RELATION TO FOREIGN COMPANIES
Introductory
.—(1) Where a railway administration order has been made in relation to a company which is a foreign company, sections 11 to 23 and 27 of the 1986 Act (as applied by Part I of this Schedule) shall apply in relation to that foreign company with the further modifications set out in the following provisions of this Part of this Schedule.
(2) In this Part of this Schedule, "foreign company" means a company incorporated outside Great Britain.
Effect of order
.—(1) Section 11 of the 1986 Act (effect of administration order), as applied by this Partof this Schedule in relation to a foreign company, shall have effect as follows.
(2) In subsection (1), paragraph (b) shall be omitted;
(3) Subsection (2) shall be omitted.
(4) In subsection (3)—

(a) paragraphs (a) and (b) shall be omitted; and

(b) in paragraph (d)—

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

(ii) the reference to the levying of distress against the company shall be taken as a reference to the levying of distress against the foreign company to the extent of its property in England and Wales;

and any reference to property or goods shall be taken as a reference to property or (as the case may be) goods for the time being situated within Great Britain.
(5) Subsections (4) and (5) shall be omitted.
(6) At the end of that section there shall be added—
"(6) Where a railway administration order is in force in relation to a company which is a foreign company within the meaning of section 63 of the Railways Act 1993—

(a) any person appointed to perform functions equivalent to those of an administrative receiver, and

(b) if the special railway administrator so requires, any person appointed to perform functions equivalent to those of a receiver,

shall refrain from performing those functions in Great Britain in relation to the foreign company and any of the company's property for the time being situated in Great

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Britain, during the period for which that order is in force or, in the case of such a person as is mentioned in paragraph (b) above, during so much of that period as falls after the date on which he is required to do so."
Notification of order
. In section 12 of the 1986 Act (notification of order), as applied by this Part of this Schedule in relation to a foreign company, the reference to a statement that the affairs, business and property of the company are being managed by the administrator shall be taken as a reference to a statement that—

(a) the affairs and business of the foreign company so far as carried on in Great Britain, and

(b) the property of the foreign company so far as that property is for the time being situated within Great Britain,

are being managed by the special railway administrator.
General powers of special railway administrator
.—(1) Section 14 of the 1986 Act (general powers of administrator), as applied by this Part of this Schedule in relation to a foreign company, shall have effect as follows.
(2) In subsection (1) (a), the reference to the affairs, business and property of the company shall be taken as a reference to—

(a) the affairs and business of the foreign company so far as carried on in Great Britain, and

(b) the property of that company so far as that property is for the time being situated within Great Britain.

(3) Subsection (2) (a) shall be omitted.
(4) In subsection (4)—

(a) the reference to any power conferred on the company or its officers shall be taken to include any power conferred on the foreign company or its officers under the law under which the foreign company is incorporated; and

(b) any reference (however expressed) to the exercise of any power conferred on the company or its officers shall be taken as a reference to the exercise of that power so far as it relates to—

(i) the affairs and business of the foreign company so far as carried on in Great Britain, or

(ii) the property of that company so far as that property is for the time being situated within Great Britain.

Power to deal with charged property
. In section 15 of the 1986 Act (power of administrator to deal with charged property etc), as applied by this Part of this Schedule in relation to a foreign company, any reference to property or goods shall be taken as a reference to property or (as the case may be) goods for the time being situated within Great Britain.
Duties of special railway administrator
. In section 17 of the 1986 Act (general duties of administrator), as applied by this Part of this Schedule in relation to a foreign company,—

(a) in subsection (1), the reference to property shall be taken as a reference to property for the time being situated within Great Britain; and

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

(i) the affairs and business of the foreign company so far as carried on in Great Britain, and

(ii) the property of that company so far as that property is for the time being situated within Great Britain.

Statement as to company's affairs
. In section 22(1) of the 1986 Act (power of administrator to require certain persons to provide him with a statement as to company's affairs), as applied by this Part
398
of this Schedule in relation to a foreign company, the reference to the affairs of the company shall be taken as a reference to the affairs of the foreign company so far as they are carried on in Great Britain, or relate to property of that company for the time being situated within Great Britain.
Particular powers of special railway administrator
.—(1) The powers conferred on a special railway administrator by virtue of Schedule 1 to the 1986 Act (which sets out certain powers of an administrator), as that Schedule applies by virtue of section 14 of that Act, as applied by this Part of this Schedule in relation to a foreign company, shall be exercisable only in relation to—

(a) the affairs and business of that company, so far as carried on in Great Britain; and

(b) the property of that company, so far as that property is for the time being situated within Great Britain.

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

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

(b) paragraph 19 shall be omitted.").

Page 156, line 12, after ("58") insert (", 59, 60 or 63").
Page 156, line 13, after ("Part I") insert ("or IA").
On Question, amendments agreed to.
Schedule 6 [Transitional provision on transfer of relevant activities]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 160 and 161:
Page 156, leave out lines 36 to 43 and insert:
("(2) In this Schedule—
"the court", in the case of any protected railway company, means the court having jurisdiction to wind up the company;
"other appointee" means any company, other than the existing appointee or the new appointee, which is the holder of a licence under section 8 of this Act and which may be affected by the proposal mentioned in sub-paragraph (1) (b) above;").
Page 158, leave out lines 13 to 31.
On Question, amendments agreed to.
Clause 58 [Railway administration orders made on special petitions]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 162 and 163:
Page 68, line 5, leave out ("but for section 59 below").
Page 68, line 9, leave out ("if it did not hold a licence").
On Question, amendments agreed to.
Clause 63 [Application of the railway administration order provisions to unregistered, unlimited or foreign companies]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 164 to 168:
Page 72, line 6, leave out subsection (1) and insert:
(1) In the railway administration order provisions of this Act—
"company" means—

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

(b) any unregistered company; and

"unregistered company" has the meaning given in Part V of the 1986 Act.").
Page 72, line 15, leave out ("where the company mentioned in that subsection") and insert ("or subsection (3) of section 59 above where the petition mentioned in the subsection in question relates to a company which").
Page 72, line 30, leave out ("the reference").
Page 72, line 30, after ("subsection") insert:

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

(ii) the reference").

Page 73, line 2, leave Out ("and").
On Question, amendments agreed to.
Clause 64 [Amendments of the Fair Trading Act 1973]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 169:
Page 73, line 15, leave out ("railway services (as defined in section 81 of the Railways Act 1993)") and insert ("such services as are specified in paragraph 5 of Schedule 5 to this Act").
The noble Earl said: My Lords, in moving the amendment, I shall, with the leave of the House, speak to Amendments Nos. 170, 171, 173, 177, 318, 319, 324, 332, 334 and 336. I shall doubtless touch on Amendment No. 172, which is not one of my amendments but is relevant to what we are discussing at present.
These amendments make a number of mainly technical changes to the Bill's competition provisions. They cover three areas: monopoly references by the Director General of Fair Trading, mergers and efficiency scrutinies under Section 11 of the Competition Act.
Amendments Nos. 169, 170 and 173 correct two defects in the treatment of monopoly references. Our broad intention here is that the Director General of Fair Trading should be free to make monopoly references in relation to railway services when those services are transferred to the private sector. Accordingly, Clause 64(1) excludes services provided by a body corporate whose members are appointed by Ministers under an enactment. This description includes British Rail, but does not include Railtrack, which will be a government-owned company, or London Underground, which is not covered since it is a subsidiary of London Regional Transport and its members are not appointed by Ministers.
Amendment No. 170 corrects this by adding references to subsidiaries and to publicly owned railway companies to the end of Clause 64(1). The other two amendments bring the terminology of the Fair Trading Act better into line with that of the Bill.
Mergers are covered in Amendment No. 171. The mergers provisions in Clause 64 were intended to clarify the way merger controls would apply to railway services, in particular to franchised services. After further consideration, we have concluded that subsections (3) to (5) as drafted did not meet that objective. The amendment therefore does two things. It replaces most of Clause 64(3) in order to make technical improvements to the drafting. These provide that a person entering into a franchise agreement is to be regarded as bringing an enterprise under his control, which has the effect of making franchising subject to merger control.
The amendment also deletes Clause 64(4) and (5). These subsections were intended to make detailed provisions applying the market share test more precisely to mergers relating to railway matters. On further reflection, we believe that the subsections go too wide in referring to services between any two points, and they would have the effect of making virtually all mergers relating to railway services potentially liable to merger references. We therefore concluded that it was best just to rely on the general test of a 25 per cent. market share as set out in the Fair Trading Act, without attempting to define this further. However, we realise that this is an area of uncertainty for potential franchisees, in particular bus companies, and the Office of Fair Trading has been commissioned to provide written guidance for potential franchisees. We expect to be able to make this available shortly.
Amendments Nos. 175, 176 and 318 extend efficiency references under Section 11 of the Competition Act 1980 to publicly owned railway companies supplying network or station services. The intention is to enable these references to be made for Railtrack, while it remains in the public sector, as well as to BR. The remaining amendments are all technical or consequential. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, the Minister has included in the group of amendments Amendment No. 172 which is in my name. I should like to speak briefly to it. It concerns the monopoly conditions for bus operators with railway franchises.
Answering a probing amendment during the Committee stage, the Minister acknowledged the problems that the usual Competition Act test (one-quarter of the market in a significant part of the United Kingdom) could cause for bus operators who successfully obtain franchises for local railway services.
One of the main advantages of bus operators winning franchises will be the opportunities that arise to develop integrated feeder bus services that provide more effective competition to cars than either mode could achieve separately. We have that in London with the combination of London Transport and British Rail through-tickets which have greatly increased the efficiency and income of both groups.
If the existing bus services in the area, together with the rail service, would by themselves result in the competition test being exceeded, then the provisions of the Fair Trading Act 1973 would be applied and a monopoly reference could follow. Only the additional services run directly in association with the franchise would be excluded. That compromise would, to a large extent, enable the kind of development that is desirable on environmental grounds, while allowing bus operators to enter the railway market. I shall move the amendment when we reach the correct point.
The Earl of Caithness: My Lords, I understand the noble Lord's wish not to discourage co-ordination of rail and bus services. Let me say first that we have been very encouraged by the interest that the bus industry has shown in franchising. The Government are keen to ensure that sensible proposals which provide benefits to passengers are encouraged, and we quite understand the

401
concerns of bus and coach operators about the uncertainties which merger controls can create. Officials in my department and in the DTI and OFT have been considering what guidance could be given to potential franchisees, specifically bus operators, to indicate how the award of a franchise would be viewed by the competition authorities. Discussions are still in progress, and I shall keep the noble Lord informed of any developments.
I cannot, however, accept that merger law should not apply to rail franchises. As the noble Lord will know, the mere fact that the relevant tests under the Fair Trading Act are satisfied does not mean that a merger will be referred to the Monopolies Commission for investigation, still less that there is any presumption that the merger operates against the public interest. However, there may be circumstances in which there are genuine concerns about the stifling of competition which need to be considered. As the noble Lord knows, the Government are proposing to delete subsections (4) and (5) of Clause 64 because, after detailed consideration, we thought they applied an inappropriately wide test to mergers relating to the supply of rail services. I hope that that goes some way to reassure the noble Lord in this somewhat complicated area.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister. There is a little encouragement in what he says about the department still looking for ways to try to implement the ideas behind the amendment. That is extremely encouraging, I am happy to leave the matter with the Minister. I shall not move Amendment No. 172.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness: moved Amendments Nos. 170 and 171:
Page 73, line 16, leave out from ("by") to end of line 17 and insert:
("(a) a body corporate to which section 16 of this Act applies;
(b) a subsidiary, within the meaning of section 736 of the Companies Act 1985, of any such body corporate; or
(c) a publicly owned railway company, within the meaning of the Railways Act 1993."").
Page 73, leave out from beginning of line 26 to end of line 9 on page 74 and insert (", where a person enters into a franchise agreement as a franchisee, there shall be taken to be brought under his control an enterprise, within the meaning of section 63(2) of that Act, engaged in the supply of the railway services to which the agreement relates.").
On Question, amendments agreed to.
[Amendment No. 172 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 173 and 174:
Page 74, line 14, at end insert:
("(6A) In Schedule 5 to the 1973 Act (goods and services in respect of which the making of a monopoly reference is prohibited or made subject to special restrictions) for paragraph 5 (which relates to the carriage of goods or passengers by railway) there shall be substituted—
"5. Services for the carriage of passengers, or of goods, by railway, network services and station services, within the meaning of Part I of the Railways Act 1993, but
402
excluding the carriage of passengers or goods on shuttle services (within the meaning of the Channel Tunnel Act 1987)."").
Page 74, leave out line 17.
On Question, amendments agreed to.
Clause 65 [Respective functions of the Regulator and the Director General of Fair Trading, and functions of the Monopolies Commission]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 175 to 177:
Page 75, line 26, after ("is") insert:
("(i)").
Page 75, line 27, at end insert ("or
(ii) a publicly owned railway company which supplies network services or station services.").
Page 76, leave out line 3.
On Question, amendments agreed to.
Clause 70 [Keeping of register by the Regulator]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 178 to 183:
Page 77, line 35, at end insert:
("() every assignment of a licence of which notice is received by the Regulator;").
Page 78, line 6, after ("agreements") insert (", access contracts and installation access contracts").
Page 78, line 9, leave out ("agreement") and insert ("contract or an installation access contract").
Page 78, line 12, at end insert:
("() every general approval given under section 20(3) above which is for the time being in force;").
Page 78, line 46, at end insert:
("(4A) Where an access agreement is entered into or amended, the facility owner or installation owner concerned shall send a copy of the access agreement or amendment to the Regulator not later than 14 days after the date on which the access agreement is entered into or the amendment is made, as the case may be.
(4B) A person who fails to comply with subsection (4A) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.").
Page 79, line 10, at end insert:
("() Any reference in this section to "assignment" shall be construed in Scotland as a reference to assignation.").
On Question, amendments agreed to.
[Amendment No. 184 not moved.]
Clause 74 [General duties of the Central Committee]:
Baroness Stedman Baroness Stedman moved Amendment No. 185:
Page 81, leave out lines 29 to 35 and insert ("to the provision of railway passenger services or of station services").
The noble Baroness said: My Lords, Clauses 74 and 75 concern the general duties of the central committee and the consultative committees. In moving Amendment No. 185, I should like the House also to consider Amendments Nos. 186 to 188, 316 and 317, 320 to 322, 325, 328 and 329, 331 and 333.
Perhaps I may deal first with my Amendments Nos. 186 and 188. These amendments were tabled at Committee stage and the Minister indicated that he would accept them. But in the flood of amendments being dealt with at speed at that time, I regret that I did not actually move them. I apologise to the Minister and to the House. I have retabled the amendments in the hope that the Minister is still minded to accept them. I am sure that at this late hour the House would not need me to rehearse again the arguments that I used at that time.
In regard to Clauses 74 and 75, if the committees are to enjoy public confidence, they have to be able to represent all the passengers, including those using open access services. To exclude those passengers from the committees' remit would make it impossible to achieve the Government's stated objective of ensuring that none of the benefit of the existing system is lost since the central council and the consultative councils currently represent all the passengers on the national railway network, including those who, by virtue of the Channel Tunnel Act, will use the international trains.
At present passengers perceive and use the railways as an integrated and co-ordinated network, not merely as individual routes. In some instances they will make journeys using a mixture of franchised open access trains, though they may not be able to distinguish between the different types. They must be able to bring to the committees any complaints which arise because of the absence of through-ticketing arrangements, missed connections, poorly co-ordinated timetables, or delays caused by an open access operator's train, a franchise service or vice versa.
It is neither sensible nor logical for services not operated on a franchise basis to be excluded from the committees' remit. No distinction is drawn between the subsidised and unsubsidised services of BR in the present passenger services; and no such exclusion applies in the remits of bodies of the existing privately owned, self-funding but publicly-regulated industries such as civil aviation, gas, electricity, water, telecommunications or broadcasting. It is unlikely to be intelligible or acceptable to passengers generally, or to be workable in practice, given that the track and station sharing, through-ticketing, connectional timetables, etc., will inevitably give rise to situations where the activities of operators providing services under different funding regimes will impact directly on each other.
Therefore the series of amendments that I have put forward are purely tidying up and drafting amendments. Amendments Nos. 185 and 187 have the effect of deleting the few remaining restrictions on consultative committees' considerations of the passenger service provided by British Rail and the franchises and on behalf of the franchising director.
In the same way it is necessary to expand the remit of the London regional passengers' committee in respect of London Transport services. This is done by my amendments to Schedules 11, 12 and 13, Amendments Nos. 316, 317, and 320 to 322. Amendment No. 316 deletes the reference to the role of the consultative committee in respect of the BR board under the 1968 Transport Act. The role of the new committees is now set out in Clauses 74 and 75 which are before us. It also deletes the references to the provision of funding and accommodation for the committee: new provisions are made in Schedules 2 and 3 of the Bill.
Schedules 2 and 3 also cover the remuneration of the chairman, and the provisions of the 1974 Act are deleted by Amendment No. 317 to Schedule 11. Amendment No. 325 to Schedule 12 acts as a saving amendment to ensure that the Channel Tunnel services remain within the committees' remit and consequential repeals to the
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Transport Act of 1968 in Schedule 13. I hope that the Minister is still feeling in a generous mood and will accept all or some of these amendments. I beg to move.
The Earl of Caithness: My Lords, perhaps I may deal with Amendments Nos. 185 and 187 first. These amendments would require the Central Rail Users' Consultative Committee and the rail users' consultative committees to investigate matters relating to all railway passenger services and station services provided by any operator. This would include open access operators and even the preserved railways.
Those services will be open to market forces and we therefore see no need to extend the remit of the committees to cover them. In order to be competitive these operators will have to provide services which meet passengers' needs at a price that the market will bear. That is consistent with the civil aviation industry and buses outside London which have no statutory consumer representation. Further, it would be quite inappropriate for the statutory consumer bodies to have a duty to comment on the heritage and leisure railways. Therefore, in regard to those two amendments, I recommend to the House that they are not accepted, should the noble Baroness wish to press them.
With regard to her other amendments, Amendments Nos. 186, 188, 316, 317, 320, 321, 322, 325, 328, 329, 331 and 333, I find her case well argued, powerful and totally convincing.
Baroness Stedman: My Lords, my halo will get very tight before this evening is over. I note what the Minister said. Perhaps we ask for too much in taking in the preserved lines and the heritage ones as well. Therefore, I beg leave to withdraw Amendment No. 185.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 186:
Page 82, line 6, leave out subsection (4).
On Question, amendment agreed to.
Clause 75 [General duties of consultative committees]:
[Amendment No. 187 not moved.]
Baroness Stedman Baroness Stedman moved Amendment No. 188:
Page 83, line 43, leave out subsection (3).
On Question, amendment agreed to.
Clause 79 [General restrictions on disclosure of information]:
Viscount Goschen Viscount Goschen moved Amendment. No. 189:
Page 88, line 23, leave out ("Part") and insert ("Act").
The noble Viscount said: My Lords, I beg to move Amendment No. 189 and will speak to Amendments Nos. 190 to 198 and Amendment No. 231 at the same time. These amendments clarify the scope and extent of Clause 79, which deals with restrictions on the disclosure of information. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 190 to 198:
Page 88, line 33, leave out ("Part") and insert ("Act").
Page 88, leave out line 38.
Page 89, line 20, at end insert:
("() for the purpose of facilitating the carrying out by the Comptroller and Auditor General of any of his functions under any enactment;
() for the purpose of facilitating the carrying out by the International Rail Regulator of any of his functions under any subordinate legislation made for the purpose of implementing the Directive of the Council of the European Communities dated 29th July 1991 on the development of the Community's railways;").
Page 89, line 24, leave out ("Part") and insert ("Act").
Page 89, leave out line 30 and insert:
("(b) the Fair Trading Act 1973;").
Page 89, leave out lines 35 and 36 and insert:
("(g) the Competition Act 1980;").
Page 90, line 12, leave out ("this Part") and insert ("Part I above").
Page 90, line 25, at end insert:
("() In this section—
"the Central Committee" has the same meaning as in Part I above;
"consultative committee" has the same meaning as in Part
I above and includes a reference to the London Regional Passengers' Committee.").
Transpose Clause 79 to after Clause 140.
On Question, amendments agreed to.
Clause 81 [Meaning of "railway services" etc.]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 199:
Page 91, line 15, leave out from ("network") to ("but") in line 16 and insert ("(or of any of the track or other installations comprised in a network)").
The noble Earl said The noble Earl said: My Lords, in moving this amendment, with the leave of the House I shall speak also to Amendments Nos. 200, 202, 203, 208 to 211, 213, 214, and 263 to 267. These are technical amendments. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 200:
Page 92, leave out lines 8 to 11 and insert:
("and it is immaterial for the purposes of this subsection and that subsection whether or not the person who provides the service in question also provides or operates a network, or any of the track or other installations comprised in a network, or provides the service on behalf of a person who does so.
() In determining whether any service is a station service, it is immaterial whether or not the person who provides the service also provides or operates a station, or any part of a station, or provides the service on behalf of a person who does so.").
On Question, amendment agreed to.
Clause 82 [Interpretation of Part I]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 201 to 214:
Page 92, leave out line 20, and insert:
(""access agreement" means—

(a) an access contract entered into pursuant to directions under—

(i) section 16 above,

(ii) section (Access agreements: contracts requiring the approval of the Regulator) above, or

(iii) Schedule (Access agreements: applications for access contracts) to this Act; or

(b) an installation access contract entered into pursuant to directions under section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network) or Schedule (Access agreements: applications for access contracts), as applied by that section;

"access contract" has the meaning given by section 16(6) above;
"access option" shall be construed in accordance with section 16(6) above;
"additional railway asset" has the meaning given by section 27(7) above").
Page 92, leave out lines 21 and 22.
Page 92, line 23, leave out ("for giving full effect to the right of any person") and insert ("or expedient for giving full effect to any permission or right which a person may have").
Page 92, line 40, at end insert:
(""experimental passenger service" has the meaning given by section 45(5) above;").
Page 92, line 42, leave out (" 16(10)") and insert (" 16(6)").
Page 93, line 11, at end insert:
(""installation access contract" has the meaning given by section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)(9) above;
"installation owner" has the meaning given by section (Access agreements: contracts for the use, on behalf of the Franchising Director, of installations comprised in a network)(9) above;").
Page 93, line 14, at end insert:
(""light maintenance" (without more) means—

(a) the refuelling, or the cleaning of the exterior, of locomotives or other rolling stock; or

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

and, for the purposes of paragraph (b) above, "maintenance work" includes the detection and rectification of any faults;").
Page 93, line 16, leave out from beginning to ("also") in line 18 and insert ("is normally used for or in connection with the provision of light maintenance services, whether or not it is").
Page 93, line 32, leave out ("ancillary facilities") and insert ("installations").
Page 93, line 36, leave out ("carrying passengers or goods").
Page 93, leave out line 40 and insert ("any purpose comprised in the operation of that network; and").
Page 93, line 44, at end insert:
(""notice period" has the meaning given by section 45(11) above;").
Page 94, leave out lines 35 to 39 and insert:
(""station" means any land or other property which consists of premises used as, or for the purposes of, or otherwise in connection with, a railway passenger station or railway passenger terminal (including any approaches, forecourt, cycle store or car park), whether or not the land or other property is, or the premises are, also used for other purposes;").
Page 94, line 45, after ("thereon") insert (", whether or not the land or other property is also used for other purposes;").
On Question, amendments agreed to.
Clause 83 [Powers of the Board to form companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 215:
Page 95, line 24, leave out from second ("the") to ("sections") in line 26 and insert ("performance by the Franchising Director of his functions under").
On Question, amendment agreed to.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 215a:
After Clause 83, insert the following new clause:
("Effect of Act on duties of the Board
. Nothing in this Act shall affect the duties imposed on the Board, any wholly owned subsidiary of the Board, or any companies formed by the Board under this Act to comply with—

407

(a) the requirements of section 68 of the Railway Clauses Consolidation Act 1845 (making and maintenance of works for the accommodation of owners and occupiers of lands adjoining the railway), as if they were therein defined as "the Company";

(b) any orders made by the Minister of Agriculture, Fisheries and Food under the Pests Act 1954 designating areas as rabbit clearance areas as if they were therein defined as "the occupier"; and

(c) any notice served by the Minister of Agriculture, Fisheries and Food under the Weeds Act 1959 to prevent We spreading of injurious weeds, as if they were therein defined as "the occupier".").

The noble Lord said: My Lords, I tabled this amendment so as to obtain an assurance from the Government as to what will happen to British Railways' present statutory duty to maintain and provide fences and other works along railway lines as laid down at the present time in the 1845 Act. I hope that my noble friend will agree that this will be the responsibility of Railtrack. I hope too that he will be able to assure me that this responsibility will be passed on to whoever takes on Railtrack should it be sold. That responsibility is onerous, not least because of the ruling in the case of British Railways v. Herrington.
Likewise, under the Pests Act 1954 and the Weeds Act 1959 there is a duty on British Rail to control pests and noxious weeds on its land. I hope that those duties too will be the responsibility of Railtrack and any successor.
Perhaps I may mention that the present increase in the rabbit population, particularly on railway property, is causing problems and I fear that it is likely to get worse. Indeed, British Rail have recently paid £6,000 to a landowner in Worcestershire in compensation for rabbit damage. I beg to move.
The Earl of Caithness: My Lords, the statutory duty on BR to provide and maintain fences under Section 68 of the Railway Clauses Consolidation Act 1845 will transfer to Railtrack where operational track transfers to it. Residual BR will retain its responsibilities in respect of non-operational track. I do not foresee circumstances under which the duty could be diluted. The duty could
408
only be altered by order or statute. Any such orders under Section 1 of the Transport and Works Act would be line specific and subject to prior consultation. The same is true for similar duties in legislation which pre-dates the 1845 Act. Similarly, we do not envisage that transfer of Railtrack to the private sector would make any difference.
With regard to the control of pests and noxious weeds, the position is very much the same. Railtrack will inherit responsibilities in respect of land transferred to it. Residual BR will retain responsibility for the land it retains. The Railways Bill does not alter or affect the powers of the Ministry of Agriculture under the Pests Act 1954 and the Weeds Act 1959. I am sorry that my noble friend is having trouble with rabbits. Some people like rabbits.
Lord Stanley of Alderley: My Lords, I do not like rabbits. However, I thank my noble friend for that answer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 84 [Powers of the Board to make transfer schemes]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 216:
Page 96, line 23, after first ("of") insert ("effecting or").
The noble Earl said The noble Earl said: My Lords, This is a technical amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 217:
Page 96, line 25, leave out ("effecting any transfer contemplated by section 25") and insert ("facilitating the performance by the Franchising Director of his functions under sections 21 to 33").
On Question, amendment agreed to.
Viscount Goschen: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and. on Question, Motion agreed to.
House adjourned at twenty-two minutes past eleven o'clock.

  ARRESTS: USE OF NECK HOLDS
  ARRESTS: USE OF NECK HOLDS
  EUROPEAN PARLIAMENTARY ELECTION: VOTER REGISTRATION
  EUROPEAN PARLIAMENTARY ELECTION: VOTER REGISTRATION
  PEERS: APPOINTMENTS BY THE SECRETARY OF STATE FOR NORTHERN IRELAND
  PEERS: APPOINTMENTS BY THE SECRETARY OF STATE FOR NORTHERN IRELAND
  PALACE OF WESTMINSTER: NON-PRESCRIPTION MEDICAL REMEDIES
  PALACE OF WESTMINSTER: NON-PRESCRIPTION MEDICAL REMEDIES
  SECURITY FACILITIES EXECUTIVE
  SECURITY FACILITIES EXECUTIVE
  LONDON BOROUGHS GRANTS COMMITTEE: GRANTS ALLOCATED
  LONDON BOROUGHS GRANTS COMMITTEE: GRANTS ALLOCATED
  FOREST ENTERPRISE VISITOR FACILITIES: COSTS
  FOREST ENTERPRISE VISITOR FACILITIES: COSTS
  FORESTRY COMMISSION: ENVIRONMENTAL POLICY COSTS
  FORESTRY COMMISSION: ENVIRONMENTAL POLICY COSTS
  PUBLIC SPENDING
  PUBLIC SPENDING
  FOREIGN-OWNED MANUFACTURING INDUSTRY IN UK: DISPOSAL OF PROFITS
  FOREIGN-OWNED MANUFACTURING INDUSTRY IN UK: DISPOSAL OF PROFITS