House of Commons - Explanatory Note
Railways And Transport Safety Bill - continued          House of Commons

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Commentary on clause

157.     Subsection (1) of clause 106 will enable a transfer scheme made under section 409 of the GLA Act to exempt LRT's/LUL's contracts from section 412(3) of that Act, and subsection (4) ensures that the exemption will continue to apply where a subsequent transfer scheme is made under paragraph 2(3) of Schedule 12 to that Act. Subsection (2) will enable Transport for London to exempt contracts from paragraph 2(3) of Schedule 12 to that Act. These parts of the GLA Act may otherwise frustrate parts of contracts made by LRT/LUL or Transport for London, such as change of control provisions, which are designed to operate when transfer schemes are made.

158.     Clause 105(5) enables provisions of the GLA Act which relate to the insolvency and winding up of a London Underground public private partnership company, and the return of its assets to the public sector, to come into effect before the transfer of London Underground to Transport for London. The GLA Act did not contemplate the possibility of a significant delay between completion of a PPP agreement and transfer of the London Underground to Transport for London. Clause 105(6) will allow the insolvency provisions in sections 220 to 224 of the GLA Act to come into force before the transfer of LUL to Transport for London.

Public sector financial and manpower cost

159.     The railways in London measures will not require any additional public expenditure over and above that envisaged in LRT's/LUL's contracts, or entail any additional public sector manpower burden.

Human Rights assessment

160.     The amendments to the Greater London Authority Act 1999 do not appear to involve any human rights implications, so the provisions of the Bill concerning the Greater London Authority Act 1999 are compatible with the Convention.

Part 7 - General

Clause 107: Money

161.     Clause 107 confirms that the money for new expenditures caused by this Bill will come from money provided by Parliament. The Secretary of State will therefore be asking Parliament to pass the appropriate financial resolutions.

Clause 108: Commencement

162.     Subsections (3)(a) and (3)(b) provide for transitional arrangements to be made if commencement of the Office of Rail Regulation takes place before legislation establishing bankruptcy restrictions orders has come into place. This is relevant because paragraph 2(c) of Schedule 1 allows an Office member to be dismissed if he is the subject of a bankruptcy restrictions order (or an interim order). These new orders are provided for in the Enterprise Act 2002, but the relevant provisions of that Act are not yet in force.

163.     Since the Enterprise Act does not extend to Scotland, subsection (3)(b) makes it possible to make transitional provisions equivalent to bankruptcy restriction orders until such time as equivalent Scottish legislation comes into force.

Schedule 1 - Office of Rail Regulation

164.     This Schedule sets out how the Office of Rail Regulation will be constituted, staffed and financed.

165.      Paragraphs 6 and 7 allow the Office to establish committees and to delegate its functions to such committees. Membership of those committees is not limited to Office members and employees. This enables the Office to bring outside expertise to committees, which may be advisory or decision making and deal with specific tasks or have continuing functions.

166.     Paragraph 12 enables someone who has been an employee of the Office and who then becomes a member to have his service as a member treated as civil service employment for pension purposes.

167.     Paragraph 18 requires the Office to make arrangements to manage potential or perceived conflicts of interests which could affect the performance of a particular function and, as well as members, covers employees and others appointed to committees.

  • Paragraph 18(1) requires declaration and withdrawal from involvement where a financial or other personal interest is likely to influence a person's performance of a particular function.

  • Paragraph 18(2) applies where an interest is not in fact likely to influence a person's performance of the function, but which is nonetheless relevant to that function. In such a case, the interest must be declared and the person must not perform that function, unless the Office decides that he may do so.

Schedule 2 - Abolition of Rail Regulator: consequential amendments

168.     This Schedule amends legislation so that existing references to the Regulator will be substituted with references to the Office of Rail Regulation and includes related minor drafting changes.

Schedule 3 - Abolition of Rail Regulator: savings, etc.

169.     The effect of this Schedule is that anything done by the Regulator prior to the transfer of his functions to the Office of Rail Regulation will continue to be valid as if it had been done by the Office. Similarly, anything in the process of being done by, or in relation to, the Regulator will be continued by, or in relation to, the Office.

170.     Paragraph 6 makes it clear that the Bill does not affect the International Rail Regulator in any way. That is a separate office, which will continue to exist.

Schedule 4 -British Transport Police Authority

Membership of the Police Authority

171.     The Secretary of State will be responsible for appointing the members of the Authority, including the chairman and vice-chairman. It is envisaged that the Authority will normally consist of 13 members. Paragraph 1 restricts the number of members between 11 and 17, although the Secretary of State may by order change these numbers after consulting with the Authority. Paragraph 2 provides that the Authority's membership should include persons who can provide knowledge and experience of the issues that concern passengers, the railways industry and the regions. As with the Service Authorities for the National Criminal Intelligence Service and the National Crime Squad the Secretary of State will be responsible for appointing the members who will undertake the roles of chairman and vice-chairman.


172.     Paragraphs 24 to 26 make provision in relation to pensions. Paragraph 24 enables the Secretary of State to make amendments to the occupational pension scheme for constables of the Authority. The scope of amendments would be limited. The provision intends to enable amendment of the trust documentation for the scheme, to recognise the new status of the Authority and its relationship with the Secretary of State, but not to provide for changing the pension benefit structure or winding up the scheme. Any amendments, on which there would be prior consultation with the scheme trustees, would be consistent with the members' historic protected rights under Schedule 11 to the Railways Act 1993.

173.     Paragraph 25 enables the Authority, with the Secretary of State's consent, to set up new arrangements to provide for retirement benefits for staff.

Schedule 6 - Convention on International Carriage by Rail

174.     Paragraph 1 makes clear that regulations under Schedule 6 may be made under both powers in the Bill or of the European Communities Act 1972.

175.     Paragraphs 2, 3, 4, and 5 list the provisions which may be included in regulations made under clause 100. The powers may only be exercised for the purposes of giving effect to the new COTIF. They include, but are not limited to, the power to:

  • give effect to the new COTIF in UK law,

  • change UK law for the purposes of giving effect to the new COTIF,

  • make provision for certain future changes to the new COTIF automatically to form part of UK law; and

  • impose conditions before any person may exercise a right or do something to which the Convention applies.

176.     In particular paragraph 3 will enable regulations to provide that most changes to the new COTIF which take place in future will flow through directly into UK law. This is intended to cater for the provisions in the new COTIF which allow certain technical changes to the terms of the Convention to be made by a Committee process and automatically to come into effect: an example might be the adoption of a new uniform technical prescription under the APTU appendix to the new Convention. Although the Government proposes that most modifications to the new COTIF and its appendices will flow through in to UK law, the Government's intention is that modifications made by the General Assembly (which is composed of the new COTIF's signatory states) should require specific approval by Parliament. This is because such modifications could potentially be of greater impact in the UK.

177.     Other provision which may be contained in regulations made under clause 100 are as follows:

178.     Paragraph 6 enables the creation, in the regulations made under clause 100, of sanctions (including criminal sanctions) for the purposes of ensuring that a duty under the new COTIF may be enforced. The effect of paragraph 6(3) is to allow regulations made under 100 to provide for greater sanctions than permitted in paragraph 6(2), but only in respect of the enforcement in the UK of parts of the new COTIF for which the EC is responsible. Such sanctions would also however be limited by the provisions of Schedule 2(1)(d) to the European Communities Act 1972.

179.     Since the new COTIF covers the international carriage of passengers and freight, paragraph 7 would allow regulations to make provision to ensure that a person does not recover damages in more than one country. That is, prevent double recovery. Provision could also be made to allow a UK court to take account of actual or potential legal proceedings outside the UK, when taking decisions during UK proceedings.

180.     Paragraph 8 enables regulations to be made which deal with the enforcement of judgements, which may in particular deal with the enforcement of foreign judgements.

181.     Paragraph 9 provides that the regulations made under clause 100 may make provision for the "Special Drawing Right" (the new COTIF's international currency unit) to be converted into sterling.


Rail Accident Investigation Branch

182.     Assessment has indicated that the likely safety benefits from the Rail Accident Investigation Branch can be expected to cover the expected costs. RAIB will have an estimated base case cost over the period 2003-2012 of £17m. This will be borne by the existing budget of the Department for Transport, in the same manner as is done with the Air and Marine Accident Investigation Branches (AAIB & MAIB). A 21/2% reduction in numbers of accidents over 2003-2012 would yield a £22m benefit in the base case.

Office of Rail Regulation

183.     The Better Regulation Task Force report 'Economic Regulators' (July 2001) favoured regulatory boards on the lines of a public limited company with a combination of executive and non-executive members. This was seen as providing a wide range of expertise, greater continuity and more transparent accountability. These benefits have been widely accepted and rail is the only remaining utility regulator that is not a board or in the process of being made into a board.

184.     There will be additional costs for the appointment of additional non-executive members to a Regulatory Board of the Office of Rail Regulation. This would be recovered at least in part from the regulated industry, to some extent offset indirectly by increases in public subsidy. The extra costs would probably be less than £200k, which is less than a 1.5% increase in the costs of the regulator, and compares with annual income of about £3.9 billion for Network Rail alone.

British Transport Police

185.     The additional administrative cost of a police authority of 13 members over the cost of the current Committee of 9 is estimated at £50,000 per annum in the context of a BTP's total annual budget of £130 million, and will be funded by the industry. In view of the negligible impact of these measures, no regulatory impact assessment is required or appropriate.

Shipping and aviation: Alcohol and drugs

186.     There is a clear but unquantifiable risk to passengers, crew and the general public from aviation and shipping incidents caused by the inappropriate operation, control or maintenance of vessels or aircraft by persons under the influence of drink or drugs. The introduction of alcohol limits in the marine and aviation sectors will help to reduce this risk by deterring personnel from being impaired through alcohol or drugs whilst on duty and hence act to improve safety to the benefit of users and travelling passengers alike. The alcohol limit will ensure that crews and other persons carrying out specified safety-critical aviation and maritime functions retain the necessary mental and physical skills to manoeuvre vessels and aircraft, in a safe and controlled manner. This will mean savings in terms of pollution prevention (clear-up costs, effects on wildlife etc.); saving damage to or loss of vessels or aircraft; and preventing injury or even loss of life. If it should lead to material reductions in accident numbers, then insurance premiums may possibly decrease in real terms (i.e. no or a small increase versus an increase in inflation).

187.     While the introduction of an alcohol limit and alcohol/drugs testing should not have any direct financial implications for the marine and aviation industries, it is possible that delays may occur if crews are made to wait to be tested. Such delays will however be kept to a minimum by the use of screening equipment to analyse initial breath samples at the scene. In addition, testing will only be carried out where an officer has reasonable suspicion that one of the offences under the new legislation has been, or is being, committed. Testing and enforcing an alcohol limit on marine and aviation personnel will place an increased burden on police resources, but this is expected to be largely offset by use of existing resources. In the aviation sector, there will be a small additional implementation cost involved in the necessary modification of existing police screening equipment to indicate a "fail" at the lower aviation limit. The number of prosecutions resulting from the new legislation is expected to be small, but will involve additional policy costs to the courts. These are also expected to be small and to an extent offset by fines.

International Carriage by Rail

188.     The new COTIF text provides an updated and expanded set of uniform rules for international rail passenger and freight carriage. In general the changes will have limited impact on the UK rail industry as they broadly bring the Convention provisions into line with existing UK practice. In particular, the new uniform rules on technical acceptance and standards for railway equipment will not impose any new burdens on operators in EC Member States, as the new COTIF includes provisions to ensure that the EC law on these matters prevails. However, the new COTIF text does increase the minimum levels of compensation for certain incidents throughout all signatory states. This will be of benefit to UK citizens making international rail journeys.

Greater London Authority

189.     The amendments to the Greater London Authority Act 1999 are designed solely to achieve Parliament's original intentions as regards the Act, correcting some unforeseen consequences of how the Act and the London Underground Public Private Partnership (PPP) contracts would operate together. The planned amendments would ensure that Tube assets return to the public sector in the highly unlikely event of a PPP company defaulting on a contract before London Underground transfers to Transport for London. They would also ensure that the GLA Act does not restrict certain provisions included in the PPP contracts or a guarantee given to providers of finance by London Regional Transport. The amendments will permit the PPP contracts and the guarantee to operate as intended. There would be no other effect on businesses, charities or the voluntary sector.


190.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before second reading, about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act).

191.     The Secretary of State for Transport has made the following statement:

    "In my view the provisions of the Railways and Transport Safety Bill are compatible with the Convention rights."

Alistair Darling

Secretary of State for Transport

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Prepared: 14 January 2003