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Mr. Spellar: We are still making heavy weather of things. I am not sure that the hon. Lady's contribution in respect of this amendment squares with her lengthy earlier contribution. She paid tribute to the rail regulator and his role in exercising his powers under
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current legislation, then seemed to have difficulty with those functions and duties being transferred to the Office of Rail Regulation. It was sensible to make the consequential amendments, which transfer those powers from the rail regulator to the Office of Rail Regulation. The hon. Lady did not make any case to say why that is inappropriate. She asked several pertinent questions, for example on reports and accounts. I advise her that the ORR currently publishes annual reports and accounts and a business plan.
The hon. Lady rightly drew attention to the roles of the Strategic Rail Authority and the rail regulator. She will be aware that when Railtrack was placed in administration, the Government embarked on a review of the regulator's role, and my right hon. Friend the Secretary of State announced the results of that review in a parliamentary answer on 12 June 2002. The proposals were to change to a regulatory board and to issue statutory guidance to the regulator and directions and guidance to the Strategic Rail Authority, having regard to the authority's budget and strategies. Those documents were subsequently issued. The announcement went on to say that the effectiveness of the regulatory regime would continue to be kept under review as the rail sector developed. The Secretary of State set out the overarching principles that applied to that, making it crystal clear that independent economic regulation was an essential continuing requirement.
The hon. Lady must take on board that the principles laid down in the functions and duties in the Railways Act 1993, as amended by the Transport Act 2000, are broad and flexible. That enables the office to be adaptable, and I will give an example. It was possible to accommodate the change in management infrastructure from Railtrack to Network Rail, which, as different types of company, raise significantly different regulatory issues. That transition was accomplished under the existing functions and duties. I hope that the hon. Lady will reflect on that and withdraw her amendment.
Miss McIntosh: I hear what the Minister is saying. I thought that he could have given more credit to, and been more generous with time in responding to the request of the Select Committee, which has been one of the most active in recent years. I say that with a vested interest, as I served on the Committee for two years. It has been one of the most well directed and focused Committees. It asked why, with the review of the SRA, the Government have not taken the opportunity to go forward.
I believe that there are strong arguments. The industry would welcome knowing that the specific functions will be replaced. There will be opportunities to come back to the matter, so for the moment I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 ordered to stand part of the Bill.
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Schedule 2
Abolition of Rail Regulator: Consequential Amendments
Question proposed, That this schedule be the Second schedule to the Bill.
Miss McIntosh: I want clarification from the Minister. The table in schedule 2 seems to have been lifted entirely from the Railways Act 1993—I assume that the Transport Act 2000 did not have a huge impact on the schedule—but it is not as clear as it could be. I am mindful of the Minister's earlier comment that there is provision for annual reports, annual accounts and a business plan, which is helpful. It would have been helpful to take the opportunity in schedules 2 and 3 to link in the relationship with the SRA.
Paragraph 22 contains the first reference to the Channel Tunnel Rail Link Act 1996. One of our amendments proposed that the channel tunnel be specifically excluded from the Bill. We had the opportunity to allow a separate body to deal with the channel tunnel, which would prevent any funny business. Someone from Europe might insist, for example, that a French investigation be conducted on the English side of the channel, or vice versa. The Minister will be disappointed, because the amendment would have been helpful.
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Schedule 3 refers to savings that will be made as a result of the abolition of the rail regulator. It would be helpful if the Minister would confirm the proposed timetable for that. My understanding is that the rail regulator will remain in place and serve out his contract. I assume that the start date for the Rail Safety and Standards Board is imminent, and that there will be a gap during which the board will perform some of the Office of Rail Regulation's duties. Can the Minister confirm the time scale for phasing out the rail regulator, so that the regulator, as well as the Committee, may know exactly where he stands?
I do not disagree with the hon. Member for Bath on the principle of replacing the rail regulator with the board, but, as my hon. Friend the Member for Westmorland and Lonsdale said, we want to know the reasons for that. Are they in keeping with the principles that the Minister failed miserably to convince me about? I do not know how I shall explain to my hon. Friend how we square that.
The title of schedule 3 mentions that savings will be made. On a cursory reading—
The Chairman: Order. We are debating schedule 2.
Miss McIntosh: I am ahead of myself. I am grateful to you, Mr. Hurst, for that stricture. Schedule 2, especially part 2 on amendments to other Acts, refers to the Channel Tunnel Rail Link Act 1996. It would be helpful to know more about the references to the Postal Services Act 2000 and the Utilities Act 2000.
The Minister said earlier that the rail regulator publishes an annual report, accounts and a business plan, and I wonder whether the Minister could direct me to the specific provision between line 35 on page 51
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and line 33 on page 52 that deals with annual accounts and, in particular, the regulator's business plan. Would it be appropriate in future for all three documents to be submitted to the relevant Select Committees?
Mr. Spellar: I reassure the hon. Lady that the Rail Safety and Standards Board will not withdraw any of the regular's functions, nor will those functions be withdrawn when they transfer to the Office of Rail Regulation. With regard to the timing of the board's implementation, we have stated that we do not plan to introduce the Office of Rail Regulation before mid–2004. The regulator's appointment runs until then. As the hon. Lady will be aware, we have agreed to undertake an interim review of Network Rail's charges. That will occupy the regulator and his team over the next year. It is important that that work is not disrupted in any way.
The hon. Lady also mentioned the Transport Act 2000. I draw her attention to paragraph 19(t), which deals with that. The Office of Rail Regulation is substituted for the rail regulator in the appropriate clauses.
Yet again, I hope that the hon. Lady is satisfied that we are reading across from current regulations on the role of the Office of the Rail Regulator, and transferring those functions and duties to the Office of Rail Regulation. The schedule gives effect to the principles outlined in the clause.
Miss McIntosh: The Minister said that the present rail regulator is undertaking a review of Network Rail, and I think that all hon. Members have been consulted on that. A further part of his work will be proposed network licence modifications following the acquisition of Railtrack by Network Rail.
It may have been confusion on my part to think that the Rail Safety and Standards Board would perform any of the duties of the rail regulator, but the two will clearly work closely, as set out in annexe A of the document. Parliamentary scrutiny of the documents would be helpful. However, the debate has been helpful.
Schedule 2 agreed to.
Schedule 3
Abolition of Rail Regulator: Savings, &c.
Question proposed, That this schedule be the Third schedule to the Bill.
Miss McIntosh: Briefly, and having spoken out of turn, Mr. Hurst, I ask the Minister to explain whether the savings referred to in the title will be made through the abolition of the rail regulator. We have already identified one increase—the £200,000 extra for non-executive members. After adding up the wage bills of the chairman, chief executive and at least three other members of the board, plus pensions for retiring members, I have great difficulty in identifying where savings could be made, and I invite the Minister to do so. Has the Treasury said that those people will all be paid less than the existing rail regulator? On the face of it, that will not be so.
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Paragraph 5(2) states that
''the Secretary of State may continue to make payments in accordance with arrangements made before commencement for or in respect of a pension for a person who held the office of the Rail Regulator.''
What pension provision does the Minister have in mind? More pertinently, paragraph 5(3) states:
''The Secretary of State may pay compensation to the last person who held the office of the Rail Regulator.''
That raises a curious spectacle.
Mr. Foster: To save my having to give a speech, perhaps the hon. Lady will ask the Minister to explain why there might be a need for compensation? He assured us that the new body will not come into force until 2004, which is when the contract for the existing rail regulator will come to an end. While she is at it, and to avoid doubt, the hon. Lady might ask the Minister whether all other employees who now work for the Office of the Rail Regulator will have their pensions continued. That seems not to be covered in paragraph 5.
The Chairman: Order. I remind right hon. and hon. Members that Members are not expected to read newspapers or other documents for amusement during Committee proceedings.
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