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Mr. McNulty: I do not wish to detain the House. These are either technical amendments that are fully endorsed by the other place or amendments that follow on from the recommendations of the Delegated Powers and Regulatory Reform Committee and, again, are endorsed by the other place. I commend them to the House.
Mr. McNulty: As with the first group of Lords amendments, in disagreeing with them, we are offering sufficient wording in lieu to meet not just the concerns expressed in the other place but anxieties raised in this Chamber and in Committee.
In the other place and in Committee concerns were highlighted, particularly by the right hon. Member for East Yorkshire (Mr. Knight), about adverse effects on train operators' businesses if an access charges review results in the reduced capacity of the rail network. An amendment was tabled to address those concerns. While
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the operators' contracts provide for mitigation and compensation for any adverse effects arising from a change to the network's capability, there is no explicit requirement for either the Office of Rail Regulation or the Secretary of State to consider those matters during an access charges review. Both the Secretary of State and the ORR have given public undertakings that issues of mitigation and compensation for adverse effects will form part of an access charges review. However, the other place and some hon. Members do not consider those undertakings to be sufficient, and wish such matters to be enshrined in legislation.
The Lords amendment addresses that concern, and would confirm in statute a commitment already given in the written undertakings. It makes it the duty of the ORR to notify the Secretary of State when it appears that such adverse effects are likely, and to advise the Secretary of State of the mitigation and compensation that would be required, and of the costs of those measures. The amendment gives the Secretary of State the opportunity to revise his specification, or budget, or both, to mitigate those adverse effects. It also requires the ORR, in conducting an access charges review, to have regard to any adverse consequences for train operators, and in particular any need for mitigating measures, or compensation, or both. Of course, such adverse consequences may not arise from an access charges review, but the amendment ensures that if they ever do arise, both the ORR and the Secretary of State will be obliged to take full account of the consequential need for mitigation or compensation.
It is not possible to concede everything that is proposed in the Lords amendment, because it would allow legislation to interfere in matters already treated wholly and properly within contracts. Further, it commits the Secretary of State and Scottish Ministers to find additional public money to fund any shortfall in adequate compensation, leaving the determination of what is adequate with the ORR. The amendment from the other place therefore undermines two important points of principle, to which we have adhered during the passage of the Bill: the primacy of the contract, and Ministers' ability to control their own budget.
By offering the words in lieu, we recognise the concerns expressed in the amendment from the other place and raised by the right hon. Member for East Yorkshire and the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) in our proceedings, without impinging on the contractual relationship. We think that that is the right and proper approach. I am grateful to their lordships for raising these issues. The words offered in lieu do what they require of us, but in a way that preserves the primacy of the contract. I commend to the House the Government motion to disagree and our words offered in lieu.
Mr. Greg Knight:
I am grateful to the Minister for the out-of-Chamber discussions that we were able to have on the matter earlier today. There is an important point at issue which, as the Minister said, we raised twice, once in Committee and once on report, because we were concerned not about the threat to the independence of the Office of Rail Regulation, but about the scope of the powersthe jurisdiction. It seemed to us that that was at risk.
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We were deeply concerned that the Bill could undermine the sanctity of contracts entered into voluntarily. That was why my party in the other place tabled the Lords amendment that is before us, in an attempt to protect investors against any Secretary of State putting the network into decline, making changes to access contracts and reducing the value of contractual rights. The amendment would provide protection for existing contractual rights. It was our view that if the Government were indeed acting in good faith, they should not have any difficulty in accepting the Lords amendment. Whatever budget is set for our rail network, it must surely take account of existing legal commitments. The amendment would therefore come into effect only in certain limited circumstances.
We accept that the Minister has been responsive to the concerns that we expressed and, dare I say it without his blighting his career, has shown his reasonable side. The amendment in lieu is not perfect. It is not ideal, but it is a move in the direction that we were urging the Government to take, and it is an acknowledgement of the force of the arguments that we adduced in Committee and on Report. It would be churlish of us to reject the Minister's overtures. We do not reject his welcome hand of compromise. We accept his suggestion that the House should adopt the amendment in lieu. I give him this pledge: next month, when I am sitting on the Treasury Bench with my colleagues, we will think of at least part of his time as Minister with affection.
John Thurso: I concur with the comments of the right hon. Member for East Yorkshire (Mr. Knight). The amendment in lieu that the Minister proposed in his new reasonable guise gives sufficient assurance and should be accepted. The matter should no longer be a point of conflict between us. I concur that the primacy of the contract is at the heart of the matter. The concern shared by the right hon. Member for East Yorkshire and myself was that, as drafted, the Bill could override a previously written contract. We agreed with the principle that the Minister advanced, but had a different interpretation. The words put forward by the Minister are not all that I would have wished to see, but they are certainly acceptable, and therefore I believe that the House should agree to them.
Mrs. Dunwoody: I am slightly worried that the Minister might have been altogether too reasonable. Although I do not naturally recognise him in that guise, perhaps he will reassure me that the clause, rewritten as it is, does not underwrite all the financial obligations of the contract holders, and, as usual in the privatisation of British Rail, leave the taxpayer having to underwrite any changes that may come about. Is it not truly absurd to have the situation that has obtained hitherto where the regulator, who has had no responsibility to the taxpayer or anybody else, has been able to agree certain basic charges and changes without any regard to the cost in the long run?
I can certainly give my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) that assurance. As I said, the Lords amendment far more readily offered an open and blank cheque in those terms, and took away from Ministers the ability to control budgets, as ultimately they should, as well as
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impacting on the primacy of the contract, which is why I am grateful for the agreement of both Front-Bench spokesmen. Without pursuing the point, the words that we have offered in lieu far more readily and in a neater and more efficient way address the concerns raised, with the caveat from my hon. Friend, rather than the existing words, and in that context, I commend them to the House.
Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 1 to 7: Mr. Greg Knight, Mr. Khalid Mahmood, Gillian Merron, Mr. Tony McNulty and John Thurso; Mr. Tony McNulty to be the Chairman of the Committee; Three to be the quorum of the Committee.[Gillian Merron.]
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