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Session 2004 - 05
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Standing Committee Debates
Railways Bill

Railways Bill

Standing Committee A

Tuesday 11 January 2005

[Mr. David Amess in the Chair]

Railways Bill

9.25 am

The Chairman: May I begin by wishing everyone a very happy new year? I remind the Committee that we have completed consideration of clauses 1 to 5 and schedules 1 to 4, and are now due to consider clause 6.

Mr. Greg Knight (East Yorkshire) (Con): On a point of order, Mr. Amess. This point does not relate to what you just said and I do not necessarily ask you for a definitive ruling today, but you might reflect on it and perhaps raise it when you next speak to other members of the Chairmen's Panel.

For the past 10 months, the hon. Member for Scarborough and Whitby (Lawrie Quinn) has been applying to the Speaker for a debate in Westminster Hall on community railways. That debate was finally granted today and is taking place concurrently with our sitting this morning. Therefore, two members of this Committee—the Under-Secretary of State for Transport, the Member for Staffordshire, Moorlands (Charlotte Atkins), and my hon. Friend the Member for Christchurch (Mr. Chope)—cannot be with us because they must answer that debate.

When sittings take place in more than one venue in this Palace, as has happened for centuries, it is sometimes difficult to co-ordinate business. However, given that the hon. Member for Scarborough and Whitby has been applying for a debate on railways for 10 months and that there would have been a clash with this Committee for only two sitting weeks during that time, those who advise the Speaker could have ensured that such a clash did not take place. I hope that someone will reflect on that.

The Chairman: The right hon. Gentleman has made a genuine point of order, which is why I allowed it to be heard. The Chairmen's Panel is considering the issue, and evidence has already been given on the subject to the Modernisation Committee. I will pass on his remarks to the Chairman of Ways and Means.

Mr. David Wilshire (Spelthorne) (Con): On a point of order, Mr. Amess. Have you received any approach from the Government this morning to end this sitting early so that we can all witness the amazing spectacle of the Prime Minister and the Chancellor being in the same place and saying the same thing when they unveil a poster—

The Chairman: Order. I am not minded to hear the hon. Gentleman any further.

<<114>>Clause 6

Financial assistance etc. from the Secretary of State

Mr. Wilshire: I beg to move amendment No. 52, in page 6, line 15, leave out subsection (3).

The Chairman: With this it will be convenient to discuss amendment No. 53, in page 6, line 23, at end insert

    'and fairly to all parts of the United Kingdom.'.

Mr. Wilshire: I am not sure whether to speak further to my point of order, or whether wishing you, Mr. Amess, and the rest of the Committee a happy new year is the best way of resuming.

I do not want to delay the Committee for long on this pair of amendments. Clause 6(3) states:

    ''Agreements or other arrangements entered into by the Secretary of the State under this section may be entered into on whatever terms, and subject to whatever conditions, he considers appropriate.''

Contrary to the Minister's views, I listen to what he says and sometimes take it on board and think that he has a point. When my colleagues and I have tried to add something to the Bill, we have often been told that it is unnecessary.

Mr. Knight: Otiose.

Mr. Wilshire: I cannot rise to the levels of my right hon. Friend, who is a solicitor; I am a layman who does not quite get his mind around things. Unnecessary is what I think otiose means, and if not, I am sure someone will put me right.

I therefore say to myself that subsection (3) must be necessary because the Minister tells me so and has included it in the Bill. It is only when I try to add things to the Bill that I am told that they are unnecessary. Will he tell us why the subsection is necessary? Does he imagine that the Secretary of State will want to do whatever he fancies, including acting unreasonably? I would have thought that if the Secretary of State did something, we could leave it to a test of reasonableness in the courts. Presumably, the Government have in mind the Secretary of State acting utterly unreasonably, because the Minister is asking us to give a blank cheque to the Secretary of State to do whatever he likes—fair or unfair, reasonable or unreasonable.

Mr. Knight: Will my hon. Friend explain why he feels that we should support amendment No. 52, which would leave out subsection (3)?

9.30 am

Mr. Wilshire: I would have assumed that in the absence of a subsection telling the world that the Secretary of State can do whatever he likes, however unreasonable, there must always be a test of reasonableness. That would be one way of ensuring that the Government behave themselves, rather than do just as they please. The Minister may say otherwise, but I am sure that if I had tabled an amendment saying that the Government were to behave reasonably, he would have told me that that was unnecessary, because
Column Number: 115
the Government always behave reasonably. That is why, on this occasion, I have concluded that the Government do not intend to behave themselves, and that the subsection gives them a blank cheque.

The Minister has included in the clause a provision requiring the Secretary of State to act consistently, perhaps because the Minister feels that the Secretary of State might be inconsistent unless he is told not to be. However, I think that if he is required to be consistent, he should also be fair. The purpose of amendment No. 53 is to tidy things up and to help the Minister to present us with government that is both consistent and fair.

The Minister of State, Department for Transport (Mr. Tony McNulty): May I start by wishing everyone a happy new year? I hope that, by the end of the year, hon. Members will find themselves in roughly the same positions as at the beginning of the year.

I believe that the amendment is not unnecessary or otiose, but inappropriate, because it would remove the explicit power of the Secretary of State to make grants, loans, guarantees or investments in respect of the railway on terms that he sees fit. Although the amendment would not prevent him from drawing up such contract arrangements on terms that he sees fit, I believe that it would muddy the waters and create a lack of clarity in relation to what he can or cannot pay for. The amendment should also be seen both in the context of the overall Bill and of the little but specific phrase ''under this section'', which links both parts of the clause. Any discussion of this matter needs to be seen in the context of the clause as a whole. I appreciate, as the hon. Gentleman implied, that the power is wide ranging, but we believe it to be appropriate.

Payment in respect of passenger franchises will form a large proportion of the payments made under the clause, and when financial assistance is given to a franchise holder, subsection (5) makes it clear that it can be given only in accordance with the franchise agreement. That locks down part of the supposedly wide-ranging powers in the subsection. All franchise agreements to which the Secretary of State will be party must appear on a public register, to comply with section 73 of the Railways Act 1993. For that chunk of the payments, we have provided proper transparency showing what the Secretary of State is buying from franchisees and on what terms.

Other payments that will be made under the clause will include payments of grant to Network Rail. As everyone knows, those will be set by the Office of Rail Regulation. Other payments will be made to third parties; those payments are designed to improve or develop the railway. Many of the disbursements provided for in the Bill will be routine payments via franchise agreements and via the ORR to Network Rail. Subsection (3) relates to the third category—payments to third parties that are designed to improve or develop the railway.

In that context, to get the best terms and conditions from any third party, the Government need flexibility on the terms on which they are permitted to pay, invest or guarantee. The amendment would remove that
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flexibility. The amendment would not have an impact on what the Government pay in terms of the ORR, Network Rail through the ORR or through franchise agreements, but it would have an impact on that third element—payments and disbursements to third parties. We need to retain flexibility in that area, because it could cover an array of payments and agreements. The amendment would remove that level of clarity and flexibility from the Bill, which is why I believe it to be inappropriate.

All the usual reporting arrangements through documents such as the Department's annual report will ensure that the Secretary of State remains fully accountable to Parliament for the spending and investment decisions that he makes. I hope that that is clear.

Clauses 9 and 11 give Scottish Ministers and the National Assembly for Wales authority to make funding and grants available to freight operators for activities within their respective devolved areas. A key principle of devolution is that it allows the devolved Administrations to adopt different funding and investment policies from each other and the rest of the UK, and from those that apply in the non-devolved areas. Amendment No. 53 would place an obligation on the Secretary of State to apply what is in effect a fairness of distribution test for funds under his control when looking at projects and schemes that are proposed and paid for by the devolved Administrations and that cuts right across the devolution spirit that we are trying to secure in the Bill. As those Administrations may well adopt different investment policies and have different levels of funding available to them for freight schemes, it would be inappropriate to place the Secretary of State under such an obligation.

I shall say this only once, but because of an error on the part of officials, my notes refer to a hope that my ''hon. Friend'' will withdraw the amendment. Given that it is our first sitting in the new year, let us leave the hon. Member for Spelthorne (Mr. Wilshire) as an hon. Friend just this once. In that context, I ask my hon. Friend to seek leave to withdraw the amendment.

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