Examination of Witnesses (Questions 560-572)
DEREK TWIGG,
MR MARK
LAMBIRTH AND
MR ROGER
JONES
19 JULY 2006
Q560 Chairman: When you took over
from the Strategic Rail Authority, tell me something simple, did
you seek to change this clause or did you say, "Payments
of £12.65 million, £3 million, £6.8 million, £143,000,
£701,000 are good value for the taxpayer"?
Derek Twigg: Ministers, in taking
over when the DfT Rail Group was set up and obviously the SRA
was done away with, we looked at the policy and we decided that
the arguments for it were still ones that we would support and,
therefore, we kept the policy.
Q561 Graham Stringer: Is this kind
of government decision replicated anywhere else in the whole of
government and all of the government contracts that they have?
Derek Twigg: I am not aware of
that, Mr Stinger. I can only speak in terms of—
Q562 Chairman: But what about the
ones you have got yourselves in relation to things like ports
or the Underground? Do you give these kinds of undertakings anywhere
else? Do shipowners get this type of compensation?
Derek Twigg: I am not aware that
they do.
Q563 Chairman: So the train operating
companies are the only people the you cannot trust not to come
to some agreement which would be so expensive it would add up
to more than all these sums of money that you have already paid
out to one company?
Derek Twigg: The case is based
on the viability of the passenger services and we have to look
at that.
Q564 Clive Efford: But the logic
of the argument has got to be that these costs are outside the
control of the train operating company, but that is the same if
the economy was to turn down and the viability of the franchise
was undermined.
Derek Twigg: Yes, but if they
took reasonable steps to try and bring about a perfectly fair
resolution and satisfy us of that case and the viability of that
train service is at risk, then I think it is reasonable for us
to consider using this policy.
Q565 Clive Efford: But on the logic
of that argument, if we accept it, surely it must follow that
if a train operating company has taken all reasonable steps, and
I use the same argument again, in an economic downturn, you would
take the same sympathetic view surely?
Derek Twigg: No, it is a specific
issue around the fact that if it was affected by an industrial
relations dispute where, in terms of the point Mr Lambirth made
in terms of towards the end of the franchise or whatever, if we
feel that everything reasonable had been done in terms of that
particular dispute and the viability of the train service is under
threat, then on that basis we would look at it. It is a policy,
I think, which has worked well for the railway and—
Q566 Chairman: It has worked well
for certain rail companies, has it not, Minister? You have only
got to look at the amounts which have been paid out so far.
Derek Twigg: I think I have made
it clear that it is not something which would be used lightly
and, as I say, as of today the Department for Transport has not
used it.
Q567 Graham Stringer: In determining
whether or not the company behaved reasonably or not, would you
talk independently to the trade union that was involved to ascertain
whether they were reasonable? Also, as a matter of fact, do you
know, and if you do not, can you let us know, whether the SRA,
when they agreed to these payments, did take independent evidence
from the trade union?
Derek Twigg: I have not got the
answer to that question today, but I can write to you.
Q568 Graham Stringer: One was historical,
and you can write to us, and one was about the way you would approach
it as the Minister responsible.
Derek Twigg: I am sure that we
were quite clear as to what the trade union views were in terms
of the issues.
Q569 Graham Stringer: Would you take
independent evidence from them directly?
Derek Twigg: We have not actually
come across such a dispute yet, so, as I say, we will treat each
case depending on its merits and circumstances, so clearly we
would want to make sure that we had the absolute picture.
Q570 Clive Efford: Would you consider
whether it would be reasonable to do so?
Derek Twigg: We would want to
get the whole picture, so clearly we would do everything, and
we would have to justify reasonableness as well in terms of how
we applied the policy.
Q571 Chairman: Do you think that
the payment by the Strategic Rail Authority of £15.6 million
in 2003 and £7.6 million in 2004 under its discretionary
power, in other words, it did not have to do it, was reasonable?
Derek Twigg: I do not know the
circumstances of those particular industrial action disputes,
so I could not answer.
Q572 Chairman: These are parliamentary
questions, Minister, column 2226, written, 24 November 2005. Presumably
that information came from your Department.
Derek Twigg: Well, they would
have had to take all reasonable steps before deciding to make
that payment. As I have said, they would have to assure themselves
that the TOC had taken all reasonable steps to settle the dispute
and come to a conclusion on it and they would have had to have
behaved reasonably to have done that.
Chairman: Well, we have been very interested
in your answers, Minister, and doubtless it will just be an accident
that we will have to now pose our questions to the Treasury, but
thank you for coming and thank you for bringing your supporters
with you.
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