Clause
28
Terms
of, and amending other contracts because of, Crossrail access
contracts
Stephen
Hammond:
I beg to move amendment No. 46, in clause 28,
page 19, line 2, at end
insert—
‘( ) Subsection (4)
applies only where a compensatory arrangement has been reached, which
is enforceable by the Office of Rail
Regulation.’.
The
amendment is designed to ensure that there is a fair deal for those
potentially or actually adversely affected by the terms of clause 28.
The clause gives the rail regulator the power either to direct a
facility owner to enter into an access contract with a prospective
Crossrail passenger service provider or to amend existing access
contracts that he may have at the request of the would-be service
provider. When doing that, the Office of Rail Regulation is not allowed
to make the parties to the affected contract change the amounts payable
under that contract. That means that a situation could arise whereby a
facility owner is forced to allow a third party far greater access to
his facility than before, but without the commensurate financial
compensation or reward. In other words, it seems that the power granted
under the clause allows the possibility that the facility owner will
give something away and make extra provision, yet receive nothing in
return.
I grant that
subsection (5) gives the ORR the power to review the appropriate access
charges, but the key point is that the financial provisions of the
contract previously agreed to by the parties cannot necessarily change.
When the parties are forced by the ORR to alter the terms of the
contract, it is likely that one of them will suffer financially. For
that loss, there ought to be a compensation process provided for by the
ORR.
Elsewhere in
the Bill, compensation is offered to parties adversely affected by
powers granted to the Secretary of State and the rail regulator. For
me, it follows that those who are forced to amend existing access
contracts should also be entitled to the appropriate financial
reimbursement and compensation. That strikes me as a just and
responsible thing to
do.
Mr.
Harris:
Clause 28 deals with two
matters. The matter relevant to the amendment is that the clause
secures the amendment of any remaining conflicting access rights when
they are outside the central tunnel area and are applied for in order
to complement Crossrail passenger services. To explain that further, it
is possible that a prospective Crossrail operator could not reach an
agreement on access rights with a facility owner outside the central
tunnel area. They will therefore ask the ORR to direct proceedings
under section 17 of the Railways Act 1993. When that procedure is
invoked, there may be existing access contracts that conflict with the
principal Crossrail passenger service, in which case the ORR needs the
power to amend
them.
The clause does
not permit amendment to access charges without undertaking an access
charge review under the 1993 Act. That would be the appropriate rail
industry mechanism for ensuring that there is a resetting to the
correct access charge payment between the parties affected by the
clause.
The
amendment would interfere with the ORR’s ability to amend the
access charges. That would be a perverse result for the holder of
access rights that are being amended as a consequence of Crossrail
contracts. If compensation is appropriate, it can be considered
separately. There does not need to be a power under the Bill to provide
for it. We have given undertakings to the industry during the Select
Committee stage of the Bill that we will, wherever possible, use
industry mechanisms, which have associated compensation arrangements.
That is the preferred solution of the industry. Where we need to adapt
those mechanisms, we will seek to agree suitable compensation
provisions with the ORR. I hope that that satisfies the hon. Member for
Wimbledon enough for him to withdraw the
amendment.
Stephen
Hammond:
I have listened intently to the Minister all
afternoon, but I must have missed something in those remarks. I do not
understand how the amendment would affect the ORR’s powers of
financial compensation. At the moment, the ORR is not allowed to make
the parties to the affected contract change the amount payable under
that contract. As the Minister says, there is a power to review the
appropriate access charges, but I do not understand how the amendment
affects that. I think that it would give more protection to railway
facility owners. From what the Minister says, I am still not clear how
it would diminish that. I would be grateful if he could clarify that
point.
Mr.
Harris:
My understanding is that the
effect of the amendment would be to interfere with the ORR’s
ability to conduct an access charge review, where it is necessary as a
consequence of the amendment of access contracts that conflict with the
Crossrail service contracts.
That is an accepted industry process. Because it introduces an
obligation on the ORR, the amendment interferes with its current
obligations.
3.30
pm
Stephen
Hammond:
I thought that this was going
to be relatively straightforward. Although the amendment may place
another obligation upon the ORR, I cannot understand how it conflicts
with the obligation that is already there. Will the Minister have
another go at trying to reassure me that this is something that
detracts rather than is additional? Looking at the wording of my
amendment, and from my understanding of the clause, notwithstanding his
explanations, that is exactly what the amendment does. It does not
detract, but is
additional.
Mr.
Harris:
The hon. Gentleman is right that
it is additional, but I do not see the need for it, given that the
industry measures that we are committed to using as part of the process
for resolving those conflicts already exist and our undertaking that
industry processes will be preferred to putting them on the face of the
Bill.
The
Chairman:
We are all running out of
energy.
Stephen
Hammond:
Yes, we are, and it is almost time for everyone
to go and have a cup of tea. [ Hon. Members:
“Hear, hear”] I think that that is the most animated that
the Labour Members have been, and I do not blame them; this is a pretty
technical Bill.
I
would like the Minister to say that he will write to me and really
clarify that point, and then I will be
happy to withdraw the amendment. I am not satisfied entirely that the
Minister has demonstrated that the amendment is not
necessary.
Mr.
Harris:
Of course, I am more than happy
to write to the hon. Gentleman. However, now that inspiration has
arrived, I shall add to my previous comments. The compensation payable
between Network Rail and train operators is dealt with separately to
arrangements for compensation under the normal industry processes to
which I have referred.
Stephen
Hammond:
We wish we had the benefit of such inspiration at
times such as
this.
Mr.
Harris:
It is not going to
happen.
Stephen
Hammond:
Not this year, but maybe soon. I would be
grateful to the Minister, not withstanding that last piece of
inspiration, if he would commit to writing to me about that, because it
is an important amendment and I am not sure that he has really
satisfied my doubts about it. I am happy, however, to ask the Minister
to write to me, and I beg to ask leave to withdraw the
amendment.
Amendment, by leave,
withdrawn.
Clause 28 ordered to stand
part of the
Bill.
Clause 29
ordered to stand part of the
Bill.
Further
consideration adjourned.—[Mr.
Watson.]
Adjourned
accordingly at twenty-seven minutes to Four o’clock until
Tuesday 27 November at half-past Ten
o’clock.
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