Clause
41
Arbitration
after referral under section
40(3)
Stephen
Hammond:
I beg to move amendment No. 24, in
clause 41, page 27, line 33, leave
out ‘results’ and insert
‘objectives’.
I accept that the amendment
might be described as an exercise in terminology and semantics.
Arbitration has come up a number of times in our discussions and we now
come to two clauses that set out how it will work in practice, as it
relates to the duty to co-operate. When I first read clause 41(1), I
was slightly taken aback. Arbitration is, by definition, a process by
which a third party settles a dispute between two persons or
organisations. The implication of the subsection,
however, is that the Secretary of State can directly arbiter as to the
outcome of an arbitration in which one party is the nominated
undertaker.
As we
know, the nominated undertaker could be an appointee of the Secretary
of State and could even be the Secretary of State herself. I would like
to give the Minister the benefit of the doubt and assume that that was
not the intention in drafting the subsection. After all, we do not want
the defendant to be able to tell the jury and the judge exactly what to
do.
In my exercise in
terminology, I suggest a wording that would remove the doubt. Replacing
“results” with “objectives” would make it
clear that the Secretary of State could have a say in what form the
outcome of the arbitration should take, but not in what the decision
was. I ask the Minister to consider those points. Perhaps he will look
favourably on the
amendment.
Mr.
Harris:
Perhaps we should rename the amendment the
“number of angels dancing on the head of a pin
amendment”. To set these matters in context, the clause sets out
the mechanism for disputes under clause 40(3) to be settled by
arbitration. The general provisions on arbitration are continued in
clause 62. Subsection (3), which the amendment would affect, allows the
Secretary of State to direct the arbitrator as to the overall results
to be achieved by the settlement. That is to avoid the possibility that
the outcome or result of the arbitration might prevent something that
is critical to the Crossrail
project.
I bear in
mind the criticisms that the hon. Gentleman has made on this and
previous clauses. Even if he has reservations, I hope he understands
that the results of an arbitration cannot allow the
construction of Crossrail to be impeded in any way. That is the only
caveat that the Secretary of State will have in mind when making those
directions. The arbitrator will have full control over the terms,
including as to compensation of the arbitration award, subject to the
rule that it must achieve certain practical
results.
The direction
of the Secretary of State will generally be only to facilitate the
completion of the Crossrail works within the agreed time scale or cost,
or to do with the subsequent maintenance of the all-important services
that Crossrail will deliver. Even then, the Secretary of State will
ensure that Crossrail is not delivered to the unreasonable detriment of
the rest of the rail
network.
The
amendment’s use of objectives in subsection (3) is the
angels-dancing-on-the-head-of-a-pin section. In terms of legal
semantics, it would ultimately miscast what is happening. In making a
direction, the Secretary of State has an objective concerning the
construction, maintenance or operation of Crossrail. In acting further
to the direction, the arbitrator will retain his original
objective—the fair resolution of a dispute—within any
parameters established by the direction.
To offer some further
reassurance to the hon. Gentleman, as with clause 40, this is likely to
be a fall-back power in practice. First, there is the general
reassurance for the rail industry of the Department’s intention
to work within normal industry processes as far as possible in
connection with the Crossrail project. Secondly, it is envisaged that
many of the works will be undertaken by railway operators that have a
direct interest in integrating Crossrail works successfully with their
own existing assets. Finally, some agreements are already in place
regarding those matters. I hope that the hon. Gentleman will consider
withdrawing the
amendment.
Stephen
Hammond:
I hear the Minister’s reassurance that he
expects this to be primarily a fall-back power. That does not
necessarily mean that we should allow fall-back powers to have a lower
test than we apply to other things. None the less, I hear that he
thinks that we are dancing on a pin
head.
Mr.
Harris:
Not you
personally.
Stephen
Hammond:
If only I could. I fully understand the
objectives. However, the word “results” has an
implication of trying to affect the arbitration and prejudge it. I have
listened to the Minister and am happy with his reassurance. I beg to
ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
41
ordered to stand part of the Bill.
Clause 42
ordered to
stand part of the Bill.
Clause
43
Transfer
of functions relating to
works
Stephen
Hammond:
I beg to move amendment No. 25,
in
clause 43, page 29, line 1, leave
out subsection
(2).
This is very much
a probing amendment. Clause 43 is necessary and, as I am sure the
Minister will point out, it repeats almost word for word what is in the
Channel Tunnel Rail Link Act 1996. However, just because there is a
precedent does not mean that we should not examine the powers or
redefine them.
The
clause refers to the transfer of statutory powers and duties relating
to works on land acquired by the Secretary of State for the purposes of
Crossrail. It makes perfect sense that if the Secretary of State
acquires such land he should also acquire any related statutory powers.
I want to probe the Minister about exactly what subsection (2) adds to
that process. It provides for
“the further transfer...of a
power or duty transferred under subsection (1) or this
subsection.”
Can he
explain exactly what that is intended to mean in practice and what are
the further transfers that he anticipates he needs the power to cover?
In the spirit of this probing amendment, I hope that he can clarify
that matter for
me.
Mr.
Harris:
Again, to set the amendment in context, when the
Secretary of State acquires from a railway operator land on which there
are works that have been
authorised by a previous statute, clause 43 allows for the transfer to
the Secretary of State or the nominated undertaker any statutory powers
or duties relating to those works and previously exercisable by the
railway operator. The clause, oddly enough, is precedented in the 1996
Act—a fact of which I would not be so dismissive as the hon.
Gentleman is tempted to be.
Mr.
Field:
There is great danger that we get bad drafting if
we allow too much legislation simply to consider
precedent. I say that as someone who practised briefly as a solicitor
in the early 1990s. Whenever a novel problem arose there was a
temptation to ask, “Where’s the precedent?” We are
joking about this to a certain extent, and I accept that there are
similarities between the two pieces of legislation that make it logical
at least to keep an eye on how the clauses are
drafted.
There is an
issue to consider about parliamentary drafting if the
draftsman’s first instinct is, “Let’s look at the
precedent and see how we can mess around with it,” when the
legislation is 11 years old. That is not a terribly sensible
approach. Our approach should be to ask what we are trying to achieve
to ensure that this is robust legislation for decades to come. We
should not simply justify it by looking at precedent. It might be easy
to draft and slightly easier for the Minister to justify certain
clauses, but we need to look much more sensibly at what the Bill is
trying to
achieve.
Mr.
Harris:
I agree with the hon. Gentleman. It would not be
appropriate or justifiable simply to say that because the clause has a
precedent that alone justifies its existence in subsequent legislation,
which is why I want to explain why we wish to follow that
precedent.
The 1996
Act is the closest legislative comparison we have to the Crossrail
project. It was a hybrid Bill that introduced a multi-billion pound
infrastructure project that was, at the time, the largest civil
engineering project in Europe, as Crossrail will be when it is under
construction. It is therefore justifiable to consider the precedent of
the 1996 Act. It was robust legislation that, crucially, worked, which
is what we want the Bill to do. However, I accept the hon.
Gentleman’s point that precedent alone is not
justification.
Subsection
(2) allows the Secretary of State further to transfer to herself or a
nominated undertaker any of the powers or duties previously transferred
from a railway operator. If subsection (2) were deleted, as proposed by
the amendment, those powers or duties, after being transferred, could
not be transferred again. That would adversely affect cases in which
the same land was needed for works by different nominated undertakers,
which is entirely possible—I would say likely—especially
in relation to construction
sites.
The result
would be that when the first nominated undertaker handed back land so
that the second nominated undertaker could undertake his work, the
Secretary of State would not be able to ensure that the
powers and duties of the original railway operator
transferred with the land. That would be an unsatisfactory outcome, to
say the least. It would not be in the interests of the continued proper
management of the railway. I hope that that is explanation enough for
the hon. Member for
Wimbledon.
12
noon
Stephen
Hammond:
Indeed, it is. I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
43 ordered to stand part of the Bill.
Clauses 44 and 45 ordered to
stand part of the
Bill.
Schedule
11 agreed
to.
Clause
46
Transfer
schemes
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to discuss the
following: Government new clause 1— Transfer schemes: tax
provisions.
Government
new schedule 1—Transfer schemes: tax
provisions.
Mr.
Harris:
Clause 46 brings into effect schedule 12, which in
turn sets out the power of the Secretary of State to make schemes to
transfer property, rights and liabilities. At this point would it be
appropriate to move straight on to Government new
clause 1, Lady
Winterton?
The
Chairman:
Yes, all three measures are being considered
together.
Mr.
Harris:
The new clause will give effect to a new
schedule relating to the tax treatment concerning
statutory transfer schemes. New schedule 1 makes provision relating to
tax consequences that could otherwise arise in relation to the
transfers of property, rights and liabilities under transfer schemes
made under schedule 12. Broadly, it ensures that inappropriate tax
charges and reliefs are not triggered as a result of a transfer scheme
and provides continuity of tax treatment where
appropriate.
At a
level of principle therefore, an understanding of
schedule 12 is—it says in my
briefing—quite straightforward. It is intended to cater for the
various scenarios concerning the transfer of assets and liabilities in
the context of construction and delivery of Crossrail. It is right to
draw Members’ attention to the fact that because Crossrail will
not be completed for a number of years, we are looking to take a power
by statutory instrument to make further modifications to the tax
treatment of transfer
schemes.
We consider
that that is necessary in order to deal with the inevitable but
unforeseeable future adaptation of the tax system. Expressed at a level
of principle, the schedule is straightforward, but the detail is
somewhat technical and I do not propose to go into it in great depth. I
hope that what I have said today and the explanation in my letter of 19
November 2007, which is available in the Committee Room, will persuade
hon. Members to give these measures their
support.
Stephen
Hammond:
I am grateful to the Minister for that opening to
this short debate. While schedule 12 may well be quite straightforward
in principle, those of us who are not of the profession that he so
likes found some of the detail quite impenetrable at
times.
The
Chairman:
Order. The hon. Gentleman referred to schedule
12. We are dealing with new schedule
1.
Stephen
Hammond:
I stand corrected and I thank you for
that.
Jeremy
Wright (Rugby and Kenilworth) (Con): Even the title is
impenetrable.
Stephen
Hammond:
My hon. Friend is quite right. The detail is
difficult and technical and it is has been difficult for some of us to
explore it properly. We are grateful to the Minister for his letter of
19 November. There is just one thing on which I would like him to
give us a little more detail. He used the phrases
“inappropriate tax charges and reliefs” and
“inappropriate tax consequences” several times, but could
he clarify what he means by inappropriate and give us one or two
examples of what is inappropriate? If inspiration does not arrive in
the normal way, I will be happy for him to concede that he might need
to write to me to define that term.
Mr.
Harris:
I would be more than happy to dazzle the hon.
Gentleman with the details that he asked for, but I will save the
Committee some time and simply write to him with them and with some of
the examples that he asked for. I hope that that will satisfy
him.
Question put
and agreed to.
Clause 46 ordered to stand
part of the Bill.
| 
