Crossrail Bill

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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. 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.
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