High Speed Rail
(London - West Midlands) Bill
The Committee consisted of the following Members:
Neil Caulfield, Joanna Welham, Committee Clerks
† attended the Committee
The Chair: We begin with the question that clause 37 stand part of the Bill. To help matters, I have decided that it will be convenient to consider the schedules, and therefore schedule 27 will be considered with clause 37.
The Minister of State, Department for Transport (Mr Robert Goodwill): Good morning, Mr Hanson. Clause 37 introduces schedule 27, which contains provisions to disapply various controls imposed by local Acts relating to London, Oxfordshire, Staffordshire and the west midlands. Similar provisions were included in the Crossrail Act 2008, with regard to the enactments having effect in London. I will briefly list the Acts that the clause will include: the London Squares Preservation Act 1931; the London Overground Wires &c. Act 1933; the London Building Acts (Amendment) Act 1939; the West Midlands County Council Act 1980; the Staffordshire Act 1983; the Oxfordshire Act 1985; and the Greater London Council (General Powers) Act 1986.
Whyhave we disapplied those Acts, and what does that mean in practice? Those local Acts provide a range of geographically specific restrictions that are not appropriate in the case of a major railway project such as phase 1 of High Speed 2. The restrictions include provisions such as the control of dust, and lighting, which would impede or delay the construction of phase 1 and which are rendered unnecessary by the environmental minimum requirements.
Mr Goodwill: Clause 38 relates to the duties of the Office of Rail and Road, as set out in section 4(1) of the Railways Act 1993, and ensures that the requirement for the ORR to facilitate the construction of phase 1 of HS2 is explicitly set out as one of its objectives. The ORR
Mr Goodwill: Clause 39 has the effect of removing the need for an operating licence under section 6(1) of the Railways Act 1993 for the HS2 infrastructure or train operator when the line is being tested prior to opening in 2026. The exemption means that the testing of phase 1 of HS2 will have the benefit of the defence against nuisance provided by the 1993 Act. During that period, the railway will not have commercial services and therefore there would be no cost, income, services or passenger elements to regulate.
Clause 39 accordingly ordered to stand part of the Bill.
This amendment would require the Secretary of State to reach a ‘reasonable’ decision on closures, which could be challenged under this act if not reached reasonably.
Amendment 18, in clause 40, page 15, line 8, leave out from “expedient” to “High Speed 2” and insert
This amendment would limit the Secretary of State’s powers to close any line or station and restrict it to the Northolt and Acton Line (also known as the “Wycombe Single Line”).
“(1A) If the Secretary of State makes a direction under subsection (1), he must make a written statement to Parliament within 28 days, setting out his reasons for making such a direction.”
If the Secretary of State makes a direction under subsection (1), this amendment requires the Secretary of State to make a written statement to Parliament within 28 days, setting out the rationale for his decision.
Amendment 19, in clause 40, page 15, line 15, leave out
This amendment would remove the station closure powers in this Clause.
Andy McDonald: As drawn, the clause gives the Secretary of State power to disapply the closure provisions of the Railways Act 2005 and enables the Secretary of State to close existing services, stations or parts of the rail network that are necessary or expedient because of the construction or operation of phase 1 of HS2. Amendment 17 would require the Secretary of State to reach a reasonable decision on closures that could be challenged under the High Speed Rail (London - West Midlands) Act if not reached reasonably.
“The Secretary of State may at any time before Phase One of High Speed 2 is ready for commercial use direct that the statutory closure provisions…are not to apply to any discontinuance which the Secretary of State considers necessary or expedient because of…the carrying out…of works”.
Although we understand and accept that it is necessary for the Secretary of State to disapply statutory closure provisions, we are concerned that the powers granted by the Bill as it stands would be too far-reaching and are unnecessary. We are attempting to place some proper and reasonable parameters around the powers that we agree the Secretary of State should have.
When the Minister responded to our concerns in previous clauses about excessive powers granted to the Secretary of State, he explained that the Government have taken a belt-and-braces approach. There seems to be a proliferation of belts and braces. Perhaps it is time to think about getting a better-fitting pair of trousers rather than to keep adding different pieces of apparatus to keep them up.
TheHS2 project shares cross-party support. Labour supports the Government’s efforts to pass the legislation necessary for us to start constructing this important and transformative piece of national infrastructure. We do not disagree that, in some instances, it is better to be safe than sorry. However, it is our job as legislators to ensure that unnecessary powers are not granted under the guise of erring on the side of caution, which is the case with clause 40. The disapplication of statutory closure provisions means the closure of existing services, stations or parts of the rail network right up until the Secretary of State has informed Parliament that phase 1 is ready for general use. The clause exceeds the belt-and-braces approach so we have tabled a series of amendments that would particularise the limit of the powers granted to the Secretary of State and increase accountability and transparency.
Amendment 17 would introduce the familiar concept of the Secretary of State having to reach a reasonable decision on closures that could be challenged under the Act if not reached reasonably. It demands a short examination of what constitutes reasonableness, to which lawyers have given a great deal of attention over the years. I will submit that it is not a daunting concept, nor one that should in any way trouble the Minister. Our legal system has defined reasonableness, quite sensibly, as,
“Whether a belief is reasonable is to be determined having regard to all the circumstances”.
Weare in Clapham omnibus territory. To reject the notion of reasonableness would be to imply that the way was clear for the Secretary of State to behave unreasonably. We would not wish to see our Government Ministers behaving unreasonably—perish the thought.
“a reasonably educated and intelligent but nondescript person”,
Reasonablenessis an important measure for introducing some transparent objectivity into the decision-making process. When significant and wide-ranging statutory powers are created, it is important to ensure that there are proper checks and balances. It is an important principle in our legal system, and was considered again quite recently in paragraphs 1 to 4 of the UK Supreme Court judgment on the case of Healthcare at Home Ltd v. Common Services Agency  UKSC 49.
Theconcept of reasonableness as a prerequisite for decision making is well embedded in many legal jurisdictions, notably in Canada. It is also described, with some local adaptations, in Australia, where in New South Wales the Clapham omnibus traveller has been replaced by “the man on the Bondi tram”, a now disused route in Sydney. One can only hope that the Bondi man’s judgment was applied in deciding whether it was reasonable or otherwise to close the Bondi tram route. In Melbourne, Victoria state, it is the person on the Bourke Street tram whose judgment is applied. We can only hope that that tram service is still running. In Hong Kong, the equivalent expression is “the man on the Shaukiwan tram”, although I think I might be running out of track now.
By introducing the word “reasonably”, we merely wish to ensure that, on any objective assessment, the decision to close a service, line or station can be readily identified as having been reached properly and reasonably on the basis of all the information that the Secretary of State has in his or her possession at the time. The amendment to insert the concept of reasonableness is the model of reasonableness itself, and I trust that it can command the support of the Committee.
Amendment 18 relates to a specific issue concerning a particular line. It would limit the Secretary of State’s blanket power to close any line or station by restricting the power to the Northolt and Acton line, which is also known as the Wycombe single line. The way the amendment would work speaks for itself. HS2 Ltd’s information paper B6 states:
“Theonly line that would close is the eastern end of the Northolt and Acton Line…between Old Oak Common and Park Royal.”
As there are no plans to close other lines, the onus is on the Minister to justify the Secretary of State receiving that broadest-ranging blanket power, if he does not support the amendment to limit the power to the specific plan to close the Wycombe single line. In short, that is the one we know about—the only closure being contemplated —so why not say so and limit the power?
Amendment 20 speaks for itself. It would introduce an important element of accountability and transparency to the powers. If the Secretary of State chooses to close
Amendment 19 would remove the statutory powers in their entirety. We have set that out separately, because HS2 Ltd’s information paper B6 says that no station closures are planned. There are no intermediate stations on the Wycombe single line, so this amendment removes the station closure powers in the clause altogether. Again, the onus is on the Minister to justify the blanket powers to close stations, as part of the construction and operation of phase 1, where no such closures are expected. As I interpret matters, as there are no such planned closures, it seems illogical to have the power to close stations. It would be a dangerous power for a Secretary of State simply to decide to close a station for reasons we know not—nor would we know where his axe may fall if he retrieves it from the Beeching store.
Many people would view such a power with great trepidation. There is nothing in the Bill or in any document describing or discussing the undertaking as a whole that I am aware of which would render it necessary for the Secretary of State simply to use the powers that the Bill currently presents, or perhaps for some unknown future Secretary of State to abuse such powers to achieve the closure of a station or stations for purposes totally outwith the contemplation of the promoters of the Bill or the nature and intent of the overall scheme.
This is a bad power and it should not remain in the Bill. If the Minister thinks it is necessary, we would like him to inform the Committee whether HS2 Ltd’s information paper B6 stating that no such station closures are planned still obtains. If not, can he state clearly which stations are within his contemplation of such closure or within the contemplation of the Ministry or promoter as being earmarked, considered or contemplated for closure? The users of any such stations and the residents in the areas of the stations will certainly wish to know whether their station is under threat. Undoubtedly, they would wish to express a view as to whether they were content with any such proposal, whether they objected and would otherwise wish to make representations.
The excellent Select Committee went through a most rigorous and robust process to listen to objections and petitions about the disruptions and land loss that the scheme necessarily causes. It would be totally unacceptable for others who may be affected by subsequent plans or announcements to close any such stations to be denied the same degree of scrutiny and the ability to challenge. There is nothing in clause 40 to describe any form of scrutiny of the Secretary of State’s decisions exercised under the clause, nor is there any statutory right of challenge. Given this Government’s attack on citizens’ ability to challenge the lawfulness of Government decisions through the judicial review procedure, there can be little or no confidence that any person will be able to challenge or contest a decision so made.
We considered extending our amendment to cover the other elements of subsection (2), as much the same considerations apply to the implied potential closure of passenger railway services in sections 22 to 25 of the Railways Act 2005 and to the discontinuance of the operation of passenger networks under sections 26 to 28 of the Act. That said, our amendment is restricted to the discontinuance of the use of or operations of stations, and I trust that the Minister is prepared to accept it.
Mr Goodwill: I am pleased that the hon. Gentleman mentioned the Clapham omnibus. I had the great pleasure last week of visiting the Wrightbus factory in Northern Ireland, which builds the Boris buses that ply their trade so successfully around this city, although I must add that other double-decker manufacturers are available, including, dare I say, one based in my constituency.
May I allay some of the hon. Gentleman’s fears about the reasonableness of what we intend and the proportionality of what we are doing? It is reasonable for him to raise these issues, but I hope that I can allay his fears. Clause 40, to which the amendments apply, deals with the disapplication of statutory closure provisions and provides that the Secretary of State may, before phase 1 of HS2 is ready for commercial use, disapply the closure provisions of the Railways Act 2005 in the case of closures that are necessary or expedient due to the construction or operation of phase 1 of HS2.
London TravelWatch, the passenger representative body for the capital, asked for an explanation of the power and its expected use. We have already responded, stating that there are no station closures planned as part of the construction and operation of phase 1of HS2, and that the only line that would close is the eastern end of the Northolt and Acton line, known as the Wycombe Single, between Old Oak Common and Park Royal, which currently carries one weekday passenger service from London to West Ruislip.
The disapplied closure provisions set out what must be done in terms of notice, consultation and provision of information in the event of a proposal to close existing services, stations or parts of the rail network. There are services that may run with a reduced frequency as they are replaced by alternative services in phase 1 of HS2. The power in the clause does not apply to such services, as the Secretary of State may not exercise the power after he has notified Parliament that phase 1 of HS2 is ready for commercial use. Once it is commercially open, the Railways Act 2005 procedures come back into force.
The clause ensures that phase 1 of HS2 can be built efficiently, as the decision to construct phase 1 of HS2 will have been approved by Parliament. We believe it is reasonable to disapply the closure procedures during construction. The proposed closure of the “Wycombe single” and its impact were set out in the environmental statement, on which the public were consulted. The issue of the Wycombe single was also raised in petitions, meaning that Parliament had full opportunity to consider it. All of that means that going through the full closure procedures would be an unnecessary duplication. Phase 1 of HS2, of course, is about adding capacity to the rail network, not reducing it. The power can be used only for closures that are necessary for the construction and operation of phase 1 of HS2, and currently we have identified only one that is necessary.
Turning specifically to the amendment, as I said, clause 40 is essential if phase 1 of HS2 is to be delivered efficiently and effectively. However, I understand the importance of getting the clause right to ensure balance. As I mentioned, London TravelWatch asked for an explanation of the power, and I responded separately. It is important to remember that clause 40 as proposed would apply only during construction. When the line is operational, it will not apply.
As I said previously, we have sought not to legislate unless necessary. I do not believe that it is necessary to insert the word “reasonable” into the clause, as in amendment 17; it is inherent. Inserting “reasonable” in that context would cast doubt on other provisions of the Bill. Similarly, I do not feel it necessary to remove the word “expedient” as amendment 18 would do. We would still behave reasonably. As to amendment 20, the Secretary of State would need to be satisfied that any closure was appropriate, having worked closely with the relevant railway operators, so I do not think any such closures require a parliamentary process.
Amendments 18 and 19 would, in relation to the line and the stations respectively, limit the power to the closure of the eastern line end of the Northolt and Acton line—known as the “Wycombe single”—which currently carries one weekday passenger service, and remove the ability to close stations. I repeat that at present there are no station closures for the delivery of HS2, and the Wycombe single is the only line that we expect will need to close. That was outlined in the environmental statement. However, I must stress that the design of HS2 is at an outline stage, so we cannot guarantee that other closures will not be necessary. Therefore a level of flexibility is involved. Currently there are no stations that have been earmarked, or are being contemplated, for closure. The provision is purely about allowing some flexibility, should unexpected situations occur.
I hope that what I have said reassures the hon. Member for Middlesbroughthat the amendments are not needed, and that in some cases they could not be passed if we are to deliver HS2, and that he will withdraw the amendment.
Mr David Anderson (Blaydon) (Lab): To take the Minister back to what he said about flexibility, which I understand, if it were decided that some stations needed to go, what degree or level of consultation would take place?
Mr Goodwill: As I say, we are not proposing that. There would certainly be wide consultation. In this theoretical case that we cannot actually identify, there would need to be provision for the passengers who used that station. Indeed, if there were plans to build a new station, of course that would mean closing the old station that it was to replace.
AsI have said, the provision is purely another example of braces and belt, in case we should find ourselves in the unexpected situation of needing to close additional lines or a station. The clause would allow us to do that, but I have not heard even a hint that we might need to close stations. Indeed, HS2 is about increasing capacity on the line, and people’s opportunity to travel. That is why it has been welcomed across the political divides in the House.
Ihope that the hon. Member for Middlesbrough will withdraw his amendment and accept at face value my assurances—“reasonably” is my middle name, for goodness’ sake—that we certainly do not have a hidden agenda that the clause is intended to facilitate.
Andy McDonald: I would not suggest any hidden agenda at all. If “reasonable” is the Minister’s middle name, why not put something in the Bill? To suggest that doubt might be cast on the ability to construct HS2 is something of a stretch. Surely we should all behave reasonably. To reject the amendment is to leave the way open to do otherwise.
I am not particularly persuaded by the argument about a need for flexibility, when no closures have been identified. The Bill has been pored over in minute detail. The plans are extraordinarily well known. A suggestion by the Minister that as construction develops something might be unearthed that would demand the closure of a station would send shockwaves around the communities along the lines. He has mentioned the very line that has been identified—the Wycombe single; and that is good. What I am driving at is that we should be specific about the closure plans.
Ihear what the Minister says, and that he has requested me to withdraw the amendment, but in the first instance the insertion of the word “reasonable” is eminently reasonable. I see no reason to withdraw that.
Mr Goodwill: The point I was trying to make was that the specific use of the word “reasonable” in the clause might throw doubt on the reasonableness of other areas where we have not used that word. I stress that this Government will behave reasonably at all times; that reasonableness contributed to a large degree to the electoral success we had last year. We are always reasonable in all things.
Andy McDonald: I am grateful to the Minister for that, but putting this requirement in the Bill would leave the matter in absolutely and utterly no doubt, and it would put in that check and balance to ensure that is possible to have an objective examination of the decision to close. Without it, the Secretary of State is beyond criticism and incapable of being held to account. It is a basic principle of English law that Ministers in these circumstances should behave with all reasonableness.
That is why I indicate now, Mr Hanson, that I wish to see amendment 17 put to a vote; if you wish me to continue with my approach towards the rest of the amendments, I will. It has been very clearly established that the current intentions only extend to the Wycombe single line and I am content with what the Minister has had to say about that. So it is not my intention to trouble the Committee any further with amendment 18.
I turn to amendment 20. A simple requirement to make a written statement to Parliament following the making of such a decision is hardly an onerous provision and I would expect the Government to make such a statement in any event, but putting the requirement in the Bill would leave absolutely no doubt about it.
Andy McDonald: I am grateful to the Minister for that. I have only been here a very short time—three years or just a bit more—but there have been so many occasions when I have gone back to my constituency on a Friday night and seen an announcement made that has snuck out when we are not here, or that has been made during a recess. I am very much aware of the parliamentary procedures available to us all to seek an urgent question, or hopefully the Minister would come along and make a statement, but this amendment would leave it in absolutely no doubt that there was a formal, statutory requirement for a Minister to come along and make a statement when any of these plans were being contemplated, and that would put it in the Bill and give it a degree of certainty that otherwise would not exist.
“(1A) If the Secretary of State makes a direction under subsection (1), he must make a written statement to Parliament within 28 days, setting out his reasons for making such a direction.”—(Andy McDonald.)
If the Secretary of State makes a direction under subsection (1), this amendment requires the Secretary of State to make a written statement to Parliament within 28 days, setting out the rationale for his decision.
Mr Goodwill: I shall be brief. Clause 41 relates to other railway legislation, etc. It introduces schedule 28, which sets out the application of general legislation relating to railways to phase 1 of HS2. That includes certain disapplications and incorporations.
Forexample, paragraph 1 of schedule 28 disapplies the Highway (Railway Crossings) Act 1839, which requires the railroad provider to maintain gates at each end of the crossing and employ a person to open and close said gates. That, of course, is not required today.
Conversely, schedule 28 incorporates provision that makes it an offence for a person to obstruct the lawful construction of the authorised works. All of those are to ensure that the HS2 railway can be constructed, maintained and operated effectively.
In some instances, modifications have been made to reflect modern times, such as increasing the maximum fine for trespass under the Railway Regulation Act 1840 in its application to phase 1 of HS2. I could go on to talk about the restriction of diesel locomotives at the North Pole depot but I will spare the Committee that particular interesting detail.
Andy McDonald: I was looking forward to hearing about the diesels at the North Pole depot; I feel cheated. I was a little surprised when I first saw that the schedule referred to the application of other railway legislation, etc., but it would be churlish of me to say that shows a lack of precision, because it is perfectly clearly set out what the “etc.” is all about.
I would like the Minister to consider this point. He has highlighted that with HS2 there will not be roadworks and barriers; it is a continuous route. Will he comment on the issue of safety and trespass around the HS2 line? It is markedly different from a conventional line. What specific measures have been introduced? It is clearly an offence to trespass upon a railway. Are there any additional provisions specific to HS2 that we should consider?
Mr Goodwill: I am happy to comment on that. Safety on the railway is of vital importance, not just for those who travel on the railway but those in proximity to the lines. One real issue that affects our rail network in this country is suicide. Network Rail, on the existing classic network, and I am sure HS2 will be aware of what we can do to try to detract from that—for example, to ensure that crossings over the railway are not easy to use in that regard.
The line will be secure, unlike some of the traditional network. There will be no level crossings or points crossings on the railway. We will be using flyovers, so the trains will not need to slow down to use points.
Ihope that allays the hon. Gentleman’s fears, but he is absolutely right: safety is paramount. Having seen some of the issues on our rail network in the past, I am delighted that there will be state-of-the-art rolling stock and state-of-the-art signalling systems. The training that will be available to staff will be second to none and, indeed, the British Transport police will be receiving training in operations on this part of the line, as they already do in delivering such a fantastic service.
Question put and agreed to.
Mr Goodwill: The clause refers to co-operation. That is a wonderful word and, given the political consensus across Parliament, it would be a very good word to describe how we are making progress on this great project, which will benefit the whole country.
Clause42 enables the nominated undertaker to require other railway facility operators to enter into agreements to support the expeditious delivery of phase 1 of HS2. Similarly, the controller of a railway asset may require the nominated undertaker to enter into such an agreement. In default of agreement between the parties, the terms of such an agreement will be determined by arbitration under schedule 29, which is introduced by subsection (4). The arbitration process is outlined in schedule 29 and is in addition to the arbitration process outlined in clause 63. However, this does not apply to any matters of agreement that are within the remit of the ORR. This arbitration process is to determine agreements that govern relationships between railway operators where particular policy issues apply .
Question put and agreed to.
Question proposed, That the clause stand part of the Bill.
Mr Goodwill: The clause provides for the transfer of functions relating to works. It provides that if the Secretary of State acquires any land from a railway operator on which there are works that are already authorised, the Secretary of State may, by order, transfer the responsibility for those works to the Secretary of State. Conversely, if a railway operator acquires land from the Secretary of State on which there are any works authorised by this Bill, the Secretary of State may, with the railway operator’s consent, transfer any responsibility relating to those works to the railway operator.
Question put and agreed to.
Question proposed, That the clause stand part of the Bill.
Mr Goodwill: The clause applies to the nominated undertaker, which is not a funeral director, as I think we mentioned on Tuesday. It allows the Secretary of State, by way of an order, to appoint a nominated undertaker or undertakers to build phase 1 of HS2. The nominated undertaker would therefore be able to draw on Bill powers on behalf of the Secretary of State to deliver the railway. Delegating authority to a delivery body is common practice on major rail infrastructure schemes. Subject to readiness, we would expect HS2 Ltd to take on that role. However, we have yet to fully determine who the nominated undertaker will be. For example, it may be prudent for different bodies to build different elements of the railway.
Andy McDonald: We are talking about Bill Powers, not the left half for Aston Villa in 1956—no, he does not exist—but the powers contained within the Bill. My singular concern is about the wording of subsection (1)(a), which says:
“The Secretary of State may by order…appoint a person specified in the order as the nominated undertaker for such purposes of such provisions of this Act as may be so specified”.
The Minister made clear in his opening remarks—but I want to impress this on him—that this is about building HS2 and nothing more. By trying to extend the remit of the clause, we could give the nominated undertaker carte blanche in terms of all the powers in the Bill. It is probably not the Minister’s intention that the powers be limited during the building of phases 1 and 2. I have a slight anxiety that, if read in another way, those powers would extend beyond building to compulsory purchase and acquisition, development and even the closure of stations, which we discussed a few moments ago. Will the Minister help me with that now, or should we return to it at a later date so that he can look into it? I have a slight anxiety that the phraseology is far too wide.
Mr Goodwill: If I may reassure the hon. Gentleman, as I said in my opening remarks, the clause is about undertakers to build phase 1 of HS2. It is not about the operation of the railway. Later, we may have an opportunity to discuss the way the operation of the railway may be delivered, but it is early days to rush those fences. In this case, we expect spades in the ground next year and, therefore, the nominated undertakers will be those charged with the delivery of the railway. There will be a number of works, not only the basic construction. A lot of the environmental works could well be given to other undertakers in some cases. At the moment, HS2 Ltd will be the main delivery body and that should be made clear.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
“(2) If property or rights are transferred from HS2 Limited or a wholly-owned subsidiary of HS2 Ltd to any body that is not a public body as defined by section 25(1) of the 1993 Railways Act, a fee must be received which reflects a fair market evaluation of that property or right.”
Clause 45 allows the Secretary of State to transfer HS2 Ltd’s property and rights to any other body. This amendment would prevent the Secretary of State from transferring assets to a private body without receiving a fair price.
Clause 45 is critically important and will undoubtedly be a matter of some contention between the Front Benchers. I want to explore it in some detail. Although we will have an interesting discussion about how railways ought to be owned and operated when we discuss new clause 21, the amendment is unashamedly hewn from the same wood. There is a huge amount of consensus on the need for the construction of HS2, but the issue of whether the railway service—its infrastructure and its operation—should be owned by the British public and run as a publicly owned operation represents clear blue, or red, water between the Government and Her Majesty’s Opposition. We will return to that fundamental issue in due course.
The amendment speaks to the concerns that property or rights that are transferred from HS2 Ltd, or a wholly owned subsidiary of HS2 Ltd, to any body that is not a public body might not be in return for a fee that is a fair market evaluation. The Railways Act 1993 sets out which those bodies are in clear detail: a Minister of the Crown, a Department or any “other emanation” of the state, a local authority, the Greater London Authority, Transport for London, any metropolitan county passenger transport authority, any body whose members are appointed by a Minister of the Crown, and so on.
I will make myself abundantly clear: we in the Opposition do not want any of the considerable publicly funded investment finding its way into private hands. We are vehemently opposed to any break-up and/or privatisation of our railway infrastructure and we fear that the power in the clause may be used, in part, in pursuit of that objective. The public will have paid a handsome price for HS2 and they should not have it or any part of it taken from under them at a knock-down price.
The amendment is about working in the best interests of taxpayers and to ensure that they are not sold short. The taxpayer is our concern, not the private entity that might have transferred to it property and/or property rights which of themselves had been the product of the taxpayer’s significant investment—the sum of £55 billion, or thereabouts. Calls upon the nation’s tax receipts are onerous and to be used wisely, so it is essential that we ensure that those moneys that have created such valuable assets—money that could have served other urgent and serious demands in our communities—are not simply siphoned off into the private sector.
Our concerns are not idle ones, but are extremely well founded. We are dealing with a potential asset sale as I speak, namely the announcement by Network Rail of its intention to sell some 18 railway stations on the existing network. It is of immense concern that, should any such sales go ahead, the receipts will be those of a fair market valuation and not simply from a fire sale to reduce Network Rail’s debts. In advance of the Nicola Shaw review, we hear that Network Rail is to sell off 18 major stations, including Waterloo, Reading and Leeds, in an effort to cut its £50 billion debt. If memory serves me right, Reading has benefited from public investment of some £897 million. I am sure that the public will be watching carefully as to what happens to the ownerships of those and other named stations.
Thesame concerns apply to HS2. I am afraid that the Government have form and that we have less than good experience, to say the least, of sell-offs of publicly owned assets that failed to secure fair or market value for the taxpayer. We need cast our minds back no further than the disastrous sell-off of the Royal Mail, which is still fresh in the minds of millions of voters. The Select Committee on Business, Innovation and Skills found that taxpayers may have lost out on about £l billion from the undervaluing of Royal Mail. Apparently, the Government feared failure and acted on bad advice over the Royal Mail stock market flotation. As we know, the shares fluctuated widely with an initial price of 330p which jumped as high as 618p and now stands somewhat lower than that. The then Business Secretary, Vince Cable, said:
presumably meaning the BIS Committee—
“now have the benefit of hindsight, which we didn’t have at the time. We sold at a price that was regarded as the best that could be achieved in the context in which we sold it.”
But the Chair of the BIS Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), said:
“It’s very important that when the government does sell off a government asset, it does so through a process that quite clearly demonstrates that nobody selling it, nobody advising it, has a conflict of interest”.
We do not want a repeat of the conduct of the likes of Lazards who were working on the inside on the sale of Royal Mail as Government advisers and then, because of the erection of an invisible virtual Chinese wall, were able to fill their boots on the acquisition of Royal Mail shares from the profits they achieved in a few short hours after launch. A number of individuals, some with high-profile political associations, also personally cashed in. We simply do not want HS2 to be turned into a profiteering exercise at the public’s expense.
Youwill recall the evidence unearthed by the Public Accounts Committee under the expert chairing of my right hon. Friend the Member for Barking (Dame Margaret Hodge). It revealed that Lazards advised the Government not to increase the price of Royal Mail shares, despite widespread fears they were hugely undervalued, and made a profit of more than £8 million by immediately selling the company’s stock. My right hon. Friend the Member for Barking said that Lazards
Asubsequent report by the National Audit Office found that the Government decided against increasing the flotation price of Royal Mail beyond 330p a share because of warnings from Lazard & Co. Government advisers were asked point blank at the Committee chaired by my right hon. Friend the Member for Barking how they could get it so wrong that it cost the taxpayer £750 million on that one day.
Vince Cable, the then Secretary of State for Business, Innovation and Skills, said that the postal service should,
Somuch for that hope, Mr Hanson. As you and I both know, the road to hell is paved with good intentions .
Andy McDonald: I am grateful to my hon. Friend for making that point. It is absolutely imperative that we learn lessons from previous experiences, and that is what the amendment is intended to address. We do not want to keep repeating these errors and finding the taxpayer short-changed. Certainly, when there is something so prestigious and ambitious and it has widespread support, we do not want its reputation tarnished in any way. We want it to be sustained.
Andy McDonald: Perhaps I have not made myself clear. The purpose of the amendment is to ensure a fair market price. We are trying to ensure that if the circumstances outlined arise, the process is carried out entirely properly and we are not complaining after the event that we have been badly short-changed. The intention is simply that.
Alan Brown (Kilmarnock and Loudoun) (SNP): I agree with the hon. Gentleman on obtaining a fair and reasonable market price, and I agree about the problems he highlighted about previous sales. I agree with the amendment, but first, is there not a wider issue on transparency; and secondly, even with the amendment, the Government could be completely subjective in how they advise and how they interact with the advisers on what advice to take. That will be crucial as well.
We in Parliament clearly have many opportunities to monitor and scrutinise the sales of publicly owned property, but one could be forgiven for questioning whether all our parliamentary devices really produce any proper advance policing of such activity. We appear to be ever-wise only after the event, and the amendment is a modest attempt to address that failing.
“the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently, and without compulsion.”
That is immensely helpful, and the international valuation standards give further guidance that market value is a concept distinct from market price, which is the price at which one can transact. Market value is the true underlying value, according to those theoretical standards.
Given the terms of our amendment, we could have a lengthy and interesting debate about what constitutes a fair market evaluation, but the public know only too well, especially given that the Public Accounts Committee pores over deals after the event when it is of course far too late. The bottom line is that the British public know when they have been scammed, and we do not want to be crying foul after a damning PAC report on the sale of HS2 assets in the years ahead.
I am sure that all members of the Committee unequivocally endorse the need to ensure that the taxpayer receives a fair deal should any assets be sold. Given that, I trust that our amendment will have the full endorsement and unanimous support of the Committee. We consider the amendment to be hugely important, so I intend to press it to a vote, although I look forward to hearing that the Minister accepts the reasonable point we are making and our reasonable amendment to secure fair market prices for any assets sold.
Mr Goodwill: I get the impression that we are now into territory that is not as consensual as it was, although we would all agree that it is important to get the best possible value when assets owned by the state are transferred to a buyer or via a share issue to the general public. It is absolutely right that if someone is selling off what some people might call the family silver they get a fair value, although that perhaps would not apply to the family gold under the Brown Government—in hindsight, that was not such a good deal.
I will not speculate too much on some of the issues that the hon. Gentleman raised, such as Royal Mail, but the process of privatisation has been successful. British Airways is now an international group. Engineering companies such as Rolls-Royce, and others such as BT and British Gas were all state owned, and all have gone on to become international companies unfettered by the restrictions that the state can often impose.
Clause45 allows the Secretary of State to make schemes to transfer property rights and/or liabilities from HS2 to another person, which includes the Secretary of State. This power also allows the transfer to take place mid-delivery should it be required. Subsection (3) introduces schedule 30, which makes further provision about transfer schemes made under the clause.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): I am listening to the Minister very carefully and I agree that there are many good examples of British industries that have performed very well in the private sector from the ‘70s and ‘80s. But he would surely separate that out conceptually from ensuring that a fair price for the taxpayer is raised at the initial point of issue of those shares in the private sector? If he reflects, he will admit that in various high-profile cases, particularly under this Government and the coalition Government, there was a feeling out there that state assets were undersold to increase the gain as quickly as possible for the people buying them. Those two issues are surely separate.
Mr Goodwill: Well, yes, often hindsight is a marvellous thing and markets move in different directions. It has always been the Government’s intention to ensure that we get best value, but also to ensure that share issues are taken up. There is a difficult balance between pitching a price at such a level that the shares are taken up and pitching a price that achieves best value. However, the track record of this Government shows that we have been stalwart custodians of the public purse. We have not wasted money. We have borne down on the deficit. We have got sound money back again in our economy and there is confidence around the world that we are sound managers of public finances. Indeed, in the Budget later this month, we will see more examples of that being delivered to the House.
Andy McDonald: Does the Minister not have just a glimmer of concern about my example of how the sale of Royal Mail was conducted? Will he not put some distance between him and his Government and that arrangement whereby a Government adviser, Lazard, was right at the heart of the sale of publicly owned assets and yet at the same time was next door deriving significant profits of immense proportions from that sale? Does he not agree that there is something wrong
Mr Goodwill: If I may, I will turn to an example more closely allied to the matter before us today, which is the case of HS1. We sold a 30-year concession on HS1 to operate and maintain the infrastructure for £2.1 billion. The Ontario Teachers’ pension fund took that concession for a 30-year licence. After the 30 years, the HS1 line returns to the Government, and we will have the opportunity to sell another concession; to keep it, possibly within Network Rail; or to give it to another operator such as, as I have said, Network Rail. The sale of the HS1 concession involved a rigorous bidding process to ensure best value. No decisions have been taken on the commercial model for HS2. It should also be noted that if any transfer of assets, rights or liabilities occur, the Secretary of State can impose conditions such as restrictions on the sale of assets, which will protect assets if that is thought appropriate.
We would always seek to get best value in the sale of the concession, and the value of the concession will take into account the value of the assets being transferred as well as the liabilities and revenue, and this would therefore be priced in. I hope that that clarifies the position so that the hon. Gentleman understands the purpose of the amendment, but, given the political differences between us on this issue, I suspect that I will not be able to satisfy him and he will press his amendment to a Division.
Mr Anderson: The Minister talked about the issue of privatisation and how successful the businesses have been, but consumers might have a slightly different view about the prices charged by companies such as British Gas and British Airways and whether they are doing a great job. They might also have a different view on the fantastic performance of the Government. Figures released today say that the national debt is now £1,580 billion, having increased by 50% on his and his Government’s watch.
We can have the political debate later on about ownership, and I am sure we will, but what I am trying to get my head around is what the problem is with the amendment. What the Minister is saying is what we are asking for: automatic best value and so on. Is that not exactly what the words on the amendment paper say? I cannot get my head around why on earth we cannot just say that if and when it happens, the Government will get best value for the customer, the taxpayer.
If we leave the clause as it is, it more or less says that the Secretary of State has the power to give away parts of the system, or all of the system, to anybody, without any price whatever. I know—I hope—that that is not the intention, but the clause at the minute says exactly that, and the amendment tabled by my hon. Friend the Member for Middlesbrough wouldprevent that from happening.
Mr Goodwill: I will respond briefly to that point. This Government always seek to get best value for the taxpayer. There is an important debate to be had, although maybe not at this stage, about how the railway will be delivered—whether we operate a traditional franchising process, run the line directly for a while to demonstrate its ability to raise revenue for a future operator or let a
Once again, I underline that this Government will always seek to get best value for the taxpayer. The previous coalition Government’s record of doing so was a major contributor to the results we achieved last year in May, when the British people had confidence that a Conservative Government could be a sound custodian of the public finances and come to grips with the economic mess that we inherited in 2010. That is a debate for another day, but I assure the Committee that we will always seek to get best value, and the clause—without the amendment, which is superfluous—will do precisely that.
Andy McDonald: The Minister is right to identify this as an area of stark political differences between us, but we have been able to discuss it civilly, recognising that we have distinct positions. I will try not to go into the whole business of what happened at the last election, but we lost 900 votes across 12 seats; I do not think the Conservatives should be crowing too much about that. Be that as it may—
Andy McDonald: We are debating the potential privatisation of an asset in the public hands, and that is what the amendment tries to address. It would be remiss of me to fail to comment that the Minister may be misreading the mood about how the public perceive the ownership of such assets, both going forward and in relation to some privatisations that occurred in the past. I do not think it is quite the rosy picture that he paints.
My hon. Friend the Member for Blaydon makes a key point. We have heard at length from the Minister that his Government, and his party in coalition, were assiduous—that is effectively his claim—about achieving a fair market valuation of assets sold. He says not only that that happened, but that it will happen in future for sales such as may be contemplated under the clause. If that is the position, why on earth would he not send that message out to the nation, which has a long memory about Royal Mail? The Government would be acknowledging, “We can do better, and we will reflect that in the Bill, so that we give an unerring, unequivocal commitment that that is what has happened. It is simply not good enough to say, “That is what we do anyway.” Say so, make it clear, so that nobody is any doubt that there is no other purpose intended.
The Minister and I have identified where we disagree but, between us, we have come to an agreement that this should happen. For that reason, I cannot understand
Andy McDonald: The Minister is shaking his head, which disappoints me gravely. I suggest, Mr Hanson, that we put the matter to a vote so that the Committee can make a decision. I am sure that hon. Members on the Government Benches have listened carefully and will express themselves in an independent fashion.
Mr Goodwill: Clause 46 deals with extension of planning permission for statutory undertakers and introduces schedule 31, which provides for the extension of planning permission to the statutory undertakers.
Paragraph1 of schedule 31 disapplies certain limitations of permitted development rights for statutory undertakers, therefore allowing them to use the planning permission granted by the General Permitted Development Order 2015 for works that form part of or are in connection with HS2.
Paragraph2 of the schedule sets out the condition that the works that are carried out are in accordance with any undertaking given by the Secretary of State to the Select Committee of either House during the Bill process, which includes the commitments given through the controls of the environmental minimum requirements.
Andy McDonald : The Minister referred to schedule 31(2), which sets out the condition that the works be carried out in accordance with any undertaking given by the Secretary of State to a Select Committee of either House. We have been through that process. Can the Minister provide some information about the undertakings that have been given to help Opposition Members understand what the provision encompasses? I am not aware of the nature of any such undertakings.
Mr Goodwill: A number of additional provisions have come before the House, many of which are diversions of utilities and are the result of petitions or concerns raised with HS2 Ltd as part of that process. In every case I can think of, the diversions are intended to facilitate and help the landowners or the owners of the infrastructure. We can probably provide several dozen examples of where that has been done in response to the sensible concerns that people have raised.
Clause 47 concerns protective provisions and introduces schedule 32, which contains provisions protecting the interests of statutory undertakers and other bodies that may be affected by other provisions of the Bill. These provisions are similar to those in the Crossrail Act 2008 and the Channel Tunnel Rail Link Act 1996. The protective provisions of the schedule cover highways and traffic; electricity, gas, water and sewerage undertakers; electronic communications code networks; the Canal and River Trust; and land drainage, flood defence, water resources and fisheries. I commend the clause and the associated schedule to the Committee.
Andy McDonald : I am grateful to the Minister for that helpful explanation. We are talking about nominated undertakers and statutory undertakers—there is a lot of undertaking going on. Does the Minister envisage that there will be better co-ordination between the nominated undertaker and the statutory undertaker? Members across the House will be besieged with complaints about the myriad works by a succession of statutory undertakers in their own territory. What I am saying in words of one syllable is that the works involving statutory undertakers will be better co-ordinated if they are done in one go. That is better than multiple moving activities and many holes being dug.
Mr Goodwill: Much of the work that will be carried out in the construction of this railway will be on the land we have acquired, and therefore will not affect those going about their everyday lives. However, from time to time work will need to be done on highways or other rights of way that could disrupt their lawful use. I know that, in those cases, HS2 Ltd is determined to minimise the disruption. Indeed, we are already working with local authorities to ensure we can deliver these changes sympathetically, as we are doing for lorry movements and the other potential disruptions to which this project will unfortunately give rise.