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Earl Attlee moved Amendment No. 348:

On Question, amendment agreed to.

[Amendments Nos. 349 to 356 not moved.]

Schedule 24, as amended, agreed to.

Clauses 231 and 232 agreed to.

[Amendment No. 357 not moved.]

Clause 233 [Transfer of Regulator's functions to Secretary of State]:

[Amendment No. 357A not moved.]

Clause 233 agreed to.

Clauses 234 to 238 agreed to.

Schedule 25 agreed to.

Clause 239 agreed to.

Clause 240 [Licence modifications following Competition Commission report]:

[Amendments Nos. 358 to 360 not moved.]

Clause 240 agreed to.

Clause 241 [Competition functions of Regulator]:

Earl Attlee moved Amendment No. 360A:

    Page 155, leave out line 32.

The noble Earl said: Clause 241 threatens market uncertainty in the business of raising finance for new railway rolling stock and thus jeopardises future investment in new trains. The Government introduced Clause 241 into the Bill in another place. There was little, if any, debate on it and this is the first opportunity for Parliament properly to consider it.

Clause 241 is said to "clarify" the powers of the rail regulator under the Competition Act 1998. It deals with powers over railway competition issues not explicitly covered by the Railways Act 1993. They are the areas in which the rail regulator exercises concurrent functions with the Director General of Fair Trading. The Competition Act 1998 gave the rail regulator concurrent functions with the DGFT over "railway services".

Clause 241(3) replaces "railway services" with the term "services relating to railways" and specifically defines them in paragraphs (a) to (d) as railway services; most importantly, the provision or maintenance of rolling stock; the development, maintenance or renewal of a network; and the development, provision or maintenance of information systems. There is no need for the clause, in particular paragraph (b). That clearly applies to the rolling stock companies (ROSCOs) which own the existing rail rolling stock and lease it to the operators. The ROSCOs are the source of investment in the trains.

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The regulator already believes that he has the powers contained in paragraph (b). He has said that he is going to question the train operating companies later this year to check that the rolling stock suppliers are not acting uncompetitively. The ROSCOs accept that they are covered by the Competition Act term "railway services". Any anti-competitive practice would be covered by that Act and the rail regulator would exercise concurrent functions in any OFT inquiry into their market.

The ROSCOs have published codes of conduct agreed with the regulator. The codes set out how they will behave towards new and existing customers, particularly if rolling stock moves from one operator to another in the event of a franchise changing hands. If Clause 241 does not represent an extension of the powers of the regulator, there is no need for it. If Clause 241 does represent an extension of the powers of the regulator, the additional regulatory risk will affect the international sources of funding which the ROSCOs use to raise new capital for the trains. It would drive up the cost of capital, make capital harder to obtain and make financing new trains more difficult. And no one has been consulted about it.

ROSCOs have already raised £2.4 billion for investment in new rolling stock. Over the next 10 years, £10 billion will have to be found to replace ageing trains and provide new trains to meet the 50 per cent growth in the number of rail passengers, which everyone, including the Government, want.

All that will have to come from private investors, who need a stable regulatory environment. At the least, Ministers should state explicitly that Clause 241 does not conceal a hidden agenda for greater interference in the rolling stock market. It must guarantee that a regulator will not use this clarification to extend his powers into detailed interference in the operation of the rolling stock market. I beg to move.

Lord McIntosh of Haringey: I listened carefully to the noble Earl, Lord Attlee, and I can assure him that there is no hidden agenda. The amendment would remove the provision and maintenance of rolling stock from the list of services where the rail regulator has concurrent powers with the Director of Fair Trading under the Competition Act. Since 1st April, the rail regulator has had powers under the Competition Act 1998 in relation to anti-competitive agreements and so forth, which relate to the supply of railway services. It is widely assumed that agreements for the maintenance and provision of rolling stock by the rolling stock leasing companies relate to the supply of railway services and in our view that is the correct interpretation.

However, as the Railways Act 1993 defined "railway services" narrowly as "passenger goods, light maintenance, station and network services", and rolling stock services are none of those, it would not be beyond the wit of the law to argue that agreements relating to railway services should be narrowly construed to mean agreements for railway services and therefore exclude rolling stock services.

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We want to put the position beyond doubt, with clarification that services provided by the rolling stock leasing companies, and also railway engineering and information services, fall within the orbit of the regulator's jurisdiction under the Competition Act 1998. I hope that that is the assurance for which the noble Earl was looking.

Earl Attlee: I shall study carefully what the Minister said. With the usual caveats, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 241 agreed to.

Clauses 242 and 243 agreed to.

Clause 244 [Passenger Transport Executives]:

[Amendments Nos. 361 and 362 not moved.]

Clause 244 agreed to.

Clause 245 agreed to.

Clauses 246 to 248 agreed to.

Schedule 26 agreed to.

Clause 249 agreed to.

[Amendment No. 363 not moved.]

Earl Attlee moved Amendment No. 364:

    After Clause 249, insert the following new clause--


(" . The Authority shall exercise its powers under section 80 of the Railways Act 1993 to obtain information (and publish the same in such manner as is calculated to bring it to the attention of those with an interest in such information) at such intervals as it may consider appropriate regarding--
(a) spare capacity in respect of railway facilities and network installations, and
(b) assets, revenue and profits by reference to such regions as the Authority may consider appropriate.").

The noble Earl said: In moving Amendment No. 364, I wish to speak also to Amendment No. 365. If the railway service is to improve and expand, new operators should be encouraged to come onto the scene. In order to encourage them, information about where spare capacity and commercial opportunities exist should be made available. It has been suggested that Railtrack's monopoly over track and signalling could be open to tender on certain stretches of the existing network. This new clause will oblige Railtrack to split its figures in order to reveal the assets and make clear the revenues and profits on a regional basis. That better accounting will help in negotiations for the upgrading of lines.

Amendment No. 365 is designed to ensure that Railtrack's maintenance of track and other facilities is monitored closely and that it is named and shamed for failings in that respect. I beg to move.

Lord Macdonald of Tradeston: I contend that these amendments are not necessary. These matters are already within the jurisdiction of the Rail Regulator and he is dealing with them. He has a consultation

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process under way in relation to a set of licence modifications under Sections 12 to 15 of the Railways Act 1993. Those relate to the setting of access charges by Railtrack, the information that it provides annually to the regulator about its activities in relation to the network management statement, and matters concerning the condition, capacity and capability of Railtrack's assets.

The six separate regional supplements to the network management statement focus on regional investment expenditure and on the role of the rail network in the economic and social development of each region. They reflect the development of regional transport strategies and local transport plans. In November last year the regulator announced that he also intended to consult about a further licence condition requiring Railtrack to establish and maintain a comprehensive and reliable register of its assets.

Those actions cover the elements that the amendments would require. Therefore, the amendments duplicate existing work of the Rail Regulator. I hope that the noble Earl is reassured by that and that he will withdraw his amendment.

Earl Attlee: I thank the Minister for his response. I shall read it in Hansard and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 365 not moved.]

Earl Attlee moved Amendment No. 366:

    After Clause 249, insert the following new clause--


(" .--(1) Any person may apply to the Authority for permission to construct or operate new railway facilities or new network installations and the Authority may grant such permission on such terms as it may consider appropriate.
(2) A permission granted under subsection (1) shall not obviate the need for the applicant to obtain the appropriate licence from the Regulator and such other permissions and consents that may be necessary for the purpose of constructing or operating such railway facility or network installation or to enter into any access contract that may be required in connection therewith.
(3) In the event of a dispute between the applicant and any relevant facility owner or installation owner as to the charges payable to such facility owner or installation owner under any access contract required, either person may refer the matter to the Regulator whose ruling as to such charges shall be binding on the applicant and the relevant facility owner or installation owner.").

The noble Earl said: This amendment is designed to allow any company that wishes to build new lines not provided by Railtrack to apply for permission to the Strategic Rail Authority or to the Secretary of State. That could allow micro-franchises to be set up to run local trains in rural or urban areas. It would also allow companies to build cheap rail lines for the transit of freight. I beg to move.

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