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Lord Berkeley: My Lords, before the Minister sits down, can he clarify his statement on grants? He is right about the amount of budget depending on the grants received. But is it not true that a significant amount of funding in the 10-year plan is for infrastructure grants for freight which could be paid directly from the SRA to Railtrack? In those circumstances, I should have thought that the budget for that would have been set by the SRA in consultation with Government rather than waiting for applications to come in. Is that correct?

Lord Whitty: My Lords, under the change provisions, that will be broadly correct. The grants to which I refer relate to grant applications from the freight operators themselves. That is less easy to estimate substantially in advance.

Lord Berkeley: My Lords, I am grateful to my noble friend and thank him for his explanation of Amendment No. 240 which will give great comfort to the rail freight industry. I look forward to seeing the instructions from the Secretary of State to the SRA. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Lord Berkeley moved Amendment No. 241:

    Page 121, line 17, at end insert--

("( ) In exercising its functions in accordance with subsections (1) and (2) the Authority shall produce regular reports on the performance of all railway passenger services.").

The noble Lord said: My Lords, the amendment would require the rail passengers council to report on the reliability and performance of all services in the UK including Eurostar, Heathrow Express, London Underground and other metros.

The issue was discussed in Committee. At col. 706 of the Official Report of 17th July, my noble friend Lord Macdonald said in respect of non-franchised services that,

    "There will not be the same public interest, in a regulatory sense, to put a requirement on the authority to publish performance information on a statutory basis".

I believe that he is right in one sense. The key is the regulatory sense. But a passenger does not mind what contract or franchise the operator has; he wants to know about the reliability of the trains. If there is performance information for most trains in the UK, it should be done for all. At present, Eurostar and Heathrow Express are discrete services. However, if terminal 5 goes ahead, there may well be services from Heathrow to Birmingham, Waterloo or Reading. Does the inclusion of performance information of such future services depend on whether they are franchised or let in some way? Will passengers understand the difference?

I seek a commitment from the Government that this should be a desirable objective. I am sure that the amendment is drafted defectively. But a principle is involved and a commitment to consider the issue in future. I beg to move.

Baroness Thomas of Walliswood: My Lords, I have put my name to the amendment, and support it.

The noble Lord, Lord Berkeley, hoped for services which may one day link Heathrow with the remainder of the United Kingdom rail services. That was one of the conditions by BAA as a sweetener for the creation of terminal 5. If they are not forthcoming, there will be a lot of angry people.

The conditions under which a service is supplied does not matter to the passenger; what matters is the quality of that service. It is necessary for people to have a concept not just of a railway, but of the whole pattern of rail travel and services Nothing would give passengers greater confidence than to feel, with reason, that the quality of rail services was improving steadily. We hope that that would be a result of having a strategic rail authority and regular reports on the quality of services.

9 p.m.

Lord Whitty: My Lords, it is important that the SRA publishes an indication of the performance of passenger train operators. Whether all passenger services, including non-franchised operations, should be subject to the same requirement is a more difficult matter. The SRA has the power to require franchised

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operators to provide that information and to produce it in the terms prescribed by the SRA because those operators are dependent on it for the franchise. There is an entirely different situation in regard to Eurostar and the Heathrow Express. I do not believe that a requirement that they provide such information would be workable. Clearly, it is within their own interests to produce such information and to convey it to the public in the same form as the information that is provided to the SRA, but the requirement must relate to the franchise. That is why I believe that the amendment of my noble friend is misplaced.

Lord Berkeley: My Lords, I am pleased to hear my noble friend say that it is clearly in the operator's interests to give such information to the passengers. I hope that he is right, but I also hope that that is another item that will be in the instructions to the SRA, even if on a voluntary basis. I am sure that many noble Lords, and people outside the House, will encourage the operators and the SRA to acquire such information and to publish it, even if on a voluntary basis. I am grateful to my noble friend for that clear explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Brabazon of Tara moved Amendment No. 242:

    Page 121, line 19, leave out ("and any investment in bodies corporate by it").

The noble Lord said: My Lords, in speaking to Amendment No. 242, I shall speak also to Amendment No. 247. Clause 206 gives the Strategic Rail Authority power to invest in bodies corporate; in other words, other commercial concerns. This amendment would remove that power.

The authority is supposed to be a strategic planning body, so why on earth is it taking shares in companies? Nothing in Clause 204, which deals with purposes, or in Clause 206, which concerns the manner of exercise of functions, suggests that that is necessary. In short, there is no discernible need for such investment in order for the authority to perform its functions. Worse still, to acquire shares in that way could give rise to serious conflicts of interest. In relation to that noble Lords have only to look at Clause 206(3) which states that the authority shall have regard to,

    "(a) the need to protect all persons from dangers arising from the operation of the railways",

and at paragraph (b) which talks about the disabled, and paragraph (c) which covers the environment.

On all those issues there is a balance to be struck. Without the impediment of a financial interest, the authority would not be compromised. On Amendment No. 313 we shall discuss lightweight cement tankers that may not be robust enough for their duties. A properly organised and planned competition may be one thing, but an ill-judged investment would be something else.

In Committee the Government said that the SRA needs the flexibility to invest in a railway. However, we believe that that flexibility will leave the authority

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vulnerable. Business will be aware that the authority can invest and will naturally take advantage of that. It is important that noble Lords remember that Clause 210 allows the authority to make grants and loans and to give guarantees but those powers do not compromise the authority's clear-headed strategic thinking. I beg to move.

Lord McIntosh of Haringey: My Lords, the good news for the noble Lord, Lord Brabazon, is that I do not believe that this amendment is unnecessary; the bad new is that I believe it to be dangerous. It would remove from the SRA a specific power that we have given to it so as to ensure that it has all the powers that it needs to improve the railways. We have sought to ensure that the SRA can be as flexible and, therefore, as effective as possible.

We intend the SRA to be a player. Its main role will be as the funder of the franchised network, but as well as that core of services we want the network to grow and to be improved, and we want the SRA to play an active role in such improvements. In order to do that, the funding powers of the SRA need to be flexible so that they can react to any circumstances where they may be needed. The SRA will play the traditional role of paying out grants, but there are other more imaginative and potentially more effective models.

The SRA may want to become involved in a joint venture in which Railtrack, the train operators, construction companies, finance houses and the SRA could participate to deliver improvements. Equally, the SRA may want to put capital into a company. There is nothing unique in the idea of investment in projects that may help to lever in private funding. I am astonished that the Conservative Opposition should believe that there is. Such investments can provide a degree of assurance to investors and can help to give support where the investment is not likely to provide returns in the short or medium term. For capital infrastructure, all the investment may need to be upfront and the payback can be decades later.

I simply do not understand what the noble Lord, Lord Brabazon, talks about when he refers to a conflict of interest. He will have to give the House some examples if we are to take that argument seriously.

The shadow SRA's forthcoming strategic plan will set out the principles of investment support from the rail modernisation fund, and it will describe the forms of support that will be available. We shall be as transparent on this issue as we hope to be on all other related issues. I hope that the noble Lord will not press the amendment.

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