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Lord Dubs: My Lords, does my noble friend agree that there might be merit in considering whether the practice in the House of Commons, whereby Questions for which there is no ministerial responsibility are not accepted, could be adopted at this end of the building?
Lord McIntosh of Haringey: My Lords, that is a matter for the House to decide rather than for an individual Minister. However, I am sure that my friends who are responsible for such matters in the House have heard that question.
Lord Howell of Guildford: My Lords, having once had the dubious responsibility of being Secretary of State for Transport, I clearly recall being asked many times about traffic jams and traffic problems in the capital. I recall being advised that perhaps the best answer was that while such matters were the responsibility of local authorities, it is the duty of the Government, and the proper course to take, to state that they would draw to the attention of the local authority—there was not a mayor in those days—most closely and vigorously the strong concerns of Members of the other place. That would apply now just as much to Members of this House. Is it not the duty of the Government to draw those strong concerns to the attention of the Mayor of London so that he can get a better act together?
Lord McIntosh of Haringey: My Lords, that is a helpful and sensible suggestion. I shall certainly draw to the attention of the Mayor and to Transport for London the concerns which have been expressed.
Lord Renton: My Lords, perhaps I may remind the Minister that my noble friend's Question is analogous to one I asked some days ago about the traffic congestion at the eastern end of Westminster Bridge. In this part of London we have some of the worst traffic congestion and heaviest traffic of anywhere in the United Kingdom. Surely, the Minister for Transport has a responsibility to persuade the local authorities to solve the problem.
Lord McIntosh of Haringey: My Lords, I have great difficulty with the concept that the responsibility of the Minister for Transport is to persuade the local authority of his own views on matters which have been devolved to the Mayor and to Transport for London. There is a read back to the Question asked by the noble Lord, Lord Tebbit, of which we should be well aware. The noble Lord, Lord Tebbit, thought that the Minister for Transport was not capable of dealing with matters which are devolved to Scotland; and I believe that is true. I shall draw to the attention of the Mayor and Transport for London the concerns raised by the noble Lord, Lord Renton.
Egg Production and Welfare of Hens
3.24 p.m.
Baroness Miller of Chilthorne Domer asked Her Majesty's Government:
- How they intend to ensure that their aim to improve the welfare of laying hens in the United Kingdom does not result in egg production moving overseas to countries with lower welfare standards.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, the directive on the welfare of laying hens applies to all member states of the European Union and we directly transposed it into English legislation only last Friday. Any further proposals on the welfare of laying hens will be subject to public consultation. As regards the application to third countries, the EU has been successful in getting animal welfare firmly written into the Doha development agenda. The labelling of eggs has a vital role to play, and improved labelling from 2004 will help consumers to decide.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for that Answer. I am pleased that the Government are going out to consultation on this issue. Liberal Democrats fully support improving the welfare of laying hens. However, the Government may decide that regulations in Britain should be imposed in such a way to bring about the end of cages altogether for hens. Surely, the Government have a greater responsibility to promote the excellence of British food so that British people buy a far greater proportion of eggs of free-range hens. At present, I believe, that proportion is only 80 per cent. Can the Government take steps to ensure that public procurement bodies, which buy eggs for school meals, hospital meals, and so forth, take account of animal welfare issues in their specifications?
Lord Whitty: My Lords, the Government—in particular, this part of the Government—spend a considerable time promoting the excellence of British food, including the produce of the British poultry industry. I agree that we should continue to do so and try to persuade British consumers of that excellence. However, at the end of the day we operate a free market and there is consumer choice. The labelling regulations will help in this matter.
Lord Hughes of Woodside: My Lords, I am totally baffled by the Question and the argument put forward. The noble Baroness, Lady Miller, seems to advocate that any time there is an effort to improve animal welfare, it has to be stopped because someone overseas might take away trade. Surely, that cannot be the position of the Liberal Democrats?
Lord Whitty: My Lords, I cannot answer for the Liberal Democrats. The position of the Government is that so far as possible such regulations should be
conducted on a European basis. However, there may be areas in which we believe the British regulations need to be slightly different. In general, we shall not be gold-plating within Europe. Beyond Europe, this becomes a trade issue, which is why I referred in my Answer to the Doha round.
Lord Elliott of Morpeth: My Lords, does the Minister accept that bringing forward the timing of the abolition of the inhumane method of egg production, which the battery cage represents, will be much appreciated by a number of welfare organisations and many individuals such as myself?
Lord Whitty: My Lords, for those noble Lords who were not present on Friday, I can confirm that the noble Lord, Lord Elliott, gave an effective speech to that end. I indicated then that we were in the process of transposing the regulations and that there would be more consultation on whether to bring forward any further the abolition of cages and how to deal with enriched cages.
Baroness Byford: My Lords, we on these Benches believe strongly in the promotion of animal welfare, as I am sure does the noble Baroness, Lady Miller. Our farmers have led the field on that issue, as perhaps the Minister would acknowledge. Can I press further on the consultation period? At present, DEFRA has commissioned scientific research into the cases for enriched cages or non-enriched cages. I understand that such consultations are going ahead before we have the scientific evidence, which is of concern. Surely, that is the wrong way round. We should wait for the research to be completed before going out to consultation.
Lord Whitty: My Lords, the issue of what is public opinion and what is the view of the industry is one aspect; the research is another. We have indicated that we are seeking the views of the public and the industry. There will be the normal 12-week period of consultation. The research may well eventually inform the final decision.
Earl Peel: My Lords, is the Minister telling the House that the Government are prepared to take action against the importation of eggs produced by hens abroad which are not kept to the same welfare standards as hens in this country?
Lord Whitty: My Lords, I indicated in my original Answer that animal welfare in this area as a whole is an issue that the EU put on the table in the discussions in the Doha round. I also indicated that in order that consumers can better distinguish between the methods of egg production—wherever they are produced—we have introduced labelling regulations which will come into effect from 2004, so that consumers can decide.
Baroness Miller of Chilthorne Domer: My Lords, does the Minister agree that there is no point in introducing these regulations if we simply export cruelty to other countries?
Lord Whitty: My Lords, British consumers and the British public expect certain minimum standards of production within the UK. However, it is also right that if one simply transfers consumer demand to the import of foreign goods where the welfare standards are not so good, one is in part defeating the object. That is why we want to move largely on a European basis and why we believe that animal welfare should feature in the trade negotiations.
Railtrack
3.31 p.m.
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:
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"I would like to make a Statement on the progress being made to put the ownership and operation of the rail network on a sound and sustainable footing; and as part of that the steps being taken to get Railtrack out of administration.
"I will keep the House informed over the next few weeks, but in the light of the conclusion of the sale and purchase agreement this morning between Railtrack Group and Network Rail, I thought it right to come to the House to set out the Government's strategy, the progress made so far and the next steps.
"As the House knows, the High Court put Railtrack into administration last October. As the presiding judge said then, the making of the railway administration order was, 'not only appropriate, but absolutely essential'.
"The Government's objective is to ensure that Britain's rail network is owned and managed by an effective and competent body and so secure a sustainable long-term future for the rail network.
"To achieve that, the next step is to remove Railtrack from administration as soon as possible and have the network under new ownership and strengthened management, who are committed to improving service and safety. That is in everyone's interests: the industry's, that of the workforce and the travelling public alike.
"On 25th March this year, my right honourable friend, the Member for North Tyneside, told the House of the bid made by Network Rail to acquire Railtrack from its parent company, Railtrack Group plc.
"While other bids would have been considered, none was received. Network Rail is a public interest company limited by guarantee and will be run for the benefit of the whole railway, concentrating on its core priorities of operating, maintaining and renewing the rail network. There will be no shareholders and any operating surplus will be used for the benefit of the railway system.
"The company will operate on a sound commercial basis with a board and management whose performance targets will be aligned to the Strategic Rail Authority's long-term plan as well as the obligations under its network licence to its customers.
"Instead of shareholders, its directors will be accountable to the company's members who will not only be drawn from the rail industry, but will also include members representing the public interest and the Strategic Rail Authority. In this way, the directors of Network Rail will be answerable to people whose primary interest is in the long-term future of the railway.
"Railtrack Group and Network Rail have concluded a sale and purchase agreement to acquire Railtrack plc. I would like to set out in some detail the terms of this agreement.
"In line with its original offer, Network Rail will pay £500 million—of which £300 million will be provided by the Government—as well as taking over Railtrack's debt, which now stands at £7.1 billion. This includes loans from the European Investment Bank and the German bank, KfW, totalling just over £1 billion, which Network Rail plans to assume.
"In parallel, London and Continental Railways is acquiring from Railtrack its interest in the first phase of the Channel Tunnel Rail Link for £295 million. At a cost of £80 million, Network Rail will acquire the right to operate, manage and maintain the Channel Tunnel Rail Link and the concession to manage St Pancras station.
"I can tell the House that Network Rail has already secured up to £9 billion of bridge financing from commercial banks to fund its acquisition costs and to refinance Railtrack's existing debt, as well as to fund the immediate operation of the railway.
"Network Rail will also put in place additional commercial financing of up to £7 billion for its medium term requirements. This is necessary to cover operational expenditure as well as to cover substantial cost overruns which were inherited from Railtrack and which will have to be met.
"Network Rail will also need to have—as would any owner and operator—access to back-stop contingency funding. For this reason, the Strategic Rail Authority will provide an additional standby credit facility. This contingency funding of last resort has been set at £4 billion.
"Further details of this funding and of the short to medium term standby credit facilities offered to Network Rail by the Strategic Rail Authority are set out in the two minutes that I am laying before the House in the normal way.
"The House will also wish to know that the rail regulator has today issued a statement setting out his approach to a request for an early regulatory review.
"These are large sums by any standards. But they are necessary, given the size of the task facing Network Rail, and they would be needed by any successor to Railtrack. There is no escaping the fact that Britain's railways need very large-scale investment—investment we believe is essential.
"It is because of the need for long-term sustained investment that the Government are, through the 10-year plan, increasing the average annual investment in the railways—on top of continued support for running costs—to £4.6 billion. That is more than three times the annual average in the 10 years prior to 1997.
"The public are entitled to expect that this investment will be spent efficiently and effectively. That has clearly not been the case in the past.
"The new company, Network Rail, faces a legacy of poor management and of very substantial cost overruns, which will have to be met. For example, when it began, Railtrack estimated that the cost of the West Coast Main Line project would amount to about £2 billion. It is now clear that the actual costs of the work will be considerably more than that.
"So what is now needed is a competent owner and operator. That is why Network Rail's acquisition of the railway network is so essential to the future of the industry.
"This agreement is a major step towards removing Railtrack from administration and putting the rail network back on a sound footing.
"The next stage in the process will involve Railtrack Group plc putting this offer to its shareholders at a special meeting which is expected to be held next month. It is for the company to decide how much it can offer its shareholders.
"The European Commission is also considering whether any aspect of the support being provided needs to be cleared as state aid.
"However, if the shareholders of Railtrack Group approve the bid at the special meeting and the appropriate clearance is obtained from the European Commission, I would expect to ask the High Court for an order releasing Railtrack plc from administration thereafter.
"It is obvious that Railtrack could not have carried on as it was. Even the company recognised that last summer. And what is more, the division and lack of common purpose that characterised the railway system in the past few years were damaging and destructive to the interests of both the industry and the travelling public.
"All the evidence shows that working together is crucial to the long-term success of the railway network. I can tell the House that over the past few months, despite the uncertainties of administration, the new management of Railtrack has enjoyed closer working relationships with the Strategic Rail Authority, as well as the rail regulator and the train operators—something which is essential if the network is to work effectively and efficiently to everyone's benefit.
"The establishment of a public interest company in which the Strategic Rail Authority is represented will continue to foster this climate of better co-operation to the benefit of all concerned in terms of achieving the objectives set.
"The railways are of critical importance to the economic and social fabric of this country. There is now an urgent need to give the rail system stability. I believe that this agreement is the right and best way of building a modern and efficient network.
"I commend this Statement to the House".
3.40 p.m.
Viscount Astor: My Lords, I thank the Minister for repeating the Statement made in another place. Does that mean that he is now responsible for transport matters in this House and will be answering Questions for that department?
The one bit of vaguely good news is that the Government have made a U-turn and are now paying £300 million to the Railtrack shareholders. I should remind the Government that almost 90 per cent of Railtrack employees are also shareholders in the company. Will the Government now admit—I do not suppose that they will—that Railtrack was not insolvent, it was the Government who made it insolvent? Indeed, I believe that the Government misled the High Court. They made Railtrack insolvent by withdrawing funding.
To turn to Network Rail, it is a public interest company. Can the Minister define that? It will not have any shareholders, so who will own it? Perhaps he can give us an example of other similar companies in the government portfolio with which we can compare it. Or is it something of totally new invention? I understand that its accounts will appear in the accounts of the Strategic Rail Authority. Does that make it a subsidiary of the SRA? Will it have independent auditors? Who will be responsible for the audit?
The Government say that they will stand behind the £14 billion of debt funding by a letter of comfort from the Secretary of State. The minute states:
- "the Secretary of State would intervene in a timely manner to ensure that adequate funds would be made available to the SRA, or any successor body".
The public interest company will be accountable to its members. I understand that it will have 120 members. How will they be selected? I understand that that will be done by a special committee. Who will appoint the special committee? Will there be more than one person? Will it be the Secretary of State? How many directors will the company have? Presumably, it will not have all of those members on its board. How will the new entity be accountable to Parliament?
As I understand it, Network Rail will be responsible for track maintenance and special purpose vehicles will be set up for improvements to the rail system.
Those vehicles will then sell the track to the SRA after they have improved it. Who will decide the price? How will that be decided? We want to ensure that we do not return to the bad old days of the cost-plus system.Can the Minister tell us about the time frame? When do the Government expect to hear from the European Commission? Is that a matter of weeks or of months?
This has been a sorry tale. The Government had five years in which to solve the problems of Railtrack. I do not deny that it had problems; I do not deny that we did not get it 100 per cent right.
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