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Lord Morris of Manchester: My Lords, I gave my views on this amendment and others in the group when moving them on Report on 4 April. Thus I shall not detain the House at any length today.

On Report, the myth that the Bill would speed up negotiations between franchisees and PTEs was exploded. In truth, it would considerably prolong them. Again and in sharp contrast to the pledge in last year's White Paper on devolving responsibilities to the PTEs, decision-making would, in fact, be centralised rather than devolved.

I had hoped that on Report we would be told in full detail where the Government stand. Would they prefer to withdraw the Bill rather than have these amendments
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included? And, are the other parties determined not to allow the Bill to become law without them? We need to know in this debate exactly where all parties stand in advance of behind-the-scenes haggling on the Bill's future.

Meanwhile, in the proceedings on the Bill in another place on 27 January, MPs from Greater Manchester tabled amendments to the same effect as those we are now debating. In doing so, they were reflecting serious public concern across the conurbation about the threat the Bill constitutes for local decision-making on public transport. All their amendments were unceremoniously guillotined. Therefore, Greater Manchester MPs will have no say on an issue of high importance to them unless these amendments are accepted and incorporated into the Bill when it returns to the House of Commons.

What happened on 27 January explains succinctly and in stark terms the importance of the role of this House vis-à-vis the Bill. The case for the amendment is strong and I hope that my noble friend will today offer a reply that we can honourably commend to the PTEs.

Viscount Astor: My Lords, we supported the noble Lord, Lord Bradshaw, when he moved the amendment on Report, but we had some concerns, as some PTEs are better than others. The noble Lord, Lord Bradshaw, has taken on board our concerns and added Amendment No. 2 to the group, which means that PTEs cannot hold up any franchise agreements. There is a 60-day period. We believe that that is an important change and I thank the noble Lord for making it so that we can fully support the amendment. Quite frankly, I am somewhat baffled by the Minister's position. I thought that his party believed in improving local representation not in diminishing local rights.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have contributed to this debate, particularly to the noble Lord, Lord Bradshaw, who moved the amendment. He has given an example of precision, which I hope will be followed by all movers of amendments that we shall consider on this Bill and other Bills today.

We have discussed this matter at considerable length in Committee and on Report and we are discussing the issue again today. I have had the benefit of meetings with Members of the House who are greatly concerned about the Bill. On this legislation we have come to a point of principle and we do not and cannot accept these amendments. That was made clear in the other place and it is my duty to reflect that position today for the reasons that I have sought to emphasise during previous discussions on these issues, but not because we disavow the role of the passenger transport executives. At times it seemed to be suggested that we wanted to abolish the PTEs. This legislation does not do that. It clearly envisages an important role for the PTEs which will be involved with the Secretary of State in drawing up the requirements that lead to the signing of a franchise.

The point at issue is whether the PTEs should be co-signatories. I recognise that the noble Lord has made an attempt to meet some of the objections
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that I presented the last time we discussed this issue; namely, that effectively there was an outright veto for passenger transport executives. I heard what the noble Lord said today, that the PTEs make a contribution to services, as indeed they do, but he would be the first to recognise that the great provider of resources for rail services is the Secretary of State and that the contribution of the PTEs, although not unimportant, is on the margins. We are not talking about any equality of partnership under the existing position with regard to co-signatories and who contributes resources. At present, there is equality in terms of being co-signatories.

We seek to change that because a fundamental proposition behind the Bill, and central to it, is the fact that the Secretary of State will be responsible for setting the strategic direction and the amount of national funding that will be invested in the railways. These amendments cut across the fundamental principle of the Bill. That is why, despite the eloquent arguments that have been presented on a number of occasions, I have been unable to move to meet those representations—this is a point of fundamental principle. The Government, of course, have listened to the concerns of the PTEs and we, of course, have moved our position to take account of those concerns as far as possible, but these amendments strike at the principle of the structure under the Bill.

An interesting point that has developed in the discussions today, and in the past, is that the Official Opposition have tended to disavow the past, for fairly good reasons when one considers the Opposition's record on railways, and they have concentrated on the future. My noble friends, and to a certain extent the noble Lord, Lord Bradshaw, have tended to eulogise the past and not look to the future. I want to make it absolutely clear that this Bill is about the future of the railways. In eulogising the past, they have painted it in rather rosy colours. The PTEs have not long been co-signatories—only since the time when Barbara Castle, as she then was, set them up. They have been co-signatories only since 1993, under the structure created by the previous administration, which my noble friends have been only too eager to support me in dismantling and putting in place a more constructive, more accurate and effective system for running the railways.

I say to my noble friends that I recognise the achievements of the passenger transport executives in the past. We will not disavow their role for the future. We see them as constructive contributors to the provision of services in their localities. The point at issue is whether they are co-signatories with the Secretary of State, given his significant responsibility for national resources devoted to the railways under the framework of the Bill and with his overall responsibility for strategy.

The system envisaged in these amendments goes back to an adversarial arrangement that would perpetuate and exacerbate the worst of the old system which the Bill is designed to replace. That is a system where some—not many—passenger transport executives use the fact that they have to co-sign a franchise before it can be let as a
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powerful lever in negotiations with the Strategic Rail Authority, a lever which, at times, has led to brinkmanship.

Lord Berkeley: My Lords, I thank my noble friend for giving way. Can he name the PTEs that are said to have caused this trouble with delays and the SRA?

3.30 p.m.

Lord Davies of Oldham: My Lords, in Committee, I detailed a number of examples regarding PTEs and other past difficulties. I am not emphasising this as the cardinal point of our argument. I am not saying that the purpose of the debate is to attack the PTEs on their past record, although clearly at times the exercise of their power has caused difficulty in the signing of franchises against a background where delays cost money.

The noble Lord, Lord Bradshaw, says that delays should be limited to 60 days. We have a problem with the definition of 60 days because it is not clear from his amendment where the 60 days begins. We have to be absolutely precise in law about when the clock starts ticking. I am afraid that I must convey that we do not think his amendment is specific enough in that regard.

I am objecting to the principle—that delay costs money. Of course having a limit of 60 days would reduce the ability of the PTEs to create delay. That would not alter the fact that delays could occur over that period of time. Delays in signing such contracts are costly and the cost would be borne by the taxpayer. Who is responsible to the taxpayer? Not the PTEs, but the Secretary of State. That is why the Bill is constructed as it is. So, we are not clear that the 60-day part of the amendment produces significant benefits. We merely see dangers attached to it.

The phrase used is, "when the agreement is being finalised". If the franchise agreement has been finalised, why would the PTEs need 60 days to consider whether they wish to sign? As the terms would be clear at that stage, the only reason could conceivably be if they wished to re-open negotiations in order to secure further concessions. To reach the signature stage and then to seek to start negotiations again would be totally inconsistent with an efficient, cost-effective franchising process.

In many ways I think that the amendment makes the situation worse than is the current system. At present, although PTEs might use the threat of delay to lever advantages, no PTE would think that they could legally refuse to sign for two months. The amendment would give them precisely that power.

The amendment also does not change the fact that PTEs could use their co-signatory status during the course of the franchise. That would lever in very significant power. We do not deny the contribution that the PTEs can make to the development of an effective rail system. We recognise—it is in the Bill—that the Secretary of State is involved in consultation with PTEs,
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before he establishes his position regarding a franchise, in order to take account of their position. But that is very different from the concept of co-signatory status.

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