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Grand Committee

Thursday, 26 June 2008.

The Committee met at two o'clock.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) in the Chair.]

Crossrail Bill

(First Day)

The Deputy Chairman of Committees (Baroness McIntosh of Hudnall): I remind the Committee that if there is a Division in the Chamber when we are sitting, the Committee will adjourn as soon as the Division Bell is heard and will resume after 10 minutes.

Clause 1 [Construction and maintenance of scheduled works]:

Lord Hanningfield moved Amendment No. 1:

Clause 1, page 2, line 4, at end insert—

“( ) The nominated undertaker shall appoint a single infrastructure manager.”

The noble Lord said: Before I describe the amendment, I shall take a moment to thank those noble Lords who sat on the Select Committee. For 29 days, they listened and commented on the concerns of the many petitions deposited against the Bill. Their time and input have been vital to the scrutiny and development of the Bill as it passes through this House.

One topic raised was the level of concern about the infrastructure management of each section of the railway, specifically the tunnel section. As the Select Committee highlighted in its report, the legislation around this topic is complex. However, under the Bill, it is entirely plausible that more than one company could become responsible for the infrastructure management of the Crossrail system. That would increase the complexity of the already multifaceted network of relationships and responsibilities shared between the promoter, undertaker, regulatory bodies and train companies involved. Ultimately, that would have a negative impact on efficiency and accountability and could increase costs.

The purpose of the amendment is twofold. It ensures that a single infrastructure manager will be appointed to oversee the construction of Crossrail from end to end, and that there will be joined-up and clear accountability for infrastructure along the route. Both outcomes—I hope the Minister agrees—are of paramount importance to the timely and efficient construction of Crossrail. The Crossrail project will be Europe’s largest civil engineering project, costing just under £16 billion. It is important that we get the delivery right. As the Select Committee concluded, it would be a concern if more than one body were to be given infrastructure management responsibilities.

Without the amendment being accepted, how can the Minister provide assurances that it is the Government’s intention to have a single infrastructure manager? How binding will the outcome of negotiations be?

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Will Parliament have an opportunity to consider the proposed arrangements before the Bill completes its passage through both Houses? Perhaps when the Minister responds, as I am sure he will, he will answer those pertinent questions for the benefit of the Committee. I beg to move.

Lord Berkeley: I shall speak to my Amendment No. 21, to which the noble Lord, Lord Bradshaw, has added his name, and for the convenience of the Committee I shall speak also to Amendment No. 22. That will save time, and it is probably more relevant here. Before I do so, and before I support the amendment proposed by the noble Lord, Lord Hanningfield, I should say that I was probably the only Member of your Lordships’ House to appear before the Select Committee as an agent, which was a very worthwhile and interesting experience. I congratulate the committee, not only because my noble friend who is sitting next to me was on it.

Lord Snape: There is another one.

Lord Berkeley: There are two? I am terribly sorry. I am surrounded by members of the Select Committee, which makes me feel very honoured. It gave everyone a good hearing and listened with interest and patience, which is not always the case for some other committees that one has been involved in. It produced a comprehensive and fair report, for which I am very grateful. I declare an interest as chairman of the Rail Freight Group, on which basis I appeared.

In connection with the amendments, it is relevant to refer the Committee to paragraph 233 of the Select Committee’s report. It says that,

“we take this opportunity to state that we would be concerned if more than one body was to be given infrastructure management responsibilities. We would be further concerned if Network Rail were required to be infrastructure manager for the purposes of the ROGs”—

the Railways and Other Guided Transport Systems (Safety) Regulations 2006, SI 2006/599—

“in the central tunnel section without also being given responsibility for the operation and maintenance of the railway in this section”,

which is covered by the infrastructure manager regulations that I mentioned in Amendment No. 21.

Clearly the committee heard evidence on the subject and thought it important. I hope that my Amendments Nos. 21 and 22 provide a good basis for ensuring that Crossrail infrastructure is part of the regulated railway, and that my noble friend will accept them. The Committee will know that that would involve the regulator determining any disputes about access if at some stage in future more than one train operator wished to provide services through the tunnel. The regulator would also fix the access charges; one would hope that everybody would pay the same charge, otherwise it would be illegal. That always causes problems; it definitely did when we debated the Channel Tunnel Rail Link amendment Bill about a month ago. I hope that my noble friend will reflect on the fact that one of Crossrail’s big problems in its development and in the passage of the legislation through both Houses has been the relationship with the British Airports Authority and the Heathrow Express, which is of course not a regulated railway or service. It is the same issue here. If you are on the right side of the fence, have a new project and

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need lots of money, you want priority over everyone else, but if you are on the other side of the fence—BAA is now; it was not before—you see it differently. My conclusion from all that is that it would be much better if Crossrail tunnel infrastructure were part of the regulated railway and if the industry processes that we spent so many hours discussing were applied.

I do not need to say any more about Amendments Nos. 21 and 22, because they cover much the same ground as the noble Lord, Lord Hanningfield, has covered, and I am pleased to support his amendment as well.

Lord Bradshaw: I too thank all noble Lords who participated in the proceedings of the Bill committee, particularly the two present. I fully endorse what the noble Lord, Lord Hanningfield, said about there needing to be a single infrastructure manager and I believe that it should be Network Rail.

I would like to touch on the question of the application of the Railways and Other Guided Transport Systems (Safety) Regulations 2006 and the Railways Infrastructure (Access and Management) Regulations 2005. It is important that Crossrail is managed and constructed in accordance with the regulations and that, therefore, if at some stage some other operator gains access to it, it will not find itself precluded from so doing by a formulation other than that applying to the rest of the railway.

With that, I am pleased to support the amendments. I believe that my noble friend might have something further to say about the use of the tunnel by other services.

The Earl of Mar and Kellie: These amendments are very important. It is essential that we retain as much flexibility as possible for the future use of the tunnel. I understand that the aim is to run a metro service; I also believe that that is not being legislated for but is merely an operational choice. I suspect that that is a mistake. It is certainly important that the capability for long-distance trains to be integrated into the tunnel should be retained in the future. Of the two Crossrail schemes under way, or at least being thought about, the Glasgow Crossrail scheme, which, for example, would allow people from Gourock or Ayr to travel straight through to Edinburgh—something that has been impossible for many years—is the kind of arrangement that we should certainly be considering for the London Crossrail scheme in the future.

Lord Brooke of Alverthorpe: I do not want to spend a great deal of time on paragraphs 232 and 233 of our Select Committee report, except to say that we were particularly concerned about what would happen with the central tunnel, and that was where we directed most of our inquiries. We felt that ultimately it was appropriate for the negotiations taking place between the different parties to continue and that we would leave it to them. We hope that they find a satisfactory outcome.

My principal reason for speaking is to express on behalf of Select Committee members our grateful thanks to the noble Viscount, Lord Colville of Culross,

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who, regrettably, is not with us today. He chaired the Select Committee effectively and efficiently, and was a most appropriate chairman. He had great experience of, and a background in, planning matters, which was of great assistance to us. He was firm but fair, and he was extraordinarily patient—to the point where one or two members of the committee reprimanded him for being too patient. I do not look at anyone in particular when I say that. At the end of the exercise, even though a fair number of petitioners went away without having secured what they had hoped to persuade us to give them, I am sure they all felt that they had had a very fair hearing and that the process had all been well worth while. They had seen the House of Lords at its best in trying to see the democratic process work to its maximum.

Secondly, I place on the record our grateful thanks to our Clerk, Sarah Price, who was also extraordinarily efficient and effective in seeing us through some very difficult periods. She ensured that all the petitioners who wanted to see us appeared before us, and even some of those who did not want to see us were persuaded to come to express their views publicly. She did that in an extraordinarily persuasive and quiet fashion, which we all found enamouring. We are sorry to learn that she will not be staying with the House. That is the House’s loss, but I understand that she is going into education and teaching and I am sure that we all wish her well in her new career. We thank her for the excellent report that she has written. It would be inappropriate if I did not also publicly express thanks for her support from Darren Hackett, who had spent 20 or even 22 months working with the Select Committee in the House of Commons before coming to work with our committee. He had therefore spent about two years of his life working on Crossrail, on which I suspect he is the font of all knowledge, probably knowing as much about the subject as anyone, and we express our thanks to him for all the efficient work that he did on our behalf.

2.15 pm

Lord Bassam of Brighton: The thanks have all been given. I am grateful to the noble Lord, Lord Hanningfield, and my noble friends Lord Brooke and Lord Berkeley. The committee did a first-rate job and I, too, am sorry that the noble Viscount, Lord Colville, is not here to hear his praises sung. He did an extremely good job. When I found a bit of spare time to listen to the committee’s proceedings, he certainly demonstrated a firm grip on events. I found the committee itself extremely interesting. All those who made their representations through that process will have felt that they had a fair hearing.

The report produced was of the highest quality, and its authors should be congratulated. It has certainly aided us in taking the Bill forward in Grand Committee, for which we are all very grateful—as I am to the authors for the forthright way in which it was produced. Perhaps polishing up our own credentials here, I say that our committee did as good a job in this House as did the committee in the House of Commons; some say even better, because it did not take quite so long. I shall go no further in my comments on that.

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I am grateful to the noble Lord, Lord Berkeley for doing a bit of instant regrouping and bringing Amendment No. 22 into this group; I shall deal with that amendment in turn. The noble Lords, Lords Hanningfield and Lord Bradshaw, and my noble friend Lord Berkeley have, in different ways, all raised the question of the infrastructure manager for the central tunnel section of Crossrail. This issue was, as has been said, explored in some detail by the House’s Select Committee on Network Rail’s petition. It is written up very clearly in paragraphs 225 to 233 of the committee's special report, which has been helpful. Also, the special report reproduces at appendix 7 the promoter’s note that describes the complexity of the legislative background to the infrastructure manager issue.

For those who have not read these parts of the special report, I ought to outline a little of the background arising from a number of EU directives. For our purposes, we must consider two sets of regulations that transpose directives. These are the Railways and Other Guided Transport Systems (Safety) Regulations 2006, which I shall refer to as the ROGs, and the Railways Infrastructure (Access and Management) Regulations 2005, which are commonly referred to as the “regs”.

The concept of infrastructure manager arises under both the ROGs and the regs, which is somewhat confusing because these are not identical functions and can be exercised by different bodies—possibly even a number of bodies. I hear what Members of the Committee have said about wishing to constrain that. However, there is, in fact, no formal appointment process for infrastructure managers whether by government, the Office of Rail Regulation or any other means. The identity of infrastructure manager is instead based on who exercises particular functions under the ROGs and the regs.

There is no reason why safety functions and charging for access to infrastructure must necessarily be undertaken by a single body; EU law certainly does not require it. Neatly, Network Rail happens to be the infrastructure manager under the ROGs and the regs in relation to the national railway network, as we have heard. That makes sense, since it owns and controls it in all respects. However, for example, infrastructure management is organised differently for the Channel Tunnel Rail Link, which is not in Network Rail’s ownership although Network Rail is infrastructure manager under the ROGs for it.

The Crossrail central tunnel section is likely to be owned by Transport for London, not by Network Rail, hence it is not an identical situation to the national network. Although it is intended that, for the central tunnel section, Network Rail will perform the functions of the infrastructure manager under the ROGs, this does not mean that only Network Rail can, or must, perform the functions of infrastructure manager under the regs. TfL has a legitimate interest in the operational phase of a project in which it is making a substantial investment. Therefore, the organisational model—defining who does what—must be developed, discussed and decided as part of the project development process.

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The debate in Select Committee came at an early stage of this project development process, so was inevitably inconclusive. A good deal of work has been carried out since then and there have been a number of discussions between the key parties—the department, Network Rail and Transport for London. We expect to meet the Office of Rail Regulation early next month to seek its guidance. Therefore it would be premature to announce a conclusion today. As was made clear in the Select Committee, Network Rail is under no obligation to accept arrangements that would prevent it fulfilling its responsibilities.

The amendment moved by the noble Lord, Lord Hanningfield, has a number of problems. As I explained, the ROGs and the regs, which transpose EU law, do not make provision for anyone to appoint an infrastructure manager. Therefore no appointment function could be given to a nominated undertaker as envisaged in the amendment. The identity of the infrastructure manager or managers will be driven by how the project is structured, so as to allocate various functions, and it will then be a matter of legal interpretation of the ROGs and the regs. That project structure will ultimately need to be agreed by all the parties.

The new clause proposed by the noble Lords, Lord Berkeley and Lord Bradshaw, goes further in requiring the infrastructure manager for both the ROGs and regs for the central tunnel section to be Network Rail. This is more than Network Rail has said that it requires, as detailed in evidence to the Select Committee and the special report. For example, Network Rail has not said that it needs to set charges for access to the central tunnel section.

In conclusion on this amendment, I entirely accept that the infrastructure manager issue is very important and needs to be resolved, but this is tied up with the organisational structure to deliver the project and cannot be decided in isolation. It is also, as I said at the outset, and as recognised by the Select Committee, an immensely complicated issue that is being tackled as a matter of considerable urgency by the department, Network Rail, TfL and the ORR. It is important to recognise that Crossrail is not being promoted and financed wholly by Network Rail, so the infrastructure management issue should not automatically be treated as if it were wholly a Network Rail project.

Amendment No. 21, as my noble friend Lord Berkeley, said, is not unrelated. I have described the relevant legislation on railway regulation, and it is perhaps worth saying that the 2005 regulations provide for certain exemptions for networks intended only for the operation of urban and suburban passenger services, for example. We do not believe that these exemptions under the regs would apply in the case of Crossrail, but it would ultimately be for the courts to decide. The issue of the identity of the infrastructure manager arises because of our working assumption that the central tunnel section is not exempted under Regulation 4. Technically the proposed new clause also has problems. Whether one of the exemptions applies is simply a matter of law under the regulations transposing the EU directives. Even if an exemption were to apply it would not by itself limit the types of traffic that could

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be taken, as implied by the proposed new clause. The main result would be that refusal of access could not be appealed to the ORR.

I hope that I have dealt with the central issues relating to the first set of amendments and that I have given my noble friend sufficient assurance. I can say only what we believe is assumed in our work in developing the project, and cannot of course give a definitive determination on whether an exemption applies under Regulation 4. I hope that having heard what I have said, the noble Lord will withdraw the amendment.

Lord Hanningfield: I am a bit concerned about the Minister’s answer. It was technical, of course, but I think he said that there should be a single infrastructure manager. Everyone—certainly the Select Committee—thinks that that would be beneficial. However, his answer did not seem to indicate that there is a way through it. As everyone thinks it is desirable, particularly for the tunnel section, we should find a way to do it. I understand the points the Minister made, but he did not give a solution. I hope someone can find a solution to this problem because that is what we ought to try to do.

Lord Bassam of Brighton: That is the purpose of the continuing discussions and negotiations. We have to be very careful in approaching this, which is why I set out the argument as carefully as I did.

Lord Berkeley: I am grateful to my noble friend. I think he said that the Government’s intention was to comply with what the Select Committee recommended in this case, but he is not quite there yet. Three issues need to be addressed, which are probably covered by my two amendments. First, there needs to be one timetabling organisation. We cannot have the central section being timetabled from the outside. That is pretty obvious, but we have to ask the question. Incidentally, my two amendments do not mention Network Rail, just one infrastructure manager. I do not see any change, but who knows?

Secondly, who sets the charges? My noble friend did not talk about that. On the regulated railway, the regulator normally sets the charges that the infrastructure manager can make. It is a combination of how much the regulator thinks he needs to spend to maintain and operate the track and, in this case, a premium because it is a new project under Article 8.2 of the 2001/14 directive. When we debated the CTRL, we discovered that London and Continental had given Network Rail an 80-year contract to maintain the CTRL on a cost-plus basis. I am sure my noble friend cannot respond to me today on why it did that because it is historical, but I hope that will not happen on Crossrail. It would be much better if the amount of money that the infrastructure manager was given was fixed by the ORR because it is clear that the department has not done very well on the CTRL and perhaps the ORR would do better.

Thirdly, there is access. Other noble Lords mentioned the possibility of other trains apart from the Crossrail metro going through the tunnel in future. Someone has to act as a sort of referee if there is demand for

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more access than is available. I accept that the amendments as they stand are probably not right, but I would be grateful if my noble friend could answer on timetabling, on whether the Government support the recommendation by the Select Committee and on charges and access.

Lord Bradshaw:While the Minister is thinking about that, I shall add that the situation he has described to us is that agreement is being sought between the ORR, Transport for London, Network Rail and the department. However, they come at it from different angles and—I have no grounds for saying this—Transport for London may put what it regards as its needs first and by so doing shut out any other ideas that anybody else might have.

Lord Bassam of Brighton: Network Rail is already in the business of timetable control and applied for the access option to run the Crossrail service on its network. It is important that charging is carefully considered in the discussions at the moment—not just in those with the Office of Rail Regulation, but in those with the other stakeholders. There have to be continued discussions, but they already involve timetable control. That should reassure the noble Lord somewhat.

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