Examination of Witnesses (Questions 8820
- 8839)
8820. CHAIRMAN: I remember the situation
well!
8821. MR ELVIN: It is in note form in
places, but I hope that it is nonetheless comprehensible, and
it is easy to give you it in writing.
8822. CHAIRMAN: I am sure it will help
us follow what you say. We will come back at 20 past two. Mr Bennett,
you are now released in accordance with the plan and thank you
very much for coming.
The witness withdrew
The Committee adjourned from 1.02pm to
2.20pm
8823. CHAIRMAN: Mr Elvin, I do not know
what it was you were going to say—the normal neutral introduction.
We have, however, heard some of the contentious points. If you
wish to mention some of them that would not go entirely amiss,
but I will leave it to you.
8824. MR ELVIN: My Lord, indeed the note
that I have set out sets out more submissions rather than simply
setting the position; because the position can be described in
probably a couple of sentences. I thought it was more useful to
the Committee to know what the arguments were, rather than simply
setting out a very neutral, "Well, these are the three issues
we have to deal with".
8825. My Lords, this is really a continuation
of what I said last week, which is that you are dealing with the
more general railways powers issues this week. I make it clear
at this stage, as I did in cross-examination of the witnesses
earlier, that one thing that is not in issue before your Lordships
is that rail freight and protecting rail freight growth is an
important matter—no-one suggests it is not. The only issues
your Lordships are effectively concerned with are the mechanisms
which are proposed to operate to provide proper protection for
rail freight, not the question as to its protection in principle.
8826. CHAIRMAN: At some stage, I think
after we get past clause 34, you were indicating before the adjournment
that it may not be all that important whether they stay in the
Bill or not. I think that needs explaining—not now but at
some time.
8827. MR ELVIN: My Lord, as you know
the Bill currently before you, broadly clauses 22-45, contain
a series of provisions which, if they were to be enacted, would
modify the duties of the Rail Regulator quite considerably in
order to ensure the operation of Crossrail, and provide statutory
powers to ensure the running of Crossrail absent an appropriate
access agreement. Concerns were expressed about that mechanism
and those series of powers before the House of Commons Select
Committee by most of the rail petitioners. Those concerns were
understood.
8828. Throughout the Bill process the Promoter
has made it clear that the use of the standard industry regulation
mechanisms was the preferred approach. As your Lordships know,
an Access Option was applied for, and that Access Option will
allow access to the main rail network and, following negotiations
with the infrastructure manager, Network Rail, proposals were
submitted to the ORR. They were consulted upon, as the ORR is
required to do under the Railways Act. The ORR then held a hearing
on 1 February, having received substantial written representations
and evidence from the industry and other interested bodies; issued
a provisional decision on 3 March; heard further representations
in written form after the provisional decision; and then issued
the final decision on 14 April. Thereafter, the ORR's role, as
I mentioned earlier, is to give specific directions as to the
final content of the access agreement, in accordance with the
decision of 14 April.
8829. You will see from the note I have provided
to the Committee that the position with regard to the use of the
industry mechanisms was made very clear in Information Paper H3,
and we have just put section 3 up on the screen.[13]
It has always been our position that should an appropriate Access
Option be obtained within the relevant timescales then Bill powers
would be cut back.
8830. Following the consultation and the processes
and the two decisions of the ORR, the provisional decision and
the final one, the Minister made two public statements setting
out current policy from the Department, which was that the provisional
decision and then the final decision was sufficient for the Minister
to state an intention to delete the principal rail powers modifications
in the Bill and to do so at the Public Bill stage.
8831. As I said in my note, it is fair to say
that the principal issues remaining for this Committee, on the
basis that the Public Bill powers will be removed as per the Minister's
statement of policy, are issues which were fully argued before
the Rail Regulator in the process I have just outlined. You have
already seen in the cross-examination of Mr Bennett the way in
which in particular certain issues with regard to infrastructure
were properly considered both at the provisional and the final
stage by the ORR. The industry has had a full opportunity to raise
its concerns in the more technical forum of the Rail Regulator's
hearing and representations, where all the matters such as capacity,
paths and timetabling (if I may say so with respect to your Lordships'
committee) are most appropriately dealt with by experts who understand
the modelling processes; and where the industry regulator is used
to balancing the various competing interests of passenger services,
new passenger services with existing rail freight interests and,
of course, protecting the potential for growth beyond the current
utilisation today.
8832. Of course, the statement of the Minister
on 11 April made it clear that clauses 23-34 would be deleted.
I will come to clauses 40 and 41 in due course. As we said last
week, as public provisions, although we are clearly more than
content for Petitioners to raise matters, and no doubt your Lordships
will comment on the position as your Lordships see fit, but it
is proposed that those matters be dealt with at Public Bill stage.
We have made available draft amendments that are proposed to be
tabled in due course. I make it clear that those are draft amendments
only. They are not necessarily the final form. No doubt there
may be some tweaking. Those draft amendments, of course, are put
forward on the basis of the policy, which is that there must be
a valid Access Option in place. If there were to be a legal challenge
to the decision of the Regulator matters might need to be reconsidered,
but we hope that that will not be the case; and certainly there
has been no sign of it to date.
8833. There is a call from some of the Petitioners
for an undertaking that the intended way forward should be made
the subject of an undertaking from the Promoter. That is to say,
an undertaking with regard to the Bill provisions. Rather difficult
to see how one could get an improvement on the Minister's public
statement of intention in the two statements of 11 and 18 April;
and it is rather difficult to see how, providing nothing significantly
changes with regard to the validity of the ORR's decision, the
Minister would be in a position to persuade the Public Bill Committee
to do anything other than his stated intention. We do not consider
it is appropriate, given the Minister's public statements, to
go any further than that. We ask your Lordships to support us
in that.
8834. We are grateful to Lord Berkeley for taking
over the mantle of representing a number of the rail freight interests,
which no doubt is very helpful in dealing with the issues in an
efficient and clear manner. We understand that the issues really
for your Lordships today are, firstly, the lack of commitment
by the Promoter to provide specific items of infrastructure that
are included as works in the Crossrail Bill, principally the issue
I took up with Mr Bennett this morning; and the proposal in the
proposed amendments for a new clause modelled on the London Olympics
and Paralympics Act to address concerns related to blocking rights
during construction. There are some additional issues, clauses
40 and 41 for example, but it seems to us those are the two main
issues where most of the Petitioners are heading, at least from
the freight industry.
8835. Turning to infrastructure, the basis of
almost all of the rail freight petitions before the Select Committee
in the other Place was on the basis that the rail clauses were
unacceptable and that Crossrail should use regular industry processes
and apply for an Access Option. I have quoted in the written submissions
at paragraph 18, if you will forgive me for doing so, Lord Berkeley's
statement to the House of Commons Committee on 6 July, simply
because it is probably the fullest and most representative statement
of what was put to the Select Committee, and it represented in
clear terms the concerns of the freight industry. You will see
at the quotation from paragraph 14362 of Lord Berkeley's statement
in Volume 4 of the Select Committee Report that the key to his
submissions was independent regulation. He says, "Independent
regulation is the key. One has to make the point that the private
sector investors are always suspicious of the government mind
or policy. If one wants private sector investment, that has to
be protected, and the protection we get is from the independent
ORR".
8836. I am pleased to note, of course, as a
result of representations, and indeed the constant policy of the
Promoter and the position with the Access Option, that we have
moved much closer together in terms of our respective positions
than we were in the other Place. Indeed, the shortness of the
issues before your Lordships this week is indicative of the fact
that you are dealing with in the scope of a few days what took
over three weeks in the House of Commons Select Committee. I am
sure your Lordships will be very pleased that that is so, rather
than the position facing the Commons.
8837. CHAIRMAN: You are quite right!
8838. MR ELVIN: The process we have used,
as I have mentioned, is that under the Railways Act. That involves,
and I have broken it down in paragraph 20 into the main stages:
the submission of the proposed agreement between Network Rail
and Crossrail to the ORR; public consultation and scrutiny by
the ORR of the proposals, including consultation with the industry;
and then directions from the ORR as to the form and terms of the
final agreement under paragraph 5 of Schedule 4 of the 1993 Act.
8839. I think it might be helpful if I just
put up the provision, because I mentioned it to the Committee
earlier, just to show you the width of the ORR's power.[14]
Under paragraph 2 of paragraph 5, you will see, "If the ORR
decides to give directions to the facility owner requiring him
to enter into an access contract, the directions shall specify
the terms of the access contract". So it is a very broad
power to the ORR. Therefore the access to the network is dependent
entirely upon the terms which the ORR decides to impose on the
access agreement. Whatever the initial position between Network
Rail and the facility owner in the draft agreement, the ORR has
the final say as to what terms should go into the agreement between
Network Rail and Crossrail.
13 Crossrail Information Paper H3-Crossrail Access
Option, http://billdocuments.crossrail.co.uk
(LIEWD-IPH3-003) Back
14
Railways Act 1993 (c. 43), Schedule 4-Access agreements: applications
for access contracts, The decision and the directions, www.opsi.gov.uk
(SCN-20080429-001) Back
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