Examination of Witnesses (Questions 10340
- 10359)
10340. What is striking about the position before
your Lordships is that the Petitioners not only welcome the ORR's
decision, but welcome the details of the ORR's decision. Their
representations show they not only understood what was decided
but they demonstrated this through their detailed representations
and you have got the letters in the exhibits and we have gone
through most of them. It is all the more remarkable therefore,
given the time spent on the issue of infrastructure before this
Committee, that so little issue was taken with the regulator's
provisional decision to reject the requirement of infrastructure
works and to use an objective approach based on outputs. Indeed
Freightliner positively endorsed the use of the objective test
without any requirement for specific enhancement works. I quote
again there from the letter that I put to Ms Durham on Tuesday.
EWS not only welcomed the output to that approach in its further
representations, but made a point, as I put to Mr Smith this morning
in Section 15, that the ORR had gone out of its way to meet EWS's
concerns in the change control mechanism and had imposed a new
form of change control mechanism which met EWS's requirements.
10341. Accordingly, therefore, you are in the
position, my Lords, where the ORR has specifically considered
freight growth and network capacity, has considered the question
to require those works that are now put before you, but the regulator
had power to require specific works to enhance capacity but decided
not to require them, but instead decided to allow further work
to continue to enable the appropriate infrastructure inputs to
the model to be identified at a future point in time so there
is a flexibility in how best to determine meeting the objective
test.
10342. The rail freight industry generally accepted
and welcomed that decision.
10343. It is now less than three weeks after
the regulator's final decision and there has been no change of
circumstances other than the favourable announcement by the Minister
of his intention to seek the removal of the rail clauses from
the Bill. Nonetheless, the same interests who did not seek to
persuade the regulator to specify works and announce themselves
content with the decision now appear to argue before your Lordships
that such works should be specified.
10344. We have tried to understand the reasons
behind this complete change of stance. The answers have been vague.
There have been inaccurate comparisons with planning applications,
which I will come back to in a minute, or simply irrelevant, namely
that there are two parallel processes. The justifications advanced
do little to hide the real point, which is that the Petitioners
seek to use the opportunity to seek from your Lordships' House
what they were unable to persuade the regulator to require and
did not contest with the regulator after the provisional decision.
10345. The analogy with the planning system
is a wholly bad one. It is bad because the analogy used by both
EWS and the Rail Freight Group failed to include in the points
that were put a situation where there is a regulator in a similar
position to the ORR, in other words there is another regulator
with a separate jurisdiction to the planning jurisdiction. In
fact, within the planning system a local planning authority will
not act so as to require by condition something that is regulated
by another regulator under a parallel regime. If you looked at
EWS and RFG's planning analogy correctly, which has not been done
by them, then the conclusion would be that you would not seek
to regulate that which the regulator had already dealt with. Indeed,
what I have done is I have set out for your Lordships two extracts
from current Government planning policy; paragraph 8 which is
a quotation from paragraph 22 from the annex to Circular 11/95,
which is on the imposition of planning conditions on planning
permissions which is still current which says that in the planning
regime you do not duplicate controls. If there is a separate regulator,
you leave it to the separate regulator to do his or her regulating,
you do not duplicate that through the planning system.
10346. Similarly, if you look at one specific
area of planning, which is pollution control, in that way you
clearly have a separate regulator, which is usually the Environment
Agency, this is paragraph nine and I have quoted from paragraph
eight of the current planning policy note 23. It makes the point:
planning and pollution control systems are separate but complementary.
Pollution control is concerned with preventing pollution and then
goes on to make the point that the planning authorities should
work on the assumption that the relevant pollution control regime
will be properly applied and enforced and should act to complement
but not seek to duplicate it. Thus, if we were before a local
planning authority rather than before your Lordships' House that
authority would not have the power consistent with planning policy
to impose a condition requiring a provision of infrastructure
because the ORR has power to do it; the ORR has determined how
any necessary infrastructure is to come forward through the application
of the objective test; and the Committee does not need to assume
that the access regime has been properly applied since it is plain
that it has been to the extent that it has earned the plaudits
of the freight industry in the correspondence and before your
Lordships; and to impose a condition by requiring an undertaking
here would duplicate the effect of the objective test mechanism
and conflicts with it because the application of that mechanism
may reveal in the future that a particular piece of infrastructure
is not necessary to secure the 92 per cent.
10347. My Lords, I simply say, your Lordships
are being led up the garden path with the planning analogy because
the proper planning analogy, which is where there is a parallel
regulator, is that the planning authority—and it is suggested
by my learned friends that your Lordships stand in the position
of the planning authority being asked to grant planning permission—should
not duplicate the duties of another regulator.
10348. CHAIRMAN: Mr Elvin, I think this
is over-simplified, is it not, because supposing that it was entirely
within the hands of the local planning authority and there was
a very big new development required which on highway grounds would
need access roads and roundabouts and that sort of thing, they
could insist on that. It is within their own jurisdiction as a
county council.
10349. MR ELVIN: Yes, but there is no
parallel regulator.
10350. CHAIRMAN: There is no parallel
regulator, but it is not right to say that they never can, they
sometimes can insist.
10351. MR ELVIN: My Lord, it is contrary
to Government policy if there is a separate regulator to duplicate
that regulation and these statements make that clear. The highways
example is a bad one because normally with highways works you
would impose a Grampian condition which would prevent you from
commencing development until the works were done, but that would
not be a parallel regulator, that is simply waiting for the works
to be done.
10352. CHAIRMAN: I am not trying to say
that your point about a parallel regulator is wrong, but it is
not entirely correct to say that planning authorities cannot deal
with infrastructure requirements.
10353. MR ELVIN: Absolutely, but it depends
on whether there is a parallel regulator.
10354. CHAIRMAN: Yes.
10355. MR ELVIN: The only point I am
making is that the analogy that the Petitioners have made with
the planning system is just a misleading one because unless you
consider the circumstances of the parallel regulator under planning,
you are putting forward a false analogy. The problem is it has
been put through submission rather than through witnesses and
the only witness that ventured a view, Ms Durham, then accepted
she was not a planning expert and was not really able to answer
the questions. It is just a bad analogy. I am not suggesting to
your Lordships you should not pursue the analogy, I am just saying
it is a bad one and I do not think it helps you. I think you have
got to make your own decision based on, with respect, looking
at the issues as they apply to the rail industry rather than to
a planning authority.
10356. Mr Bennett accepted that what was being
sought was outside the normal industry process, as your Lordships
will recall, and Mr Cann eventually accepted that the issue before
both the regulator and the Committee was about securing capacity
and that he was asking the Committee to take its own view on the
infrastructure requirement. Ms Durham sought to argue that it
was more the role of the Committee to specify works than the regulator,
despite the fact of its consideration of that issue, though she
was unable to advance any real basis for that argument.
10357. Mr George said in opening that what he
was seeking would not override the regulator's decision, but immediately
went on to explain why the evidence presented at the regulator's
hearing on 1 February should not have satisfied the regulator
that 92 per cent was achievable. In fact, with respect to him,
he confused the true position on that evidence. For example, the
improvement in maintenance of 40 per cent that he referred to
in opening is 40 per cent on the 2006 baseline which, as Mr Burns
said on behalf of Network Rail they were starting effectively
from a very poor position in 2006. As he said, it did not seem
unreasonable given the things we are going to do to expect that
to improve by 40 per cent. In any event, as Mr George failed to
acknowledge the 40 per cent improvement and the changes to assumption
about miles per casualty were just two examples of the inputs
to the model that have to be investigated to determine how best
to achieve the 92 per cent. Indeed, Mr Burns made this clear.
If your Lordships look at what he said, he said, referring to
Mr Morris, "Richard described what happened if you just move
two of those variables to reasonable positions of expectation".
It is clear he was not saying that they were the only issues,
but if you just change two of the assumptions, then matters change
considerably in terms of the capacity.
10358. We say that whether or not particular
items of infrastructure should be provided should be part of that
process. Adoption of the Petitioner's current position would be
to preclude this, as indeed Mr Garrett accepted when Mr Taylor
cross-examined him.
10359. Just to remind your Lordships that Mr
Smith said this morning I think in re-examination that in fact
passenger train companies were now meeting about 90 per cent to
date and, of course, the modelling has some way to go so far as
Crossrail is concerned. As your Lordships know, the regulator
dealt with the matter at this stage when modelling was at the
first stage.
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