Lord Berkeley
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Lord Berkeley (Lab)
My Lords, I support my noble friend and will briefly speak to some of the amendments in this group, namely Amendments 2, 2B, 5, 6, 6A, 7 and 7A. I will not repeat all that my noble friend has said, because the various amendments that we have tabled between us provide the basis for the proper link between primary legislation and the licence, which, as my noble friend said, is so lacking in the Bill.
I started off by looking at the relevant clauses of the Railways Act 1993 and the Railways Act 2005, which we discussed in Committee and in some helpful meetings with the Minister and officials, for which I am grateful. It was remarkably easy, at this comparatively high level, to cross out “rail” and put in “road”; they are very similar. If, as my noble friend said, we are to have a company that looks after the strategic roads in a way that is similar to what Network Rail became in September by becoming fully government-owned, it would seem logical that the legislation under which this happens would be similar.
I will not go through all the amendments in detail; my noble friend has done that very well. However, I have two questions for the Minister when she comes to reply. First, under the Bill, will it still be possible for Members of Parliament and of this House to table Written Questions and ask questions of Ministers, as we currently can with the Highways Agency? Noble Lords will know that we cannot do that for Network Rail, because if you table a question about it the answer comes back, “Write to the chief executive”. I am sure one gets good answers from the chief executive, but one does not see the answers that other noble Lords get to the questions that they ask the chief executive. I hope that the same thing will not happen with the strategic highways company and that we will still be able to table questions about its operations and the company generally, and to get a proper Written Answer or be able to have an Oral Question or debate on it as the circumstances demand.
I also hope that when Network Rail becomes subject to the Freedom of Information Act on 1 April next year, that situation will apply to it. Clearly, we would not want to ask whether a motorway sign or signal had been moved; that would be a ridiculous waste of ministerial time. On the other hand, there are many things that it would be useful to ask such questions about for the purposes of parliamentary scrutiny.
My second question for the Minister concerns my Amendment 7A which relates to Section 48 of the Health and Safety at Work etc. Act 1974. This exempts Crown-owned companies, or officers or companies of the Crown, from being taken to court by the Health and Safety Executive if it believes that they have contravened the Act. I know that the Highways Agency itself is exempt, being a Crown agency. It would be nice to know whether any change was planned in this relationship, and therefore the exemption, when the strategic highways company comes into existence. I believe that Network Rail does not have an exemption, because the Health and Safety Executive, through the Office of Rail Regulation, has taken action against it on several occasions. There should be a balance between the two and as much transparency as possible. I am very much looking forward to what the Minister has to say in response and fully support the amendments of my noble friend.
Lord Bradshaw (LD)
I shall say just three things. The Government are mistaken. The Office of Rail Regulation should, under that title, oversee roads as well. In spite of all the arguments, if it were signalled, it could change its name at some future date. It could be planned for and there would not be a lot of expense. It would be much more understandable to motorists and everybody else who the regulator was, whether it was a railway regulator or a transport regulator.
I also endorse the points made by the noble Lord, Lord Berkeley, about safety. One thing that the Office of Rail Regulation has done is to drive up safety standards on the railways. Although the Government keep saying the safety standards on the roads are the best in Europe, these are really quite deplorable, as we see with the continued deaths of cyclists in London, for example.
Lastly—I know I am reaching for the moon here—would it not be better to be honest and say that we have to adopt road pricing some time and, to make it acceptable, to say that the money raised from it would be used for roads and motoring purposes? If you explain what the money is for, people are much more likely to embrace the idea. A recent opinion poll in one of the national papers showed that people were against raising taxes, but if they were specifically asked whether they would pay more tax to improve the health service, they said yes. The same applies to road pricing.
Lord Davies of Oldham
My Lords, this amendment requires the Secretary of State to publish a report on allowing a public sector rail operator to take on lines and challenge the train operators on a genuinely level playing field in the public interest, securing value for money for passengers and taxpayers.
Many noble Lords will no doubt recall the exchanges that we had at Question Time last week on the future of east coast rail. I congratulate the Minister on her performance then in defending the Government’s position, which I regarded then, and still do regard, as indefensible, but I hope that today her response will be somewhat different. We should learn the lessons of east coast rail, where we have seen the benefits of a not-for-dividend operator running a rail line.
East coast rail was brought back into public ownership in 2009 after the private operator reneged on its commitments. It is efficient, it has returned more than £600 million to the taxpayer and it invests every penny of that profit back into the company. It provides a quality service, achieving record levels of passenger satisfaction and punctuality. The new timetable that it introduced in 2011 allows it to operate 7,000 more trains each year, and it now has 500,000 more passengers. It has also delivered for passengers. This year’s fare rise was in fact a real-terms cut—something that no private franchise was able to do. In fact, elsewhere, season tickets have risen in price by 30% since 2010—a stark contrast.
Despite that, the Government appear intent on pressing ahead with the privatisation of intercity east coast services. Will the Minister confirm that the cost to the taxpayer of reprivatising the east coast could run to £6 million? It is important that the Minister responds to this question and says what steps the Government are otherwise taking to improve the functioning of the railways. It is unacceptable that our rail lines are, according to the 2011 McNulty review, up to 40% less efficient than the best-performing European networks.
We know that the Conservative Party is unwilling to take a pragmatic approach on this issue. Its Railways Act 1993 effectively prohibits a public sector operator, except in the most restrictive circumstances. But the public do not feel this way. Only 28% of those polled support the sell-off of east coast. Can the Minister say on which side of this divide her own party finds itself? Many will recall her party’s support for a public sector operator while it was in opposition. It is time to put an end to this rigid ideological approach, which also sees the Government trying to rush through a sell-off of the 40% public stake in Eurostar before we have even seen the conclusion of my noble friend Lord Myners’s inquiry into the Royal Mail privatisation.
This amendment would give the Government the opportunity to reflect and to alter their stance. It is time to learn the lessons of east coast and legislate to allow a public sector operator to take on lines. It should be able to challenge the train operators in the public interest on a level playing field. That is the way to secure the best deal for passengers and for taxpayers. I hope that the Minister will accept this amendment so that we can move in that direction. I beg to move.
Lord Berkeley
My Lords, it is worth reminding the House that we already have public sector operators in this country; we have lines owned by Dutch railways, French railways and German railways. They are not called that in this country—they have different names—but they are owned by those countries. On the continent, some of them operate effective, positive and well liked services; some of them are pretty awful. When you hear that Eurostar, which is still 40% owned by the British Government—although it is for sale—is allowed to bid for the east coast, but a company that is perhaps 100% owned by the British Government would not be allowed, it does seem a bit odd. I am sure that the Minister has an answer to that, but it seems to me that we are selling off our crown jewels in the shape of a piece of Eurostar and allowing the companies that buy them—perhaps from the continent, perhaps from elsewhere—to come back and provide a good service on certain occasions, but to compete a little unfairly against what our own companies might do if they existed.
Lord Snape (Lab)
My Lords, I have followed this debate over the years with some interest and have a number of questions arising from this amendment that I would like to put to the Minister; perhaps my noble friend on the Opposition Front Bench would also like to consider them. I have no interest to declare in this debate other than the fact that I worked for the railway industry, as did my father. The romantic view, perhaps, of British Rail that some of my colleagues occasionally expressed was one that neither my father nor I shared.
Working for a nationalised railway industry, as I did before being elected to the other place and before being appointed to this House, was a massively depressing experience. Year after year, the amount of finance available to the railway industry was the subject of debate. It was quite often cut back. Short-termism was the only way to describe the finances of BR. Although I am no great supporter of the form of privatisation that the Government have inflicted on us, at least it has provided some degree of long-term continuity so far as railway finances are concerned—a continuity that did not exist when the railways were nationalised. Indeed, some of those in my own party used to mock what they called the concept of Morrisonian nationalisation. They said that it was not nationalisation at all and that the railways were being run by the civil servants. That view was widely shared by many of us who worked in the industry at the time.
I speak to this amendment not from any romantic attachment to a nationalised railway but as a confused supporter of the railway industry who wonders how we got into this particular mess in the first place as far as franchising is concerned. I have said in previous debates that what we have at the present is neither one thing nor the other. It is certainly not franchising. If we look at the new trains that are in the process of being ordered and built, it appears that they were designed by civil servants. The Government or civil servants set the fares as far as companies are concerned. The Japanese build the trains and the rest of us ride around the country in what remains of the whole industry. It is a confused picture, to say the least, but I do not feel that the amendment would help to clarify matters particularly.
I have one or two questions I want to put specifically to the Minister about the current process, before we look at whether or not directly operated railways should be allowed to bid for franchises. How are these decisions actually taken? The whole thing is shrouded in mystery. Various companies, we understand, put forward bids for the franchises, and a process of evaluation takes place behind the scenes. Perhaps the Minister can tell us how this process is conducted and who is involved in it.
If this amendment were to be accepted, would it mean that one desk in the Department for Transport would put together a bid and its merits or otherwise would then be decided by another desk in the Department for Transport? I hope that I am second to none in my admiration of the legal profession, which does not go unrepresented in your Lordships’ House, but if the answer is yes, one can imagine a bonanza for lawyers in the event of an appeal. Indeed, the taxpayer has just paid heavily for the mess that was the west coast main line franchise. Perhaps the Minister could tell us in passing exactly how much that cost.
If the amendment were accepted, how much does she envisage it would cost the taxpayer to fund legal inquiries or complaints if DOR’s bid—an internal departmental bid in some ways—were accepted over and above a private sector bid: or, as my noble friend Lord Berkeley rightly reminded us, a bid from a nationalised railway industry in Germany, France or Holland, to name but three? I hesitate to sound critical, but one can imagine the legal profession rubbing its hands at the prospect of such a financial fracas taking place behind the scenes.
Allowing DOR to bid is not particularly revolutionary. In the debate on privatising the railway industry in 1993, your Lordships’ House accepted an amendment moved by that well known left-winger Lord Peyton of Yeovil to allow the British Railways Board, as it then was, to bid for franchises. That amendment was struck out in the other place and we have the system of privatisation, franchising or whatever you like to call it that we have now. I do not wish to add to the difficulties of the Minister if, as I suspect, she rejects this amendment, but some clarification is long overdue before she does so as to exactly how this process works at present and how it would be affected if the amendment were accepted.
Lord Berkeley
“Strategic highways company licences
(1) A licence under section 1 may include—
(a) such conditions (whether or not relating to the licence holder’s being responsible for assets under the authorisation of the licence) as appear to the grantor to be requisite or expedient having regard to the duties imposed by section 4; and(b) conditions requiring the rendering to—of a payment on the grant of the licence, or payments during the currency of the licence, or both, of such amounts or amounts as may be determined by or under the licence.(i) the Secretary of State,(ii) the Office of Rail Regulation, or(iii) any other person, or any other person of a class or description, specified in the licence, except a Minister of the Crown or Government department,of a payment on the grant of the licence, or payments during the currency of the licence, or both, of such amounts or amounts as may be determined by or under the licence.(2) Conditions included in a licence under subsection (1)(a)—
(a) may require the licence holder to enter into any agreement with any person for such purposes as may be specified in the conditions; and(b) may include provision for determining the terms on which such agreements are to be entered into. (3) Conditions included in a licence under subsection (1)(a) may require the licence holder—
(a) to comply with any requirements from time to time imposed by a qualified person with respect to such matters as are specified in the licence or are of a description so specified;(b) except in so far as a qualified person consents to his doing or not doing them, not to do or to do such things as are specified in the licence or are of a description so specified;(c) to refer for determination by a qualified person such questions arising under the licence as are specified in the licence or are of a description so specified;(d) to refer for approval by a qualified person such things falling to be done under the licence as are specified in the licence or are of a description so specified;(e) to furnish to a qualified person such documents or other information as he may require for the purpose of exercising any functions conferred or imposed on him under or by virtue of the licence;(f) to furnish to the Secretary of State or the Office of Rail Regulation such documents or other information as he may require for the purpose of exercising the functions assigned or transferred to him or it under or by virtue of this Act.(4) Conditions included in a licence may contain provision for the conditions to cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined by or under the conditions; and any provision included by virtue of this subsection in a licence shall have effect in addition to the provision made by this Part with respect to the modification of the conditions of a licence.
(5) Subsections (2) and (4) are without prejudice to the generality of subsection (1)(a).
(6) Any reference in subsection (3) to a “qualified person” is a reference to—
(a) a person specified in the licence in question for the purpose in question, or(b) a person of a description so specified,and includes a reference to a person nominated for that purpose by such a person pursuant to the licence.(7) Any sums received by the Secretary of State or the Office of Rail Regulation in consequence of the provisions of any condition of a licence shall be paid into the Consolidated Fund.
Lord Berkeley
I shall be brief in speaking to this group of amendments because we have discussed at some length the licence for the strategic highways company. My Amendment 9 is a provision similar to what Network Rail now has. I was interested in the Minister’s comment that it is a licence for a commercial model and that the strategic highways company is not going to be commercial. I do not know whether Network Rail was ever commercial in her definition of the word, but it certainly is not now and I notice that the Government have not tried to change the licence to reflect any alteration. Perhaps she has a quick view on that. The draft licence that we received on 3 November was certainly an improvement on the previous version, for which I am very grateful.
The only other thing I wish to comment on in this group is my Amendment 17, which is to do with the duties of the strategic highways company. Whether they should go in a licence or in some other document, I do not know, but the draft licence from the Department for Transport is a licence to build roads, to take into account environmental concerns and to do it reasonably efficiently. Given experience of legislation over the years, there is a need to have in the Bill, for preference, or in a licence, if it must be that way, a wider role and wider responsibilities for this company to go cross-modal. That includes looking at road and rail—I declare an interest as chairman of the Rail Freight Group—passenger as well as freight, efficiencies, travel choices, developments in sustainable locations, as sustainability is very important in all this, and different modes to secure the economic, social and environmental gains jointly and severally. I do not think that these are in the draft licence at the moment. If the Minister would look at this again and see whether some—preferably all—these issues could go into a licence, I would be much happier that the strategic highways company was going to be part of a wider transport and environmental structure, taking into account the needs of customers, the environmental needs, roads, railways and developments in local transport. With that short introduction, I beg to move.
Lord Whitty
My Lords, I have Amendment 10 in this group. Again, as in the previous debate, my noble friend Lord Berkeley has put his finger on another lacuna in the Bill. Nowhere does the Bill spell out the functions and duties of the proposed strategic highways company. There is a whole schedule, 26 pages long, which largely consists of adding,
“or a strategic highways company”,
but does not actually say what that company should do. I find this extraordinary and not consistent with earlier circumstances in which we have set up public bodies or corporations to do a particular job, some of which are still doing it, where there was clarity in the legislation as to those functions. Those functions have to be economic, social and environmental these days. The Government should at least consider making sure, at later stages, that the Bill spells out the central duties of the companies. I hope that the Minister will take that away.
Lord Berkeley
My Lords, I am grateful to the Minister for her response. We must recognise that she has moved a long way on these discussions in the last month or so and I very much welcome her commitment to come back at Third Reading with some of these issues—particularly those in my Amendment 17—in the Bill. As she says, some of the things are in the draft licence but, as many noble Lords have said, we would like to see it strengthened a little more. I hope that we will be pleased with the result at Third Reading in a week or two. In the meantime, I beg leave to withdraw the amendment.
Lord Berkeley
My Lords, I support my noble friend on this group of amendments. I will briefly develop his theme by looking at the amendments in the group that relate to the monitor. I have proposed that the name of the Office of Rail Regulation should be changed, but that does not matter very much.
In Clause 9, the Government have introduced Amendments 41 and 43, both of which are welcome. They are a step forward from our discussions and I am certainly pleased to see them there. I have one or two amendments to those two amendments on the Marshalled List, which are complicated to go through and I am not going to attempt to go into any great detail now. Their purpose is twofold. One relates to safety and the other efficiency.
On the railways, one of the two tasks of the Office of Rail Regulation is to ensure that the network is operated as safely as possible under the Health and Safety at Work etc. Act, which is slightly modified for railways. As my noble friend Lord Whitty said, the approach of the amendments is to do the same for the roads. Let us not forget that, as my noble friend said, just under 2,000 people were killed on the roads in the past year compared with none on the railways—no passengers, very few rail workers and I am not sure about the road workers. Sadly, suicides are a separate issue. The difference between 2,000 on the roads and none on the railways indicates that the structure of the Health and Safety at Work etc. Act is working very well on the railways. In these amendments, I propose that a similar thing should be done on the roads, supervised by the Office of Rail Regulation.
The other relevant matter in this group is that, as we discussed briefly in Committee, the monitor should not only have the ability to check on the efficiency of the strategic highways company, but have powers of enforcement if it felt that the efficiency was not as it should be. Again, that is contained in the amendments. One thing worries me about the Government’s amendments. There is a constraint on the independence of the monitor, which is serious. The rail regulator is totally independent. He cannot be sacked except under extreme circumstances that we do not need to go into. But in Amendment 43 on general duties that the monitor should act under, the Government say that the principles are that:
“(b) regulatory activities should be targeted only at cases in which action is needed”.
Who decides when that takes place? Who decides which actions are needed? Surely it must be the regulator who decides. If that is the case, then proposed new subparagraph (b) in Amendment 43 is superfluous. If it is the Government, I suggest that they would be interfering in the independence of the regulator.
In Amendment 48, the guidance that the monitor would receive in proposed new subsection (2) includes:
“The Secretary of State and the Treasury, acting jointly, must give the Office”,
of Rail Regulation,
“guidance as to the circumstances in which the payment of a fine under [this] section … should be required”.
Whereas the ORR can fine Network Rail whenever it likes if it has due cause, when it comes to the strategic highways authority it has to ask the Treasury’s permission first. That sends completely the wrong message. It would be good if the Minister could agree to look at those two things and the general safety outline as to how it will be implemented under the Health and Safety at Work etc. Act as part of the discussions between now and Third Reading.
Lord Jenkin of Roding
My Lords, I have listened to the argument with interest and some incredulity. Seeking to compare the number of deaths on the railways with the number of deaths on the roads ignores major differences between the two forms of transport. The roads are essentially a matter for individual drivers and many accidents and deaths are caused by serious driver error. It can be because the vehicles have not been properly inspected. Older vehicles always have to have annual road testing. Of course, there are many other causes, such as the terrible bonfire that swept smoke right across the motorway and caused serious accidents. But none of those can conceivably be laid at the door of the highways authority.
The design of the roads, signposting, warning signs and a whole range of things are the responsibility of the highways authority and would be the responsibility of the strategic road company, but a great many of the issues for which the strategic highways authority would be made directly responsible—the noble Lord, Lord Whitty, talked about legal liability—cannot conceivably be laid at the door of that authority. The language that he has used in his various amendments simply does not draw the distinction between issues that are clearly the responsibility of other authorities, notably the whole question of licensing, inspection and testing of vehicles and the question of skills of drivers and so forth. I do not see how the highways authority could be made responsible for all that.
I studied the noble Lord’s amendment and listened to his eloquent speech in which he made it clear that he has a very real interest, although non-pecuniary, in road safety, but it is overstepping the mark to try to lay the liability for that sort of thing at the doors of the strategic highways authority. I will listen to what my noble friend says having studied her amendments on this issue with interest. For the moment, I am not persuaded on this occasion by the noble Lord, Lord Whitty.
Lord Berkeley
“Formation of route strategies: consultation and co-operation1AA (1) The strategic highways company shall produce route strategies for all highways under its control (“specified highways”) and shall ensure such strategies remain up to date.
(2) In deciding how to divide up specified highways into route strategies, the strategic highways company shall have due regard to local government boundaries and travel to work areas.
(3) Route strategies shall consider—
(a) other transport modes, including railways and port facilities, that are served by specified highways or run parallel to them;(b) the interaction between specified highways and other highways;(c) opportunities to secure the expeditious movement of people and freight;(d) opportunities to reduce environmental impacts.(4) The strategic highways company must—
(a) carry out such consultation, and arrange for such publicity, as the strategic highways company thinks appropriate in relation to a route strategy;(b) consult such persons, and such descriptions of persons, as may be prescribed;(c) have regard to the responses to the consultation and publicity in deciding whether to proceed with a route strategy.(5) In setting or varying a roads investment strategy, the Secretary of State shall have due regard to route strategies.
(6) The Secretary of State may make regulations about route strategies.”
Lord Berkeley
I speak briefly on this amendment. We are in Schedule 2, Part 1 now. It suggests that there need to be route strategies before the Secretary of State can really put forward investment strategies. We have discussed this before—in route strategies it seeks to ensure full consultation. The Minister has been very forthright in her commitment to consultation, which of course I welcome very much. It is, however, another way of saying how important it is, when one is considering route strategies, to look at all different modes, including not only the local government travel to work areas, how to move people around and ensure consultation.
The proposal is a very useful precursor to an investment strategy, and I hope it will give the impression outside, as it is designed to, that transport, surface transport, road, rail and other means of transport are being looked at in the round rather than just having an investment strategy in which we are investing in roads willy-nilly. I beg to move.
Baroness Kramer
My Lords, I will speak briefly to the amendment. We recognise that what the noble Lord is seeking to do is to remove some ambiguity, but we are not comfortable with his amendment because we think it would prevent the company from adapting the route strategy process to meet changing needs and circumstances. That would make it somewhat undesirable. We recognise what is driving this. It seems that it is being driven by a desire for greater clarity, so I am happy to commit to him to include a requirement in the final version of the statutory directions and guidance along the lines that the company will agree the process with the Secretary of State and publish it. That should provide the combination we are seeking, both of clarity and of flexibility. I hope that on that basis the noble Lord will feel able to withdraw the amendment.
Lord Berkeley
I am grateful to the Minister for that short reply. I shall read it with interest, but it sounds good. On that basis, I beg leave to withdraw the amendment.
Lord Berkeley
My Lords, I will speak to one or two of the other amendments in the group, and hope that the Minister will be able to respond under the slightly odd arrangement we have.
In Clause 8, on my Amendment 33A, the Government have moved a long way in changing the name and activities of the Rail Passengers Council. The point of the amendment is to emphasise the need for them to consider not just the users of the network, but also those who do not currently use it or who cross over the network. In other words, they must look at the people who are not using it, at the potential for modal shift and at reducing the need for travel. They must look at the thing in the round before they come up with their excellent data, which I am sure they will do on the roads as they currently do for railways and, of course, buses.
Moving quickly, I raised a question about Amendment 48 in a previous grouping—I got it wrong—and the Secretary of State giving the Office of the Rail Regulator guidance as to the circumstances in which payments were defined. I hear what the Minister said. My question is whether that is the same guidance and instruction that the ORR currently has with the railways. If not, why not?
Lord Davies of Oldham
My Lords, I speak to Amendment 33, which asks the watchdog to look after the interests of cyclists and pedestrians. As we know, and as the department has recognised, a strategic road network can often be a barrier for pedestrians and cyclists. That means that there are many potential users of the network who may wish to use it to cycle to work but currently cannot.
The legislation would not allow Passenger Focus to consider their views. The chief executive, Anthony Smith, has been quoted as making clear his view that, given the legislation, Passenger Focus could focus only on actual users of the strategic network along with, perhaps, a second tier of fleet managers marshalling its use. While he quite understood the concerns around the remit, any change must be a matter for government and the legislative process. This is therefore our chance to effect that change, against a background in which the Government continue to respond to the increasing pressure for the use of cycles by saying that they are very much in favour of such growth.
Of course, the greatest deterrent to cycle use in our towns and cities and on connecting roads of any significance is danger. Because we do not set out to protect cyclists adequately, our present figures are dreadful in comparison to many other European countries. In the UK, 2% of journeys are made by bike, compared with 10% in Austria, 19% in Denmark and 27% in the Netherlands. Some 22% of all journeys in the UK are of less than a mile, but a fifth of these are in a car. Some people are, of course, obliged to use a car for a journey of less than a mile. However, the great deterrent to using the far more efficient and effective cycle is that people consider cycling to be dangerous.
The Government promised to support cycling but, of course, Cycling England, the pressure group for cyclists, was shut down; the body which co-ordinated policy and action on cycling, which had a £60 million annual budget, was shut down; and the Government also abandoned the cycling towns and cities initiative which we, as the previous Administration, had initiated—and it was delivering results. The proportion of people cycling at least once a month in England dropped from 15.3% to 14.7% in the year to October 2013. No one is going to say that that is a dramatic drop, but it is movement in the wrong direction when there are calls on all sides, to which the Government subscribe, for cycling to be encouraged. There was a decline in all regions in the United Kingdom.
I am therefore seeking with this amendment for the Government, who alone can take the legislative initiative on this—that is quite clear—to give a voice to cyclists and pedestrians, and to ensure that we make some progress on the aim of improving the use of cycling, and even walking over short distances. In order to achieve that, certainly with cycling, we must overcome the anxiety of the public that cycling on so many of our roads is just not safe enough.