Railways: Franchises

Earl Attlee Excerpts

Wednesday 10th October 2012 Lords Chamber

[Lord Davies of Oldham]

My Lords, I wish to ask the Question of which my noble friend the shadow Leader of the House has given private notice.

[Earl Attlee]

My Lords, first, I refer to the answer that I gave the House yesterday. The Secretary of State has asked Sam Laidlaw to look into the west coast procurement process with the support of independent advice. This review is due to provide findings by the end of October and it would be premature to speculate on them. A second review will examine the implications for the wider franchising programme. Both reviews will be published reports. As I said to the noble Lord, Lord Adonis, yesterday, if there are any questions about the thoroughness and integrity of Sam Laidlaw’s inquiry, I shall be happy to debate these when his findings are made public. It is in the interests of the taxpayer that the review is conducted swiftly and thoroughly, and I have every confidence that the Laidlaw review will uncover exactly what went wrong and why.

[Lord Davies of Oldham]

My Lords, the question asked by my noble friend Lord Adonis yesterday, to which the Minister referred, indicated that these reviews are being carried out by officials in the department that is in the middle of this debacle, and they will inevitably involve the conduct of senior officials, including probably the Permanent Secretary, and Ministers. Therefore, how can they be carried out effectively by junior Ministers? Furthermore, how can the Minister justify the point that was addressed to him in another question yesterday? Ministers received warning of flaws in the franchise process on 10 August, a month before both the Secretary of State and the Minister of State were somewhat surprisingly reallocated to departments far away from transport.

[Earl Attlee]

My Lords, the noble Lord asked how Sam Laidlaw and Richard Brown can perform their duties. The answer is that they will do so with integrity, and I am sure that the noble Lord is not suggesting that they are unable to do that. He also suggested that officials have acted in bad faith. I can assure the House that there is no evidence whatever of officials having acted in bad faith. It is a serious mistake but there is no evidence of bad faith.

[Lord Bradshaw]

Will the noble Earl think about the fact that the franchise process is probably irretrievably broken? Will he ask his right honourable friend the Secretary of State to make a bid for room in the legislative programme in the next Session of Parliament, as I believe it is inevitable that this Act and its successors will have to be reviewed?

[Earl Attlee]

My Lords, I do not believe that the franchise process is inevitably broken, but that is a matter for Richard Brown to review. Professor David Begg has been reported in the Financial Times as saying:

“Because of this procurement failure we risk becoming far too negative and throwing the baby out with the bathwater. We can fix this, we’ve done it before”.

Wise words indeed, and the first and correct step is these two fairly quick inquiries.

[Lord Morris of Aberavon]

My Lords, is not the basic problem the division of responsibility between those who operate the coaches et cetera and those who operate the track? That is one reason why the Department for Transport has a most difficult task indeed. Is the Minister aware that when I chaired the joint inquiry into the finances and management of British Rail, rather a long time ago, not one witness ever suggested such a split? Given where we are, will the Government consider having an independent body of expertise to advise all government departments on the allocation of major contracts?

[Earl Attlee]

My Lords, if we need a more fundamental review of the structure of the rail industry, and in particular franchising, I am sure that the Brown review will suggest that. I redraw the House’s attention to what Professor Begg said over the weekend.

[Lord Campbell-Savours]

The noble Earl is deliberately avoiding answering the question that is being asked by my Front Bench, which is a question that I tried to ask yesterday. Were Theresa Villiers and Justine Greening informed by civil servants, prior to the appointment of Mr McLoughlin as Transport Secretary, of discrepancies in the calculations concerned with these bids? The answer is simply yes, they were aware, or no, they were not.

[Earl Attlee]

My Lords, that matter is to be determined by the Laidlaw inquiry.

[Lord Martin of Springburn]

My Lords, every Monday I use the Pendolino to come here and every Thursday I go back using it. Could I put on record that it is an excellent service? Whenever it has been late it has been because it has had to slow down for the safety of the passengers. The staff are excellent and provide a good service to everyone on that train. It would be a great worry for those who come from further north if there were uncertainty over this service.

[Earl Attlee]

My Lords, the noble Lord is one of the first to worry about the passengers. I take this opportunity to reassure all noble Lords and passengers that the service on the west coast main line will continue after 9 December.

[Baroness O'Cathain]

My Lords, in view of the fact that it has been stated that the franchise system is broken and that track and train should never have been divided, the reality is—I would like confirmation of this—that, because of the European Union, we had no option but to divide train and track.

[Earl Attlee]

My Lords, I would not like to deny that what my noble friend has said is true.

[Lord Adonis]

My Lords, twice this afternoon, the noble Earl has cited Professor David Begg and his view that the franchise system can easily be rectified. Is the noble Earl aware that Professor David Begg is a non-executive director of First Group, the company to which his department awarded the franchise before it had to be cancelled, and that therefore he is not an entirely independent observer of these events? Does the noble Earl understand what the word “independent” means; it means that one should be apart from the matter that one is reviewing.

How can Sam Laidlaw, for whom I have the highest respect—he is an executive of great integrity—possibly be judged to be independent when he is a non-executive director of the department whose actions are the subject of an inquiry in this case, including the actions of senior civil servants and Ministers who are with him on the board? Does the noble Earl not recognise that the findings of such an inquiry will always be tainted until they are properly and independently conducted and that proper independent review cannot take place under a non-executive director of the very department that has conducted probably the single biggest failure in British public policy since the poll tax?

[Earl Attlee]

My Lords, I answered the noble Lord’s second point yesterday. On the first point, Professor Begg chaired the Commission for Integrated Transport, which was set up by the party opposite.

[Lord Craig of Radley]

My Lords, will the Minister confirm that the Treasury was involved in considering and approving the figures worked out by the Department for Transport that proved to be at fault? If so, will the review take account of the contribution that the Treasury has made to this fiasco?

[Earl Attlee]

My Lords, I am sure that the reviews will look at all causes of the fiasco. The difficulty is that the error was not obvious until officials started looking very closely at the figures in the light of the judicial review.