Railways Bill

Public Bill Committee, 14 December 2004.

Standing Committee A

Railways Bill

Win Griffiths (Labour, Bridgend)

I remind the Committee that the debate on the programme motion may continue for up to half an hour.

Tony McNulty (Labour, Harrow East)

I beg to move,

That— (1) during proceedings on the Railways Bill the Standing Committee shall (in addition to its first meeting at 9.25 a.m. on Tuesday 14th December) meet— (a) at 2.30 p.m. on Tuesday 14th December; and (b) at 9.25 a.m. and 2.30 p.m. on Thursday 16th December, Tuesday 11th January, Thursday 13th January and Tuesday 18th January; (2) the proceedings shall be taken in the order shown in the first column of the following Table below and shall (so far as not previously concluded) be brought to a conclusion at the time specified in the second column of the Table.

TABLE Proceedings Time for conclusion of proceedings Clause 1, Schedules 1 and 2, Clause 2, Schedule 3, Clauses 3 and 4, Schedule 4, Clause 5 11.25 a.m. on Thursday 16th December Clauses 6 to 19, Schedule 5, Clauses 20 and 21, Schedule 6 5.30 p.m. on Tuesday 11th January Clause 22, Schedule 7, Clauses 23 to 25, Schedule 8, Clauses 26 to 44 11.25 a.m. on Tuesday 18th January Clauses 45, Schedule 9, Clauses 46 to 52, Schedule 10, Clause 53, Schedule 11, Clauses 54 to 58, Schedules 12 and 13, Clause 59, new Clauses, new Schedules and any remaining proceedings on the Bill 5.30 p.m. on Tuesday 18th January

Clause 1, Schedules 1 and 2, Clause 2, Schedule 3, Clauses 3 and 4, Schedule 4, Clause 5

I am sure, Mr. Griffiths, that it will be an enormous pleasure to work with you and Mr. Amess, your co-Chairman. We had the great delight of Mr. Amess chairing the Programming Sub-Committee last night. There was a good deal of good humour in what proved to be a lengthy meeting, but it was not without some dispute.

The Sub-Committee's draft resolution sets out the number of sittings that the House has allowed us, and with an element of organisation and marshalling—and some logic—it includes a timetable. I know that the Bill will be dispatched with good humour. I promised on Second Reading that I would provide commentary, including a rough schedule of the regulations and guidance—they are to be found on the Table—and a range of other elements, because, like most legislation, the Bill needs to be seen in the wider context and because we are also doing a range of things in the non-legislative dimension. The latter are as important as the Bill, and I am sure that we will come to them subsequently. The motion is eminently logical and it has integrity. The timetable for the 10 sittings is set out in a way that should provide fun and entertainment, after which the Bill will be reported to the House and sent on its travels. I commend the motion to the Committee.

Greg Knight (Conservative, East Yorkshire)

I associate myself with at least some of the Minister's remarks. I certainly hope that the Committee remains good natured. We have a good chance of that with you in the Chair, Mr. Griffiths. Nevertheless, I notice that the Clock facing me is showing the same time now as it did when the Minister started speaking.

It will not have escaped the Committee's attention that the motion is in two parts. We all accept the need for the first part, as we need a framework so that we know the dates and times when we are to sit. However, the Opposition do not accept that the second part is either desirable or necessary. The danger is that what becomes commonplace will become acceptable. I therefore place on record our view that the timetable is not only unnecessary, but in many respects objectionable.

I recall what happened when I was discharging duties similar to those of the hon. Member for Lincoln (Gillian Merron). During my time as a Government Whip, I was given responsibility for the Home Office. The Opposition spokesman for one Bill that I dealt with was the right hon. Member for Sedgefield, who is now the Prime Minister. In those days, we did not have restrictive motions such as this. Our discussions through the usual channels were such that the right hon. Gentleman was content if certain debates took place at a time of day that suited him. He was not interested in keeping the Committee sitting late or filibustering, or in frustrating the Government's will. I thought that he took a responsible view.

In other words, if the provisions under discussion were debated in a manner and at a time that the Opposition found acceptable, the right hon. Gentleman was quite content to follow the process, and at the end of the day, the Government got their business through the House. Neither side ever had a problem with the legislation, because we both got what we wanted from the Committee process. Now, however, the Government have automatically put the Committee in a straitjacket.

Under the old process, which was in operation when John Major was Prime Minister, the Government had a problem with the Committee stage and subsequently had to consider a programme motion on only a handful of occasions. When they decided to change the Standing Orders towards the end of their time in office, as part of what were widely known as the Jopling reforms, I was in the more elevated position of Government deputy Chief Whip. My instructions from the Prime Minister were that we were to do nothing that was unacceptable to the Opposition, who were at that time, of course, the Labour party. So the only reforms that we carried through towards the end of that Parliament were those that were acceptable to the Labour Opposition. What is depressing about the present state of affairs is that the Government have introduced their changes without the consent of the official Opposition.

I therefore invite my hon. Friends to vote against the programme motion. It is a sad day when the Government seek to put a Committee in a straitjacket, particularly when there has been no indication of any rebellion by Opposition Members, who merely want to scrutinise the Bill in a way that they deem fit, without being placed in such a straitjacket.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I, too, hope that our proceedings will be marked by the good humour that we have come to expect from the Minister and which I enjoyed during proceedings on another Bill.

Liberal Democrat Members are broadly content with the programme motion, and we shall vote in favour of it if a vote is called. This is an important Bill, and we broadly support its principles, but some points need to be scrutinised. In my experience, any scrutiny that does not happen in this place will merely happen in another place. That generally takes longer, so it would be helpful to ensure that we give the Bill proper scrutiny here. I hope that the Government will allow for a degree of flexibility to ensure that everything is covered. That aside, however, we are content with the motion.

Finally, let me make a personal apology. I shall not be here on Thursday, because my daughter is getting married, and there is one authority higher even than Parliament, which I must obey.

David Wilshire (Conservative, Spelthorne)

May I start with a point of order, Mr. Griffiths? I have been told off many times for taking my jacket off before the Chairman has given us permission to do so. Could you perhaps clarify the position?

Win Griffiths (Labour, Bridgend)

The hon. Gentleman may take off his jacket.

David Wilshire (Conservative, Spelthorne)

Thank you, Mr. Griffiths.

It is important to put it on record at the outset that the usual channels have, as always, been as kind as they can be. They have tried to encourage me to co-operate and to become an enthusiast for guillotine motions. The Minister has also set out to be helpful, but I am always suspicious of Ministers who do that, because they are usually disguising some awful truth that they hope we will not notice. Nevertheless, however hard the Government try to persuade me that programming is a good idea, I am afraid that they will fail.

I have an example that makes my point better than would any lengthy speech about my concerns. [Interruption.] The Clock is still at 20 minutes past nine, so the half hour that we were given has not started. As far as I can see, we are always invited to ask not how much time a Bill needs, but how much we are prepared to give it. Flexibility is suggested, but it is not real. At the outset of discussions on this Bill, I was asked how many sittings I thought it would need, and there was some good-humoured debate about the matter. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) has more important duties, and I would be the last to criticise his priorities. What his constituents might make of knowing that he is shirking his duties here is for them to decide, but if I were in his position, I would make the same decision. However, yesterday I gathered that the other Liberal Democrat member of the Committee, the hon. Member for Southport (Dr. Pugh), also has difficulties on Thursday. I do not want to make personal criticisms, but the point was made to me—

John Pugh (Liberal Democrat, Southport)

I am on the School Transport Bill Committee; Parliament has double booked me.

David Wilshire (Conservative, Spelthorne)

In my party at least, there is always discussion about who would like to serve on which Committee, but that is a different issue.

The situation that we discovered yesterday was, for reasons about which people can draw their own conclusions, that both members of the Liberal Democrat party will not be able to be here. I understand that they suggested—they have not approached me—that it would be a good idea if the Committee did not sit on Thursday afternoon. I have some sympathy with that idea, which I would be more than willing to discuss in principle. However, I was then told that, irrespective of what decision was taken about whether we would sit on Thursday afternoon, the end date is not negotiable.

It was never going to be a discussion about how long the Bill would take to consider. We were told that the Bill will be dealt with by a particular date and that we can meet as often or rarely as we like, as that is a matter for flexible discussion, but that the length of consideration of the Bill is not open to debate. That says it all about the programme motion. The Government are saying, ''Meet when you like and at what times you like, but you must finish irrespective of how much substance there is in the Bill.''

As my party supports some parts of the Bill, it is possible that it might not need as much time as has been allocated. On the other hand, it might need more, but I am being told that there is no more time on offer, irrespective of what transpires. That is wrong, and it says everything that is bad about such an approach to legislation. It does not matter what the detail is, what the concerns are or whether we get it right, as long as we get the measure on to the statute book according to a timetable pre-ordained by a Government who are not prepared to listen and do not want to know whether they have got it right, as they just want to get on with it. On that basis, I object in principle to the motion.

One cannot be a realistic politician unless one becomes pragmatic about some things. The Opposition are prepared to see whether we can make the best of a bad job. We are prepared to be as flexible as we can, provided that our attempt to be helpful in the circumstances is not taken as acquiescence in the principle to which we object. We will work within it, while protesting about it, provided that we are never told during the proceedings that that means that we acquiesce. If we get to that stage, we will be back to the Clock needing to be repaired, and we might well run out of time. For the time being, however, we will do our best to make this Committee a success, and I promise that we will do our level best to make it a good-humoured, enjoyable experience.

Mark Field (Conservative, Cities of London and Westminster)

I agree with the comments of my right hon. Friend the Member for East Yorkshire (Mr. Knight) and my hon. Friend the Member for Spelthorne (Mr. Wilshire). Some of us newer Members have not been used to the pre-guillotine sittings that were spoken of by the old timers—slightly old timers, perhaps I should say. It seems that the guillotine is here to stay and I suspect that, when the Conservatives are next in government, we will not change the system entirely. We need to move with speed, not just on the programme motion debate, but more generally, to ensure that all aspects are covered.

The Conservative Opposition have played as active a part as we can to ensure speedy progress. After all, it was only four or five parliamentary working days ago that it received its Second Reading, so we have moved as quickly as possible to the Committee stage. I appreciate the pressures felt by the Minister and the Government Whips, given that there could be an election as early as May or even sooner. With the parliamentary timetable in mind, there is some need to move as swiftly as possible. Equally, we will be discussing important issues—they are certainly important from the London perspective, particularly with regard to clauses 15 to 17—at the end of this week and in early January. I shall seek guidance on those issues from the Minister, who is also a London Member.

We have some grave and understandable concerns about the programme motion being rushed through, particularly as 18 January is a fail-safe last date. I hope that we will have an opportunity to discuss everything in great detail and that we will be satisfied by the Government's replies. However, it is right at this juncture that we should put down a marker to express our concerns.

Tom Harris (Labour, Glasgow Cathcart)

I had not intended to make any comments at this stage, but the record should show someone from the Labour Back Benches saying—I believe that I speak for most of my hon. Friends in doing so—that the introduction of programme motions is welcome. Like the hon. Member for Cities of London and Westminster (Mr. Field), I was elected in 2001 and therefore did not have the opportunity to enjoy the all-night debates on the Bill that became the National Minimum Wage Act 1998, for example, although that is a missed opportunity that I do not regret.

The right hon. Member for East Yorkshire and the hon. Member for Spelthorne sent out conflicting messages. The right hon. Member for East Yorkshire gave an undertaking that there would be no filibustering or undue extension of debates were the programme motion not to be carried. However, the hon. Member for Spelthorne, who has spoken consistently on this issue, then said that we needed longer debates and that we should extend the timetable indefinitely. Those positions cannot be reconciled.

Back Benchers, especially on the Government side, benefit from programme motions because we can make contributions without the Whip giving us the evil eye and telling us to sit down so that we can get on to the next business. Because the programme motion exists, we know that we will not be holding up the Bill and delaying crucial votes.

I finish by asking the right hon. Member for East Yorkshire and the hon. Member for Spelthorne whether they will give an undertaking to maintain their opposition to programme motions on every occasion if the Conservative party ever comes back into government. I suspect that such a position is wise in opposition but not very practical in government.

David Wilshire (Conservative, Spelthorne)

Rather than invite us to make a commitment, perhaps the hon. Gentleman could make a commitment himself not to argue against programme motions when he finds himself in opposition next year.

Tom Harris (Labour, Glasgow Cathcart)

I can give a firm undertaking to oppose programme motions if I am in opposition after the general election in 2005.

Tony McNulty (Labour, Harrow East)

There we have, in microcosm, the fun that the Committee will be as we rattle along.

We would all like to extend our heartiest congratulations to the hon. Member for Thurso on his daughter's wedding. We will miss him, but I am sure that he will be back, fighting fit, after the break.

Greg Knight (Conservative, East Yorkshire)

The dilemma of the hon. Member for Caithness, Sutherland and Easter Ross could surely be resolved by inviting the Committee to attend the wedding.

Tony McNulty (Labour, Harrow East)

Even as a Minister, that is something beyond my gifts and powers. I apologise for referring to the hon. Member for Caithness, Sutherland and Easter Ross as the hon. Member for Thurso. I know that he owns most of his constituency, or that his family purports to do so—they are all going to the wedding—but still, I apologise.

I was on my feet for only two minutes, but I made the right hon. Member for East Yorkshire sad and depressed, which was a good start, and turned the hon. Member for Spelthorne, who is usually a hearty chap, into a complete cynic. We heard a degree of honesty, which we have come to expect, from the hon. Member for Cities of London and Westminster, who said somewhere in his short contribution, unless I misheard him, that the Conservatives probably would not make many changes if they were to get into government.

The only point on which I disagree with the hon. Member for Spelthorne is about flexibility—the system is flexible. We have on our side, in the usual channels, someone whose middle name is flexibility. I am sure that the Programming Sub-Committee could meet again before 18 January to re-evaluate the position as we go forward with our deliberations. That may not be a terribly popular idea, but it could meet just after this sitting, and we could reinstate the sitting of 21 December if people are that desperate for more time. I am sure that that would go down extremely well with our Assembly colleagues. It might be a smaller Committee, but the option is there, none the less.

Hon. Members will see from the programme motion that we shall meet at 2.30 pm on Tuesdays and Thursdays, but that there is no end time. If we are having fun, we can go on for as long as we choose, so there is flexibility, and that is an appropriate way to do business.

I will happily make the same promise as my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris), because if there were ever a Conservative Government, they would not change this, and because the chances of that are so remote that we in this House shall carry on as we do. This is an appropriate way to marshal our business; the motion is fair, and I commend it to the House. I hope that we can dispatch the motion and get on with the fun.

Question put:—

The Committee divided: Ayes 14, Noes 4.

Win Griffiths (Labour, Bridgend)

I remind the Committee that there is a money resolution and a Ways and Means resolution in connection with the Bill, copies of which are in the Room. I also remind Members that adequate notice of amendments should be given, and that as a general rule my co-Chairman and I will not accept starred amendments. I ask Members to ensure that their mobile phones and pagers are either turned off or in silent mode while they are in Committee.

Clause 1 - Transfer etc. of SRA functions and abolition

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 14, in clause 1, page 1, line 8, leave out 'may' and insert 'must'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following amendments: No. 15, in page 1, line 14, leave out paragraphs (a) to (c).

No. 17, in page 2, line 7, at end insert ', and franchisees and passengers'.

David Wilshire (Conservative, Spelthorne)

The challenge facing me, Mr. Griffiths, is whether you will let me develop some points to the extent that this becomes a stand part debate, or whether we should keep the debate tight, although I suspect that that will become clear. These amendments go to the heart of the Bill, so we may need to take a bit of time on them. We do not seek deliberately to hold up the Bill, and have given an indication of our good faith by not using all the time available to discuss the programme motion. Should this group of amendments take a while to debate, it is because they are of some significance, or at least amendment No. 15 is.

I shall deal first with amendments Nos. 14 and 17, as they do not need to be discussed at great length. Some cynics could look at amendment No. 14 and say, ''Here we go: changing ''may'' to ''must'' is a well-tried tactic for discussing something that is not really of any great importance.'' However, on this occasion I genuinely think that it is of importance, because clause 1(2) states:

''The Secretary of State may make a scheme for the transfer of property, rights and liabilities from—

the Strategic Rail Authority''

and so on.

My understanding of the Bill is that one of its key purposes is to abolish the Strategic Rail Authority; I understand not that we may decide to do it, but that getting rid of the wretched thing is a key purpose. Therefore, to say that as a result of the Bill the Secretary of State ''may make a scheme'' misses the point. An important issue arises: if we grant the Government the powers in question, the abolition and the transfer of powers must happen. I therefore suggest to the Government that they make things clearer and simpler. For the avoidance of all doubt about the purpose of the measure, changing ''may'' to ''must'' is more than a tactical debating point; it would clarify the Bill no end.

Amendment No. 17 relates to subsection (5), which sets out whom the Secretary of State must consult when he comes up with a scheme. It defines the category as

''every person to whom property, rights or liabilities would be transferred under the proposed scheme.''

Amendment No. 17 would add two other groups of people who should be consulted: the franchisees who run the railways and the passengers who use them. It could be argued, and I suspect that the Minister will try to persuade the Committee of this, that the provision is all about property, rights and liabilities, and therefore has nothing to do with passengers. However, one of the problems about the Government's approach to trying to run the railways is that passengers' interests have been pushed down the list, and political objectives have become more and more important.

If at any stage in our consideration of the Bill we come across instances of the people who run the railways and the passengers not being included—even if it might not seem logical to include them at the outset—we are stacking up trouble, because the people who matter will yet again be left out of the loop when it comes to sorting out the future of the railways. Amendment No. 17 is intended as a correction to that. I do not see any great need to explain in detail why franchisees should be involved, although if the Minister wants me to I shall happily return to the matter—as I will for passengers. It is fairly self-evident for the purposes of a discussion of this sort that they could and should have a contribution to make at all stages.

I must accept, in talking about amendment No. 15, that I could have tabled all sorts of variations of amendments to subsection (3); but for the purposes of the debate I simply opted for suggesting the deletion of paragraphs (a), (b) and (c) from the list of persons to whom the Secretary of State might transfer the relevant property, rights and liabilities. So, under my amendment, the people to whom such responsibilities should not be given are the Secretary of State, the Scottish Ministers and the National Assembly for Wales.

I am fairly certain that the Minister will tell me that that strikes at the heart of what the Government are trying to do. I hope that it does, because it is intended to do so. Whereas my party agrees with the abolition of the SRA—I am sure that my right hon. Friend the Member for East Yorkshire will give a far better explanation of this than I—we do not agree with passing its responsibilities, duties and powers upwards, ever further from the franchisees and the passengers, and ever closer to politicians and civil servants, who are admirable people but useless at running businesses.

One need only look back over the years to see how problems arise when politicians try to behave like business people. Civil servants are good at many things, but if they were good at managing business, that is what they would be doing. I do not mean to criticise Ministers or civil servants when I say that they are, in my general experience, quite useless at running things like railways. Indeed, we are delighted to see the end of the SRA, for reasons that I shall explain in a moment. However, we are not happy about the fact that the SRA's responsibilities and duties are going upwards. They will now be more remote and will be in the hands of people who will not be good at doing what they will be asked to do.

On the other hand, there is the benefit that we will be getting rid of the SRA. Over the four years that it has been around, the SRA has demonstrated itself to be an utter waste of time and money. When it took over, the Office of Passenger Rail Franchising cost £13 million and employed 187 people. The organisation that we are being asked to abolish costs £102 million and employs 454 people. The cost of the thing and the number of people it uses have grown and grown as it has become less and less effective, so we are of course delighted to see it go.

I am also delighted to see the SRA go because it has not improved services. It has failed to give the railways any leadership or direction. In fact, the reason that the Government have given for getting rid of it is that there should be more strategic leadership in somebody else's hands. Of course, that is a bit rich from the very Government who set up this wretched body in the first place. Four years ago, colleagues of ours sat in a Committee Room, having to listen to the Government saying that the SRA was the best thing since sliced bread and that it was the future of the railways. Here we are four years later, however, in another Committee Room, with a different group of colleagues, being told how useless it is and that we should get rid of it. Rather than criticising me, as I am sure he will, the Minister should apologise for wasting time, using people unnecessarily, messing around with the railways and getting things wrong.

Amendment No. 15 would make it clear that power should not be transferred upwards and that we want it transferred downwards. It is the railway operators themselves who deal with passengers and freight; they should be given the power to get on with the job of running the railways, not have power taken even further away from them.

One of the difficulties for the railways is that the franchisees' lack the confidence to invest, because they are always being messed about. Well, they will be messed about even more now, and much-needed investment, which would improve the railways, will be even more difficult to obtain if power is passed upwards. Amendment No. 15 would, I hope, move power in the other direction.

Those, then, are the reasons why these three amendments stand in my name. I seek your guidance on one further issue, however, Mr. Griffiths. Subsection (3)(f) refers to a company, and I would be perfectly happy speak to it now. Equally, if you would prefer, I could leave it to the stand part debate.

Win Griffiths (Labour, Bridgend)

Given the fairly general principles that have been set out in dealing with paragraphs (a) to (c), I would be content to allow a few words to be said about paragraph (f). We could then avoid a stand part debate.

David Wilshire (Conservative, Spelthorne)

I am grateful to you, Mr. Griffiths. I hoped that you would say that, because paragraph (f), in conjunction with amendment No. 15, raises a substantial issue, which is worthy of debate. It refers to

''a company which is wholly owned by a person falling within any of paragraphs (a) to (d) or is jointly owned by more than one of them.''

That simply means that it will be impossible to involve any company that is not owned by the Government, other politicians or some combination of the two. The question that arises from subsection (3), however, is what on earth is wrong with transferring powers to a company owned by shareholders? Yes, it is the whole issue of nationalisation versus privatisation.

Just as the Minister will not apologise for making a mess of the railways, I will not apologise for wanting to privatise those businesses currently being run by politicians, because we are not very good at it. Instead, clause 1(3)(f) imposes a restriction on the use of outside companies. It that provision stands, it will be impossible to go to the private sector in order to use the expertise of businesses to run things properly. That was the general point, Mr. Griffiths; I shall not elaborate because of your suggestion that I speak to the amendment only briefly.

That is the thinking behind the amendments. I look forward to hearing the contributions of other hon. Members.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Let me preface me remarks by saying that any member of the Committee who wishes to come to the wedding is welcome, provided that they travel there and back by rail—which means, I suspect, that I shall not see many of them there.

I was interested to see what would be the exact thrust of this little group of amendments. Amendments Nos. 14 and 17 raise the perennial question of whether ''may'' should be ''must''. The hon. Member for Spelthorne could have chosen the verb ''will''; it would have served the same purpose. However, there must be a reason, and I look forward to hearing what the Minister has to say.

Amendment No. 17 would insert into subsection (5) the words ''and franchisees and passengers''. As a general principle, I am happy to see anyone consulted. Indeed, when it comes to consultation, the more the merrier. However, whether that consultation has a particular purpose is a moot point.

The main thrust comes with amendment No. 15, which would leave out paragraphs (a), (b) and (c) of subsection (3). As the hon. Gentleman explained, his party would like to see the running of the railways taken away from politicians and given to business. I fundamentally disagree with that premise. The problem with the railways is that the long-term strategic thinking required for running a successful railway has not been delivered because, for as long as the railways require a subsidy, it is a task for Government. If subsidies are required, it will always be for the Treasury and Ministers to make those decisions.

I think that the hon. Gentleman slightly misunderstands what the SRA's property rights and liabilities might be, because it does not own great chunks of the railways. I suspect that it does not own much. Indeed, I submit that the majority is owned through Network Rail. I suspect that the clause deals with the residual rights and liabilities. I imagine that, with the abolition of the SRA, its staff will go somewhere else, and those staff will have pension rights, resulting in more obligations and liabilities. There will also be contracts with suppliers to be fulfilled, and the office buildings that it owns or leases will all have to be dealt with.

If one accepts that strategic direction will come in the main from the Department for Transport and from the devolved bodies, it seems perfectly appropriate that those staff should go to whomever is to receive such direction. If we start with the premise that the SRA should go, the Government will have to take primary responsibility for strategy, although operational delivery will come from Network Rail. In that case, those liabilities assets and rights will clearly have to be transferred somewhere else. The very people and bodies to whom they are to be transferred are likely to be the Secretary of State, Scottish Ministers and the National Assembly for Wales. I am afraid that the hon. Gentleman did not carry me on that argument.

With regard to the hon. Gentleman's general point, I assume that subsections (2)(b) and (3)(f) are required to cover the fact that some of the bodies mentioned may own companies. I doubt whether those provisions are meant to exclude the private sector, inasmuch as I believe—perhaps the Minister will say whether I am right—that the clause concerns the transfer of the SRA's property rights and liabilities, rather than the ownership of the railways.

Having been both a business man and a politician, I concur with the hon. Member for Spelthorne. Businesses should be run by business men, but equally, where political direction is required it is right that it should be given. So long we have a subsidised railway it will be for this Government or any future Government to give that direction.

Greg Knight (Conservative, East Yorkshire)

Unless my eyesight is failing, it has become apparent why the hon. Member for Glasgow, Cathcart was in favour of the programme motion. He voted for it and then disappeared. En passant, in response to his point, I never said that we would oppose programme motions on every occasion. When my party takes power after the next election I will campaign for a change in these procedures because they are bad and do not lead to appropriate scrutiny.

I do not want to make heavy weather of the amendments, but shall make a few points. Having served on a Committee with the Minister before, I know that one of his favourite words is ''otiose''. I suspect that when he catches your eye, Mr. Griffiths, he will say that amendment No. 14 is otiose.

Amendment No. 15 is not perfect, but I get the drift of what my hon. Friend the Member for Spelthorne wants to achieve and I agree with the thrust of his arguments. We do not support taking the strategic operation of the railways back under Government control, although I have sympathy with the Government's reasons for abolishing the SRA, as I said on Second Reading. We therefore do not oppose the thrust of what the Government want to do in part 1.

My hon. Friend hit on something, however, when he said that the answer was not necessarily to give powers to the Secretary of State, Scottish Ministers and the National Assembly for Wales. However, if amendment No. 15 were agreed to, further attention would be needed to deal with the gaping hole that doing so would leave. For instance, it would make subsection (3)(f) nonsensical.

I agree with my hon. Friend's comments and those of the hon. Member for Caithness, Sutherland and Easter Ross about amendment No. 17. If one supports the principle of consultation, the wider the consultation, the better for all concerned.

Christopher Chope (Conservative, Christchurch)

It is a pleasure to serve under your chairmanship, Mr. Griffiths.

On amendment No. 15, will the Minister say what the implications will be for Scotland, because my understanding is that there is a conflict between local interests in Scotland and the national strategic interest, particularly in relation to the future of Waverley station and who will pay for its redevelopment?

Under clause 1, as I understand it, responsibility for ScotRail, which runs local services in Scotland, will be transferred to Scottish Ministers, but there will be no transfer to Scottish Ministers of responsibility for, say, the through east coast main line taking passengers from London to Edinburgh and further north. There has in the past been a conflict of interest between the needs of the long-distance franchise holders and ScotRail, the local organisation. Will the Minister explain exactly how this will work in practice, as I wonder whether we are in danger of creating two different areas of responsibility, and thus conflict, rather than having one unified control? I would be greatly obliged if he could illustrate his answer with specific reference to Waverley station and the much-needed reinvestment in it.

Tony McNulty (Labour, Harrow East)

As someone said, we need to be very clear that the clause is not about who owns or runs the railways or any other such element of public policy, but about the subsequent transfer of the SRA's assets and liabilities on abolition. Hon. Members will look in vain for the detail of the transfer scheme and all the other elements in the clauses because they are not appropriate in the clauses. The best part of a 14-page schedule, schedule 1, goes into some detail about the transfer of functions, which are not all simply transferred back to the Department, but are equally, as hon. Members have said, transferred to Scottish Ministers, to the National Assembly for Wales and to the Office of Rail Regulation. Some functions disappear.

The substance of what the hon. Member for Caithness, Sutherland and Easter Ross said is entirely right: beyond the people who work at the SRA, their pension liabilities and other such liabilities, some of the contracts into which they have already entered, and a range of other elements that are germane to its existence, the SRA is not about to transfer a huge bank of assets. With the best will in the world, therefore, the overall thrust of the amendments is inappropriate. Let me deal with them in turn.

The hon. Member for Spelthorne will be pleased to know that amendment No. 14 is not otiose. I shall probably repeat the word otiose in due course. If he has studied previous Committee proceedings, he will know that there is no doubt that I will also return to phrases such as ''undue specificity'' as we deliberate. In this instance, however, his amendment is not otiose. It is irrelevant, redundant and entirely superfluous, but it is not otiose. Whether or not we want to arm wrestle about whether it should say ''may'' or ''must'' is entirely a matter of style for the Committee, but we will resist the amendment, none the less.

Given that clause 1 invokes the abolition of the SRA and schedule 1 explains in 14 pages where all its functions will go, the notion that the amendment is necessary, because the Secretary of State might say, ''Well, that is all very well, but I do not fancy abolishing the SRA this week or making a transfer scheme, so I am not going to bother,'' and so, just to be sure that we cover ourselves, the clause must say ''must'' rather than ''may'', is entirely irrelevant and superfluous. We will therefore not press the Committee to vote on the amendment. Hopefully, we will leave it to one side and resist it if it is pressed to a vote.

The same is true of amendment No. 17. Should we consult franchisees and passengers if we are talking simply about creating a transfer scheme in lieu of abolishing the SRA and transferring its assets and liabilities elsewhere? I agree with the sentiment that we should do more to consult franchisees and passengers on matters relevant to running the railways. That is why, as we will see, the Bill transforms the rail passengers committees—the passengers' voice—and why we do more and more, in the Bill but more readily outside it, to engage franchisees.

Are we seriously saying that every single passenger who used the railway system last year—the number of passengers reached a billion for the first time since 1961—should, at least potentially, be consulted about Joe Bloggs of the SRA and where his pension liabilities and assets should go when he leaves the SRA? Of course not.

Clause 1(5) clearly states:

''Before making a scheme under subsection (2)''—

the transfer scheme to which the hon. Gentleman refers—

''the Secretary of State must consult every person to whom property, rights or liabilities would be transferred under the proposed scheme.''

There is a huge reservoir of work going on, and processes and procedures to unfold, which will affect every individual in the SRA in terms of their subsequent role or otherwise in the DFT unit, or in other elements. We should bear in mind that the ORR, Network Rail and, to a small extent, the RPC, will take on some of the SRA's functions. It is not a huge land-grab back into government. In the context of what the clause is about—the transfer of SRA functions and abolition—if I were to be unkind, I should say that amendment No. 17 is a tad otiose. It is misguided and totally irrelevant to the clause, but I shall throw in ''otiose'' to satisfy the hon. Member for Spelthorne.

That leaves us with amendment No. 15, which the hon. Gentleman rightly said was the most important of the three. As his right hon. Friend the Member for East Yorkshire gently suggested—teasing him, I thought—if the amendment is accepted, we had better hurry to replace it, otherwise the entire asset base, liabilities and functions rested with the SRA will go either to the Office of Rail Regulation, the independent economic regulator of the railways, which seems rather strange, although we could, perhaps, sort out the mess if we were foolish enough to pass them to that body, or the Rail Passengers Council.

It is entirely honest of the hon. Gentleman to say that he is trying to wreck the Bill, which is entirely in order, but let us be clear what he is about: there is nothing with which to replace it, so we are back where we were on Second Reading, with the Conservatives saying, ''We know that we do not like the SRA, and we don't have a clue what to replace it with, but we don't like that.'' That is a bit of an irresponsible, yet vaguely defendable, position on something as important as the national railway system.

The Conservatives do not like the fact that this is the most significant element of devolution since the Scotland Act 1998, in terms of what goes to Scottish Ministers, which is rather strange, because I am sure that I heard someone suggest that it might be appropriate to get closer to those who most directly impact on decisions. We would say that that is right for a strategic framework. So the Conservative position is this: nothing for Scotland, nothing for Wales, and nothing for England or the UK. They are against coming up and against going down; they are not sure what they want, but they know what they do not like. That may be a defensible position, but, hopefully, the robustness of their arguments will improve rather than otherwise as the Committee goes on, because we cannot have the functions, assets and liabilities of the SRA being inherited by the Rail Passengers Council, which would not want that, or the Office of Rail Regulation, for different reasons.

If the hon. Gentleman is serious about there being a significant rail passenger voice, why encumber the new Rail Passengers Council with all the assets, liabilities and functions of the SRA? It would not get out of the trap in terms of properly representing passengers. I do not understand the objection to the strategic dimension of the SRA coming back to government, because we need it. I reiterate that, given where we started, post-1997, and where we are now, the SRA has carried out a huge body of work across the piece—much of it unsung—in freight, franchises and early work on route utilisation strategies, which has got us to the position at which we can get the rail network into some sort of shape. That is all in the context of the 1 billion-plus passengers who use it. So, although the SRA's day is done—that is the effect of the clause—I should not traduce it and insult it quite as the Opposition do. It has carried out much very good work and encompasses a body of expertise that we shall try to capture for the new Department for Transport rail unit, which is not in the Bill but is mentioned in the papers that I tabled earlier. To characterise that expertise as a bunch of bureaucrats or a bunch of civil servants who cannot run anything is, as I said on Second Reading, not terribly helpful.

Once we have dealt with abolition and the transfer of SRA functions, we shall come on to the substance of issues suggested by the hon. Member for Christchurch (Mr. Chope). I shall be happy to return to them at that point. However, it was interesting that he said he did not want two different areas of responsibility and no overall control. That is code, I suggest, for not wanting any further devolution to Scotland. That is an entirely fair position, but we disagree with it.

The hon. Gentleman wants ultimate uber-centralisation. He wants command and control in an almost Stalinist way, which is interesting. That, he says, is the only way to make things work; it is not possible for all the internal network run by ScotRail to be managed in the context of the inter-city lines that go in and out of Scotland. That is nonsense. Of course it is possible. That is what we need to work towards. It cannot happen if we say that the Office of Rail Regulation and the Rail Passengers Council need to run all the SRA's functions and take over all its assets and liabilities, which is the main thrust of the amendment.

Christopher Chope (Conservative, Christchurch)

I hoped that the Minister would deal with the substance of what I said, rather than put words into my mouth or my hon. Friends' mouths. Why is not it possible for us to discuss, as a specific example of the implications of clause 1, what will happen about the demand in some quarters for the redevelopment of Waverley station? Who will pay—ScotRail, Scottish Ministers or the UK Government?

Tony McNulty (Labour, Harrow East)

Of course I put words in the hon. Gentleman's mouth, and I do not apologise for that. I shall probably do so throughout the Committee's sittings. I did say, in my next breath, that the hon. Gentleman's point was interesting, but not appropriate on the clause that we are considering, and that I was more than happy to return to it when it became appropriate. However, it will not be appropriate at all if the amendment is passed. If that happens, the interface between Scottish Ministers and their responsibilities for rail and the Secretary of State and the wider rail interests of the UK will not form the basis of any discussion, because of the top-down centralisation that has been implied.

I am more than happy to discuss—I could spend hours discussing—Waverley station. I would discuss who owns it, who runs it and who will modernise it or otherwise. That means, of course, starting from a premise that for 18 years the Tories did nothing much with it. That is one reason why we are in the hole that we are in. However, we can return to the matter, and I look forward to doing so in due course.

Christopher Chope (Conservative, Christchurch)

Will the Minister give way?

Tony McNulty (Labour, Harrow East)

No, I shall not, because the hon. Gentleman will only go on about the same thing. He should save it for later or he will spoil my enjoyment; I have something to look forward to on the rest of the Bill.

Amendment No. 14 is not otiose but utterly irrelevant and redundant, so we do not want it. Amendment No. 15 would put a huge hole at the heart of the overall strategy and public policy laid out in the Bill, so we would rather not pursue it, especially on clause 1. Amendment No. 17 is at best misguided in the context of consultation because it relates to the very limited focus of the transfer of the SRA's functions, liabilities and assets. Anyone affected by the transfer of those assets and liabilities will be consulted, as the clause states.

Greg Knight (Conservative, East Yorkshire)

I think that my hon. Friend the Member for Christchurch was just concerned that the Minister should not fob him off about Waverley station. I expect that my hon. Friend would be satisfied if the Minister could tell us at what point in the Bill's consideration he thinks it will be appropriate to discuss the issue.

Tony McNulty (Labour, Harrow East)

The one thing I never do is fob people off, as the hon. Gentleman will know. [Interruption.] If I do, I hope that I do it with a degree of politeness, although it strains me sometimes, but there we are. I suspect that we can return to the issue when we start discussing the early stages of part 2 and the substance of the various assistance and transfer schemes for Scotland and Wales. Indeed, I suspect that we will return to it when we discuss several other issues, which, on paper, do not appear to be directly related to Scotland, but which relate to the substance of the Bill's transfer and devolution elements. Some of those elements are specific to Scotland, but others, such as those in part 2, are more general, and refer, where appropriate, to the Secretary of State, Scottish Ministers or the National Assembly for Wales.

I assure the hon. Member for Christchurch that I am not fobbing him off, and we shall return to the issue at the appropriate stage. It is a tad ironic that he wants to discuss the interface between the Scottish and the UK dimensions, when one of his hon. Friends has introduced a Bill that would totally destroy that devolution. However, I am not fobbing the hon. Gentleman off. He is a strong, forceful character, and if he feels that he has been fobbed off, I am sure that he will return to the theme with a vengeance. For the reasons that I have given, however, none of the amendments commends itself, and I urge my colleagues and all right-thinking members of the Committee to resist them.

David Wilshire (Conservative, Spelthorne)

Well, that was fun. I am glad that the Minister and I have taken up where we left off the last time we were in Committee together. Perhaps I should get in an apology now, because I may well burst into applause in a couple of sittings' time. By then, the Minister will have used up all the insults that he has used before, which will be some sort of achievement. I have been keeping a mental list of them. Thus far, he has said that I am not right thinking, so that is that one ticked off. I am also irrelevant, so that is another one ticked off. Furthermore, I am misguided. They get worse as the days go by, but I have heard them all before. One of my kind and gentle colleagues was even called a Stalinist, which is going some for our first morning. It is typical of the Minister to bluster away and hope that nobody notices the sense of the points that I am making, but I have got used to that.

Let us consider what was behind the Minister's comments. I have learned that he always makes set-piece abusive remarks, which owe nothing to the arguments before us. He works off a bit of steam on the subject and then sits down if he has enjoyed himself. He also likes to put words into my mouth, but I do not think that I have made any reference to devolution, for example. For him to say that amendment No. 15 indicates any view that I may or may not have about devolution in Scotland and Wales, is so ridiculous that it is funny. I do not think that Hansard will show that I have made any reference whatever to devolution. None the less, the Minister decided that he wanted to get that one in in the hope that it would do him some good. Well, I am afraid that it will do him no good at all on this occasion, because I will not rise to the bait on the issue. Indeed, you would not let me, Mr. Griffiths. However, if the Minister would like to talk to me about it afterwards, I would be happy to do so.

Let us look at some of the silly thing that the Minister has said. I am sure that he has a mental list of the things that I say, but he has said that amendment No. 14 is utterly irrelevant. His comments on the substance, however, suggest that it is not. He argued that it was ridiculous to say that the Secretary of State would not shut down the SRA once he had done everything that he was required to do in the Bill. However, if it is ridiculous to say that he will not shut it down after he has transferred all its power, why on earth does the Bill not say so? Instead of saying that he may transfer the powers afterwards, will the Minister admit that the Secretary of State has to transfer them? Surely to goodness, it would be sensible to say so. It is not the amendment, but giving the Secretary of State some choice that is the irrelevant bit. If the Minister feels strongly about it, I do not wish to go to the stake for it.

So far as consulting is concerned, it was fascinating to hear the Minister saying that he would pick and choose whom to consult; that people who use the railway might have a say in some things and not in others. That is what is wrong with this Government's approach to passenger service. What does it matter if he has a great many people whom he ought to consult? Lots of people use the railways and lots of people have an opinion. I am all in favour of asking them. Similarly, I do not necessarily want to go to the stake on that one either.

[Mr. David Amess in the Chair]10.30 amÌOn amendment No.15 and the question whether deleting paragraphs (a), (b) and (c) of subsection (3) would knock a hole in the Bill, I readily concede that it is a probing amendment to find out whether power would go upwards or downwards. At no stage have we said that we could do without the provisions. I sought to indicate as best I could without straying beyond the terms of the subject under discussion that the power should go down and not up. I shall not elaborate, and neither will I apologise for suggesting that that power should not go upwards to politicians.

The Minister does not like some of the suggestions. Indeed, the hon. Member for Caithness, Sutherland and Easter Ross, who represents half of Scotland—[Interruption.] I will get the map out over lunch and check the exact proportion of the geographical area; it is vast. The hon. Gentleman seems to have a notion that if there is a subsidy, it gives politicians a right to run the thing. I am sure that when he went to buy a wedding present, he did not say, ''If I buy this I am determined to dictate to the manufacturer all sorts of things about how, where and when it should be made and what it should look like.'' I see no difference between buying something and providing a subsidy. If we provide a subsidy, we are entitled to discuss the handing over of the money, but that does not give us a right to run the business. That is the difference.

George Howarth (Labour, Knowsley North and Sefton East)

Is the hon. Gentleman seriously proposing that a public subsidy to a service should be unconditional?

David Wilshire (Conservative, Spelthorne)

No, I am not suggesting that one little bit. I see no difficulty in saying what the subsidy is for. Organising the strategy of the business once the subsidy has been obtained and the requirements of the person providing it, however, are best left to the business, not to the politicians who attach so many strings—way beyond what the subsidy justifies—to the running of the business. That is the distinction that I am making. I know that I will not persuade the hon. Gentleman or the hon. Member who represents half of Scotland, but that is where I am coming from.

This has been an interesting debate and it would not be sensible to divide the Committee. I have made my points, and we have heard some responses. We have had offers from the Minister to return to the substance of some of the issues, for which I am grateful. In those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 18, in clause 1, page 2, line 14, after 'Authority', insert

', provided proper compensation is paid'.

I am sure that there is a simple answer in this case. I want to indicate to the Committee that I am not a total right-wing philistine in moving the amendment, which says that if one is going to remove somebody from their job, one should pay the proper compensation. I should have thought that that was a principle that commended itself to the Minister. I do not need to elaborate, except to say that I seek to protect the interests of somebody who is chucked out of their job.

Tony McNulty (Labour, Harrow East)

Welcome to the Committee, Mr. Amess. I am sure that we will have as much fun today as we did in yesterday's Programming Sub-Committee. I look forward to working under your chairmanship.

Paragraph 3(3) of schedule 14 of the Transport Act 2000 states:

''If, when a person ceases to hold office as a member of the Authority, the Secretary of State determines that there are special circumstances which make it right that the person should receive compensation, the Authority shall pay such compensation as may be determined by the Secretary of State.''

If we abolish the SRA and transfer its functions, as we intend to do, we cannot leave that element on the statute book, because the SRA would then be authorised to compensate the members of its board whose positions were terminated in special circumstances. We are halfway there with what is already in legislation, with the notion of compensation—the hon. Member for Spelthorne is entirely right and the point is worth making—yet we cannot say that compensation should be paid in special circumstances, which the abolition would be, but that the SRA should pay it, because we are abolishing that as well. The proposals therefore draw in to the Secretary of State the power contained in schedule 14 of the 2000 Act. I give my assurance that we will interpret the demise of the SRA as a special circumstance, as outlined in the 2000 Act.

It is equally important that we should be allowed from time to time to decrease the SRA's board membership, as subsection (7) also says, because the board number is fixed in statute too. However, we will not take a big bang approach. There will not be a day between now and whatever date is fixed in the future on which someone flicks a switch and the SRA no longer exists and its assets, liabilities and so on are transferred. By definition, the process will taken place over time. We want the numbers on the board to reflect the SRA's residual functions as that process takes place. However, I take the point about compensation, which we feel is substantially covered in our proposals.

Greg Knight (Conservative, East Yorkshire)

I welcome what the Minister has said thus far. Can he confirm that he is saying that, where someone is under contract and that contract has certain provisions relating to its termination, those contractual terms will be honoured?

Tony McNulty (Labour, Harrow East)

Within the context of the amendment, of course I am. In the broader sense, there will be other cases involving the transfer of the SRA's liabilities and assets where contract law will prevail. The amendment refers to subsection (7)(a) and concerns membership of the SRA board. We want to roll forward what prevails in the 2000 Act, because the point that the hon. Member for Spelthorne made is entirely fair.

The issue also concerns numbers. Under the 2000 Act, we are obliged to ensure that the SRA board consists of at least eight members and no more than 15. It is possible to amend that by order, and the current membership is 11. However, once the transfer of functions, assets and liabilities is in train, the role of the board will become moot. We therefore want the board to diminish as part of the process.

The compensation elements that the hon. Member for Spelthorne mentioned are covered in schedule 14 of the 2000 Act and I am happy to give a commitment that ''special circumstances'', as outlined in those provisions, would include, I assume, the demise of the SRA.

Christopher Chope (Conservative, Christchurch)

What is the Minister's estimate of the likely total bill for compensation?

Tony McNulty (Labour, Harrow East)

Given that the current membership is 11 and that at some stage we would like to get it down to zero, I suspect that the answer will depend on the speed at which we move from 11 to zero. If we did that tomorrow, the answer would be 11 times whatever is the proper compensation for those 11 individual members of the board. If it is done over time, the compensation package will be either more or less, although I have not thoroughly investigated the root and branch details; it will be whatever the optimum compensation package is under paragraph 2(3) of schedule 14 to the Transport Act 2000 times 11. What we are not going to do is increase the membership of the SRA to 15 at a time when we seek the diminution of its role and its ultimate demise. That may sound like Sir Humphrey, but that is the best answer that I can come up with. It is 11 times whatever is the current package.

Greg Knight (Conservative, East Yorkshire)

I do not criticize the Minister for not having the figures at his fingertips, because they obviously involve complex calculations. Is he prepared to give the Committee an outline of the figures, either in a future sitting or by letter, bearing in mind that he must know at some point how quickly he wants to proceed with abolition?

Tony McNulty (Labour, Harrow East)

That is a fair point. To the extent that I am committed to ensuring that the Committee and the House are given as much detail as possible about the non-legislative dimensions of the policy as well as the legislative ones, that seems perfectly in order. The only caveat is that specific, individual circumstances to do with length of time served and a range of other elements may affect the compensation package. If I can at least get ball park figures for what the compensation element might be, however, and at what stage the 11 will go down to a residual board as a prelude to its ultimate demise, I will happily share them with the Committee. In that context, I ask that the amendment be withdrawn.

Mark Field (Conservative, Cities of London and Westminster)

The amendment is interesting. I am keen for the Minister's confirmation that any compensation arrangements will be made public. The rail industry has clearly been subject to controversy, not least with the renationalisation of Railtrack some three years ago. As a result, it seems that books are likely to be written and stories told not only by members of the SRA but, more interestingly, by former rail regulators, that could be of commercial value. As a result, I suspect that some sort of confidentiality arrangement is likely to be part and parcel of any compensation arrangements.

It is certainly my understanding that the erstwhile rail regulator, Tom Winsor, was put under some pressure to resign at one point, and substantial compensation packages were bandied around in what might be called a quasi-offer, if not a fully fledged offer, that were well in excess of what might be considered normal. I understand that that gentleman is likely to write a book about his experiences as rail regulator both before and after the October 2001 decision to renationalise Railtrack and about the expensive mess that our rail industry got itself into over the past few years.

We are likely to see somewhat less dispute in relation to the Strategic Rail Authority. One hopes that when it is wound down from 11 members to zero, its members will be less likely to wish to sell their stories. Given the concern that has been expressed, however, it is important that the compensation arrangements are made entirely public and that we know on what basis they are made.

The Minister made it clear that he would try to give us some indication of the general arrangements, perhaps in writing. On the basis that one or two members of the SRA are likely to have been more deeply concerned with rail strategy over the past six or seven years, however, he will understand that the Opposition are concerned that if confidential compensation is put in place that takes account of the controversy that might emerge about the running of the railways over the past few years, that fact should be in the public domain.

On that basis, I hope that the Minister will at least give us some comfort; what we are discussing is an important factor, and in the context of abolishing a public body that has been controversial, it should not be ignored.

David Wilshire (Conservative, Spelthorne)

Well, well; an amendment of mine has not had abuse dumped on it by the Minister. I must be on to something. We have heard his assurances, and this is a serious subject. Whatever we feel or think about an organisation, the people in it will have been doing the job to the best of their ability, and if a Government decide to wind it up, it is proper to observe all the normal courtesies and rules about compensating people who may have made assumptions about the length of their tenure. I have listened carefully to him and I am sure that the record will be sufficient ammunition, should something go wrong in future, in establishing clearly the Government's intention.

Tony McNulty (Labour, Harrow East)

I intervene on the hon. Gentleman purely to answer the question asked by his hon. Friend the Member for Cities of London and Westminster, rather than speaking again once he concludes. In the context of freedom of information and the caveats that I mentioned earlier about personal circumstances and personal conditions, I should say that if I can make public the compensation packages and announce when they are likely to be made available—perhaps there will be paperback rights to my lurid inside story of the SRA—I shall of course do so. I shall take advice and pursue the matter.

David Wilshire (Conservative, Spelthorne)

I am sure that my hon. Friend the Member for Cities of London and Westminster is grateful for that reassurance.

This brief debate has been about putting on the record what is needed for the future. I therefore do not see the need to press the amendment, but I am glad that we have had the opportunity to clear up a few matters. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 19, in clause 1, page 2, line 32, leave out 'may' and insert 'must'.

I must admit to being slightly tempted, since you, Mr. Amess, are now in the Chair in place of Mr. Griffiths, to have the same debate that we had in your absence about substituting ''may'' for ''must'', since exactly the same arguments apply, and as you have not heard them you would not tell me that I was repeating them. However, other members of the Committee have heard the arguments and I am sure that they have better things to do than listen to me repeat all that I have said. [Interruption.] I am glad to have some support from the Labour Benches.

The arguments are the same, and my feelings about why the change should be made are the same. I am not merely being pedantic. When things such as those for which the Bill provides are happening, we might as well make them clear. I shall leave the Minister to decide whether he wants to repeat all the arguments about why I am wrong.

Tony McNulty (Labour, Harrow East)

At the risk of offending you, Mr. Amess, my response is also the same as previously; it was not terribly interesting the first time round, so I shall spare you the torture of listening to it again.

Christopher Chope (Conservative, Christchurch)

I do not think that that is a satisfactory response from the Minister. We have a lot of detail in clause 1 about liabilities for pensions, for example. I should be grateful if he expanded on what he has in mind in relation to the transfer of pensions. It is not clear to me whether subsection (10) will come into operation before or after the resolution of that issue.

Paragraph 34 of the explanatory notes states:

''Section 244 of the Transport Act 2000 had the effect of converting the British Railways Board's customary practice of providing indexation for cost of living increases for . . . older pension schemes into a binding obligation of the SRA. Consequential provision will be required to reflect the abolition of the SRA. It is likely this will be to transfer this obligation to the Department for Transport to reflect the expected transfer of employer obligations for these schemes to the Department. The intention again will be to ensure that the existing position of beneficiaries . . . is unaffected by amendments made.''

However, subsection (8) makes it clear that there is no definite obligation on the Secretary of State to ensure that there is no difference in the terms of transfer; rather, he is granted discretion on the issue.

The provision deals with the issue of the overall liabilities, which may or may not be extinguished, and I would be grateful if the Minister could—contrary to the practice of a lifetime—get down to a bit of the detail. What consequential provision will there be for the indexation of cost-of-living increases for the older pensions scheme? When is the transfer likely to be made? Can he guarantee—this is set out in the explanatory notes, but not reflected in the wording of the Bill—that the scheme's beneficiaries will benefit in exactly the same way as they would at present?

Tony McNulty (Labour, Harrow East)

Paragraphs (a), (b) and (c) are included in subsection (8) because some SRA employees are potential beneficiaries of the different pension schemes. We must therefore include elements in the Bill to modify provisions for those pension schemes. However, I give an absolute assurance that the position of exiting scheme members will be fully protected. That is one element of the detail that is being worked up as part of the longer-term transfer; as I said, there will not be a big bang.

There is no intention to use the power in subsection (8) to undermine the pension position of transferring SRA staff. The Bill refers to the Transport Act 1980, the Railways Act 1993 and the Transport Act 2000 because beneficiaries of each pension scheme are currently employees of the SRA. I give an assurance that we intend to ensure that the exiting position of scheme members is fully protected.

Beyond that, all that the amendment would do, as the hon. Member for Spelthorne said, is replace the word ''may'' with the word ''must'' to insist that the Secretary of State should abolish the SRA. In your absence, Mr. Amess, I was accused of saying that the amendment was entirely otiose, which, of course, it is not. However, I did say that it was irrelevant, redundant and superfluous, which it is. If members of the Committee need me to give a full assurance, signed in blood, that the Secretary of State will go further and abolish the SRA, they can have it—metaphorically speaking, as I am not about to prick my thumb for anybody in the Committee. By the time we are in a position to wind up the SRA—all the preconditions having been met, and its functions, assets and liabilities having been transferred—it should be clear that we will do so, whether the Bill says ''may'' or ''must''.

I apologise for returning to our earlier discussion. I was trying to be brief earlier, rather than discourteous, and to follow the model outlined by the hon. Member for Spelthorne, but I was rudely imposed on by the hon. Member for Christchurch. None the less, I urge the hon. Member for Spelthorne to seek leave to withdraw the amendment.

Greg Knight (Conservative, East Yorkshire)

I rise at this point, Mr. Amess, because your predecessor in the Chair said that he was not minded to allow a clause stand part debate. The Committee's seating arrangements envisage an argument's proponents being on one side of the Room and its opponents being on the other, and that is, indeed, normally the case. However, we have already placed on record the fact that we do not oppose the thrust of clause 1, and my colleagues will not divide the Committee when we decide whether the clause should stand part of the Bill.

David Wilshire (Conservative, Spelthorne)

I am afraid that I want to say more than merely that I wish to withdraw the amendment. It is sad that the Minister should suggest that my hon. Friend the Member for Christchurch was doing anything rudely. I thought that he was being very polite and that the point he raised was valid, particularly given that there will be no stand part debate. As I understand procedure, it would not have been possible to discuss pension issues, which are very important and relevant. Indeed, I am pleased to say that the Minister's response was not rude. It was actually quite helpful, and it will be an important part of the Committee's proceedings when people want to refer to this valid issue, which my hon. Friend has raised.

I must say that I would not have pursued the matter if the Minister had simply said that he thought it was irrelevant and sat down, but he did not. The trouble is that he carried on with what I consider a ridiculous comment. He said that he was not prepared to prick his finger and produce the blood, but that he was otherwise prepared to write in blood that the Secretary of State ''will'' abolish the SRA. That is exactly what my amendment says.

Perhaps the Minister will tell me that I am a simple soul who does not understand the niceties of drafting legislation, but the clause states that the Secretary of State ''may'' abolish the SRA where he is satisfied, for any reason, that it is no longer necessary for the authority to continue to exist, whereas the Minister says that the Secretary of State ''will'' abolish it. My amendment seeks simply to make the Bill say that the Secretary of State ''will'' abolish the SRA, yet the Minister says that that is unnecessary.

I remain totally puzzled by that inconsistency. The use of the word ''may'' is the only thing that is redundant. Why give the Secretary of State discretion when the Minister is prepared to sign in blood that the Secretary of State does not want to use it? None the less, I am content to withdraw the amendment if it will make the Minister happy and if it will enable us to get on to other matters. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.

Schedule 1 - Transfer etc. of functions of the Strategic Rail Authority

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I should like briefly to seek clarification from the Minister on two points that relate to the schedule, which has a great deal of meat in it, but to which no amendments have been tabled, largely, I suspect, because hon. Members had the same difficulty as I had in trying to frame an amendment that asked the right questions.

Part 1 provides for the SRA's strategic and financial functions to pass to the Department for Transport. The broad thrust of the issue is dealt with in the schedule. The first of my questions relates to strategic functions. One of the SRA's strategic functions was to formulate a strategy, write it down and present it to the Secretary of State. Clearly the Secretary of State cannot present a strategy to himself, so how will a strategy be written down and will it be presented to Parliament? Now that the Secretary of State has taken that duty, he is no longer the check and balance on the SRA, and the report that was previously made to him, and made public, now need not be made. I hope, however, that it will be made by the Secretary of State and laid before Parliament.

My second question relates to financial functions and how the Secretary of State will deal with funding for the devolved Administrations, particularly in Scotland, but also in Wales. How will he ensure equity in funding so that the funds that are available, particularly for railway improvements, will be equitably shared between all the devolved nations?

David Clelland (Labour, Tyne Bridge)

I seek clarification and assurance from the Minister about the schedule, which abolishes some of the SRA's functions. When a passenger boards a train at a station and travels to another station, they are not simply travelling from one point to another, unless they happen to be fortunate enough, or unfortunate enough, to live next to the station and are travelling to a destination that is also next to a station. They may rely on other forms of transport.

According to section 205 of the Transport Act 2000, one of the purposes of the SRA was

''to contribute to the development of an integrated system of transport of passengers and goods.''

The schedule before us abolishes that and replaces it with a duty on the Secretary of State to promote improvements in railway service performance and otherwise to protect the interests of users of railway services. There is no reference to any obligation on the part of the Secretary of State to involve himself in the development of an integrated transport system. Can the Minister assure us that that is not a deliberate deletion, and that the Secretary of State will still consider integration issues? If that is the case, can he also assure us that, either in Committee or on Report, the Government will table an amendment to reintroduce an integrated transport system?

Christopher Chope (Conservative, Christchurch)

As the hon. Member for Caithness, Sutherland and Easter Ross said, this is a meaty schedule. We know that one of the rationales for the Government's abolishing the SRA is to save money. That will result in a reduction in the number of people employed. In the context of this schedule, can the Minister spell out the detail of how many of the 454 people currently employed by the SRA will have their jobs transferred—in other words, their functions will be replicated under this schedule—and how many will lose their jobs because the functions that they perform will be taken away? That should be an easy assessment for the Minister to carry out; at its heart is the saving that will result from the whole process.

Although we are told that a lot of functions will be abolished, the list of abolitions in the schedule is pretty short. Can I ask the Minister about two of the abolitions that are specified in paragraphs 34 and 36? Paragraph 34 is about the abolition of functions relating to penalty fares. How many people are currently involved in that function, and how often it has been exercised up until now? What impact will its abolition have? Similarly, how many people exercise the powers that are to be abolished under paragraph 36—those under the 2000 Act to provide railway services and substitute bus and taxi services, and to make byelaws? What will be the impact their abolition? Will the railways be able to survive without their being performed? Most of all, I hope that the Minister will be able to tell us how many of the 454 people will have their functions abolished rather than replicated under the schedule.

Simon Thomas (Plaid Cymru, Ceredigion)

As this is the first time that I have had an opportunity to speak in this Committee, may I say how pleased I am to be here and to work under you, Mr. Amess? I look forward to our debates, as the Bill has a lot in it for Wales, as well as for the United Kingdom as a whole, and a great deal on devolution, as we discovered under clause 1.

I should like to make some brief comments along the lines of those of the hon. Member for Caithness, Sutherland and Easter Ross and the hon. Member for Tyne Bridge (Mr. Clelland). Of particular relevance is the SRA's duty to promote the railways as an integrated whole, which many of us welcomed when the SRA was set up. I am sure that clause 3 will give us an opportunity to discuss amendments along those lines, but, as this schedule abolishes that duty, it is relevant to ask the Minister now how he foresees himself undertaking the general promotion of the integration of freight and passenger railway services. That is not easily transferred either to himself, to the National Assembly or to the Scottish Parliament. There is a gap there. While I strongly support devolution, I should not like there to be a lack of integration throughout the UK as a whole, which is essential for the smooth running of services and the promotion of an environmentally sound railway. The promotion of freight comes into that context. This is an opportunity for the Minister to explain that in more detail. I look forward to hearing what he has to say.

The second aspect relates to finance. We are abolishing functions and transferring liabilities as well as the opportunity to spend. It has already been mentioned that this is a possible way of saving money. I am not so concerned about the 400 or so jobs that might be affected. I am concerned about the individual cases, of course, but that is not where the big money is. The big money is in the transfer of functions to the Scottish Executive and the National Assembly. There is an opportunity to ask those national Governments to try to spend on the railways to make up for a possible shortfall from the central Government purse.

As liabilities and spending are transferred it would be useful to have an indication of the sort of negotiations that are going on now about the spending and funding arrangements that will be in place. The hon. Member for Caithness, Sutherland and Easter Ross spoke of equity, but we also want to ensure that if Scotland spends a little more on the railways because there is a particular social, environmental or economic need, it can do so without it having a knock on effect on spending in forthcoming years. The same would be true in Wales.

If one of the new bodies that is now undertaking the work of the SRA is prepared to invest a little more as a one-off, how can we prevent that from becoming embedded in the relationship and leading to knock-on effects further down the line? We have to be careful that we do not all jump for joy and see the wonders of transferring functions to Scotland and Wales, but overlook the dangers of not having a carefully worked out relationship and funding formula between the constituent parts of the United Kingdom. We have to ensure that there is equity there and equity for many parts of England too. We are all aware of where the funding is going at the moment in the national rail service and what parts of England are being excused from that.

Two key questions lie at the heart of my reading of the schedule. One relates to the overall promotion of the railways, ensuring integration and ensuring that the railways are used in Wales, Scotland and by the Secretary of State as an environmentally safe alternative and a physically safe alternative to road transport for passengers and freight. The second is how we ensure that the promotion does not have spending consequences that could be deleterious to the National Assembly or to the Scottish Parliament. Equity, safety, environmental responsibility and the promotion of an integrated railway are the key concerns. We need to ensure that that still happens, even though we have transferred functions and accountability to different bodies. I am sure that it can be done, but I do not think that we can read a schedule and a clause to find out how it will be done. It is for the Minister to explain and to put the meat on the bones so that we have a sense of the Government's purpose in trying to achieve this end.

Tony McNulty (Labour, Harrow East)

As I said earlier, there are some 14 pages to schedule 1. Hon. Members are entirely right: that is where the substance lies, rather than in the clauses. It is therefore appropriate to discuss it. I shall try to pick up on some of the issues that hon. Members have raised. First, there is a tad of confusion over the SRA and the notion of integrated transport. When it was set up the SRA, as its name implies, was charged with a whole range of functions and duties around railways: nothing else, just railways. It was important in that context to put on the face of the Bill that created the SRA the additional function of integrating the railways into all other forms of public transport. That was quite proper.

With the demise of the SRA, given that most of those functions are coming back to the Department for Transport, do we need to maintain that duty? We would argue strongly that we do not. At best, it is a tautology to say that there needs to be a statutory duty in respect of integrated transport on the Department for Transport, with its myriad strategies that, rather like in an episode of ''Yes, Minister'', aspire to an integrated transport system. We say that such a duty is not needed, because it is already there in the substance—in all that we do across the piece.

One of the White Papers issued in July, ''The Future of Transport'', said clearly that we are wedded to an integrated approach. Indeed, it goes beyond that and says that in the course of devolution, of getting some decision-making processes down to a lower level, matters should be addressed far more firmly in an integrated context. We have said that in the context of passenger transport executives and the role of local councils with local transport plans. We have tried to make it as explicit as we can that, with regard to the future of local transport plans and much of what PTEs do, integration should be uppermost in people's minds and in strategies, whether they relate to bus, light rail, rail or whatever. I am talking about what local authorities and PTEs are doing on urban congestion, bus prioritisation and all the other elements.

The duty was very important when creating an organisation specifically to deal with rail. To say that it should have wider regard to integrated transport was appropriate. However, just because we have got rid of that body, it is not necessary to say to a range of other bodies—PTEs, local authorities, the devolved Administrations and the Government—that they should have due regard to an integrated approach, because that is already the aspiration and it is already happening across the piece in legislation, strategies and policies. We do not need anything in the Bill or in other legislation for that to be the case. All those strategies, including our own, will be in the public domain, whether at the level of route utilisation strategies, the overall approach that follows on from the rail White Paper or whatever else.

The second point made by the hon. Member for Caithness, Sutherland and Easter Ross on equity and the devolved Administrations is fair, and the hon. Member for Ceredigion (Mr. Thomas) is right. Devolving power or responsibility without equitable resources is not terribly clever or useful with regard to public policy for the central Administration or the devolved Administration. All I can say at the moment is that detailed discussions are ongoing with the Administrations in Scotland and Wales. I can assure the Committee that our goal in the negotiations is equity, but as they are ongoing I cannot at this stage report their outcome.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Will the Minister elaborate on that point? I do not doubt that he is seeking equity and I am sure that Scottish Ministers will also want to come to a good resolution, but he has spoken about a negotiation taking place. Will that negotiation produce a result for this year, and then there will be another negotiation next year and another the year after? Or are the Government and the devolved Administrations seeking to negotiate a formula that at least puts in place broad parameters to allow people on all sides to know what may or may not be available? I should be particularly grateful if the Minister addressed his remarks not so much to maintenance of the network—that is fairly straightforward and can be easily done by Network Rail—as to enhancements, which may or may not take place in a particular year. In other words, are the Government and the devolved Administrations seeking a formula, or will there be an annual negotiation process?

Tony McNulty (Labour, Harrow East)

At the risk of sounding like a Liberal Democrat, I suggest that there will probably be a bit of both. Detailed negotiations will be needed on the first transfer of resources, but we hope—I think that both sides agree—that there will be a degree of a formulaic approach thereafter. I take the point about maintenance versus enhancement. That must be part of discussions with us, Network Rail and others, and the relationship between enhancements and maintenance will be an issue in terms of cross-national railway lines and more locally controlled lines. Those remain matters for discussion. I am not being facetious; the answer is a bit of both. We are trying to resolve the issue around a package in the first instance, and a formula thereafter. It is not necessary on either side for there to be some sort of annual bidding war and arm-wrestling contest.

Simon Thomas (Plaid Cymru, Ceredigion)

I accept what the Minister says. It makes perfect sense in the context of getting the process moving, but for the future, will the formula be the Barnett formula or some other formula that relates specifically to the cost and use of railways in different parts of the UK?

Tony McNulty (Labour, Harrow East)

As I said, the negotiations are ongoing, and ongoing means ongoing. I am sure that those involved are having as much fun as we are discussing an array of options and particular futures in relation to that settlement, and that is entirely appropriate. If at any stage I can report anything to the Committee by letter or in person about the negotiations regarding Scotland or Wales, I shall be more than happy to do so.

I am conscious of the time, and it would be nice to dispatch schedule 1 by the end of the sitting.

Mr. Knight rose—

Tony McNulty (Labour, Harrow East)

I must also admit to an error, but I shall first give way.

Greg Knight (Conservative, East Yorkshire)

We wait with bated breath to hear the Minister admit to his error.

I ask the Minister to move from equity to transparency, and I refer him to paragraph 15 of schedule 1, on pages 62 and 63, which discusses statements of policy made either by the Secretary of State or by Scottish Ministers. Sub-paragraph (6) envisages a scenario in which a statement of policy is not published, and says that that will not

''affect the validity of any selection made.''

Will the Minister give a commitment that the Labour Government will make statements of policy, and that Labour Ministers of the Scottish Parliament will also make such statements?

Tony McNulty (Labour, Harrow East)

Again, it is not for me to speak for others, but there are already numerous statements of policy about the future of rail, not least including the White Papers issued in July. Our future strategy and all the consequences of the review will be published and in the public domain. This is the most substantial devolution of power since the Scotland Act 1998 in terms of Scottish rail, and I cannot foresee a circumstance in which there will not be a statement of policy from the Scottish Executive, although it is not for me to speak on their behalf.

I am conscious that we will probably have to return to the fun that is schedule 1, so the right hon. Gentleman will have to wait to hear about the error, as I shall first deal with a few points that were appropriately raised. On the point made by the hon. Member for Christchurch, I appreciate that the paper that I promised on Second Reading was made available only this morning, so hon. Members probably have not had the chance to read it. Under the heading, ''Implementing the White Paper; changing the structures'', it starts to put some flesh on the bones of what the Department's rail unit will look like post SRA.

The paper says that we anticipate some 250 to 280 people being involved in the new rail group in the DFT. Currently, there are not only 430 people at the SRA looking after rail, but 100 people in the Department who do so. Those 530-odd people will be reduced to 250 or 280 in terms of the Department; perhaps 50 others from elsewhere in the SRA will go to the RPC and certainly to the ORR, while a few will go to Network Rail. That reduction of up to 200 does not mean that there will be 200 redundancies; other options will be explored, and there are ongoing discussions with those individuals and the unions now that the high-level element is in place.

Some of the SRA functions that are being abolished are functions that it currently shares, such as penalty fares. I cannot tell the hon. Gentleman, hand on heart, how many SRA staff are involved in penalty fares at this very moment. It is a shared function and some of it will come back to the Department. The same applies to the functions to be abolished under paragraph 36.

We will consider boosting the local dimensions of some of those functions, affording greater local control over some of the penalty fare structures. In some areas, including Tyne and Wear, it takes a parliamentary order to change penalty fares. I do not understand why that happens; that is why we are examining it. It might not please my hon. Friend the Member for Tyne Bridge, because a number of people just carry £10 in their top pockets when travelling on the Tyne and Wear metro, on the off-chance that they will be caught every now and then. They pay it over, and their free travel is covered for the rest of the time. There are some concerns in the area that that needs to change. Tyne and Wear needs a parliamentary slot of some sort to enable that change. We are considering that, too.

Much of what the Bill does, as will become apparent as we trundle through it, is enabling. Any number of matters of substance and detail follow from it, rather than being contained in it. The Committee should take that on board.

Greg Knight (Conservative, East Yorkshire)

On the Minister's point about Tyne and Wear, the long title of the Bill is extremely wide. Why does he not introduce a measure in this legislation?

Tony McNulty (Labour, Harrow East)

That is an interesting point, but it is the reverse of what I was saying about the need for the SRA, as a railway-specific body, to have integrated functions under the Bill. The powers that we want to give to local authorities or enhance for them invariably involve penalty fares across public transport, so it would not necessarily be appropriate to introduce them in the Bill. We think that we can do that in other ways, and we shall explore those.

I am tempted to try to explain the error that I have mentioned in three minutes and dispatch the schedule, although I am not sure whether that is possible. In paragraph 20(5), we refer to a service provided or secured immediately before the commencement of the paragraph by the Secretary of State. Of course, that is nonsense; it should say ''by the SRA'', because it refers to the winding up of services that are currently carried out by the SRA. We do not have to look at the provision in detail now; it is a drafting error and I shall introduce an amendment to correct it. I shall also have a note drafted so that everybody is clear what the error was: it should say SRA rather than Secretary of State.

It has been important for us to spend some time on the schedule, because it contains the meat or at least the framework of the post-SRA world; that is why it takes up 14 pages. I am sure that everybody has read it, but it is worth reflecting on it for a while, because the characterisation that we are getting rid of the SRA and that all its functions are coming back to the Government is not appropriate. There are elements relating to the change of previous relationships between the Office of Rail Regulation and the Department that involve some SRA staff, and elements to do with Network Rail that include some of the functions currently performed by the SRA. It is worth reading the schedule to see the route map for the future of rail post-SRA.

Christopher Chope (Conservative, Christchurch)

Will the Minister give way?

Tony McNulty (Labour, Harrow East)

I will not.

I commend the schedule to the Committee.

Christopher Chope (Conservative, Christchurch)

I am disappointed that the Minister did not give way. The whole point of debate in Committee is to have some flexibility. He referred to a document that he laid on the Table this morning, but he has not told us whether it responds to the concerns that I expressed. I made some perfectly reasonable points, and I should have thought that it was possible for the Minister to say, in respect of each of the paragraphs in the Schedule—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee A

Schedule 1 - Transfer etc. of functions of the Strategic Rail Authority

Christopher Chope (Conservative, Christchurch)

Before we adjourned, the Minister told us that there would be quite a saving in staff numbers, and he kindly drew our attention to the briefing note on the Bill, which was made available earlier today. I have been looking in detail at page 12, which sets out the six units involved in DFT rail, although I do not know why it is not simply called Df rail. Unfortunately, it does not link them to schedule 1.

It would be extremely helpful if the Minister could set out in writing—I am not asking him to do this in a detailed oral response this afternoon—how the different paragraphs of schedule 1 will link in with the new structure, where the staff savings will arise and where staff will be redeployed. That would give us a much better feel for how the new structures will work.

The group structure proposed in annex A shows that the six directors, heads of procurement and so on will report directly to the director general rail, but it does not deal with the functions that will be transferred as a result of schedule 1 or with the savings that will be made when functions are removed altogether from the Department's ambit.

I hope that the Minister, in the spirit of good will, will be a little more forthcoming on the issue. One of the watchwords of Conservative Members is accountability, and we think that it is important for Ministers to be as open and accountable as possible with Committees that are scrutinising Bills such as this.

Tony McNulty (Labour, Harrow East)

I am all for accountability and due scrutiny, and many of the hon. Gentleman's points are entirely fair and reasonable. They go to the heart of what I said earlier about the Bill unleashing our ability to carry out a process. Page 12 starts that process and is, in part, the mirror image of schedule 1.

If powers and functions are to be transferred, they must be transferred to something. That something is DFT rail, in the case of the Department. It is called DFT rail because the separate entity is the Department for Transport rail division, not the Department for rail. Having presented the Bill to the House, we set out at the earliest opportunity the high-level organisation of that unit within the Department.

As I said on Second Reading—and I am happy to say again—I will be more than happy to keep hon. Members informed if I have more to say about the DFT rail unit during this part of the parliamentary process or subsequently. However, at this stage, I cannot say what the end beast will look like, because we are in the early stages of abolishing the Strategic Rail Authority. That is a transitional process, and it will not simply happen at the flick of a switch. We are also dealing with more than 500 people—be they from DFT rail as it is now or the SRA—their individual circumstances and how they will fit or not fit into new positions within the new beast. As the hon. Gentleman will appreciate, that is a long, drawn-out process, but as and when I can do so, I will be more than happy to report back to the Committee and keep it informed of that and the other non-legislative elements that flow from what we seek to do through legislation. I hope that that is helpful.

Greg Knight (Conservative, East Yorkshire)

My hon. Friend the Member for Christchurch (Mr. Chope) referred to the statement that the Minister kindly made available to the Committee and that was placed on the Table this morning. Could the Minister tell us what is the status of that document? It almost appears to be a statement of policy. The preamble to the document refers to the fact that it is available to members of the Committee. If the document is a statement of policy in all but name, should it not be made available to the whole House, perhaps by the Minister issuing it as a written statement so that it is printed in Hansard?

Tony McNulty (Labour, Harrow East)

I take the point, but I do not think so—not least because, for want of a better phrase, it is a position statement that emanates from the original parliamentary statement made in July. We felt it important to let the House, as well as staff in the SRA and the DFT, know what is going on through some of the non-legislative transitional elements as well as through the Bill. We do not want people to run away with the notion that either nothing will happen in terms of implementing the White Paper until the Bill is secured, or a whole host of things are to happen of which they have no knowledge, regardless of the passage of the Bill through the House. We are trying to keep a balance between the two.

I said on Second Reading that I am more than happy to make this and subsequent update or position papers on the non-legislative side available to members of the Committee and to the House through the Library. I think that that is an entirely fair point.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

May I ask the Minister for clarification regarding annex A? If he cannot answer now, he could give me an answer at a later stage. Among the directors of the various projects, who would have the primary responsibility for freight?

Tony McNulty (Labour, Harrow East)

Again, that is a good question, and one that we are considering in some detail. Page 15 of the briefing note states:

''The Department is working with the industry and ORR to agree a basis for long-term access contracts on the network and to identify key freight routes.''

In the context of what is be transferred or otherwise from the SRA, much of the freight element of its work will come to the DFT rail unit for strategic reasons, and some will go to Network Rail for the operational set-up.

As and when we firm up the proposals, I shall inform the Committee how we intend filling the little boxes in annex A, who will take what responsibilities, and who will fill the subsequent boxes beneath them. The weekend after the publication of the Bill and subsequent papers, we advertised for the director general of the entire unit. Beyond that, the hon. Gentleman and others will appreciate that we are still talking about what exactly is needed.

The transfer of functions will affect the DFT in large measure and the Office of Rail Regulation and Network Rail to a lesser extent, and we have to decide what will be the best fit of existing staff and the positions represented by those little boxes. That will rightly be a fairly lengthy process. We are talking about people's livelihoods and jobs, and the process is better done with less haste and more concentration. The apportioning of freight in the high-level organogram in annex A is a good point. I shall get back to the hon. Gentleman and the Committee when we start filling in the boxes more generally than is apparent from the initial titles.

The Committee has raised fair and reasonable points, but I am now ready to commend schedule 1 to the Committee.

Question put and agreed to.

Schedule 1 agreed to.

Schedule 2 - Transfer schemes

Greg Knight (Conservative, East Yorkshire)

I rise to ask the Minister a question. Schedule 2, as I am sure all members of the Committee will know, sets out the parameters that will apply to the transfer schemes. Why does the Minister deem paragraph 2 to be necessary?

Tony McNulty (Labour, Harrow East)

Unless guided by some extra-temporal force that says otherwise, I shall point out that some elements of the SRA's assets, liabilities and contracts are specific to the relationship between the SRA and the Department for Transport, and include no third party. Clearly if the whole thrust of the schedule is about how the transfer scheme or schemes will relate to third-party arrangements with franchisees, contractors and everything else, it is important to get all that down in detail. There will, however, be residual elements that remain entirely a matter for the DFT and the SRA. We do not, in effect, have to instil a transfer scheme to transfer back to ourselves what we transferred to the SRA and that was ours, because that dual relationship becomes a single relationship. It is important to write that into the Bill, because otherwise it might float around in the ether and be subject to some sort of legal action. For completeness, those elements in which no other party is involved and that were part of the DFT-SRA relationship but are now just a DFT matter also need to be swept up.

So I believe that paragraph 2 is included for completeness, but I am open to guidance and tutorage.

Christopher Chope (Conservative, Christchurch)

May I take the opportunity to ask the Minister about paragraph (10), which talks about compensation for third parties? Does he have in mind a rough estimate of the extent of a possible contingent liability as a result of third-party rights arising from the changes set out in the Bill? Obviously the compensation payments will be paid out of national taxes by the citizens of this country, and it would be interesting to know what levels of compensation the Government envisage are likely to have to be paid.

Tony McNulty (Labour, Harrow East)

The very short answer is that it depends, in part, on any remaining potential liability, against which there should be no contingency, once the entire transition has been effected. The hon. Gentleman will know, because it arose on Second Reading, that we are not about to flick a switch and stop any number of the active and operative contracts and franchises in which the SRA is involved, as and when we finally close it down. A transitional period is clearly involved. There may well be some residual contingent liability, but we really need to wait and see, as we saw with the previous schedule, how many people we are talking about transferring into the new unit and what residual elements—not of the DFT-SRA relationships but of the relationship between the DFT, the SRA and the third parties—are left.

Clearly a huge body of work needs to be worked through. I do not apologise for not having all the answers at my fingertips now, given that that work, much of which is non-legislative, must be done. It will, as the hon. Gentleman suggests, need to be understood that there may be a contingent liability at the end, but given that most, if not all, the SRA's operative and franchise contracts will remain extant and run their course, we will have a far clearer picture once we start to unpick all the other assets and liabilities involved in the SRA. I am more than happy, as I said, to keep the Committee fully apprised of how things unfold.

David Wilshire (Conservative, Spelthorne)

I agonised over paragraph 11 of schedule 2 for a moment or two. Paragraph 11(10) states that

''a reference to the production of a document includes a reference to the production of a legible and intelligible copy of information recorded otherwise than in legible form''.

I am curious as to what the provision means about not being in legible form. Presumably, if information is recorded on computer or on disc, it is in legible form, because that is how it appears on the screen. If the provision refers to a document that is either on paper or recorded on computer, those forms are legible and intelligible. What things are recorded otherwise than in legible form?

Tony McNulty (Labour, Harrow East)

In short, I have no idea, but I am sure that I shall find out shortly.

David Wilshire (Conservative, Spelthorne)

Keep talking for a minute.

Tony McNulty (Labour, Harrow East)

That is the plan. The hon. Gentleman makes a fair point. I am pretty sure that this issue arose previously—I think that he was on the Committee—during the passage of the Planning and Compulsory Purchase Act 2004. I am sure that I shall receive divine guidance on the matter soon.

David Wilshire (Conservative, Spelthorne)

The cavalry is coming.

Tony McNulty (Labour, Harrow East)

Well, the cavalry had better hurry up.

To return to the point made by the hon. Member for Christchurch, schedule 2 provides for compensation for third parties, when certain provisions of the schedule prevent them from enjoying the interest or right to which they would otherwise be entitled as the result of a transfer scheme transferring SRA property rights and liabilities, and the scheme does not make provision for the interest or right to arise in future if corresponding circumstances arise. That is gobbledygook for saying that there will be some tail-end residual liabilities and contracts that need to be smoothed over and got out of the way. That does not mean going about it in any elephantine way that involves rolling over the contractees, but we need to understand the myriad liabilities and contracts that exist and to make provision for sweeping them up at the end of the process.

Apparently, the term ''legible form'' means precisely transcripts of oral materials or electronic files. I am sure that that makes things all the clearer to the hon. Member for Spelthorne (Mr. Wilshire), and that he will be able to rest assured and sleep easy at night.

David Wilshire (Conservative, Spelthorne)

I appreciate that the Minister's answer is not his fault, but it confirms my question rather than answering it. The schedule states that material must either be in legible form—and the Minister has now confirmed what that means—or recorded in some other way. My question was what would the other ways be.

Tony McNulty (Labour, Harrow East)

I have, I think, misinformed the hon. Gentleman—not deliberately, in this instance, although I happily own up to doing other things deliberately. I think that if we translate roughly into English, in the reference to

''a legible and intelligible copy of information recorded otherwise than in legible form''

the word ''otherwise'' denotes electronic files and transcripts of electronic materials. I apologise for any confusion, but I am sure that it will not be the last time that I, if not the hon. Gentleman, get confused.

Mark Field (Conservative, Cities of London and Westminster)

I want to follow up the point made by my hon. Friend the Member for Christchurch on paragraph 10 of the schedule, relating to compensation for third parties. All sorts of railway and London Underground projects have given rise to a grave concern that affects many London folk—the potential for third-party blight and, arising from that, the notion of compulsory purchase. Was the Strategic Rail Authority subject, with reference to the myriad contracts, to any compulsory purchase issues that might affect some of the compensation for third-party rights included in the paragraph?

Tony McNulty (Labour, Harrow East)

Again, that is an entirely fair point, but without fully understanding the myriad that I described, I cannot give a definitive answer. I suspect that the answer is that there will not be any need for a compulsory purchase dimension to the scooping up of assets and liabilities. I cannot, as I said, give a definitive answer because I do not entirely understand the huge range of possibilities concerning the asset and liability base. However, given what the SRA's asset base would look like, it is hard to imagine a compulsory purchase order scooping up residual, third-party rights.

As I said, we are committed to providing reviews and reports from the front, although I cannot promise that they will be weekly. However, as we work through the transition that the Bill will allow us to make—clearly, the Bill itself will not bring that transition about, and many non-legislative issues will be equally important, if not more so—I will keep members of the Committee fully informed.

Greg Knight (Conservative, East Yorkshire)

My hon. Friend the Member for Spelthorne asked about paragraph (10), and I want to give the Minister an example to illustrate my hon. Friend's point. If I dictate something to my secretary and she writes it down in shorthand, that will be the original document, but, to me, it will not be legible. If I ask her to type it up, it will then be a legible and intelligible copy of information that was otherwise recorded.

David Wilshire (Conservative, Spelthorne)

I am always eternally grateful to a lawyer who gives me free advice.

Greg Knight (Conservative, East Yorkshire)

The danger, of course, is that free advice is worth only what one pays for it.

The Minister said a moment ago that he did not apologise for not having all the information at his fingertips, and we do not criticise him for not having it at his fingertips. He fairly and properly said that, if he was unable to answer a point immediately, he would give the Committee an answer as soon as possible, and we are grateful to him for that. On that basis, we are broadly content with the way in which we are proceeding.

We are also broadly content with the schedule. The Minister has answered some of our questions about it, and we shall not divide the Committee.

Question put and agreed to.

Schedule 2 agreed to.

Clause 2 - Transfer of safety functions to ORR

Christopher Chope (Conservative, Christchurch)

The clause gives me the opportunity to ask the Minister some more questions. Page 13 of his briefing note includes a section headed ''Office of Rail Regulation'', which is what the clause is all about. The briefing note states:

''No final decisions have yet been taken on the organisational arrangements to be made as and when the ORR takes over responsibility for the regulation of safety. It will be important that whatever arrangements are adopted ensure that safety regulation is seen to be independent and impartial. The ORR will consult on the new arrangements shortly.''

It seems that we are being asked to give a blank-cheque endorsement of this significant policy change, which has implications for the billion or so passengers who travel on the railways every year and who want to have a safe journey to their destination.

All we have from the Government so far are the five lines of general intentions that I read out. What, however, will be the time scale for establishing the ORR and transferring to it responsibility for the regulation of safety? How will that fit in with the transfer of responsibilities for London Underground? Will that be done on a different time scale? What will be the implications of including London Underground among the responsibilities of the ORR?

Furthermore, where will the savings come from? Many of us are familiar with anecdotal evidence from people who operate on the railways that a lot of unreasonable demands are made of them, under the various safety cases and the current legislative framework, with not enough emphasis on risk assessment and too much emphasis on breaches of technical requirements that may have no impact on the safety of people travelling on the railway. I would welcome a change in culture as a result of the Government's proposals, with more emphasis on risk assessment and less emphasis on dirigistic regulation.

The Minister needs to explain more about how everything will work and where the savings will come from. All we have heard so far are general statements. For instance, he said that rail safety would be maintained at its present level or, where reasonably practical, continually improved, and that there was no question of delivering a lower safety level or of compromising the independence of the safety regulator. Fine words, but how will that be worked out in practice?

How will we ensure that the prosecuting authority is independent? Perhaps I have misunderstood, but I gather that the Health and Safety Executive, which is under the control of the Health and Safety Commission, decides whether to prosecute for health and safety breaches, which are different from cases where there may be an accident. Where there has not been an accident but a breach of health and safety requirements that could result in significant concern or damage to people who travel, who will take the responsibility for prosecuting and how will that decision be independent?

For example, we know that the local authorities responsible for prosecuting health and safety offences do not prosecute the offences of which they themselves are, unfortunately all too often, guilty. Those prosecutions are handled by the Health and Safety Executive nationally, so I would be grateful if the Minister could explain how the proposals will operate in practice.

There are a number of more detailed matters that we shall come on to later, but this debate gives us the opportunity to press the Government to restate or expand upon the justification for their approach, and to say where the savings will come from, how safety will be improved and how we will ensure that there are no conflicts of interest, with the Government wearing more than one hat.

Greg Knight (Conservative, East Yorkshire)

My hon. Friend has raised a number of important points and we look forward to the Minister's reply. Our initial view of the clause was that it was designed for management and efficiency reasons, not an indication that existing safety standards would be abandoned or lowered. However, I am concerned that the Minister's paper, which he says is not a statement of policy—I suppose we should call it the limbo paper—refers to clause 2 and says:

''It will also allow safety to be integrated more closely with other issues, such as costs''.

That is a warning that part of the reason for the clause may be that safety is to be compromised.

The Minister is aware that one cannot always get safety on the cheap. We are happy to support the clause if its aim is to obtain savings through more efficient management of safety issues, but if there is any suggestion that safety standards might be lowered, we would not wish to associate ourselves with it. I hope that the Minister will say that my concerns are unfounded and that the clause concerns improvements in the management of safety issues. We would be content with that response.

Graham Stringer (Labour, Manchester, Blackley)

I concur with the right hon. Gentleman's argument about not cutting costs. However, does he accept the finding of the Select Committee report on the future of the railway that there is substantial evidence of inappropriate gold-plating in the railway system by the Health and Safety Executive? That kind of expenditure should go.

Greg Knight (Conservative, East Yorkshire)

I am grateful for that helpful intervention. I agree with what the Select Committee said. Indeed, some 12 months ago I was approached by a train operator who told me that the HSE had prevented one of his trains from running because a light bulb was not working in one of the carriages. A common-sense approach to safety is necessary, and there might well be occasions on which a light bulb in a particular carriage is not functioning, yet it is perfectly safe to travel in the train. Most of us would assume that a train should not be stopped for that reason. There are savings to be made, and that is why I said in my opening remarks—I hope that the hon. Gentleman took note—that we support the saving of money by streamlining management efficiency, and we will support it provided the Minister can assure the Committee that it is no part of his policy to lower safety standards.

Tony McNulty (Labour, Harrow East)

There is no agenda to lower standards. Safety is and remains paramount throughout the industry. Our goal here is, if anything, to embed safety more readily in other areas of industry regulation, such as the economic and other issues that concern the Office of Rail Regulation. I agree with my hon. Friend the Member for Manchester, Blackley (Mr. Stringer) and the hon. Member for Christchurch—one of whom described it as gold-plating and the other as dirigiste regulation—that matters such as those highlighted by the Select Committee are likely to be looked at more efficiently within the belly of the industry than otherwise.

On the points about the transfer, which this clause allows, we anticipate that anything to do with rail safety that currently sits with HSC will be transferred. It is in the nature of the Bill that this clause, and subsequent ones, are concerned with the manner of transition of functions from one body to another. That will not compromise safety in any way or diminish the functions of the committed professionals who work in the industry. Given all the lessons that have been learned, independent safety regulation sits far more readily with ORR than elsewhere. On one of the other points made by the hon. Gentleman, the tube and metros and other elements will transfer, and it will be for the ORR to prosecute. We intend to make regulations under the Health and Safety at Work, etc. Act 1974 that will make the ORR the authority responsible for enforcing and prosecuting breaches of safety legislation on the railways.

Also, the limbo document, as it was called, that I introduced this morning—it merely updates the situation, and there are more to come—states clearly that there will be a memorandum of understanding between the HSC and the ORR on where rail safety starts and the wider, ongoing Health and Safety at Work, etc. Act 1974 concerns, for which the HSC will be responsible. The Secretary of State will also issue guidance on the general duties under the 1993 Act.

The ORR will act as the independent safety regulator, and will assume responsibility for the prosecution of breaches under the 1974 Act. We believe that it is premature to move from legislation that states that the transfer should happen—again, rather like the SRA—and then simply flick a switch so that, all of a sudden, it happens. There needs to be extensive discussion between the HSC and the ORR to reach the stage where safety responsibilities can be transferred efficiently and effectively and within a time scale in which the focus on safety is maintained.

We are not making changes across the rail industry simply for the fun or it, nor do we want to reach the stage where much of the very good progress that has been made in the industry across all areas is somehow impeded during all these transfers and the abolition of the SRA. So, again, it will not be appropriate to rush at this and do it quickly: better that it was done over time and efficiently. If I had to hazard a guess, however, I would say that it will probably take the best part of next year to get to the stage where the ORR has full responsibility and everything has been transferred over so that the ORR's entire focus is on safety, organisation and management some time towards the end of next year.

That is a guess. It may well be that the transfer of responsibilities is much smoother that I have indicated. I say, with no offence intended, that that is a conservative estimate. It is better that it is done properly and is not rushed. It is also better that the focus on safety—currently the HSE's responsibility, but eventually the ORR's—is maintained, but I do take the point made by the hon. Member for Christchurch about dirigiste regulations and the point made by my hon. Friend the Member for Manchester, Blackley about co-operation.

Christopher Chope (Conservative, Christchurch)

I am grateful for the Minister giving us some indication of the time scale. In his briefing note, he says:

''The ORR will consult on the new arrangements shortly.''

Is that consultation likely to be, for example, before Christmas and in sufficient time to inform the proceedings of the Committee or the Report stage?

Tony McNulty (Labour, Harrow East)

I can probably say with some confidence that the consultation is unlikely to be held before Christmas. I can say with equal confidence that there will certainly be something to report before the end of the Bill's parliamentary passage, hopefully on Report, rather than during consideration of a Lord's amendment or at the tail end of the Report stage. Again, I will be more than happy to report back to the Committee as and when I have things to report, but I reemphasise that safety is and will remain paramount. We agree that the transfer will increase the industry's focus on safety, and that it is better that the responsibilities are transferred appropriately and properly the first time rather than rushed.

Graham Stringer (Labour, Manchester, Blackley)

My hon. Friend will be aware that a criticism levelled by the rail industry at the HSE is that it classified the rail industry as a major hazard industry. Will he explain whether, as Minister, he will be responsible for keeping or changing that designation, or whether that will be transferred to Her Majesty's railway inspectorate? Does he intend to make a policy statement on whether that classification should be changed?

Tony McNulty (Labour, Harrow East)

In the first instance I think that my hon. Friend is right. The transfer will happen as he suggests, and there will be a need—not necessarily as part of the Bill or even the transfer—for subsequent discussion and reflection. Perhaps then there should be a policy statement. I am told by those who want to intervene on me from a divine, rather than a parliamentary, position, that I can certainly specify the first half of next year—which is roughly what I said anyway—in the context of the parliamentary timetable that we can all refer to in our heads. Ultimately, there will be a transfer of this matter, and the classification will be for the ORR or the rail safety element within it.

David Wilshire (Conservative, Spelthorne)

I wanted to listen to the Minister before I commented or even decided whether I needed to comment. I am not against what is being suggested, but I am cautious about whether we are going to get things right. Safety is perhaps the most sensitive of all the issues that we must deal with. I set out not to be critical but to raise some reservations that I have.

The Minister rightly says that we need to take some time, and that six months may be needed. I worry whether even that will be long enough. To be an enthusiastic supporter of the change I need to get my mind round the idea that we shall obtain clear and substantial benefits. If ever there was a case of ''if it ain't broke, don't fix it,'' this is one. Rather than briefly passing over the matter and saying that it is self-evidently a good thing, perhaps we should wait for the consultations to be completed—wait for the six months that the Minister mentioned to expire—and, at some point, have an opportunity to revisit the entire issue. We could then assess whether the consultation, research and thinking that had been done had resulted in the devising of a good scheme. Without necessarily wanting to oppose the approach that is being taken I suggest that there may be a need to revisit the question.

The other thing that concerns me in this debate—I touched on it briefly on Second Reading but we did not explore it—is that, as I understand the proposal, the ORR will set safety standards and then enforce them. I am always nervous when the setter of standards is also the enforcer. There is always the temptation, when an organisation is carrying out investigations into standards that it has set, that its representatives will work from the premise that the standards are not to be part of the investigation: the only question will be whether they have been met. The people doing the investigation and, ultimately, the enforcing, may take a view that the standards should have been set higher or differently, and that that contributed to whatever accident has happened; an independent enforcement body is more likely to take an objective view of the standards than the organisation that set them in the first place.

I worry about that. I know that it has been suggested that we should adopt the approach in question because it was adopted in aviation. The Minister will know that no day will ever go by, while I am around, without Heathrow coming into a conversation of this sort—and a reference to the Civil Aviation Authority is, I hope you will agree, Mr. Amess, in order on this occasion. It has been pointed out that it is sensible for aviation safety issues to reside with the CAA rather than the Health and Safety Executive, and that that seems to work well. However, I am prepared to be worried about the way the CAA operates, for the very reasons that I have given: it is judge and jury in its own court. The argument ''Well, it works well in aviation, so let's follow that route'' is not one of the clear benefits that will persuade me on this issue. There must be more to it.

There is another aspect of the matter, which caused mirth when I tried to explain it in the Chamber. I said that I could see a clear distinction between aviation issues and railway issues. I wanted to say that things that take place in the sky are all aviation-connected as far as I can see—I have tried to think of exceptions to that.

It is perfectly reasonable for one organisation to try to make an overall arrangement for what happens up there, but to what extent can the railways be segregated as a discrete system? The ORR is to be the only party looking at rail safety issues, but as one or two horrible road traffic accidents recently demonstrated, railway failures are not the only things that can cause such problems. Again, I do not know the extent to which consultation will take place, for example with the Highways Agency and the other organisations involved in traffic matters.

If investigations are carried out, will they be confined to what happened on the railway itself—on the tracks or at the edges of the tracks? Will investigations be confined by the boundary fences of the railway? What if investigations need to spread beyond the railways into roads, fields or elsewhere? I assure the Committee that I am not trying to be pedantic, but I can see difficulties. I remember that we had similar discussions—I believe with the same Minister—about changes in motorways. Patrols on the motorway were to be introduced, but the same problem arose of what happens if such a patrol has to go beyond the boundary fence of the motorway. We had a problem with overlap, but it was not of party political dimensions.

If responsibilities are moved away from the Health and Safety Executive, which has a much more general remit, irrespective of where things happen, I hope that the consultation will consider carefully whether the Bill as drafted will make investigations more difficult rather than simpler. I would be grateful if the Minister responded on that point, although not necessarily now.

Graham Stringer (Labour, Manchester, Blackley)

I did not intend to speak in this debate, but although I strongly support the clause for reasons that I shall come to, I sympathise with the caution that the hon. Gentleman urged in making a direct comparison with how the CAA works.

The CAA is an economic regulator; it sets standards and looks at safety, and it works extraordinarily well. Having been a member of the Transport Committee for many years and having asked why aviation gets safer, I have come to the conclusion that the answer is not the way in which the CAA is set up— ideally, one would not set it up in such a way—but the fact that all the people involved know each other and have worked closely for many years. Safety is deeply imbued in every part of the CAA's activities. One must be careful in taking the structure of the CAA, which has its own culture, and putting it elsewhere.

To underline that argument, I point out that the privatised structure of the railways is too fragmented and does not work, but it is exactly comparable to the structure of the aviation industry. Railtrack is like an airport and the competing airlines are like the train operating companies. One can continue with the analogy—it is almost perfect—but whereas aviation works well, the privatised rail system does not work. The hon. Member for Spelthorne is therefore right to say that we should be careful.

On the other side of the argument, however, the hon. Gentleman is wrong when he says, ''If it ain't broke, don't fix it''. That is good common sense, but the Health and Safety Executive's involvement with the rail industry is broken.

David Wilshire (Conservative, Spelthorne)

I do not think that I said ''It ain't broke''; I said ''If it ain't broke''. I did not seek to suggest that there is nothing wrong. I was saying that caution should be applied when considering whether the system was broken. I welcome the chance to have made that clear.

Graham Stringer (Labour, Manchester, Blackley)

I am grateful for that, because if we agree that the system is broken, we can move on fairly quickly.

When the Select Committee took evidence on safety from the various parts of the rail industry, we were shocked to find that the Health and Safety Executive was not communicating with the director of rail safety. He had been given his position following the Cullen inquiry, but he and the HSE were not talking to each other, and the industry was talking to its stakeholders.

The industry was dissatisfied with its classification as a major hazard industry. That was caused not by relatively minor but expensive gold-plating problems such as not allowing trains to be used if light bulbs were not working, but by other, more serious problems, such as expensive platform extensions being demanded when much cheaper solutions to the problem are clearly available or extension of the train protection warning system that, over 25 years, would save only five lives but which cost £375 million. If that money had been applied to the roads or any other part of the transport system, it could have saved more lives.

I could go on at length, but I must emphasise that I support the change because the system is broke. The industry has, by and large, shown 100 years of safety improvements. Apart from the obvious blips resulting from major accidents, it is very safe. It is at least 365 times safer than the roads, because as many people are killed on the roads every day as would die in a major rail accident.

I support the change that is being made, because although the industry is getting safer and has a good safety record, it does not trust the Health and Safety Executive, which does not communicate with it, and it feels that unreasonable costs are being placed upon it. Such change is necessary.

Christopher Chope (Conservative, Christchurch)

The hon. Gentleman brings a lot of knowledge to our debate, based on his Select Committee work. In that context, will he comment on the concern expressed by Brendan Barber of the TUC that finance and safety regulations do not mix?

Graham Stringer (Labour, Manchester, Blackley)

I am not aware of the context of that statement. I do not believe in principle that economic regulation and financial control should be mixed with safety. The CAA is an organisation in which that mixture has been successful, but I urge caution while accepting the necessity for change, because things are and have been poor between the HSE and the rail industry.

Greg Knight (Conservative, East Yorkshire)

Our differences on this question are ones of degree, and they relate to the speed of progress rather than to matters of principle. My hon. Friend the Member for Spelthorne thought that there should be a longer period before consultation gets under way in order to ensure that every aspect is properly considered. My hon. Friend the Member for Christchurch takes the opposite view; he thinks that consultation should come sooner rather than later. With that divergence of opinion, the Minister may conclude that the Department has it about right.

Safety responsibilities should be undertaken by people who have an expertise in the industry and a deep knowledge of it, and who are in dialogue with key players. To that extent, the hon. Member for Manchester, Blackley was correct in his analysis. The Minister's comments a few moments ago were predictable. That is not a criticism; there should be no difference between the two main political parties on safety. I am therefore reassured by what he had to say and we are all grateful that he said it. It is absolutely necessary for it to be on the record.

Tony McNulty (Labour, Harrow East)

The exchange that we have just had has been useful and responsible. We are aware that there are concerns about the move, and I share some of the views about caution that have been expressed. We are not about to graft on the aviation model simply because it works in aviation. Railways are quintessentially different from aviation, but the model is worth looking at. We need to get the right balance between economic performance and safety, and that will happen. Safety is much more at the core of all that the railways do than it used to be. The Committee will know that the rail accident investigation branch, which was introduced in the Railways and Transport Safety Act 2003, will come into play next year, and that has to be factored into the mix.

I appreciate much that the hon. Member for Spelthorne said, but I do not share his concern that the rail regulatory judge and jury are in one place. They will certainly not be in one place once this legislation is enacted. There will need to be, however, as there has been until now—Ufton Nervet showed this very clearly—a full understanding between all the parties involved about safety in road and rail transport. I am with him on that. What was the Ufton Nervet tragedy—a road accident that had consequences for the rail sector or a rail safety failure that had consequences on the road? It was clearly the former, so there will have to be, as there is now, full understanding between those involved in rail safety on the rail side and their counterparts in the Highways Agency, the police and everybody else involved. That understanding prevails now, and it will have to prevail in the new circumstances.

David Wilshire (Conservative, Spelthorne)

It might be that the answer to this question is in a part of the Bill that I have not looked at, but can the Minister assure us that somebody will have a long, hard look to ensure that there is no scope for buck passing in cases in which there is a debate about whether something is a rail accident or a road accident? It would be tragic if that were not clear and capable of being sorted out very quickly.

Tony McNulty (Labour, Harrow East)

The matter is already very clear. That needs to continue and we should not lose sight of it in the context of the changes under the Bill. It was clear in Ufton Nervet, where all authorities, to their credit, worked enormously well and extremely efficiently together. There will always be an interface, however, between various elements, and with safety paramount, we need to take that into account. I am fairly comfortable with the notion that, by the first half of next year, we will have all the flesh on the bone of the management structures.

As the right hon. Member for East Yorkshire (Mr. Knight) so kindly suggested, safety is and will remain paramount, and it will run throughout all that we do in respect of the railways. It underpins all that we seek to achieve in the Bill. That will never be lost from our focus, and I am grateful to the right hon. Gentleman for his comments in that regard. In this one instance—and this one alone—I am delighted to be so blindingly predictable. I commend whatever we are commending to the Committee.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Schedule 3 - Transfer of safety functions

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 20, in schedule 3, page 80, line 10, after 'a', insert 'surface or underground'.

This amendment should not take long to debate. I am anxious to be absolutely clear that ''a transport system'' includes both overground and underground systems, and that we shall not have people arguing that underground systems are not railways.

Tony McNulty (Labour, Harrow East)

As I said in the previous debate, I can certainly confirm that the underground, tube and metro are railways for the purposes of this provision.

Sitting suspended for a Division in the House.

On resuming—

The Chairman's attention having been called to the fact that seven Members were not present, he suspended the proceedings.

Sitting suspended for a Division in the House.

On resuming—

Tony McNulty (Labour, Harrow East)

With those assurances, I hope that the hon. Member for Spelthorne will withdraw his amendment.

David Wilshire (Conservative, Spelthorne)

I am struggling to remember the answer and the amendment, but it seems sensible to withdraw whatever it was. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 21, in page 80, line 18, leave out 'negative' and insert 'affirmative'.

This amendment will not be disposed of quite so lightly. I tell the Minister at the outset that I am minded to insist that we press it to a Division unless he satisfies us that we would be wrong to do so. Some people may think, ''Oh, there they go again—'may' or 'must'; 'negative' or 'affirmative','' and that we are making nice debating points that do not count for much, but there is, in my judgment, good reason to say that the regulations should be subject to the affirmative resolution procedure, because of the nature of the business with which we are dealing.

Paragraph 1(4) states:

''The Secretary of State may, by regulations, modify the definition of ''railway safety purposes''.''

That is a significant and fundamental point. If we get such things wrong, it could have the most appalling and tragic consequences for lots of people. This matter should be put to the House, because if a tragedy were to happen that could be laid at the door of the regulations modifying this definition, it would not do for colleagues to say, ''It wasn't much to do with us because we were not asked to consider it and vote on it.'' I urge the Minister to give serious thought to whether we should debate this matter under an affirmative resolution procedure rather than a negative resolution procedure and for very sensible reasons, rather than simply for the sake of debating it. This is a safety issue. The consequences could be very serious, and the whole House should be given an easy opportunity to say whether we all approve of making changes to safety on the railway, rather than having to kick up a fuss under the negative resolution procedure if we are unhappy.

Tony McNulty (Labour, Harrow East)

I in no way traduce the ''may'' or ''must'' arguments or the negative or positive elements of our scrutiny. They are perfectly fair. I might disagree with them—that is my right—but I do not traduce the notion of them as key elements of the scrutiny process, which are entirely fair.

I would agree with the hon. Member for Spelthorne if the wording of this part of the schedule meant that the Secretary of State could, at any given moment and whenever he fancied, change or modify the definition and sneak it through the House under the negative resolution procedure without a by your leave. There is a statutory duty in the schedule for the Secretary of State to consult the HSC, the ORR and other appropriate bodies before any modification of the definition. That is a very important distinction. There is still scope for the House to pray against such a measure under the negative resolution procedure if it chooses to do so—this is where we get into routine arguments about positive and negative resolution procedure—and to have a debate afterwards. However, given that those most directly involved in safety on the railways must—not may, might, or if they fancy it—by statute consult before any such modification is laid before the House under the negative resolution procedure, many of the points made by the hon. Gentleman are covered, and we reach the stage where, with a degree of comfort, we can have proper scrutiny of any proposed modification to the definition. As I said, I have no concerns about the hon. Gentleman's points about the negative and positive resolution procedures. They are well made, although I disagree with them in this case. The hon. Gentleman's fears are unsubstantiated, given that substantive and statutory duties are imposed on the Secretary of State to consult in full before any modification is laid before the House, and I ask him to withdraw the amendment.

Greg Knight (Conservative, East Yorkshire)

I understand why the Minister said what he had to say in answer to the amendment, but he is rather missing the point. The level of consultation does not matter. The point made by my hon. Friend the Member for Spelthorne is about parliamentary scrutiny and about Ministers seeking the approval of this House for one of its Committees to make a change or an order, and it should not have to rely on the beady eye of an Opposition Whip to ask his colleagues to pray against a particular matter. The Minister should come to this place for consent. I believe, in any event, that our procedures are in need of a serious overhaul. More and more decisions are being taken by Ministers under delegated legislative powers, and more and more changes are being implemented without there being proper scrutiny. I have long taken the view that members of Standing Committees should be dedicated for a Parliament, because one way in which Ministers can avoid very effective scrutiny is to ensure that only Government Members who do not have an interest in the subject are chosen, so that questions are not asked. I am pleased that that is not entirely the case on this Committee, as we have heard in some excellent interventions from the Government Benches. Despite the Minister's assurances about consultation, my view is that we make too much use of the negative resolution procedure and I agree with my hon. Friend.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

On this one rather rare occasion, I am inclined to support the amendment. There is concern that the safety functions may be conflated with the financial functions, although I do not believe that that will happen. The Government's model is right and I support that principle, but I understand those who have such concerns. Because of that concern, the negative resolution procedure would send the wrong message, whereas the affirmative resolution procedure would allow the House to scrutinise any proposal. That would be the safeguard for those who are worried, which is why I support the amendment.

David Wilshire (Conservative, Spelthorne)

I am always pleased to receive support from any quarter and I am not too proud to say that I welcome the support of half of Scotland. My only regret is that only one Liberal Democrat Member is here. If both were here, the hon. Gentleman could vote in favour and the other one could vote against, in true Liberal tradition. Nevertheless, we shall take help wherever we can get it.

I warmed to the suggestions that my right hon. Friend the Member for East Yorkshire made about appointing Standing Committees for a whole Parliament because, as I know from experience, one of the most unpleasant jobs that Whips have is persuading hon. Members that they are keen to volunteer to serve on Standing Committees. Having to do so only once a Parliament would make life so much simpler.

I am sorry that the Minister wondered whether I thought the Secretary of State would try to sneak regulations through. There are occasions on which I have treated the Minister to comments about sneaking things through and about jackboots—he will remember them. However, I deliberately chose not to go down that route because the issues are too serious to be mired by that sort of debating—they are issues of safety, of life and of death.

I accept that minor changes can often be usefully made through the negative resolution procedure. Doing so saves time and effort and stops people from preparing paperwork unnecessarily. I accept that and I do not think that there is always an argument for using the affirmative procedure. However, the issues are so important that they ought to be brought forward for parliamentary scrutiny automatically. It should not be enough to leave such matters to consultation.

I accept what the Minister said about there being no scope to sneak things through and about the statutory requirement to consult. However, consulting Parliament ought to be obligatory as well, rather than leaving it to Parliament to say, ''We'd actually like to discuss this,'' so I am afraid that the Minister has not persuaded me.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 11.

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 22 in page 80, line 32, leave out 'appropriate' and insert 'necessary'.

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following amendments: No. 42, in page 80, line 35, leave out paragraph 2.

No. 23, in page 80, line 36, leave out 'appropriate' and insert 'necessary'.

No. 24, in page 80, line 41, leave out 'appropriate' and insert 'necessary'.

No. 25, in page 81, line 1, leave out 'appropriate' and insert 'necessary'.

David Wilshire (Conservative, Spelthorne)

I am prepared to listen to the Minister before deciding whether to pursue these amendments to the bitter end, because they involve more than a minor point. I have tabled them to question whether it is appropriate to use the word ''appropriate'', if hon. Members will permit me to put it in that way. It seems to me that the word ''necessary'' has a significantly different meaning, and that it raises an issue that can usefully be explored. The issue arises from a point that my hon. Friend the Member for Christchurch made earlier about needing to be careful not to overdo things.

The word ''appropriate'' suggests to me that if the Office of Rail Regulation is to make changes and create duties it may decide ''This would be a good idea, and, if it is going to be done, it is appropriate that it should be done in a particular way.'' However, it should be asking whether it is necessary to take the action in question. There is a great difference between the two terms. Using the term ''appropriate'', there could be a list of things that might be worth doing, without there being any need to decide whether they were necessary; if they were thought appropriate they could be allocated accordingly.

There would be no test of necessity, and overkill could result—the attitude that certain things should be done just in case. A great long list could be drawn up, which would be going way over the top. If the test of necessity were used, I should not mind if the terms ''appropriate'' and ''necessary'' were both included. However, some test should be applied of whether action would be sensible—not just whether it was going to be done in the right place.

Greg Knight (Conservative, East Yorkshire)

I always hesitate to disagree with the Whips, for obvious reasons, and I was delighted to support my hon. Friend the Member for Spelthorne on his previous amendment, but he has not yet convinced me that the Opposition should support amendment No. 22.

I base my conclusions on an example. The change that my hon. Friend wants to make comes under the heading of the ORR's principal railway safety functions, and would affect the duty, under paragraph 2(1)(a) of the schedule,

''to do such things and make such arrangements as it considers appropriate''—

my hon. Friend would have the word ''necessary'' there—

''for the railway safety purposes''.

The ORR may consider it appropriate, but not necessary, to install security lighting or security fencing at a station or in a car park. It seems to me that ''appropriate'' is indeed the correct word, because safety not only means safety from trains being derailed but also passengers' safety from being mugged or attacked. If they considered safety in its broadest sense, those charged with responsibility under the arrangements in question might well decide that something was appropriate and that they had the money to make an improvement that would make female passengers in particular feel more relaxed about using a late-night train. However, it could not be said by any stretch of the imagination or the language to be necessary to do that work. Unless my hon. Friend has a good answer to the argument,I regret to say that we should not support his amendment.

I refer the Committee to amendment No. 42, in my name and that of my hon. friend the Member for Christchurch, which seeks to leave out paragraph 2. It is a probing amendment, because I want the Minister to tell the Committee why he feels that one of the duties of the ORR should be to carry out research. I can understand why it might from time to time wish to undertake research into a particular issue. However, this measure does not give the body the power to research as and when it deems it to be appropriate; it goes further than a permissive power and imposes a duty upon it to undertake research. If it is felt that the ORR should have to carry out research, why is there not a similar duty on the Highways Agency? It would help the Committee if the Minister were to say why it should be a duty.

Tony McNulty (Labour, Harrow East)

As I should have said last time, but refrained because I did not think that it would have persuaded anybody on the Opposition Benches on the last amendment, just as it will not on this one, we have deliberately taken into account the wording and the substantive duties of the principal Act, the Health and Safety at Work, etc. Act 1974. Is it appropriate to use ''appropriate'' rather than ''necessary'' in the context of the amendments before us? We think that it is, because that affords the ORR, as the focal point for rail safety, a degree of discretion to carry out its duties, rather as the principal Act does for the Health and Safety Executive. We believe that it is necessary for the rail safety regulator to have those elements of discretion in order to carry out its work.

I enjoyed the debate on the modernisation of our scrutiny procedures. At some level, I am with the right hon. Member for East Yorkshire. Standing Committees should be for the duration of a Bill, rather than of a Parliament, where a Bill means Second Reading and Committee stage, right through to the dispatch of all commencement orders. The tail end of the Bill process is increasingly—across parties in Government—the end where the meat of delegated legislation, guidance, regulations and so on is prepared. It might be appropriate if the same people were to sit on the Committees all the way through. That is an interesting point, which we might pursue in other regards. Much of the focus of the supposed modernisation since 1997 has been fatuous and peripheral, to say the least, precisely because it has not dwelt on our main purpose, which is how the Executive and others might scrutinise legislation and account for Government more readily. We have spent most of our time worrying about whether we should start our deliberations at half past 11 or half past 2. However, that is by the by, but I feel all the better for having got it off my chest.

Let me also say in passing that nobody should be under the illusion that the negative resolution procedure is somehow any less robust or comprehensive than an affirmative one. They are different ways of securing the same degree of scrutiny. I would not necessarily agree with the notion that affirmative is better than negative.

In amendments Nos. 22, 23, 24 and 25 on ''appropriate'' or ''necessary'', we find it appropriate to use ''appropriate'' because that is what was used in the principal Act, the Health and Safety at Work, etc. Act 1974. It affords that modicum of discretion in legalese that ''necessary'' would not. We feel that there needs to be that element of flexibility.

On amendment 42, I can half understand where the right hon. Gentleman is coming from, but we think that it is important that the safety regulator has a research duty. The situation is not the same as that of the Highways Agency, as that agency is not an independent regulator but part of the Department for Transport. It carries out its own research, but only as part of the Department's overall research programme. In that case, the specific duty for road research is on the Department and happens to be carried out in part by the Highways Agency.

To return again to the principal act, the Health and Safety Commission had a duty, not a discretion, to carry out research on safety. We feel that it is more than appropriate that, as the rail safety element is transferred to the ORR, the duty to carry out safety research goes with it. We have not cheated, but instead carried forward the template that has worked extremely well for the best part of 30-odd years from the Health and Safety at Work, etc. Act 1974 into the framework of rail safety and the focus on it under the ORR.

I hope that in the context of that 30-year history Opposition Members are persuaded. I freely accept that had I deployed such an argument on the previous issue of positive versus negative resolution procedure and said that it worked 30 years ago and in the principal Act, that would not have moved in the direction of the modernist bravado of the right hon. Gentleman.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I follow the Minister's argument, and it is important that there is a duty to procure research. Is it not the case that a similar duty is laid on the Civil Aviation Authority, which is the model that we are seeking broadly to follow?

Tony McNulty (Labour, Harrow East)

Very much so. Importantly, in all its paragraphs and sub-paragraphs, the schedule talks about making such arrangements as appropriate. It does not say, ''Please procure research in exactly the same fashion as the CAA does for aviation;'' it simply says, again referring to the parent Act, that it is appropriate that the rail safety element of the ORR has a duty to make arrangements where appropriate for research. That is eminently reasonable. As the hon. Gentleman suggests, it follows the CAA model far more readily than the Highways Agency model, because the second is part of the Department for Transport. On that basis, I ask the hon. Gentleman to withdraw the amendment.

David Wilshire (Conservative, Spelthorne)

Before I respond, I should say that if my right hon. Friend the Member for East Yorkshire comes to the next Committee sitting with his arm in a sling, it will not be because of his disagreeing with a Whip but because of some unfortunate accident in which I played no part.

I should also say that the alert student of these matters will have noticed that the official Opposition spokesman is my right hon. Friend, and when he pronounces, he is pronouncing the policy of the next Government, who will be taking over in May. When I pronounce, I do so in my individual capacity, so he is at no risk in disagreeing with me. In fact, he is probably helping me by making some fair points.

It is interesting that I should respond to my right hon. Friend rather than to the Minister. I listened carefully, and just as I failed to persuade him of the reasonableness of my argument, I am afraid that he failed to persuade me. However, I know when I am beaten—I cannot even gather up friends to help me out. I am certain to lose and on that basis, although I am not persuaded, I beg to ask leave to withdraw this splendid amendment.

Amendment, by leave, withdrawn.

David Wilshire (Conservative, Spelthorne)

I beg to move amendment No. 26, in page 82, line 11, leave out 'may' and insert 'must'.

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following amendments: No. 27, in page 82, line 12, leave out from 'paragraph' to end of line 13.

No. 28, in page 82, line 14, leave out 'at such time' and insert

'within three months of its completion'.

David Wilshire (Conservative, Spelthorne)

Here we go again—replacing ''may'' with ''must''. On this occasion, there is an important point that needs to be explored. The three amendments have to be taken together to achieve what I always feel is important on such occasions. Paragraph 4 seeks to provide that a report is required at the end of an investigation into an accident:

''The Office of Rail Regulation may authorise a person to investigate and make a special report on any accident''.

It goes on to say that the Office of Rail Regulation may publish the report or part of the report

''as such time . . . as it thinks fit.''

If there has been an investigation into a tragic accident, there will be very legitimate public interest and almost certainly direct individual interest to families affected by such an accident. I do not think that it should be left to the discretion of the ORR to decide for itself whether it wants to publish the report; I believe that there should be an obligation for a report into an accident to be placed in the public domain in full. If it is not, one wonders what on earth is going on; if bits are left out, one wonders about what is being covered up; and if it is left to the ORR's discretion to decide when it might get round to publishing it, it could be at any time.

My three amendments, which commend themselves to me at least, seek to say that the report must be published, that it must be published in full and that it must be published within three months of it being completed. I am not wedded to three months if someone could argue that four months or six months would be more sensible, but the principle of the time limit is important. That is for the benefit of the public so that they know what is going on. I seek a response from a Government who believe in freedom of information. Such a report is a good example of what should be in the public domain as quickly as possible.

Greg Knight (Conservative, East Yorkshire)

My hon. Friend the Member for Spelthorne will be pleased to know that I have more sympathy with him on this group, especially amendment No. 28, which seeks to insert in line 14 the words

''within three months of its completion''

instead of the words ''at such time''. Can the Minister give us any reason why a completed report should not be required to be made public within three months of its completion? The only example that I can think of is that it might be politically embarrassing to a Minister.

If we allow the current wording to remain in the Bill, a report that is critical of the Secretary of State may remain away from the public gaze until elections are out of the way. One can envisage a scenario in which the Secretary of State has sight of a report that is critical of some act or omission by him or one of his Ministers, and he then asks that the report not be published for a period of time. That is the only example that I can think of when such a delay might be used. I cannot think of any other scenario in which it would be necessary for a completed report to be held back. I should be interested to hear what the Minister has to say about that, and if he cannot give a reason, I should have thought that the Committee should insist that when a report is completed, it should certainly be published within three months of the date of completion.

Mark Field (Conservative, Cities of London and Westminster)

It seems odd that the Bill should leave such widespread discretion in the hands of the ORR. I agree entirely with my right hon. Friend the Member for East Yorkshire, and it would be interesting to see whether there is a similar, all-embracing discretion in the hands of other regulators, as far as what may be considered to be politically sensitive reports are concerned.

In precisely the same way as my right hon. Friend mentioned, it seems to me that only political problems, or potential political problems, would delay the issuing of a report for a prolonged period. It is surely in the interests of the rail-going public, passengers and the public at large to ensure that the disclosure of information from an important report that might follow an accident or other incident is brought to public attention at the earliest opportunity. A three-month delay seems long enough for any procedural concerns.

I wonder whether there is a precedent from the actions of other regulators. For example, if concerns were raised about the financial regulation by the Financial Services Authority, we would have a public report post haste. I disagree with the notion that such a report could be delayed for whatever reason—any long-term delay would seem to have political ramifications. Perhaps the Minister can give us guidance, because he will understand why Opposition Members are concerned that the provision could be misused to grave political advantage.

Tony McNulty (Labour, Harrow East)

There we are; all this time I have been nice, but now Opposition Members are provoking me. The ORR will be independent. Under this and other legislation, we have no control whatsoever over the timing, publication or contents of any report. Let us get entirely off the table the notion that we are roughly at the stage of democracy that the Ukraine is trying to reach. That is nonsense, and everyone on the Opposition Benches knows that.

The provisions of the schedule are again—I do not wish to repeat myself—exactly those prescribed for the Health and Safety Commission in section 14(2)(a) of the parent Act for this part of the Bill—the Health and Safety at Work, etc. Act 1974. There are circumstances in which parts of reports should be repressed, some parts should be published and in which others should never be in the public domain, certainly not within an ill-defined and arbitrary three-month period. Any number of legal processes may unfold in the wake of a particular incident or accident that would make that entirely inappropriate, but it should be left to the discretion of the regulator when or if certain parts or all of a special report should be forthcoming.

Rather laboriously, I have had to read God knows how many pieces of paper and attend the odd seminar on freedom of information—fun though they are—given that new legislation is coming in January. We are getting to grips with the concept, and I suspect, from my limited knowledge of the FOI provision, that there is nothing that would challenge the circumstance in which the regulator would hold back parts of a report because of criminal or civil proceedings or because a special report was part of a wider conflagration or accident. If the ORR produces a special report covering specifically rail safety in an accident or incident with wider implications in terms of the transport modes involved—for example, the Ufton Nervet road-rail accident, or an incident between aviation, rail or road transport—it would be hugely inappropriate if the rail safety report was published, and it preceded or pre-empted wider-reaching safety reports.

There is a whole range of reasons to hold back parts of a report. Equally, it is appropriate for the regulator to determine when such a report should be published publicly or otherwise. The notion of political suppression is simply nonsense. The regulator will be independent, and we will have no control over him. In that context, the practical flexibility afforded by this part of the schedule is appropriate. It is not about the suppression of information. It is not about doing a favour for a Minister or a Secretary of State. Within the context of the parent Act—the Health and Safety at Work, etc. Act 1974—it allows those carrying out the investigations that precede a special report to get on with their job of determining how to take things forward in the important context of the failure of rail safety measures.

In that context—and apart from what I said about cross-cutting inquiries that cover more than rail safety and those in which criminal or civil proceedings are in play, and now that we have the political nonsense out of the way—I can think of no other capricious or malevolent reason why the ORR would choose not to publish most if not all its reports. However, it requires a degree of flexibility, which is why I ask for the amendment to be withdrawn.

Greg Knight (Conservative, East Yorkshire)

The amendments are the children of my hon. Friend the Member for Spelthorne. It is a matter for him what should happen, but I hope that, on reflection, he will press amendment No. 28 to a Division.

If the Minister ever decides to leave politics to pursue an alternative career, he should consider the stage. That was the best smoke screen that I have seen for some time. He said that Ministers would have no control over the ORR. That is correct, but denying that Ministers would have influence is another matter. We all know that the Secretary of State has to work closely with the industry, and I can well see a scenario developing in which, if something politically embarrassing was mentioned in a report, the Secretary of State might seek to use his influence—not his control—to suppress a report.

In arguing that the Committee should reject the amendment, the Minister said that parts of a report might be sensitive and that the ORR would not wish to publish them. We should pause and look at page 82 of the Bill, and at paragraph 4 of the schedule. The previous paragraph still gives the ORR the power to withhold parts of a report if they are deemed to be inappropriate for publication. In such cases, we seek only to put a duty on the ORR to ensure publication within three months of the completion of the report. That is reasonable; it is fair. It is in accord with the freedom of information legislation of which the Government are so fond. I therefore commend amendment No. 28 to the Committee.

David Wilshire (Conservative, Spelthorne)

I took the friendly suggestion of our official spokesman as an instruction to press amendment No. 28 to a Division; I shall be delighted to do so in due course, Mr. Amess, if you allow it.

I have to enter a caveat. I listened to what the Minister said, but I deliberately did not go down the political and skulduggery route because I felt that if I were to upset him by raising certain issues, they would get completely lost in the bluster of righteous indignation about us daring to suggest that he was a politician.

I do not know whether I read too much into what the Minister said, but he said more than once that he felt that there was a need for flexibility because the ORR might sensibly wish to hold something back. He could have said ''withhold'', a definite and for ever state of play. I listened carefully, and he did say that it would be possible for something in a report to prejudice subsequent court proceedings. I can buy into his reasons for saying that, in some circumstances, three months would be inappropriate. However, that is not a reason for a time limit of some sort not being included.

The Minister may prefer to come back on Report with an amendment saying that a report should be published within three months of its completion unless—and then provide some reasoning as to why it could be held back for a period. I would welcome such an amendment if it said that reasons must be given when that power to hold back is used, so that their sensibleness can be tested, and that the time limit still applies when the objection to immediate publication has gone away. The time limit would therefore be three months unless there were to be court proceedings and publication would prejudice a trial, in which case one of the ''unless'' reasons would be triggered and publication would take place three months from the end of the court case. There should still be a requirement to publish; that is what I am after. I have not heard any reason why, when all other reasons and difficulties are out of the way, something should be withheld for ever. I am persuaded that there is an argument for such publications to be held back, but not for ever.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Has the hon. Gentleman considered the security aspect? This may be an unlikely scenario, but if there were a rail accident that needed to be investigated, any such report may involve security matters, and may contain paragraphs that should not be made public because they would give comfort or information to a potential terrorist.

David Wilshire (Conservative, Spelthorne)

I understand the hon. Gentleman's point, but it does not undermine the general principle. I have accepted that the Minister came up with one circumstance in which it may be sensible to say that a report should be published within a certain amount of time unless something was about to happen, and I am prepared to discuss with the hon. Gentleman whether terrorism requires some references as well, but I am not sure whether that should be the case for ever, because it could well be that the potential terrorist threat that gave rise to a report being withheld may not appertain later. If the terrorist threat goes away, the matter should be in the public domain.

I am only too willing to listen to people's suggestions of circumstances in which 28 days would not be a suitable time scale, but I have not yet heard one that says that the general principle of requiring publication within a fixed time, but with exceptions, is not the right way to go, rather than there being so much flexibility that things can be withheld on a whim. On that basis, I wish to press amendment No. 28, at least, to a Division.

Sir David Amess (Conservative, Southend West)

Will the hon. Gentleman clarify that last remark? Does he seek leave to withdraw amendment No. 26?

David Wilshire (Conservative, Spelthorne)

I have been instructed to press amendment No. 28, but not amendments Nos. 26 and 27, so if it helps with progress, I will willingly withdraw amendment No. 26, provided that that does not lose me the right to press amendment No. 28. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 28, in page 82, line 14, leave out 'at such time' and insert

'within three months of its completion'.—[Mr. Wilshire.]

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 12.

Christopher Chope (Conservative, Christchurch)

May I raise a question about paragraph 12 of the schedule, which makes provision for the Secretary of State to make regulations for a levy to be paid to the ORR in respect of railway safety activities that it undertakes? That replicates a power that was given under the Railways and Transport Safety Act 2003 in relation to the Health and Safety Executive, but that power has not yet been implemented. Will the Minister say how he sees the levy operating? What will the level be and will there be any constraints on the ability of the ORR to increase its costs in the knowledge that those costs could be passed on to the railway industry?

In that context, it is relevant to recall our short debate about research. If all the research is funded by the railway industry through a levy, will a ceiling be put on it? Will the end result be greater costs being borne by railway passengers rather than taxpayers as a whole, which is how the Health and Safety Executive has traditionally been funded?

Tony McNulty (Labour, Harrow East)

I shall respond in the overall context of the schedule, on which there has been a useful and substantive debate. Rather like the previous two schedules, schedule 3 is important and faces two ways. In one sense the schedule affords the move of the rail safety elements that were previously with the Health and Safety Executive to the ORR, but the legislative consequence—as I am sure hon. Members will know, because they have read the schedule in full—is that the process is also reversed. The schedule has to take out of legislation the assorted elements that flow from moving such matters to the ORR. That is slightly clumsy, which is why the schedule is so techy and long, but we must ensure that the elements of law relating to HSE powers are taken out and given to the ORR.

On the specifics of the levy, the root of the power, rather like the entire schedule, is the Health and Safety at Work, etc. Act 1974. It is important to work with the ORR in the range of ongoing discussions that are part of the transfer, many of which are non-legislative, as I have said. That is necessary to ensure that the levy is set at an appropriate level and is limited, that we do not get regulatory dirigisme, as I suspect the hon. Gentleman would say, and that there is an open check.

It is important that the ORR should be properly funded for the rail safety element, much of which simply follows on from the position under the HSE. As I have already said in many instances and will no doubt say again in our Committee, that is a feature of the transition period over the coming years as matters unfold, some while we are still with the Bill, some beyond it. As I said, I will endeavour to keep the Committee up to date.

Christopher Chope (Conservative, Christchurch)

Can the Minister say whether he expects the HSE to be able to impose a levy under the Railways and Transport Safety Act 2003 while it retains the powers of rail regulation? When does he intend to implement those provisions?

Tony McNulty (Labour, Harrow East)

With the proviso that I am no lawyer—I am grateful not to be one—I suppose that the strict answer is yes. While the 1974 Act is alive and until we reach the stage at which the Bill prevails in rail safety rather than the HSWA, the technical answer is yes. Practically, however, I think that it is unlikely that what prevails now will prevail and that the provisions of the 1974 Act will be called on instead of those that are being reproduced.

As I have said on other elements, we are trying to get to a stage at which a simpler and more straightforward network of organisations runs the railways, but we cannot afford a huge, mushy, messy and ultimately dysfunctional transition to that, and certainly not in the context of safety on the railways. The ongoing negotiations and discussions are about trying to ensure that there is the smoothest of transitions from the SRA to the post-SRA world, from a world in which rail safety lies with the HSE to one in which it lies with the ORR. In answer to the specific point, I cannot see any circumstance in which the intention on the part of the HSE would be to set such a levy, but we need to get the transition right in this element of the Bill as well as in many others.

Christopher Chope (Conservative, Christchurch)

Am I not correct in my understanding that the power to raise funds from a levy, which is given in the Railways and Transport Safety Act 2003, has not yet been introduced by the Government? The Government do not yet allow the HSE to exercise that power. I am asking whether they intend to allow the HSE to exercise the power while it continues to enjoy responsibilities in this area.

Tony McNulty (Labour, Harrow East)

Again, the answer is that whatever intention there may be, that is unlikely to happen in the context of schedule 3 and the transition of the rail safety focus from the HSE to the ORR. I have made that perfectly plain and I do not think that anything the hon. Gentleman has said challenges it.

Question put and agreed to.

Schedule 3 agreed to.

Clause 3 - General duties under s. 4 of the 1993 Act

Greg Knight (Conservative, East Yorkshire)

I beg to move amendment No. 29, in page 3, line 3, at end insert

'for both passengers and freight customers.'.

Sir David Amess (Conservative, Southend West)

With this it will be convenient to discuss the following amendments:No. 7, in page 3, line 4, at end insert

'both passenger and rail freight'.

No. 30, in page 3, line 4, at end insert 'both passengers and freight.'.

No. 31, in page 3, line 4, after subsection (1) insert

'(1A) The Secretary of State shall have a duty to promote the use of the railway network for the carriage of passengers and goods, to secure the development of the network, and to contribute to the development of an integrated system of transport of passengers and goods.'.

No. 6, in page 3, line 34, at end insert

'(7A) After subsection (4) insert—

''(4B) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to ensure that local and regional authorities in England, and the devolved administrations of Scotland and Wales, implement where applicable rail freight infrastructure developments.

(4C) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to ensure that Network Rail ensure improvements in railway service performance for freight operating companies and their customers as well as rail passengers and train operating companies.''.'.

Greg Knight (Conservative, East Yorkshire)

In addition to moving amendment No. 29, I shall also speak to amendments Nos. 30 and 31, which are in my name and that of my hon. Friend the Member for Christchurch.

May I start these deliberations by making a plea through you, Mr. Amess, that before we meet on Thursday someone winds the clock that I am facing? As I look at the sea of Labour Members and then up at the clock, I keep thinking subconsciously that time is standing still. It would be helpful to see the hour that we are at, rather than 9.20 throughout the day.

There is a duty on the Government under the Railways Act 1993

''to promote the use of the railway network . . . for the carriage of passengers and goods''.

That duty appears to remain in place despite the changes being brought about by the Bill. Retention of the duty is fundamental to the ongoing use of the network not only by passengers but particularly by freight.

The duty was expanded in the Transport Act 2000, which set out the purposes of the Strategic Rail Authority. Its duties were

''to promote the use of the railway network for the carriage of passengers and goods . . . to secure the development of the railway network, and . . . to contribute to the development of an integrated system of transport of passengers and goods.''

Those provisions of the 2000 Act are repealed by the Bill, but our view is that if they were necessary in 2000, they are necessary now and should be reinstated as duties of the Secretary of State instead of duties of the SRA, which we have agreed to abolish.

Under the Bill, as I read it, the only duty on the Secretary of State is

''to promote improvements in railway service performance''

''otherwise to protect the interests of users of railway services''.

That is useful, but we want the clause to contain the wider and more comprehensive duty. That is the reason for amendment No. 31, which makes it quite clear that the duty on the Secretary of State applies not only to passengers but to freight. That is why amendment No. 29 refers to promoting improvements in the railway service performance

''for both passengers and freight customers''.

That is important, because since the role of Network Rail is set to increase, and some argue that its current attitude to freight is not always positive, we believe that it is essential that the agreement between the Secretary of State and Network Rail should include the above duties.

I hope that the Minister will either support the amendments or tell us that, despite what appears to be a lack of a duty towards freight customers, these issues will be part of the Secretary of State's duty, which he will pursue with vigour.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

To all intents and purposes, amendment No. 7 is the same as amendment No. 29, although I have decided that it is slightly defective in that it does not contain the word ''for''. If the matter were pressed to a vote, I would support amendment No. 29 and let my amendment lapse.

I have some difficulty in coming to terms with the duty, which I agree is important, largely because one has to read two Acts of Parliament and the Bill together. I have done that, and I am not sure that I have understood the matter, so with your indulgence, Mr. Amess, I shall examine these points in detail and ask the Minister to tell me whether I have got them right.

The relevant part of the 1993 Act is subsections (1), (2), (3) and (4) of section 4. Section 4(1)(b) gives the Secretary of State a duty

''to promote the use of the railway network in Great Britain for the carriage of passengers and goods, and the development of that railway network, to the greatest extent that he considers economically practicable''.

However, the Transport Act 2000, which created the SRA, states in section 224(2):

''for ''Secretary of State and the Regulator shall each'' substitute ''Regulator shall''''.

The same substitution is made in all the subsections of the 1993 Act to which I have referred. The effect is that all the duties referred to in section 4(1) of the 1993 Act, which begins with

''The Secretary of State and the Regulator shall'',

have become simply duties of the regulator, through the phrase ''The Regulator shall''. So we have removed the Secretary of State from all those duties and we have only the regulator.

Perhaps the Committee can understand why I was beginning to get a little confused at this point. Section 224(5) of the 2000 Act, however, states:

''After that subsection insert—

'(3A) Subsections (1) to (3) above shall have effect in relation to the Secretary of State as in relation to the Regulator'''.

So the regulator seems to have come back again. Subsection (5) continues:

''except that in their application to the Secretary of State—

(a) paragraph (za) of subsection (1) above shall be disregarded; and

(b) the references in each of the subsections to the functions transferred or assigned to the Secretary of State under or by virtue of this Part include only the functions transferred or assigned to him under or by virtue of sections 6 to 22 and 37 to 50 below.''

Of course, that takes us back to the 1993 Act, in which sections 6 to 22 refer to licensing and access agreements, and sections 37 to 50 refer to closures and experimental railways.

I am not sure, but I think that the duty that the 1993 Act imposed on the Secretary of State in regard to the railways, which was removed by the 2000 Act and placed on the SRA, has now been removed entirely and is not being replaced. My amendment and those of the right hon. Member for East Yorkshire seek merely to put back into the Bill the duty that the Secretary of State had after 1993 but before 2000 and the introduction of the SRA. If the SRA is created and given a duty, it follows that removing the SRA means that the duty should be given back whence it came—the Secretary of State.

The matter is important not only for passengers, but for freight. Given the time that it takes to put projects in place, whether they are for infrastructure in terms of road, rail or other links, a time is coming quite quickly down the track, if I can put it that way, when we will run out of capacity on both the railways and the roads. If we do not build roads and we cannot build sufficient roads to meet the requirement for capacity for freight, we will need rail. If we are running out of such capacity, we will have a further problem. If the duty is not imposed on the Secretary of State—this point is allied with my earlier comments about strategy—in about 2016 we may find ourselves in considerable difficulty. That is why it is so important that the duty be reinstated and imposed on the Secretary of State.

Tony McNulty (Labour, Harrow East)

I do not think that anyone would dispute that the success of freight over recent years should continue, that freight is very important or that our rail network is and should be utilised for the conveyance of goods as well as passengers. No one would dispute that.

For the first time in our deliberations, the hon. Member for Caithness, Sutherland and Easter Ross has totally confused me, if not himself. As I understood it, the element of duty towards freight remains. That is certainly the case for the ORR. I also understand that if the SRA goes, the broad duties that are upon the Secretary of State remain, as was said earlier. Given that the duties that were discharged towards the SRA are no longer discharged towards it, they must, by definition, return whence they came—the Department for Transport. Whether we need that to be explicitly stated in the Bill is a moot point, as is whether the most appropriate place to put such provision is a schedule about the ORR.

No one would dispute—this is why I am sympathetic to the thrust of the amendments—that rail freight is an important dimension to the rail network. It is a growing and competitive industry, and it is better placed than central Government to know and plan its own developments. Once the SRA and its strategic focus are taken away, I am not sure whether simply broader duties should be back at the centre in terms of freight; those duties are there by definition in the absence of the SRA. However, in the first instance, the freight sector working with central Government is best placed to determine what it needs and in what context.

Equally important, but not for deliberation here, is access to pathways and the issue the hon. Member for Caithness, Sutherland and Easter Ross raised in speaking about the conflict in utilisation and capacity between freight and passengers. I know that a good deal of work is being done on that factor across the piece, particularly in the context of utilising inter-city lines for freight and using new capacity for freight. That is always a balance. We feel that there has been no diminution in the Government's commitment to rail freight. Chasing around little phrases that were there and are not there any more because the SRA is to go does not diminish central Government's real duties and our responsibility to recognise the importance of freight in the absence of the SRA and its duties in that regard. With that assurance, I ask that the amendments be withdrawn.

Greg Knight (Conservative, East Yorkshire)

I am grateful for the constructive way in which the Minister has commented on the amendments. If I understand him correctly, he does not think that they are necessary, but he can see why we were concerned. Will he reflect further on the points that have been made later in the Committee's deliberations, and tell us later what his conclusion is? This is an important matter, and because he indicated that he has not ruled out including the proposals in the Bill, we should reflect on it once we have heard his ultimate conclusion and perhaps return to it on Report. On the basis that he does not have a closed mind on the issue and might be prepared to reflect further, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I beg to move amendment No. 2, in clause 3, page 3, line 4, at end insert—

'(3A) In subsection (1)(b) (duty of the ORR to promote the use of the railway network in Great Britain for the carriage of passengers and goods, and the development of that railway network, to the greatest extent that [it] considers economically practicable) at end add ''and environmentally sustainable''.'.

This is something of a probing amendment. It is an attempt to find out more from the Government about their views of the duties of the Office of Rail Regulation. On Second Reading, I mentioned that I was in favour of the way in which the Government were transferring safety responsibilities, but I wondered why the ORR did not have duties with regard to the environment similar to those held by the Civil Aviation Authority. I do not pretend that the schedule is the best place for such provision, and somewhere else in the Bill may be more appropriate. I shall therefore be grateful if the Minister does not tell me that the amendment is defective, as mine usually are, but addresses himself, if he will be kind enough to do so, to the substance of the argument.

The point is that in the railway industry, the consequences for the environment, and what we are seeking to do through our environmental policies—matters on which there is a degree of agreement between the Government and my party—are not made as clear as they might be. Let us consider, for example, the question of specifying new rolling stock. There is nothing in the specification of rolling stock that would require the Secretary of State, the ORR, Network Rail, the train operating companies or the rolling stock companies to consider the fuel efficiency of the locomotives or the train set.

It is interesting to note that while fast trains in France and other countries are becoming more fuel efficient per passenger kilometre, trains in this country are, if anything, becoming slightly less efficient. That reason why is that we have put other matters at the top of the list of specifications. I am not saying that they should not be there, but they are there to the exclusion of the environment. They include safety, disabled access and a range of other issues. We are decreasing the numbers of passengers on the trains, while increasing the weight, requiring, therefore, more engine power to deliver the speed.

Until such time as we get things such as hydrogen fuel cell technology—an interesting development on which I am delighted to see research being done—it would be useful if we could put a duty on to the ORR At least the importance of ensuring fuel efficiency would then be given the same degree of commitment as it is by car manufacturers on our roads, in aviation and elsewhere.

Greg Knight (Conservative, East Yorkshire)

Is the hon. Gentleman not concerned that one of the side effects of his amendment, were he to pursue it, might be to deter, discourage or even prevent heritage rail services from taking place on the main line? I am thinking in particular of those services that are fuelled by steam engines.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I do not believe that that would be the case; it is certainly not the intention. On the basis that we are debating the principle, I would say that any amendment made to the Bill would not include heritage railways within its scope. What I am looking to do is, in effect, ensure that within the complex of bodies that will be responsible for the railways, there is someone somewhere who has regard to fuel efficiency.

Graham Stringer (Labour, Manchester, Blackley)

The hon. Gentleman makes an interesting point, exposing the dilemmas in building trains with access for the disabled. That is one of the reasons why trains are heavier but are carrying fewer passengers. I am interested in what the Liberal Democrats' position is on the balance between fuel efficiency and access for disabled people.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

The hon. Gentleman raises an important and difficult point. We are all in favour, in principle, of increasing disabled access. I have constituents who are disabled whom I have sought to help. In particular, I have a constituent who lives in the village of Helmsdale, which is on the east coast, where the northbound train is not accessible because his disabled electric chair cannot get across the railway. There is no crossing, so he cannot get on to the train. ScotRail therefore agreed—and it was extremely good of it—to ensure that when trains were going in the direction that does not have access, they would go forward out of the station then reverse into it on the other side. They would take my constituent on board, pull out of the station going the wrong way and then come back through the station going the other way. Clearly, there is a cost implication for ScotRail of running that service. It is a particular case in a very small community, but given the number of times that my constituent wishes to use the train—only a relatively small number of times in a year—that might be the right solution. If there were a greater demand or if it were a bigger city, putting in more permanent access might be right approach.

My point with this amendment is that there is often a trade-off, and certain arrangements quite rightly have extremely good access for disabled people. However, there is currently no consideration required in any part of the system for environmental issues. I therefore ask that such issues be given consideration within the mix of safety and disabled access, all of which are important criteria.

Tony McNulty (Labour, Harrow East)

The hon. Member for Caithness, Sutherland and Easter Ross makes a fair point about rolling stock. He will fully accept that it is not a legislative issue, but we are aware that rolling stock procurement has not always delivered the best solutions in cost, technical or environmental terms. We need to look at issues such as increased standardisation, moving away from the over-complexity of energy efficiency and whole-life costs and see how they can be better reflected in future procurements. As I said on Second Reading, we are exploring all those elements with the ROSCOs and the wider industry. As my hon. Friend the Member for Manchester, Blackley suggested, harsher issues exist on which it will be necessary to obtain a balance between various perspectives.

I happily assure the hon. Gentleman that his amendment is not defective—it is duplicative. Referring back to the 1993 Act, we see that all the provisions that he is concerned about, in fact, remain with respect to the Office of Rail Regulation. The ORR will be required to exercise its function in a manner that it considers best calculated to contribute to the achievement of sustainable development. It is, under clause 4(3)(b) of the Act, required, in exercising its functions,

''to have regard to the effect on the environment of activities connected with the provision of railway services.''

Sustainable development, sustainability and the environmental dimension are already in the body of the legislation affecting the ORR, and will remain so under the Bill. I am happy to say this time—I do not promise it is a precedent for the duration of our deliberations, when the hon. Gentleman is not at family weddings—that the amendment is not defective. It is duplicative and unnecessary, and I ask him to withdraw it.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I am extremely grateful to the Minister for putting on the record the Government's commitment to the environment in the context of the effect on it of activities connected with the provision of railway services. That was precisely what I had hoped might happen. On those grounds, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Thurso (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I beg to move amendment No. 1, in clause 3, page 3, line 34, at end insert—

'(7A) After subsection (4) insert—

''(4A) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to promote the renewal of franchise agreements to incumbent companies which have met the terms of their previous franchise agreement.''.'.

The amendment would place on the Secretary of State, in exercising his functions with regard to the renewal of franchises, a duty to have regard to those incumbent companies that had met the terms of their previous franchise agreements. The reason for that is to increase stability. I think that it is commonly agreed that following privatisation, the railways have tended to operate in a way that has not been wholly successful, and one reason is that privatisation led to the fragmentation of the railways, and, sometimes, to competition where it has not been entirely necessary.

A factor in perhaps securing better value from the railways for the public purse and passengers might be longer franchises, and rewards for franchise companies that fulfil their objectives. A current example is provided by the east coast main line and GNER. The company started with some great advantages, including a line in reasonably good order and some of the more modern rolling stock. However, to give credit where it is due, it added to that a quality of service that is a fine exemplar, from which several other companies might learn. I know that hon. Members of all parties have used GNER regularly and find it both comfortable and normally reliable. Those responsible for re-letting the franchise should be obliged to take that into account.

I suppose that one might unkindly call my amendment the GNER amendment, but I want to draw attention to the fact that some companies—there are others besides GNER—have done a very good job for their passengers. Those companies that have done a good job for their passengers should be entitled to a small form of comfort, and have their efforts recognised and taken into account when franchises are re-let.

Tony McNulty (Labour, Harrow East)

I shall not unkindly characterise the amendment as a GNER amendment, or as any other type of amendment. Equally, and for obvious reasons, I shall refrain from commenting on the value and virtues or otherwise of particular franchisees.

I understand the broad the sentiments behind the amendment, but I fear that it will not do what the hon. Gentleman seeks. That is not because it is defective or duplicative, but—I hate to mention the European Union at 25 minutes past five o'clock on a Tuesday evening, as it will create excitement on the Opposition Benches—because I suspect that it will fall foul of EU procurement law.

It is not practical for a number of reasons. We said in the White Paper in July that we are minded to give more regard to performance. The White Paper said that train company bids

''will be judged not only on cost, but on relevant past performance, their commitments to improve train and crew liability and their operational viability.''

I cannot accept the amendment because of its wording. It depends on an effective, efficient and useful set of franchises coming to term; the achievement and performance of the incumbent will then mean something. In the context of any number of the franchises let after privatisation, the targets were not particularly strenuous, to say the very least. Incumbency and successfully achieving a franchise is of no particular merit. The amendment would also disadvantage bidders that have run successful operations elsewhere. It is only fair if we are taking past performance into account that it should not be done on one franchise alone but on the past performance of the company itself. The amendment would also—this is the EU procurement bit—unnecessarily prevent new entrants from coming into the market, with all the associated fears of costs, market efficiency and so on that would be involved.

We made a huge commitment in the White Paper to get to a stage on franchises so that the number, the nature and the substance of each would be far more rigorous than they have been thus far. Nevertheless, however good we are on that, it is not enough to judge the record of the incumbent in pursuing the franchise as a reason to preclude new competition or to disadvantage newcomers or other bidders to the advantage of the incumbent. That is not entirely fair. Although I understand the sentiments behind the amendment, I ask the hon. Gentleman to withdraw it.

Debate adjourned.—[Gillian Merron.]

Adjourned accordingly at twenty-eight minutes past Five o'clock till Thursday 16 December at twenty-five minutes past Nine o'clock.