Crossrail Bill

moved Amendment No. 3: 3: Before Clause 22, insert the following new Clause— ““Objective of ORR in relation to Crossrail (1) The list of objectives in section 4(1) of the Railways Act 1993 (c. 43) (objectives of Office of Rail Regulation and Secretary of State) shall be treated, in relation to the Office of Rail Regulation only, as including the objective of facilitating the construction of Crossrail. (2) The Office of Rail Regulation shall consult the Secretary of State about the duty under section 4(1) of the Railways Act 1993 (as modified by subsection (1)). (3) This section shall cease to have effect on such day as the Secretary of State may by order made by statutory instrument specify. (4) A statutory instrument containing an order under subsection (3) shall be laid before Parliament after being made.”” The noble Lord said: I will introduce two new government clauses by first explaining those clauses that I have given notice of my intention to oppose, as these new clauses and subsequent deletions form a package of amendments to the railway matters covered by the Bill. That means that I shall speak for some while, but it is important that I provide the Committee with an appreciation of why I propose to delete Clauses 23 to 34 before we can understand those clauses that I propose to insert. I shall also refer to the amendments to those new clauses tabled by the noble Lords, Lord Hanningfield, Lord Berkeley and Lord Bradshaw. Clauses 23 to 34 are a dozen clauses that include overriding duties on the Office of Rail Regulation, which affect in particular the process for gaining access rights to the railway network. I have given notice of my intention to oppose all the clauses and remove them from the Bill, and the Department for Transport made clear on several occasions in several statements in April that it would seek to delete them. The clauses were from the outset intended to be reserve powers, as our intention was to use normal railway industry processes where possible, and the Bill process has allowed time for the key process to run its course. As Members of the Committee know, an application was made in July 2007 to the Office of Rail Regulation by the Secretary of State and Network Rail for approval under Section 18 of the Railways Act 1993 of an access option that would grant access rights for Crossrail services on the existing railway network. The Office of Rail Regulation undertook a public consultation and held a hearing on 1 February involving those who responded, which included many representatives of the railway industry. It issued a proposed decision and invited further comments. The ORR issued its final decision on 14 April, approving the access option with modifications. This means that, having taken careful account of the interests of the railway industry, the ORR has approved firm, long-term access rights to operate the bulk of the proposed Crossrail services on the Great Eastern and Great Western main lines, as enhanced as part of the Crossrail project. Much timetabling and other work to validate the operational viability of these Crossrail services has been undertaken over several years, and will continue iteratively until the opening of the Crossrail service in 2017 and beyond, resulting in a high-performing railway for all users. The access option consequently provides the Government and others investing in this project with the certainty they need to take Crossrail forward, and should provide Parliament with the confidence that the public benefits of the Crossrail services are sufficiently secure, should Clauses 23 to 34 be removed from the Bill. The access option means that there is no need for the Bill powers, for example, to direct Network Rail to enter into access agreements or to activate duties of the ORR in respect of Crossrail services. The Crossrail train operating company will have no superior access rights to those of any other operator with an access agreement. Any access disputes between operators would be resolved by existing industry processes, and any additional access rights for Crossrail services beyond those specified in the access option will be subject to approval by the ORR under the normal industry processes, and not under any Bill powers. It is notable, also, that the access option provides future growth capacity for other railway users, such as rail freight. There is one caveat, mentioned by our counsel during the Select Committee hearings, of which I should make the Committee aware. If there were to be a judicial review of the ORR’s granting of the access option, the Government may need to revisit at later stages of the Bill whether there are sufficient railway powers in it to ensure that the project can go ahead. A £16 billion investment cannot be taken forward unless the necessary approvals have been obtained to construct and operate the project in question, or unless the Bill contains the necessary provisions to obtain those approvals. However, this will be considered only if there is uncertainty over the access option, and it is notable that the railway industry has already broadly welcomed the ORR's decision. In summary, I hope that we will today delete Clauses 23 to 34, which are now no longer necessary following the granting of the access option, and insert two new provisions, which I am afraid that noble Lords will now have to listen to me carefully introducing. In contrast to those powers that I have proposed be removed, neither of these provisions contains an overriding duty on the ORR, nor do they seek to modify access arrangements directed by the ORR under the Railways Act 1993. Amendment No. 3 includes a new additional but not overriding objective of facilitating the construction of Crossrail in the ORR's list of objectives in Section 4(1) of the Railways Act 1993. It is precedented in Section 17 of the London Olympics and Paralympics Act 2006, and follows the wording of that Act in referring to ““objective””. This is purely drafting semantics and does not give any special priority over what is listed under the duty in Section 4(1) of the Railways Act 1993. The clause does not direct the ORR as to how it should meet this new objective. This is properly left to its judgment as the independent Rail Regulator in the circumstances at the time. However, ultimately, the ORR would have to oversee a track possession regime which, by whatever means it considers appropriate and while balancing all its existing Section 4(1) objectives, would enable the Crossrail construction works to take place. Overall, Amendment No. 3 provides an appropriate and reasonable objective for the ORR to help to deliver the Crossrail works, as authorised by Parliament, but within the context of national railway services and the network itself. More specifically, there has been a long-standing issue regarding whether existing train operators could exercise so-called blocking rights that would prevent the track possessions for the carrying out of Crossrail works. If consultation with train operators and optimisation of the track possessions has taken place in accordance with the network code, and satisfactory compensation has been paid to train operators in accordance with Crossrail information paper H2, then it would not be appropriate for blocking rights to prevent these possessions. It is doubtful that blocking rights could be exercised in a way that would prevent works being undertaken that had been authorised by Act of Parliament, since that would cause a contractual arrangement to conflict with the purpose of primary legislation—what will be the Crossrail Act. Nevertheless, it is desirable to ensure certainty with regard to this issue, as the consequences of relatively small but none the less essential works being frustrated or delayed could be extremely serious and costly. Accordingly, an action for the ORR in relation to this new clause would be to consider whether the track possession regime could be conducted under the network code as it is, or whether it should amend the network code to make it explicit that blocking rights could not prevent sufficient track possessions to undertake works approved by Act of Parliament. Once the Crossrail construction phase has been completed, this objective will cease to have any purpose, and the Secretary of State can, by means of an order, remove the objective from Section 4(1) of the Railways Act 1993 as an act of transparency and administrative tidiness. The new clause proposed in Amendment No. 3 has no relevance to the operation of Crossrail services. I now turn to Amendments Nos. 4 and 5. They require the ORR, when exercising the new objective in the proposed new clause, to have regard to the interests of other railway users and operators. That is unnecessary because the ORR’s existing Section 4 objectives in the Railways Act 1993 require it, among other things, "““to protect the interests of users of railway services … to promote efficiency and economy on the part of persons providing railway services””," and, "““to enable persons providing railway services to plan the future of their businesses with a reasonable degree of assurance””." The ORR will necessarily have to balance the interest of Crossrail construction with the interests of affected users and operators. The new objective in the proposed new clause is desirable because the ORR should specifically address issues, such as the one I have just described in relation to the network code, that could frustrate Crossrail construction. But the decision on what, if anything, should be done would naturally take account of the interests of others under the existing Section 4 objectives. The objectives of the ORR are not generally written so that each is individually qualified, as noble Lords propose in their amendments. Instead, the objectives are considered and weighed collectively. The result of the amendments could be very odd and confusing, so I invite noble Lords not to move their Amendments Nos. 4 and 5. The new clause proposed in Amendment No. 7 requires the Office of Rail Regulation to produce a report on what it has done or proposes to do to meet its new Crossrail construction-related objective, as provided by the new clause in Amendment No. 3, and how it has exercised or proposes to exercise any of its functions in relation to the operation of Crossrail services. The Office of Rail Regulation must do this from time to time, when it considers appropriate. The amendment of the noble Lord, Lord Hanningfield, to this proposed new clause would remove the ORR's discretion as to when it could publish the report. That could actually reduce the benefit of the clause if a particular issue arose outside the reporting schedule—if it were an annual schedule, for example. The flexibility in the clause enables the ORR to report when such issues arise, or perhaps time doing so for particular stages of the project’s construction. That is supported by the power for the Secretary of State to require a report. She might exercise this, for example, if there were an issue on which she wished to ensure that the ORR published a timely report, or perhaps because she wished to ensure a particular frequency of reports. I doubt whether reporting less than annually would be satisfactory, but I would like to maintain flexibility to maximise the value of this new provision. I therefore hope that the noble Lord will give further consideration to his amendment and not move it. Subsection (3) imposes a duty on the ORR to have regard to any report it produces relating to future action. However, there is no duty on the ORR to act in accordance with the report in every circumstance. This makes sense because the report is likely to be, in part, a statement of policy and, as is the norm, the ORR may wish to develop its policy in the light of future circumstances. This provision is therefore intended to aid transparency and accountability for the project sponsors and investors, Parliament and the wider railway industry. Crossrail is a major project authorised by Parliament, and the Office of Rail Regulation will be key to facilitating its efficient construction and the high-performing operation of its services. The ORR will do this under its statutory duties and functions, taking account of the interests of other railway operators. The report produced by the ORR would, for example, assist the work of the Transport Select Committee in another place, which is an important part of the normal accountability arrangements for the ORR. In contrast, Amendment No. 8A, tabled by my noble friend Lord Berkeley to Amendment No. 7, would require the ORR to also report on the impact of the construction of Crossrail on other rail passenger and freight services. That widens considerably what the proposed new clause in Amendment No. 7 is trying to achieve. As I explained a moment ago, that new clause requires the ORR to report on what it is doing in exercising its functions, whereas the amendment requires the ORR to undertake a whole-industry assessment of Crossrail construction and its impact. I question the necessity for that. It could, for example, involve research and investigation into the decisions of others; for example, Network Rail and the industry’s dispute-resolution machinery. Given the repeatedly expressed wish that Crossrail follows normal industry practice, I cannot see why the ORR should have to undertake such a review for those enhancements to the network, which are by no means the largest enhancement works being undertaken. The ORR has plenty of powers to investigate and enforce, if it considers that necessary; for example, through Network Rail’s network licence. If the concern is over what has happened recently on the west coast main line, then that is an industry-wide issue needing an industry-wide approach. It makes no sense to me for there to be a two-tier process, with special investigating and reporting arrangements on the impact of undertaking Crossrail works on the network. I therefore hope that my noble friend will reconsider his amendment. Once the Crossrail passenger services are fully operational, they will become part of the national rail network and be subject to normal railway industry processes. Therefore, the usefulness of such reports from the ORR is expected to diminish over time, and the Secretary of State's exercise of the power in proposed new subsection (5) would be an act of administrative simplification, lifting a by-then redundant requirement on the Rail Regulator. In summary, both these new provisions complement the independent regulation of the railway network, and particularly the use of the access option to accommodate Crossrail by allowing special attention to be given to the Rail Regulator’s important role in the implementation of the Crossrail project. We are at the realisation of a government policy to enable the cutting back of the railway powers in the Bill. It was always going to be challenging for the rail industry to accommodate a new major project such as Crossrail but, to its credit, it has risen to that challenge. The rail industry and the promoter of the project have together devoted considerable time and effort to resolving concerns. Clauses 23 to 34 and the overriding duties on the Office of Rail Regulation that they contain—not any other railway powers in the Bill—were certainly regarded by the petitioners from the railway industry as the most serious issue as the Bill reached the Select Committee in this House, but the Government’s proposals ensured that this was dealt with completely before those petitioners appeared. Furthermore, the new provisions were published in draft during the Select Committee hearings so that railway industry petitioners and other stakeholders could consider them. Neither the Committee nor the petitioners submitted any comments on or amendments to the draft clauses, reflecting their uncontroversial nature. Indeed, the first new clause was a provision actively sought by some railway industry representatives as an acceptable alternative to the existing railway powers in the Bill. It may assist the Committee to note that Amendment No. 11 to Clause 35 and Amendment No. 18 to Clause 36 are simply consequential on the insertion of the second proposed new clause following the deletion of Clause 23, and that Amendment No. 36 to Clause 60 and Amendment No. 38 to Clause 65 are simply consequential on the deletion of other clauses. I beg to move.