Crossrail Bill

moved Amendment No. 20: 20: Clause 40, page 28, line 19, at end insert— ““( ) Subsections (1) and (2) do not apply in relation to— (a) a matter which pursuant to any enactment must or may be dealt with by the Office of Rail Regulation, or (b) a matter relating to an agreement which pursuant to any provision of that or any other agreement must or may be dealt with by the Office of Rail Regulation.”” The noble Lord said: Amendment No. 20 was foreshadowed by the promoter's response to the House of Lords Select Committee's special report, which said: "““The Promoter is considering an amendment to make the intention explicit that clause 40 of the Bill—and, consequently, clause 41—should not be invoked by either party where the matter may be dealt with by the Office of Rail Regulation in accordance with its statutory duties or functions, as recommended by the Committee. The Committee’s support for this approach to these clauses will assist the House in its consideration of the amendment when it is brought forward at the next Bill stage””." Therefore, the amendment is in direct response to petitioners' concerns, heard by the committee, that Clauses 40 and 41 could be used to subvert normal regulatory processes. That was never the purpose of these clauses, as I will explain in a moment. However, I note that the noble Lords, Lord Berkeley and Lord Bradshaw, have given notice of their intention to oppose that Clauses 40 and 41, and the associated multiple proceedings clause, Clause 42, stand part of the Bill. I hope that my explanation of my amendment and the circumstances in which the clauses might apply will reassure the noble lords that we have indeed dealt with the railway petitioners' concerns to the satisfaction of the committee, and why the provisions are still required. Clause 40 is based on a provision contained in the Channel Tunnel Rail Link Act 1996, and provides an obligation to co-operate between the nominated undertaker and controllers of railway assets with which Crossrail construction, maintenance or operation interact. Either party can require the other party to enter into an agreement. The purpose is to ensure that neither the nominated undertaker nor the controller can act unreasonably in dealing with a problem relating to the interaction of the Crossrail works with overland or underground railway assets. The asset controllers in question include London Underground and the public-private partnerships, BAA, and Network Rail. If the parties cannot reach agreement under Clause 40, the matter is referred to arbitration—the mechanism for which Clause 41 sets out. The Secretary of State may then, under Clause 41(3), direct the arbitrator as to the results that are to be achieved by the settlement—in practice, to set the arbitrator strategic policy objectives. If a direction were given, the arbitrator would have full control over the terms, including as to compensation, for achieving the overall results that the Secretary of State specifies. Clause 41(3) is necessary to avoid the possibility that the result of the arbitration prevents something that is critical to the delivery of the Crossrail project, as authorised by Parliament, from happening on fair terms. Therefore, the direction of the Secretary of State will generally only be to facilitate the completion of the Crossrail works, or completion within a reasonable timescale, or the subsequent maintenance or operation of the all-important services that Crossrail will deliver. Even then, the Secretary of State would ensure that Crossrail is not delivered to the unreasonable detriment of the rest of the transport network—an issue that has been a particular concern this afternoon. Amendment No. 20 ensures that Clause 40 cannot be used in circumstances where the matter may be dealt with by the ORR, in effect requiring a solution to be reached under the aegis of the normal regulatory processes. Indeed, Clause 40 should not supplant or override the allocation of access rights under the Railways Act 1993, the taking of possessions under the network code as overseen by the ORR, nor our stated intention to work within normal industry processes as far as possible in connection with the Crossrail project. If Clause 40 does not apply in these circumstances, Clause 41 will be irrelevant in these circumstances, because Clause 41 applies only to arbitrations referred under Clause 40. However, there are other circumstances where Clauses 40 and 41 might apply. For example, the Crossrail works at Farringdon station will involve a complex interface with other construction works and non-regulated asset controllers, such as London Underground. It is therefore recognised that this complexity requires managing in order to ensure the successful delivery of the Crossrail project at this location. In particular, it may be necessary for the Secretary of State to ensure that the terms of a London Underground or PPP contract, which is not regulated by the Railways Act 1993 or within the ORR's jurisdiction, do not unreasonably prevent something that is critical to the delivery of the Crossrail project, which has been defined as part of the Bill process, from happening on fair terms. Nevertheless, Clauses 40 and 41 remain only as fallback provisions, as it is also recognised that, in this example for instance, London Underground, as a key delivery partner to the project, will have a direct interest in integrating Crossrail works successfully with its own existing assets, and many agreements are already in place regarding these matters. It has also been put to me that Clause 40 might be used to deal with Crossrail’s interaction with the unregulated Heathrow Express service. The department has negotiated a number of specific agreements with BAA and Network Rail about the construction and operation of Crossrail, which means that it is highly unlikely that the Secretary of State would need to rely on Clause 40 in relation to Crossrail’s interaction with Heathrow Express. I apologise again for the lengthy exposition, but I know that these clauses have excited considerable interest, and hope that my explanation provides some of the context and reasoning behind the amendments—for example, why Clauses 40 to 42 are still necessary and should stand part of the Bill. In those circumstances, I hope that noble Lords will withdraw their opposition to Clauses 40 to 42. I beg to move.