Clause 23

Crossrail Bill – in a Public Bill Committee am 2:30 pm ar 22 Tachwedd 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Overriding duty of Office of Rail Regulation before Crossrail operational

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I beg to move amendment No. 39, in clause 23, page 14, line 22, at end insert

‘and with regard to commercial freight requirements.’.

Photo of Ann Winterton Ann Winterton Ceidwadwyr, Congleton

With this it will be convenient to discuss amendment No. 40, in clause 23, page 14, line 38, leave out subsection (5).

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The Committee will be well aware of the concerns within the rail freight industry about the Crossrail project. EWS, the largest commercial rail freight company in the country, has provided the most vocal representation from the industry in pronouncing concerns about the implication of the project for freight transport. Mr. Graham Smith, the planning director, said:

“Whilst appreciating the importance of improving passenger traffic in London, this must not be done at the expense of freight by rail.”

EWS also tendered a comprehensive submission to the Transport Committee last year, as I am sure the hon. Member for Leicester, South and my hon. Friend the Member for Northampton, South are aware.

In essence, I agree with the Transport Committee’s conclusions on the matters raised by EWS—namely, that we all accept that the freight industry has been beset by a number of problems, not only in London, but across the country, that need to be addressed appropriately. I am sure that almost every member of the Committee is committed, as I am, to supporting the rail freight industry and to persuading more freight off the roads and on to the railways. In particular, Network Rail could and should do more to help freight. We hope that every effort will be made to ensure that the freight industry suffers no negative repercussions from Crossrail.

I support the general purpose of the clause—namely, that the ORR shall exercise its powers in a way that facilitates the effective operation of Crossrail services. I take the point that freight is not an issue for the bulk of Crossrail, but at either end of the route there are implications concerning it. Therefore, I want the freight industry to be reassured that there will be no negative impact to its operations. I have tabled the amendment in an attempt to have regard paid to commercial freight requirements. I hope that the Committee looks favourably on it.

Amendment No. 40 is probing. I have already alluded to subsection (1), which provides that the ORR should carry out its functions in a way that facilitates the operation of Crossrail services. Subsection (5) allows the ORR to disregard the provisions of subsection (1), provided that the Secretary of State agrees. Why does the Minister at one stage want the ORR to promote and facilitate the operation of Crossrail while, in subsection (5), allowing it to act in a way that might hinder that? That seems slightly odd. Will he explain exactly why subsection (5) is there and what specific circumstances it is supposed to cover? I look forward to his response.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Transport, Transport, Shadow Secretary of State, Liberal Democrat Spokesperson (Transport)

I echo the concerns over the role of freight. The amendment would be a neat way to bring the issue back into the overall conversation and make it clear that there is a significant freight issue in the construction and operation of Crossrail. I say that in part as a Londoner.

London’s major aggregate yards require freight to be able to use some of that track. That would not turn the track into a freight line, but there needs to be access to part of the Crossrail track—for example, if the aggregate  depot at Acton is to be available. With all the construction in London that is necessary and ongoing, it would be a devastating blow if that freight access was all but killed before the entire project was developed.

Photo of Brian Binley Brian Binley Ceidwadwyr, Northampton South

The Minister knows that considerable concern was expressed by the freight industry about the impact of Crossrail services on line time. There are fears that freight will have diminished time as a result. We had some very sizeable discussions in that respect. I need the Minister’s reassurance, because it seems to me that subsection (5) says that if there is a clash of interests on line time between Crossrail and freight services, the Secretary of State can overrule the ORR and say that Crossrail is a priority and that freight must therefore take another hit. I am not saying that he will say that, but it could happen because of the words

“with the consent of the Secretary of State”.

Am I totally wrong in that belief? Will the Minister reassure me that that is the case?

Photo of Peter Soulsby Peter Soulsby Llafur, Leicester South

The hon. Members for Northampton, South and for Wimbledon have drawn attention to the consideration that the Select Committee gave to the issue of freight. Some very real concerns were expressed by the freight industry. We gave them considerable consideration and to some extent we became expert on rail freight as a result.

It was clear from our discussions with the promoters and the representatives of the freight industry that there are real potentials for conflict between freight usage on existing lines and the Crossrail services. At the end of our consideration, we concluded that those were not matters for which we could provide simple solutions. We were reassured that the conversations that were clearly taking place could ultimately lead to a satisfactory solution, but had not done so yet. It was with that in mind that the Select Committee concluded by saying:

“We look to the Committee in the House of Lords to ensure that Access Option and any other remaining issues relating to the freight industry are adequately evaluated.”

That gives a clear signal to the Committee in the House of Lords to return to certain issues and that there are potential conflicts between freight and Crossrail that need to be resolved.

With that in mind and with the clear steer that I hope the Select Committee gave to our equivalent Committee in the Lords, I suggest that although it is tempting to seek to amend the Bill here in Committee and to try to do so in a piecemeal fashion to accommodate the needs of freight, it would be more sensible to recognise that the matter will be considered elsewhere. I hope that the Bill will then come back with the conflicts resolved in a form to which the Commons can give approval at a later stage.

Photo of Tom Harris Tom Harris Parliamentary Under-Secretary (Department for Transport) 2:45, 22 Tachwedd 2007

It will come as no surprise to the hon. Member for Wimbledon that I cannot support his amendment. I draw his and other Members’ attention to my letter of 7 November, copies of which are available in the room and in which I explained in some detail why the railway clauses are needed at this stage to protect the ability to operate sufficient Crossrail services to secure the public benefits of the project.

The amendment would undermine that. To explain, as I did in my letter, I need to set the amendment in the context of what the railway clauses are trying to achieve. By way of background, access to the existing Network Rail network is subject to the approval of the ORR. In reaching decisions, the ORR weighs a range of general duties under section 4 of the Railways Act 1993. Access contracts are then granted for periods of up to 10 years, or longer in exceptional cases. These contracts then give priority in bidding for train paths in the national railway timetabling process. Once granted, access rights can be flexed and motivated under the network code—for example, to facilitate maintenance of the railway—but are normally not rescinded.

The Crossrail project affects the Network Rail network in the construction phase because there will be works on the network itself. Crossrail services will then run on it. The long title of the Bill makes it clear that Crossrail is a transport system running between Maidenhead and Heathrow via central London to Shenfield and Abbey Wood. Through services are not an optional extra, but they are key to securing the public benefits of the Crossrail project. The intention is that Network Rail will continue to own and operate the railway under ORR’s regulation and Crossrail services will share capacity with other operators. This means that the regulation and the role of the ORR are necessarily central to the delivery of the Crossrail project.

Although the ORR currently has many but not all of the necessary powers in the Railways Act 1993 to enable the delivery of Crossrail, there can be no certainty that future decisions would enable Crossrail to be constructed and operated as intended. This presents a problem because, in considering the project in the context of a hybrid Bill, Parliament should be confident that the relative importance that it and the Government place on Crossrail services and that has been the basis for promoting the Bill should be translated into a real train pattern.

Parliament then grants the necessary outline approvals and powers for the Secretary of State, with approval of details as necessary left to other bodies. This approach should apply just as much to access to the railway network as it does to compulsory purchase and planning approval. There is a real, practical issue at stake here: £16 billion cannot be spent without being sure that the necessary construction activity can be undertaken on the network and that a train service will be allowed to operate that delivers the public benefits that justify the investment.

To give the necessary assurance on the delivery of the service, the Bill provides that the ORR will have certain duties in relation to Crossrail that override its existing general duties. However, that will not affect the ORR’s role on safety and fair charging. The Secretary of State will play a part in establishing the overriding duty, notably by specifying the minimum level of Crossrail services. The specification will take into account the relative importance of Crossrail services and the interests of other rail users. That builds on her existing role in which she has a considerable say in the utilisation of the network because she specifies franchised passenger services.

The ORR’s overriding duty and the Secretary of State’s role—which is hers alone and cannot be devolved to the Greater London authority or Transport for  London—are strictly limited to Crossrail purposes. They should also be regarded not as setting a precedent. A hybrid Bill for a £16 billion rail project that is dependent on access to the existing network, if not unique, will, I expect, be very rare.

These railway clauses are largely reserve powers. The intention is to use existing rail industry processes where possible. For example, an application was made in July to the ORR by the Secretary of State and Network Rail for approval under the Railways Act 1993 of an access option that would grant access rights for Crossrail services. The ORR’s decision is not expected until the new year. It would be premature to cut back the Bill’s powers before that decision is known. However, that should be in time for consideration of the Bill in the other place, at which point those rail powers could be rescinded, depending on the result of the application for the access agreement.

I turn to the detail of the amendments. Clause 23 deals with the interim period between Royal Assent and Crossrail becoming operational. Its intention is to ensure that Crossrail passenger services—in effect services going through the cross-London tunnel—can use the overground network and be integrated with it. Once operating at the minimum levels for Crossrail passenger services specified by the Secretary of State, the clause should ensure that the ORR does not grant inconsistent access rights that run beyond the start of the prospective principal Crossrail passenger services or conflict with them. That is a sensible advance planning measure to reduce the risk of conflicting access rights being granted that need to be removed once Crossrail services come into operation.

The result of amendment No. 39 would be that while the ORR would receive the Secretary of State’s specification of the minimum level of Crossrail services, that would form only the basis of the overriding duty. The ORR would also have to consider whether commercial freight requirements have been met. There would be little point in having such an overriding duty, over and above the application of the ORR’s general duties.

Although a great deal of work has been done on dovetailing Crossrail services and freight needs, there could ultimately be a conflict. If that arose, it would have the potential to threaten the Crossrail project. As I have already said, if a minimum level of Crossrail service is not accommodated, the public benefits will not be realised that justify the investment in the project. One cannot start construction simply in the hope of gaining the necessary access rights at some indeterminate point in the future. Clause 23(5), which amendment No. 40 would delete, is needed to provide flexibility for the Secretary of State to consent to the ORR not applying its overriding duty in relation to Crossrail services that make use of the tunnel.

In conclusion, although I entirely accept that the needs of freight are important, they have been given careful consideration at the project development stage, in the hybrid Bill process and in the current applications before the ORR. The amendment is a step too far because of the potential damage to the delivery of the Crossrail project. I hope that the hon. Gentleman will consider withdrawing it.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I have listened very carefully to the Minister’s lengthy response to the amendments and to the hon. Member for Leicester, South. I think that there is a general concern about freight and I take the point entirely that the other place should look at the issue. If there is a need to bring back general provisions across the Bill to ensure that freight is protected, it would be appropriately done in a unified, rather than a piecemeal way. However, I think that the Committee has to bear the issue of freight in mind in the passing of the Bill.

It was certainly not the point of the amendment to affect the minimum service required by Crossrail merely to provide a sub-requirement on the ORR with regard to freight, and I think that the Minister understands that. Having listened to the hon. Member for Leicester, South and the Minister, and with the knowledge that the interests of freight will also be looked at in the other place, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I beg to move amendment No. 41, in clause 23, page 15, line 1, after ‘may’, insert

‘, no later than 6 months after the commencement of commercial services on the Crossrail network,’.

As the Minister rightly said, the clause deals with the interim period between Royal Assent and the commencement of passenger services. Subsection (7) gives the Minister the power to extend the so-called interim period. The implication of such a move, as I understand it, will be to lengthen the term during which the ORR’s independence is restricted by the terms of the clause.

The amendment is designed to put a time limit on the interim period, and hence on the time during which the ORR is required to favour Crossrail in situations where it might otherwise not. Once services are operational, should they continue to have a preferred status at other parts of the network at the expense of other passenger services?

Access contracts are clearly of particular importance during the construction of the railway line. The ORR will be obliged to follow the terms of the Bill and carry out its duties in a manner so as to facilitate Crossrail services. However, such an obligation does not need to be duly extended beyond the completion of the construction phase, and that is why I have proposed putting a time limit of six months on the so-called interim period. That seems to be timely and rational.

Photo of Tom Harris Tom Harris Parliamentary Under-Secretary (Department for Transport)

The amendment would affect the Secretary of State’s ability to extend the so-called interim period, as the hon. Gentleman has said. That is the period between Royal Assent and the first use of Crossrail passenger services. In that period, the ORR has an overriding duty in the exercise of its access contract functions to facilitate the operation of the prospective services.

The Secretary of State might need to extend that period. For example, the Crossrail services are expected to be phased in over a year, as was stated when the funding announcement was made in October. For a new railway service of the scale of Crossrail, it would be unwise to attempt to introduce overnight the full  service to all destinations. With regard to access planning, it makes sense for the ORR not to grant access rights that would frustrate the phasing in of services over that period.

Once the Crossrail service is fully in operation, it will have been granted the appropriate access rights and Network Rail and the ORR would not then grant conflicting access rights. Therefore, even if extended, the interim period has a finite and useful life because of the protection that the clause affords. Should the Secretary of State need to extend the interim period, my expectation is that she would decide to do so within six months of the commencement of commercial services, as the amendment proposes. My concern is that an arbitrary deadline of six months would not account for the unexpected and might be problematic.

There is, however, quite a lot of sense in the argument that the hon. Member for Wimbledon has put forward. If he is willing to withdraw the amendment, I intend to keep it under advisement.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I am grateful to the Minister for those words. He has clearly understood the thrust of the amendment and from where it is coming. I have listened carefully to what he has said. If the interim period needs to be flexible because the phasing in of Crossrail services needs extra protection, that seems entirely appropriate. I look forward to discussing with him, perhaps in the period between the conclusion of the Committee’s proceedings and Report, some way of keeping that issue under review. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 ordered to stand part of the Bill.