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The Chairman: Order. I do not want to restrain the hon. Lady too much, but it is a stand part debate on clause 14. She has been tempted into discussing amendments from the next debate. May I ask her to return to clause 14 stand part?
Miss McIntosh: I am most grateful, Mr. Hood. My point is pertinent to the Bill, because the clause says:
''There shall be a body corporate to be known as the Office of Rail Regulation.''
I want to find out the extent of that body corporate, without discussing any of the functions, which we will have ample opportunity to consider subsequently. Can the Minister explain where the Office of Rail Regulation will interface between the train-operating companies as the provider of the private sector funds and the Treasury as the provider of the public sector funds?
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The fundamental point that I wish to raise in connection with the clause is not terribly complicated. To what extent will the Government's amendments strengthen the independence of the rail regulator? The Opposition have a deep-seated fear about that, having seen how the present occupant of the Office of the Rail Regulator has demonstrated his integrity, his independence and his ability to stick within his established office and the rules that set it up. How does the Minister think that the clause will enhance the independence of the regulation of the railway sector? Why is the railway industry being singled out in this way as the pioneer for the better regulation taskforce?
Mr. Foster: I fear, looking around the Room, that I may be occupying the crease but briefly.
First, may I place it firmly on the record that my party fully supports the proposals to establish the Office of Rail Regulation? Secondly, we do not believe that the move is a guinea pig measure for the Better Regulation Task Force, as it is the only regulator that has not already got a board or has plans to put a board in place. The proposal brings the rail regulator in line with all other regulators in the system.
Thirdly, when the hon. Member for Westmorland and Lonsdale (Mr. Collins) spoke on Second Reading he was completely wrong even to imply that the establishment of the Office of Rail Regulation was a means of the Government getting their own back on the individual who holds the current Office of Rail Regulator. Many of us are aware of the difficult relationships that have existed in the rail industry involving the current holder of the post, but many believe that he has done an extremely good job and has fought hard for what he believes to be right. That does not mean to say that it is not right to move forward in establishing the Office of Rail Regulation.
I also place on the record my huge disappointment that neither this nor subsequent clauses honours the pledge given by the former Secretary of State in relation to future plans for the regulatory regime. As I reminded the House on Second Reading, when the former Secretary of State announced his intention to turn Railtrack into a not-for-profit public interest company, he said categorically that it
''would need far less intense regulation. We therefore intend to streamline the existing structure''.—[Official Report, 15 October 2001; Vol. 372, c. 956.]
There is nothing in the proposals that would streamline the regulatory machinery.
The hon. Member for Vale of York who was a member of the Transport Committee will be well aware that in its first report of the 2001–02 session, published on 23 January 2002, the Committee argued strenuously in the light of the commitment made by the former Secretary of State for a more streamlined regulatory system. It stated:
''While the need for an independent economic regulator with clearly defined responsibilities, duties and objectives will continue, the respective roles of the Regulator and the Strategic Rail Authority should be reviewed.''
The Select Committee made a very clear recommendation, and I regret that in this and
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subsequent clauses an opportunity has not been taken to review the respective roles of the Office of Rail Regulation and the Strategic Rail Authority. Notwithstanding those two major concerns, the broad principle of the establishment of such a board is welcome on the Liberal Democrat Benches.
Question put and agreed to.
Clause 14 ordered to stand part of the Bill.
Schedule 1
Office of rail regulation
Miss McIntosh: I beg to move amendment No. 27, in
The amendment relates to the vexed question of reserved and devolved matters in relation to the Scottish jurisdiction. The schedule does not allow for any form of regional representation, and that is important, as there will be queries about the role and jurisdiction of the Office of Rail Regulation. I hope that someone will be responsible for securing a degree of representation in that regard by adding a new subsection to schedule 1.
Mr. Mark Lazarowicz (Edinburgh, North and Leith): Will the hon. Lady explain how the Strathclyde Passenger Transport Executive would be affected by the powers that she wants to confer on the Scottish Minister?
3.15 pm
Miss McIntosh: I hope that the Under-Secretary or the Minister will explain the relationship with the Scottish Executive because the Bill is not entirely clear about it. I do not know whether the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) has had a chance to read Hansard containing the Under-Secretary's answer to the question I referred to this morning.
Mr. Lazarowicz: I assure the hon. Lady that I have read the comments in Hansard to which she referred. As we are debating her proposal, however, will she tell the Committee how the Strathclyde Passenger Transport Executive, which is responsible for most of the passenger services in Scotland, would be affected? It is important for hon. Members such as myself, who represent Scottish interests, to understand that.
Miss McIntosh: It is not for me to usurp the Government's position. The Under-Secretary will have heard the hon. Gentleman's question and will take the opportunity to respond to it. Both the Under-Secretary and the Minister have told me several times that I should not usurp the Government's position, today or any other day, in Committee. I have explained the purpose of this probing amendment, and I look forward to hearing the Under-Secretary's response.
Mr. Jamieson: There is no disagreement on the importance of properly reflecting regional interests in railway policy, but the amendment is not the way to
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achieve it. It would put the independence of economic regulation at risk and cause confusion between the respective roles of the Strategic Rail Authority and the Office of Rail Regulation.
Let me detain the Committee a few moments to provide more detail. Broadly, the Strategic Rail Authority's role is to set policy and the Office of Rail Regulation's role is to ensure the fair implementation of that policy. Regional representation is appropriate for a policy body such as the Strategic Rail Authority, which is catered for in section 202(3) of the Transport Act 2000. In contrast, representation by regional interest is inappropriate for the Office of Rail Regulation. All appointments should be made on the basis of expertise and merit alone to reinforce the independence of the economic regulatory function.
Mr. Foster: I fully understand the Minister's concern that allowing some conditions would lead to others. He referred to selection on the basis of expertise, so will he give us an idea of the range of expertise likely to be sought by the Secretary of State in appointing people to serve on the board?
Mr. Jamieson: The hon. Gentleman has pre-empted what I was about to say in a few moments.
Mr. Foster: I like to help.
Mr. Jamieson: The hon. Gentleman always like to help, but on this occasion he has helped to detain the Committee from receiving an answer to the question that he put to me.
Having representative members of any interest, section or region in the country could call the independence of the body into question, but it is not only a matter of independence. An Office of Rail Regulation board member appointed to cover a sectional interest would start second-guessing railway policy in trying to serve that constituency. That would lead to confusion about who has the policy lead in the railway industry.
That is all set out in the consultation document sent out to interested parties in November. Responses came from across the industry, and there was a strong desire for members of the regulatory board to have appropriate expertise and to be independent. Only a handful of responses suggested regional or sectional representation, and although people from various parts of the United Kingdom may sit on the board, it will not be out of necessity. There is also a practical consideration. The Office of Rail Regulation covers Scotland, Wales and England. To have a representative from each country and English region would make the board unmanageably large, particularly as room has to be made for economists, industry experts, executive members and so on. That should answer the point of the hon. Member for Bath. However, to be selective could create concerns among the countries and regions not represented on the board.
Mr. Foster rose—
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Mr. Jamieson: I see that I have tempted the hon. Gentleman.
Mr. Foster: The Under-Secretary has tempted me. I am grateful that he has given us some examples, but I wonder whether other Committee members share my view that it is slightly odd that expertise on the railways was absent from the Under-Secretary's list.
Mr. Jamieson: An economist may be an economist with an expertise on the railways; an industry expert could be a railway industry expert. None of the people whom I mentioned would be precluded from having railway industry expertise; indeed, one would expect them to have some interest and be able to contribute to the board. It would be strange if we appointed them and they did not have an interest in carrying out the job.
We cannot support the amendment. Regional interests are important, but only in the appropriate place. It is for the Strategic Rail Authority and the infrastructure manager in formulating their strategies to take into account the regulatory functions to ensure that they are implemented fairly, not to second-guess them through sectional representation on the board.
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