Select Committee on Constitution Minutes of Evidence

Examination of Witness (Questions 597-599)




  597. Mr Winsor, thank you very much for being with us today. We are very grateful to you for being here and we are also very grateful for the paper you put in which is extremely helpful. Before we put questions to you, are there any comments you would like to make to the Committee?
  (Mr Winsor) Thank you, my Lord Chairman. I have a brief opening statement. I would like to say that strong accountability is not inconsistent with independence. With the possession of considerable powers, as regulators have in their areas, comes a legitimate expectation that those powers will be used lawfully, proportionately, consistently and so as to achieve the objectives for which the powers were conferred. It also brings a right of those affected by the exercise of those powers—and that can be a very wide class indeed—that the person or authority entrusted with those powers will act rationally and explain why the powers have, and have not, been used in individual cases. Although Parliament has created independent regulators in privatised industries and in other fields of activity and enterprise to protect the public interest and in some respects to take the place of ministers' general powers of direction over the boards of nationalised corporations, it has also created a matrix of accountability which is probably more specific and more intense than ever applied to a minister. Perhaps that intensity was seen as necessary to take the place of ministers' direct accountability to Parliament and the rest of the political process. However that may be, I believe it works well. That accountability, the accountability of regulators, is to the executive, to Parliament, in some respects to a higher tribunal and, perhaps most importantly, to the people and organisations who use, finance or depend on the activities which we regulate. I should just like to summarise very briefly the instruments or nature of accountability which we, and I, face: appointment and reappointment by ministers; a general authority to grant licences and the Secretary of State has the right to take that authority away or to amend it; I have 17 statutory duties, all of which must be discharged when I exercise my functions. Our funds come from the Treasury, with which we have a public service agreement. I have a statutory duty to have regard to statutory guidance from the Secretary of State. I have obligations under section 69 of the Railways Act 1993 in relation to the priorities with which I may review railway services and considerations to which I must have regard when exercising my functions, subject to the other duties I have. I have to prepare, of course, an annual report which the Secretary of State lays before Parliament. I am subject to internal audit by the Department for Transport. However, arm-twisting by a minister and giving in to such an action would in my view be an irrelevant consideration in law and should be resisted. As far as Parliament is concerned, I have had quite a few appearances before Select Committees of Parliament, the latest of which is this one, of course. I am subject to scrutiny by the National Audit Office. I am the accounting officer for the department which I head and I have had one outing in front of the Public Accounts Committee already and I expect to have another before I leave office in a year's time. There are parliamentary questions on which we are asked to assist in giving answers, and all correspondence from MPs is dealt with by me personally. The Parliamentary Commissioner for Administration deals with allegations of maladministration. As far as the wider world is concerned, it is important we have credibility and standing with the industry and companies which we regulate. Public opinion, criticism from there and from the media, is of course felt, particularly if it is unfair. I have an obligation—because I have said I will do this—to publish, and I do, an annual business plan as to our work programme going forward. Then there are the obligations of public law, the duty to act fairly, and challenges can be made on the basis of illegality, irrationality and procedural impropriety. I may face actions for breach of statutory duty; I may face action for damages for misfeasance in public office—I hope I never do. There are statutory appeals in some respects against my decisions. I am obliged to adhere to the principles of good public administration. In some respects there are appeals, substantive, to the Competition Commission in relation to licence modifications, price controls and Competition Act decisions, and finally the Freedom of Information Act 2000 and the code of practice in relation to access to government information applies to my organisation. I think that is a formidable array of accountabilities; I do not say that list could not be improved but I do say that the commentators who say we are unaccountable and that something must be done about us are wrong in law, are wrong in fact, and are wrong in policy terms.

  598. Thank you very much. There are two elements which come through in your paper and from what you have just said, and clearly there is a myriad of levels of accountability which, on the whole, you think work well although you would welcome more systematic scrutiny by Parliament itself, and perhaps we can come on to that in due course. But the other aspect is your independence which you need in order to fulfil your role; then you are answerable for the decisions you take, but you were stressing in your paper the importance of the independence. Now, do you feel that the powers that are granted you are sufficient to protect that independence and that it depends very much upon the individual or the regulatory board to exercise that independence and therefore it depends who it is, or do you feel it is more the powers that are conferred on the regulator?

   (Mr Winsor) My powers to protect my independence are principally in acting rationally and lawfully and in accordance with due process and to inspire confidence in the decisions I take, even though people affected by those decisions may not like the decisions in question. I think that is the best protection against any moves to take away my jurisdiction or my independence or, indeed, to remove me as regulator from office. Those powers, and indeed the independence that goes with them, can only be taken away with the authority of Parliament. They were conferred by Parliament and that is the only way they can be altered or removed. Parliament has now had three opportunities in my four years in office to legislate, to alter my jurisdiction, alter my independence, or make some other changes in relation to my organisation. In fact what it has done is it has added to my jurisdiction; it has added to my statutory duties; and the only change that has been made in relation to my jurisdiction or my organisation is in the Railways and Transport Safety Bill, which has just finished its Committee stage in this place, to replace the single office of Rail Regulator with a statutory board, and I think the ORR would be the last of the regulators to be subject to that change. I make no complaint about that.

  Chairman: That aspect is something we may wish to come on to.

Lord Lang of Monkton

  599. Your opening statement really underlined to me the issue I wanted to raise with you which is that you operate in a complex and diffuse industry, made more complex by the creation of Network Rail. You also operate alongside the Strategic Rail Authority which is not independent of government, as you point out in your paper, and is a non departmental public body and rather different from the regulator. Accountability to be successful and effective has to be transparent and accessible, and I have the feeling that  the structure of accountability within your industry—and this is not intended in any way as criticism or hostile—is obscure to the general public and I think you have underlined that. Your power was derived from five Acts of Parliament and there are some twenty-two specific duties imposed upon you. How would you like to see the situation improved that would enable you to communicate more clearly to the public precisely how you do regulate the industry and how you can be held accountable?

   (Mr Winsor) I entirely agree that transparency and accessibility are essential requirements. It is often frustrating to me and my colleagues that there is uncertainty as to the relative jurisdictions of my organisation and that of the Strategic Rail Authority and, indeed, the Health and Safety Executive and the Department of Transport in the field of activity in which we operate. We try very hard to explain it: we publish, and we publish on our website which gets an extraordinary number of hits, guides to our jurisdiction. We published three quarters of a million leaflets called Who Does What? which was a very popular leaflet which went into every railway station and was taken up with remarkable speed. We explain our jurisdiction in virtually all our consultation documents, the powers we are using or contemplating using, and I explain it on every outing in front of any parliamentary body that I face, and frequently in the media—the broadcast media and the print media. I am not sure there is much more that I and my colleagues could do to explain what our jurisdiction is and why we are exercising our powers. Within the industry it is well understood what we do and why it must be different from the politically controlled Strategic Rail Authority. The idea that the two organisations, mine and the Strategic Rail Authority, should be merged was floated some time ago, frequently aired in the press, and has now been comprehensively debunked by the government on the grounds that it would be hostile to private investment in the railway industry. The idea that removing the independence or the jurisdiction of the regulator just to reduce the number of regulatory bodies by one was a good one was not, and I think it has been done away with. How we can improve the understanding of the railway industry and the wider public as to what we do—I think we must just go on explaining. I intend very shortly to publish a second edition of a document which we published in June 2001, then called The Accountability of Railtrack—this one will be called The Accountability of Network Rail—explaining in detail (but with a summary at the beginning) what it is we do, why and how those functions differ from the other regulatory or public bodies operating in the railway industry—namely the Department, the HSE and the Strategic Rail Authority. I also believe that it is desirable that we publish a statement of the accountability of the regulator and the ways in which, which I have summarised in my opening statement, the office is accountable. I have no complaint if somebody criticises our decisions fairly: I have no complaint if I face judicial review. I think judicial review is an extremely healthy part of our constitution. I am facing a judicial review action at the moment by London and Continental Stations and Property Ltd in relation to a decision I took concerning access to St Pancras station, and I have no complaint about that. I wish it were not happening because it is consuming a colossal amount of my office's time but nevertheless I believe it is a proper exercise of the constitutional right of the companies concerned.

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