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Lord Archer of Sandwell: My Lords, can my noble friend confirm that the citizens of Ashraf have been accorded protected person status under the fourth Geneva Convention, that the initial protecting power was the United States and that it cannot divest itself of its obligations simply by announcing that it has transferred
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Lord Brett: My Lords, the United Kingdom view is that the residents of Ashraf are not protected persons under the status provided by the fourth Geneva Convention. That ceased to apply in Iraq after 24 June 2004, the date of the end of hostilities and occupation. The United States Government have continued to grant protected persons status as a good-will gesture, but this is not granted through any legal obligation under international law, and the UN High Commissioner for Refugees has previously determined that Camp Ashraf residents do not qualify as refugees. However, the United Kingdom continues to take an interest to ensure that human rights are protected, as does the United States.
Lord Dholakia: My Lords, would the noble Lord accept the recent statement made by Mrs Rajavi in Paris calling for free and fair elections supervised by the United Nations? More importantly, is he aware of the intimidation of the inhabitants of Ashraf City? Would it not be right at this time to ensure that the European Union, Britain and America warn Iran that any harm, intimidation or persecution of those inhabitants will result in a reference to the International Criminal Court?
Lord Brett: My Lords, I have no knowledge of intimidation in the manner that the noble Lord suggests. If he has such evidence, I would be pleased to receive it and pass it to authorities which can take the matter further. It is a clear indication of the Government of Iraq's position that they have given assurances that no Ashraf residents will be forcibly transferred. That suggests that they are honouring their obligations. Our consular staff in Baghdad have talked to people in the camp and assure us that food and medicines are getting through, so there does not seem to be any lack of supply. However, I will happily take on board any evidence that the noble Lord has.
Lord Waddington: My Lords, would the noble Lord agree at least that Britain, being a party to the decision to hand over responsibility for Ashraf City to Iraq, now has some responsibility for recent developments and for the residents' safety? How on earth can it be right for the Iraqi authorities to blockade Ashraf City, refusing people the right to take in food, and demanding police access to the city while asserting that those living there have no rights whatever as citizens? Surely it is time that the British Government talked again to the Iraqi Government and reminded them of their responsibilities under international law.
Lord Brett: My Lords, I can but repeat the invitation I gave to the noble Lord, Lord Dholakia. If the noble Lord, Lord Waddington, has evidence of that nature to put forward, I will happily take it on board and ensure that the Foreign and Commonwealth Office can inquire into it.
Lord Maginnis of Drumglass: My Lords, I am surprised that the Minister is unaware of the fact that Camp Ashraf is in essence being besieged by the Iraq authorities.
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Lord Brett: My Lords, the answer is already in the noble Lord's question. Iraq is a democratic and independent sovereign state. The United Kingdom, and even the United States, which handed over control of the camp from 1 January, have to recognise that fact. However, that does not prevent us making representations, hence my invitation for any evidence.
Royal Mail
Question
3.24 pm
The First Secretary of State, Secretary of State for Business, Innovation and Skills and Lord President of the Council (Lord Mandelson): My Lords, market conditions have made it impossible to conclude the process to identify a partner for the Royal Mail on terms that we can be confident would secure value for the taxpayer. There is therefore no prospect in current circumstances of achieving the objectives of the Postal Services Bill. When market conditions change, we will return to the issue. We remain convinced that Hooper's combined package offers the best chance of securing the universal postal service while protecting Royal Mail pensions.
Lord Hunt of Wirral: My Lords, in thanking the First Secretary of State and Lord President of Council for that statement, may I say that it is sad that, not for the first time, we have learnt of a major change in government policy not here in Parliament but through the media? By shoving this critical Postal Services Bill into cold storage to suit their short-term political ends, despite the Conservative Party still standing ready to help see it on to the statute book, does the Secretary of State not realise that he and his colleagues are putting the trustees of the Royal Mail pension plan in an impossible position given the revaluation that took place on 31 March last? What does he intend to do to restore confidence and certainty to everyone involved with the Royal Mail and its pension plan?
Lord Mandelson: My Lords, I can assure the noble Lord, Lord Hunt, that this House is the first to learn of this. Whatever spin may be put on any remarks that I make in an interview is a matter for the newspaper concerned. I take this opportunity to say to noble Lords that the time spent on the Postal Services Bill in this House has strengthened and improved it. I thank noble Lords for their contributions in Committee, on Report and at Third Reading which have helped to achieve that.
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We have thoroughly tested the market to see who is interested in partnership, but economic circumstances, I need hardly point out, are extremely difficult. I have always been clear that we would do a deal with the private sector only if it represented value for money for the taxpayer-indeed, I said so at Third Reading on 20 May. Our market testing has shown that now is not the time to sell a minority stake in Royal Mail. The pension remains a matter for the company and the pension trustees. The Government have been clear about the basis on which they would be prepared to take on the pensions deficit. They do not intend to cherry-pick the implementation of the Bill.
Lord Clarke of Hampstead: My Lords, given that the Secretary of State has paid tribute to the work done in this House in getting the Bill as far as it went, although there were many warnings about the climate of selling shares at that time, perhaps I may ask him two specific questions-he may have dealt with one of them, but I should like to be clear. Workers and management in the postal services country are living with uncertainty. My first question is: will the Secretary of State urgently get down to talking about the pension fund deficit? My second question is on the regulator. There was almost unanimity around this House about the unbalanced approach of Postcomm. That was clear; it is accepted. Will the Secretary of State now take steps to see that the yoke of Postcomm is removed and move Royal Mail over to a balanced and fair regulator?
Lord Mandelson: My Lords, as we discussed during the Bill's passage through this House, the pensions deficit is a huge and growing burden on the Royal Mail. Annual payments to pensioners in the plan currently run at around £1 billion. However, government have to be fair to taxpayers. They cannot expect them to take responsibility for the deficit if the other challenges facing Royal Mail are not also addressed. As I said, it would be irresponsible for the Government to cherry-pick implementation of the Bill. It would be irresponsible in respect of the taxpayer and impossible in respect of the European Commission, which would have to give state aid approval. As for the regulator, Postcomm will continue to regulate the postal market for the time being. It will not do so in a vacuum. Its powers will remain the same, but it will have to take full account of developments in the postal market, where volumes are falling at unprecedented levels.
Lord Skelmersdale: My Lords, would the Minister tell us when he expects the Bill to get Royal Assent?
Lord Mandelson: My Lords, as I have made clear from the beginning of my statement, market conditions have made it impossible to conclude the process to identify a partner on terms that would give value for money for the taxpayer. When market conditions change, as I said at the outset, we will return to the issue.
Lord Cotter: My Lords, I was going to say that we seem to have come half way up the hill and ask the Minister whether he was going to carry on or stay where he is. However, we now seem to be collapsing from the position that the Government put forward in
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Lord Mandelson: My Lords, there will be no adverse impact on post offices, no. But the noble Lord is right: the need for modernisation in the Royal Mail has not gone away. We have heard from both management and the union that they are up for change; they have to put that rhetoric into action and it is time to see it being delivered. In the coming months, we will look for full delivery of the changes to Royal Mail's operations and working practices envisaged in the 2007 pay and modernisation agreement between the company and the unions. Endless industrial relations problems must stop in the Royal Mail, and we will look for evidence that there really is an appetite for modernisation in the company.
Financial Services and Markets Act 2000 (Regulated Activities) (Amendment)(No. 2) Order 2009
Link to Grand Committee Debate
Banking Act 2009 (Restriction of Partial Property Transfers) (Amendment) Order 2009
Link to Grand Committee Debate
Motions to Approve
3.31 pm
Relevant documents: 17th and 18th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 June.
Transfer of Functions of the Consumer Credit Appeals Tribunal Order 2009
Link to Grand Committee Debate
Transfer of Functions (Estate Agents Appeals and Additional Scheduled Tribunal) Order 2009
Link to Grand Committee Debate
Transfer of Functions (Transport Tribunal and Appeal Panel) Order 2009
Link to Grand Committee Debate
Transfer of Functions of the Charity Tribunal Order 2009
Link to Grand Committee Debate
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2009
Link to Grand Committee Debate
1 July 2009 : Column 225
Criminal Defence Service (Provisional Representation Orders) Regulations 2009
Link to Grand Committee Debate
Data Protection (Processing of Sensitive Personal Data) Order 2009
Link to Grand Committee Debate
Motions to Approve
3.32 pm
Relevant documents: 16th and 17th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 June.
National Express East Coast Franchise
Statement
3.32 pm
The Secretary of State for Transport (Lord Adonis): My Lords, with the leave of the House, I shall make a Statement about rail services on the east coast main line. The House will understand that because of the imperative for the Government to respond immediately to the trading statement made by National Express when the markets opened this morning, it was also essential for me to make a Written Ministerial Statement earlier.
For some months now, National Express has been seeking to renegotiate the terms of the franchise agreement to operate services on the east coast main line between London, West Yorkshire, the north-east and Scotland which it signed in 2007. My position has been consistently clear-that the Government do not renegotiate rail franchises. That remains the position today. This morning, National Express Group announced that it will not provide the further financial support necessary to ensure that its subsidiary, National Express East Coast, remains solvent. As a consequence, National Express East Coast is no longer able to continue operations to the full term of its franchise, and expects to become insolvent later this year.
The decision of National Express to break its contract is regrettable and disappointing. All other rail companies are fulfilling their contracts, despite the economic downturn. It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging.
My first and overriding obligation in this situation is to ensure continuity of service to passengers, with no disruption or diminution of service standards. When the Government have had to step in to protect rail services in the past, there has been no such impact on passengers. I have therefore established a publicly owned company, which will take over this franchise from the point at which National Express East Coast ceases to operate.
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We will agree an orderly handover with National Express. Until that date, National Express will operate services on the current basis. After that date, the new public company will do so. There will be no interruption of services. Existing operational staff-who continue to provide a good service-will transfer to the new east coast main line company, so will the assets necessary for the continuation of the service. I can assure the travelling public that services will continue without disruption and all tickets will be honoured. I have today appointed Elaine Holt, until recently managing director of First Capital Connect, a major train operating company, as chief executive designate of the new east coast main line company.
The failure of National Express East Coast obviously entails the loss of some future premium payments to which the company was contractually committed. However, while the franchise is under public control, the Government will receive the full revenues of a business which continues to make an operating profit. We will also gain the benefit of any premium payments from the new franchise once it is re-let. This represents a far better deal for the taxpayer than the only alternative course of action, which was to renegotiate the franchise in an exclusive manner with National Express, with no recourse to what is a highly competitive market for rail franchises. The cost of re-letting the franchise will be met from the performance bond of £32 million, to which the company is contractually bound in the event of termination.
National Express also operates rail services on the East Anglia main line and associated commuter routes. The company has said that it does not intend to default on its obligations in respect of these franchises. Notwithstanding that, the Government believe they may have grounds to terminate these franchises, and we are exploring all options in the light of the group's statement this morning. In the mean time, we expect National Express to meet its obligations on these franchises in full.
The department's procurement procedures test a company's track record and their ability to deliver a franchise and to demonstrate value for money in so doing. It would clearly be reasonable not to invite a company to bid for future franchises in circumstances where it had recently failed to deliver on a previous franchise. A company which had defaulted in the way National Express now intends would not have pre-qualified for any previous franchises let by the department. I note that the parent groups of previous franchise failures are no longer in the UK rail business.
The Government intend to tender for a new east coast franchise operator from the end of 2010. The specification of the new franchise will reflect my concern to secure better passenger services and facilities. In particular, I will be seeking to secure significant further improvements to service quality, including to station security, bike and car parking facilities at stations, bus interchange facilities and train catering. This will ensure a step-change improvement for passengers from a new east coast franchise. I intend to consult fully on the new franchise specification, including with passenger groups, parliamentarians and the Scottish Executive.
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I have explained the action I have taken to ensure that passengers are not affected by the decision of National Express Group, and the consequences for that group of their decision.
Let me also put these events in a wider context. No other train operator has defaulted on its franchise or indicated to us any intention to do so. Nor has any other company sought to renegotiate its franchise. Today's events do not represent the failure of the system, but the failure of one company. The rail franchising system was examined by the National Audit Office last year. It was found to deliver good value for money. The National Audit Office also concluded, and I quote:
"The Department's arrangements for identifying and managing risks, including handling the failure of a train operator, are well planned and follow good practice".
We are following that good practice in today's announcement, and I would welcome a further examination by the National Audit Office once the franchise is re-let.
In respect of rail services at large, they are steadily improving. Passenger numbers are at their highest levels since the 1940s, punctuality is over 90 per cent and overall passenger satisfaction is rising, as shown in the latest independent National Passenger Survey, published yesterday. Moreover, the revenue from rail franchising is enabling us to make record investments in upgrading the network and services on it.
We saw this as recently as last month in the award of the new South Central franchise for services on lines through south London, Surrey and Sussex. This was conducted during the recession yet yielded a winning franchise bidder-the existing operator-committed to paying a premium of £534 million to the taxpayer over nearly six years, in place of the previous contract under which the operator was subsidised by the taxpayer. This bodes well for future franchise awards, including for services on the east coast main line.
3.40 pm
Earl Attlee: My Lords, I am grateful to the Secretary of State for making his Statement today. He has explained some of the background and I am sure that noble Lords will be grateful to him.
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