Railways Act 1993 (Determination of Turnover) Order 2005

I am grateful to all Members of the Committee who have contributed to the short debate. The noble Baroness, Lady Hanham, asked several questions, one of which was about what happens if the contravention is beyond the train company’s control, such as problems with signals and so on. Any penalty has to be reasonable. In imposing a penalty, we would take into account the company’s ability to control events. Clearly, it would be unjust to impose a penalty for a failure that occurred for which the company was either not responsible or only partially responsible, and the penalty would have to take account of that. We would certainly take that into account. The point is well made. The noble Baroness also asked about what happens if contraventions last longer than two years. We thought that it was right to impose a cap on the duration of a breach. That is why we indicated that the maximum is up to 24 months. If the breach lasts longer than that, no further turnover can be added, but we would consider whether other action may be necessary, such as a contract change or, if warranted, removal of the operator; for example, he could lose the franchise. The noble Earl, Lord Mar and Kellie, asked about Connex. Connex was not penalised but it lost the franchise. That is a rather more significant change, but one which is there when a significant failure, to the cost of the travelling public and to the taxpayers in relation to contributions to the service and so on, has occurred. The noble Earl, Lord Mar and Kellie, also asked about the penalties to date; there have been three—not including Connex, which I just mentioned. Arriva Trains Northern was penalised £2 million for poor performance in 2002. Railtrack was penalised £7.9 million for failing to achieve targets for reducing passenger delay minutes in 1999. In 1997, train operators participating in the national rail inquiry service were penalised a total of £350,000 for failure to meet call-answering targets, which is a breach of their licence conditions. Given that these are still early days in the development of the structure, that history reflects and indicates that the system is watched over with the greatest care and is subject to proper regulation. In answer to the question asked by the noble Baroness, Lady Hanham, I say that the Secretary of State will be responsible for developing his policy. It will be necessary for him to make clear what the companies are facing. The noble Earl, Lord Mar and Kellie, also asked why the order addressed turnover and not profitability. Turnover is set out in the Act, and the provision applies to other regulator utilities. I was going to end on a rising note, but I have been dragged into this peroration a little earlier today. It will be recognised on all sides, although every noble Lord who has participated has stuck so closely to the business before us, that the Committee has not mentioned the fact that the proposals contained in the order are four-square with the regulation proposals that we have across a range of public utilities operating on the same principles and the same concept. That ends my peroration of a broader kind. The noble Earl, Lord Mar and Kellie, wanted to bring the Scottish Ministers into a role beyond the border, or perhaps in his terms not beyond the border but only when the company actually provided services across the border. I am afraid that he is right. Scottish Ministers can impose penalties on the area for which they have responsibility, namely Scotrail and its franchise agreements. Their role is not yet in force, but it will be. He is right when he rather pessimistically and gloomily, in his terms, suggested that it is a pity that they will not have any role with cross-border franchises. Unfortunately not—that is where the Secretary of State will have to bear full responsibility, and he is answerable, as the Committee will recognise, to Parliament. My noble friend Lord Berkeley asked why only land at stations was included. We make it clear that the list in Article 2.2 is not exhaustive. We can take into account all rail business activities. I give him that assurance. It is not meant to be an exhaustive list. He would recognise that if we set out to create an exhaustive list the order would be many pages longer than it already is, so he will forgive us for that. It is complex enough as it is. If I failed to answer any of the questions—my noble friend is about to tell me that I have failed to answer some of them.