In answer to my noble friend, and in recognition of some of what I have done in the past, it is sometimes a surprise when you read the performance requirements for contracts that you inherit. This is clearly one of those cases. I cannot defend the statistics that my noble friend cited, and I cannot defend a contract that allows that to happen without remedy.
In answer to the noble Baroness, Lady Randerson, we will come to devolution later in Committee.
5.45 pm
Turning to the specifics of the amendments, I begin with Amendment 1 in the names of the noble Baronesses, Lady Scott and Lady Randerson, and the noble Lord, Lord Moylan. As I have said, I agree entirely with the sentiment behind the amendment. We have made it clear that we will take decisive action where the contracts allow us to do so. However, I do not agree that it is necessary to impose a statutory obligation on the Secretary of State on how to exercise her contractual rights. She has already made her intentions very clear.
Amendment 1 also deals with contractual break clauses. I have explained the Government’s approach: where unacceptable performance triggers early termination rights, we will not hesitate to act decisively. Otherwise, we will bring services into public ownership as contracts expire, because this is the way to deliver public ownership as quickly as possible, while avoiding unnecessary cost to the taxpayer.
Amendment 1 would also require the Secretary of State to be satisfied that appointing a public sector operator would result in service improvements. The Government would not be pursuing public ownership if we did not expect it to drive improvements, decrease costs by integrated management and improve revenues. This condition would have only one practical effect: it would create a new opportunity for train operators and their owning groups to bring spurious legal challenges against the Secretary of State, again prolonging their tenure and delaying the benefits of public ownership.
Amendment 48, tabled by my noble friend Lord Liddle, seeks to confirm that the Bill does not interfere with any of the Secretary of State’s existing contractual rights to terminate franchises. I reassure my noble friend that the Bill does not interfere with those rights; I do not believe that anything in the Bill can be construed as doing so. In those circumstances, it would not be appropriate to include an express statement in the legislation. I am advised that it would be poor drafting practice to include provisions in legislation that are legally unnecessary. Doing so can cause difficulties in interpreting the meaning of legislation, because the courts will attempt to give legal significance to every provision of an Act.
Amendment 30, tabled by the noble Lord, Lord Moylan, deals with the word “reasonably”. That word always brings him to mind whenever I hear it. The amendment would narrow the circumstances in which the Secretary
of State could temporarily continue an existing franchise. Those circumstances are already very narrow: the power is available only where, in the Secretary of State’s opinion, it would not be “reasonably practicable” for the public sector operator to take over services when the existing franchise ends.
The omission of the word “reasonably”, as proposed in this amendment, would force the Secretary of State to press ahead with transferring services to a public sector company in circumstances where it is “practicable” to transfer services, but not reasonably so. For example, if it becomes clear that transferring services on the planned date would cause disruption to services, or require disproportionate cost to avoid that disruption, it might still be “practicable” to go ahead with the transfer, but it might also be in the public interest to delay the transfer by a short time. Under Amendment 30, the transfer would have to go ahead, and that does not appear to be in anybody’s interests.
In light of my explanations, I hope that the noble Baronesses and Lords can be persuaded not to press their amendments.