My Lords, I rise to move Amendment 3 and speak to Amendment 5 and a number of others in the group. We may find this naturally flows from the discussion we listened carefully to on the previous group. Some of the themes might well re-emerge, not least the question of the desirability or otherwise of a mixed economy in the provision of rail services.
We have just approved, for these purposes, Clause 1. Under Clause 1, we have agreed that
“section 23 (passenger services to be subject to franchise agreements)”
is to cease and that, in future, securing the provision of services will be the responsibility of the Secretary of State under the new Section 30. Clause 2 revises Section 30 for these purposes. At the moment, it is a section about the duty and the absence of franchise agreements, but it would become, under Clause 2, the public sector provision of services.
The other thing that is probably important to note is that under Clause 1 we have deleted the existing Section 25, so that there is now no longer a prohibition on public sector operators—all of which is naturally part of the process of implementing a policy, which, as the Minister has told us, is the narrow objective of the legislation.
Why have I thought it appropriate to bring forward these amendments? They are probing amendments to try to examine whether the Bill, even from the Government’s own point of view, is future-proofed against the circumstances that may arise and the objectives that they may seek to achieve.
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The Bill of course removes the presumption that services will be provided by private sector operators and creates a presumption that services will be provided by public sector operators—publicly owned companies. Clauses 1 and 2 provide for the temporary continuation of existing franchises, as indeed we just discussed. However, in this group there are very interesting amendments in the names of my noble friends Lord Young of Cookham and Lord Moylan. The purpose of Clause 2 is to take away the temporary nature of the extension of franchises, while Amendment 29 would change the basis on which the continuation of existing franchises is to shift from whether it is practicable for the Secretary of State to move to end the franchise services when it comes to an end, to look at the question of whether it provides a satisfactory service, and whether the franchise should be extended on that basis. I will leave my noble friends to talk to their amendments in detail, but in practice they would be a very positive way of deciding whether to continue existing franchises.
My argument stems from the question of whether competition in the provision of railway services serves any purpose at all. I get the impression from having listened to the debates at Second Reading and again today that many Members of your Lordships’ House think, as I do, that there are aspects of railway services that have not been amenable to competition and which have not therefore delivered the objectives that were sought at privatisation. There are, however, others which have been subject to competition, or indeed contestability—if I can extend the concept of competition in this case to contestability through the tender processes of competitive award—where it is clear that competition has in the past delivered these objectives and could form a part of a future policy towards the provision of railway services, and that a mixed economy is potentially desirable.
Certainly, from the Government’s point of view, I remember that during the course of the Second Reading debate very good points were made by my noble friend on the Front Bench about the pressures that the department may feel in trying to be the operator under all circumstances that may make it difficult for the Government to take control of all railway operations.
What would my Amendment 3 do? It takes out “only” so that, when the Secretary of State is in the position of having to secure the provision of railway services, the Secretary of State would not have to do so only by direct award to a public sector operator but, as Amendment 5 would add, would offer the option to do so by means of the provision of a contract to a person who won a competitive award following an invitation to tender. I freely admit that that is not the Government’s policy. My question to the Government by means of this amendment is: is it wise for them so to bind themselves that, when franchises end, under no circumstances could they contemplate that it would be in the interests of passengers and the various other duties to have competition? The Minister confirmed that a number of duties are placed upon the Secretary of State under Section 4 of the Railways Act 1993, including Section 4(1)(d) relating to the promotion of
competition, which I think can sometimes be satisfied only by the potential use of competitive tendering in order to deliver private sector as well as public sector operators for aspects of the operation of the railways.
So, although the Government say, “This is not our policy and therefore we oppose it”, I want them just to consider in two respects in this group whether, first, there may be circumstances in the future where they do not want to be constrained to go only to a wholly owned public sector company for the purposes of the provision of railway services and they may want to go to other providers, and, secondly, that there may be circumstances where they want to continue franchises where a wholly satisfactory service is being provided and it would not be in the interests of passengers for them to bring those franchises to an end.
My question is therefore very straightforward. When writing legislation, it strikes me that the normal practice of Ministers and of government is not to write legislation so as to restrict their powers. It is normal to write it so as to give oneself the powers to act in ways that one might need in the future. Here we have a very odd situation where the Government are deliberately stopping the possibility of extending franchises that are being successfully operated and are writing the new Section 30 in a way that allows them to make a direct award of a contract only to a wholly owned public sector company, whereas it may be in the Government’s and indeed the passengers’ interest for them to do something different. So, I put it to the Government—that is my probing amendment for this purpose—that they should write the legislation in a way that gives them more powers in the future. I beg to move.