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Channel Tunnel Rail Link (Supplementary Provisions) Bill

My Lords, I am grateful to speak on a Bill which, although short in length, has the potential to have far-reaching implications. The Channel Tunnel rail link opened in its entirety late last year amid much fanfare, with the newly refurbished St Pancras station the crowning glory of the achievement. Yet still more is expected, with 40 per cent of the rebranded High Speed 1 line reserved for commuter services between Kent and London, as the Minister just said. That alone has huge potential significantly to change the commuting lives of many into the capital from 2009. It was the 1996 Act that permitted the construction of all that, with the regeneration potential of the line crucial to the decision-making process in the preconstruction phase. In that regard, the opening of Stratford International station is eagerly awaited to fulfil completely the promise of the line for the 2012 Olympics and beyond—again, as the Minister just said. We are faced with a Bill that makes minor changes to the underlying legislation, with the objective of providing an optimal environment in which to restructure the rail link into three sustainable constituent businesses. The ostensible aim is to secure the best value for taxpayers when these elements are sold. Before the minutiae of the Bill are explored, it is important to mention how pertinent solid and effective legislation is to the rail link. It is evident that the end product that we can admire today is in many ways the result of the vital rescue package that was required soon after the Act was passed. The vastly overoptimistic passenger forecasts—again, as the Minister said—which were integral to London and Continental Railways’ bid, undermined the overall purpose of the 1996 Act. The House is currently considering the Crossrail project, and I hope that lessons can be learnt when we deal with grand transport projects as hybrid Bills. Clause 1 introduces no new provisions; rather, it simply clarifies a point that could suffer from ambiguity. However, the Government think it necessary to restate, "““for the avoidance of doubt””," as they say in the Explanatory Memorandum, that the Secretary of State may fund High Speed 1 and the trains that operate on it. We are told that this is necessary to secure the best price during bidding. I do not quite understand that. I understand that the Railways Act 2005 allows funding for any part of the rail network, including High Speed 1. I therefore see the benefits of domestic services on the line being subsidised in the same way as the rest of the network under Network Rail, but surely the 2005 Act covers that. Moreover, from reading Hansard from another place, I understand that, aside from domestic service subsidies, the intention is not to fund the line in any regard, and to provide only short-term support for Eurostar (UK) Limited. If this is the case, why cannot the clause be tightened to reflect this intention? The answer so far has been that doing so would preclude offering historic support to Eurostar in the short term. If the ultimate aim is to make Eurostar financially sustainable in the long term, why cannot this be written into the Bill? We shall have to explore this in Committee. Perhaps a drafting that excluded the direct subsidising of non-domestic services, exempting any historical support, would suffice. An acknowledgment in the Bill that the intention is to subsidise only in the short term, during a potentially volatile period, would provide reassurance. The wording of the clause is already rather unusual, so adding this caveat would not prove to be too exceptional. As I said, I am sure that we will explore this further in Committee. Clause 2 removes further the power of the Office of Rail Regulation to approve access contracts for High Speed 1. The 1996 Act provided for domestic train operating companies on the line to be immune to the normal procedure in the Railways Act 1993. Instead, the development agreement requires the Secretary of State to oversee access contracts. This is the case for all the line, except, importantly, where High Speed 1 crosses any part of the national rail network and where the ORR still oversees access contracts. The Bill removes these exceptions and any potential duplication between the two regulatory regimes. I certainly see the benefit of avoiding dual regulation. I understand that High Speed 1 is a new asset and is therefore not subject to the economic regulation and the reviewed access charges of the rest of the national network, but are there any other advantages in creating a regulatory exception for this line? One possible advantage is that international services could be required to make full use of the High Speed 1 asset. There has been much discussion in another place of imposing terms on operators to stop at the new Stratford International station, which will be very well connected to different parts of the national rail network. I live in the east of England, and I very much support that. I understand that international operators are on open-access contracts. Having looked at the consultation documents regarding the charging framework, it seems that the charging regime will be priced so as to not discourage the use of intermediate stations. Can the Government do anything else to help ensure that the full potential of the asset is realised? As the Minister said, the regeneration potential of the line was key to the routing, which I hope will continue to be borne in mind when thinking about international lines. On Clause 3, the 1996 Act gives an ““overriding duty”” to the ORR, "““to exercise his regulatory functions in such a manner as not to impede the performance of any development agreement””." The Bill proposes to remove the sections of this clause which pertain to the construction of High Speed 1, which are now irrelevant, but seeks to retain the development agreement as the rail regulators overriding consideration. The example used in another place of why this is still necessary is to prevent train operators running to the Channel Tunnel on the domestic network and undermining the purpose of High Speed 1 as a result. Is that likely? Are there any other convincing reasons why this clause should be retained and priority of attention given to High Speed 1 over other parts of the rail network? I understand that the line is rather different from the rest of the rail network, but are there commercial benefits to treating it in a different manner? The final substantive clause allows the Office of Rail Regulation to charge fees for its duties. As mentioned, the ORR’s duties are much less than those that it holds over the national network. The clause is in place if and when the need for the ORR to get involved becomes apparent. I understand that an example of such a scenario could be during a dispute between a rail operator and the line owners. The ORR also has health and safety duties. Would it be possible to make a charge for these, or are they excluded along with the competition aspects of the regulation? I was pleased to see that this clause was modified sensibly in another place to ensure that any charges represent costs reasonably incurred, which provides a degree of objectivity to any charge imposed. This is a very complicated, technical Bill and I have tried to highlight some of the questions about which we are concerned. But there are several other issues which, although are not explicitly covered in this amending Bill, relate directly to the Channel Tunnel Rail Link. Waterloo International station ceased to operate Eurostar services when St Pancras took over and has five platforms vacant as a result. I understand and have read all the arguments against facilitating their usage in the short term. However, there was plenty of time in the interim period for the Government to address, or at least acknowledge, some of those issues. Instead, we are now faced with the prospect of major works on the crossover at Clapham Junction and on the heavily congested throat of Waterloo station, and for South West Trains to acquire further rolling stock before any benefits can be realised. The cost of mothballing the platforms is not insignificant at £500,000 a year. Of course, the original intention was for international services to run from Waterloo and St. Pancras stations, a decision which was overturned rather late in the process. Why were the reasons against this not thought through in the first instance? Perhaps we would be in a more optimistic position than being able to offer only platform 20 for conversion in the near future. Given that the Waterloo situation is a direct result of the Eurostar legacy, would it be possible to use some of the money raised from the sale of High Speed 1 to address the issues at Waterloo and make one of the busiest stations in the country more useable? International services on High Speed 1 are subject to open-access contracts, and I would very much like to see a degree of competition on the line. Will the Minister be able to comment on the likelihood and feasibility of competing services being launched, and on whether on the French side of the Channel Tunnel there is sufficient free capacity? It is all very well describing contracts as ““open-access”” but is a degree of competition possible in reality? In High Speed 1, we finally have an asset we can be proud of, with the benefits for passengers and regeneration potential enormous. We need to ensure that this Bill is sufficiently well drafted for High Speed 1 to continue in this vein. As I have said, this is a very technical Bill and I have tried to put forward some of the problems. For those reasons I look forward to being involved as the Bill progresses through the House.