Source · Select Committees · Transport Committee
Recommendation 29
29
Accepted in Part
Amend clause 71 to require consultation with affected parties before drafting regulations.
Recommendation
The broad powers in clause 71 for the Secretary of State to alter existing access agreements could have a dampening effect on long-term investment in the railways by giving rise to uncertainty. The Government must consider whether these powers can be revised to provide reassurance to business and industry. The clause should be amended to require consultation with affected parties before regulations are drafted. (Recommendation, Paragraph 74) 36
Government Response Summary
The government partially agrees, committing to consultation with affected parties if the power at clause 71 is used but disagrees that legislation is needed to mandate this. They state the ability to amend contracts is a necessary legal backstop as a last resort.
Government Response
Accepted in Part
HM Government
Accepted in Part
The Government partially agrees with this recommendation. Providing as much certainty as possible for existing operators is central to the Government’s plans for reforming how operators can access the network. That is why the Government has committed to honouring all existing Schedule 5 access rights until their natural expiry, as well as honouring the charging determination set by the ORR for the remainder of the current control period. This clause does not change that. The Government agrees with the Committee that, should the power at clause 71 ever need to be used, consultation with affected parties is crucial for providing certainty and reassurance to industry. However, the Government disagrees that legislation is needed to facilitate this. Early engagement with third party operators is already being undertaken by Network Rail, without any legislative requirement in the Bill. The Government has also committed publicly to ensuring operators with existing contracts in scope of needing this power will be consulted to identify inoperable clauses and agree on replacement wording. The ability to amend contracts is a necessary legal backstop, intended to be used as a last resort only, to ensure smooth transition to the new regime; or to avoid leaving operators with unworkable arrangements. There is a risk that without this power, existing contracts will be inoperable, because the contracts reflect today’s industry structure including the role of the ORR on access and charging, rather than the new structure for GBR. It does not serve anyone, including open access operators, for valuable access contracts to become inoperable and outdated. Therefore, this clause ensures that once GBR is established, those with existing contracts can continue to operate with confidence.