Considered in Grand Committee
That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of BRB (Residuary) Limited) Order 2013.
Relevant documents: 3rd Report from the Secondary Legislation Scrutiny Committee, 2nd Report from the Joint Committee on Statutory Instruments.
My Lords, this order transfers the function of BRB (Residuary) Ltd and then abolishes it. A transfer scheme will also be created that will transfer property rights and liabilities to the Secretary of State for Transport, Network Rail, London and Continental Railways and the Rail Safety and Standards Board, and will come into effect at the same time as this order. I commend BRBR on the sterling job that it has done since it was created in 2001 to manage the rump of property and ill health claims left after rail privatisation. It has disposed of 90% of those properties, generating in excess of £400 million.
BRBR was incorporated as a wholly owned subsidiary of the British Railways Board to hold and manage the residual property rights and liabilities of the board following privatisation. It was always intended that BRBR would be wound up at the appropriate time and its ongoing functions, properties, rights and liabilities transferred to successor bodies. The Public Bodies Act 2011 is the only efficient and cost-effective means of divesting BRBR of its statutory functions, including the statutory liabilities that arose in the original 19th-century Acts authorising the construction of the railways. The draft order proposes to transfer the majority of BRBR’s statutory functions to the Secretary of State for Transport, with a small number to be transferred to Network Rail (Assets) Ltd.
As I said, a transfer scheme will also be made under Section 23 of the Public Bodies Act—the draft is attached to the explanatory document. This will transfer the property, rights and liabilities of BRBR to London and Continental Railways Ltd, Network Rail Infrastructure Ltd, the Rail Safety and Standards Board Ltd and the Secretary of State.
The abolition of BRBR is further evidence of this Government’s determination to increase efficiency, reduce unnecessary overheads and remove management layers wherever possible.
The Government carried out a targeted six-week consultation between May and July 2012. This sought the views of interested stakeholders on the abolition and consequential transfer of BRBR’s functions, properties, rights and liabilities to the various successor bodies. The majority of the respondents were supportive of the abolition. Where concerns were raised, they tended to be about specific aspects of the plans, rather than questioning the underlying rationale. In addition, the Department for Transport liaised closely with BRBR and the proposed successor bodies in relation to the consultation.
London and Continental Railways Ltd is a company with specific expertise in managing and developing property assets within a railways context, as can be seen from the HS1-led regeneration at Kings Cross and Stratford. LCR is wholly owned by the Secretary of State for Transport. The properties transferring to LCR include sites with development potential, or where there is a policy of promoting or maintaining rail use.
Network Rail Infrastructure Ltd is the company that carries on the business of acquiring, owning, managing and developing the rail network in Great Britain. The properties which will transfer are assets which are of significance to the railway industry; for example, the 13.5-mile high-speed test track at Old Dalby in the Midlands, which is used for testing rolling stock. The other assets transferring are those one would expect the rail infrastructure owner to own or manage, such as memorials to railway staff killed in the wars or in railway accidents, as well as properties and structures that correct anomalies that occurred during rail privatisation in the 1990s.
BRBR currently owns and holds the intellectual property rights in 300,000 drawings and 30,000 maintenance documents relating to traction and rolling stock built before 1996. These drawings and documents have no quantifiable value but are of importance to the rail industry. I notice the noble Lord, Lord Faulkner of Worcester, ready to pounce on that issue. The ownership of the intellectual property rights in these drawings and documents will transfer to the Rail Safety and Standards Board Ltd, which is a not-for-profit company owned and funded by major stakeholders in the rail industry.
Any property, rights and liabilities which do not specifically transfer to a successor body will transfer to the Secretary of State. This includes 3,400 structures, such as bridges, abutments, viaducts, tunnels, cuttings and retaining walls associated with disused railway lines. The responsibility to maintain these for ever stems from the original Acts of Parliament which authorised the construction of the railways in the 19th century. This is known as the burdensome estate.
The burdensome estate will be managed by the Highways Agency on behalf of the Secretary of State. It has the engineering expertise, so there will be no diminution in the maintenance of these structures. In addition, most of BRBR’s employees who currently manage the burdensome estate will transfer to the Highways Agency, maintaining continuity.
A senior representative of the Highways Agency will sit on the board of Railway Paths Ltd, which is a charitable company which purchased some 220 miles of disused track and structures in 1999 as part of the national cycle network. The Highways Agency representative on Railway Paths Ltd’s board will help replicate the existing close working relationship between BRBR and Railway Paths Ltd.
Waterloo International terminal, North Pole depot in west London and Temple Mills bus depot near Stratford will transfer to the Secretary of State. These properties are, or may become, of strategic importance to the rail network and have some development potential over the longer term. They will be managed on his behalf by London and Continental Railways.
The Secretary of State will manage the continuing settlement of ill health claims made by former British Rail staff. These primarily stem from medical conditions that do not arise until some time, often many years, after an individual’s employment has ceased, such as asbestosis and mesothelioma. Noble Lords will recall that the board did not just operate rail services, but also hotels and ferries. The claims experts currently handling the workload at BRBR will transfer to the Department for Transport.
The remainder of the residual estate, which includes such disparate matters as shipwrecks belonging to former rail companies that were absorbed by the board and its responsibility as head lessee for 698 freight wagons leased to Freightliner Ltd, will transfer to the Secretary of State.
There are currently 44 employees working for BRBR, including four board directors. All employees have been consulted over the plans to abolish BRBR, in accordance with TUPE regulations. Compromise agreements offered to staff at risk of redundancy have resulted in 12 members of staff entering into such an agreement, with 23 members of staff remaining eligible to transfer to successor bodies, in accordance with TUPE legislation. Of these employees, seven will transfer to the Highways Agency, two to the general counsel’s office at the Department for Transport and 14 to LCR. The transfer of these employees will ensure knowledge transfer and business continuity. A further five employees will be made redundant and the employment of the four board directors will not be renewed when their current contracts come to an end on 30 September 2013.
The abolition of BRBR and the absorption of its functions into the various successor bodies, as I have described, represents a better deal for taxpayers. Total savings upon abolition will be in the order of £2.4 million per annum. Abolishing BRBR under the Public Bodies Act 2011 is extremely efficient. For example, it allows properties to be transferred to successor bodies without incurring huge costs for conveyancing, which could be up to £1.5 million for the several thousand properties involved.
In conclusion, the Government are confident that the abolition of BRBR and the transfer of its functions, properties, rights and liabilities to successor bodies will not only ensure business as usual but reduce overheads and management layers, as well as representing a good deal for the taxpayer. I beg to move.
My Lords, I intend to speak very briefly about this order. I agree completely with the Minister in his tribute to the work of the board of BRBR and its staff over the 12 years or so of its existence. The Minister may remember that I spoke about the inclusion of BRBR in the Committee stage of the Public Bodies Bill on 14 December 2010. The Minister has referred to how the British Railways Board (Residuary) has gone about fulfilling its responsibilities since 2001, and I agree with him that its record has been excellent in many respects. I have been particularly impressed by how it has dealt with the 6,400 or so industrial injury and other health claims from former BR employees, to which the Minister referred in his speech. I hope that these will continue to be dealt with as expeditiously in future as they have been by BRBR until now.
BRBR has also done really well in discharging its railway heritage responsibilities, and I thank the Minister for his reference to this issue in his speech. I speak as a former chairman of the Railway Heritage Committee and the current chair of its successor body, the Railway Heritage Designation Advisory Board, which as part of the Science Museum Group has taken on the RHC’s statutory powers of designation. This is partly thanks to the efforts of the Minister, who supported us in resisting its abolition under the Public Bodies Act 2011.
Very many significant railway artefacts have found their way to BRBR stores. The Minister referred to the drawings, which are literally priceless, but there are also some wonderful paintings from the railways’ art collection. Many of those are now on public display in museums and galleries all over the country as a result of, first, the statutory designation, and then the disposal procedures of the RHC and the co-operation of BRBR.
The other great contribution that BRBR has made in this area is in supporting the Railway Heritage Trust which, under the chairmanship of Sir William McAlpine, plays a huge part in restoring and preserving historic railway buildings. BRBR has been instrumental in securing third-party funding for the Railway Heritage Trust, particularly from Network Rail. In this context —I hope that the Minister will allow me to do this—I should like to put on record my own tribute to one of the unsung heroes of Britain’s railways, Peter Trewin, who is the legal and secretariat director of BRBR. He was also the secretary of the British Railways Board. He is a lifetime career railwayman, whom I knew first when he worked with Sir Peter Parker more than 30 years ago. He has played a crucial role in ensuring that the railway takes its heritage responsibilities seriously. I should like to thank him on the record for that work.
There is one further matter that I wish to raise with the Minister. He talked about burdensome estate— the structures that were once part of the operational railway—and that in the main these will be transferred to the Highways Agency. Can he give an assurance that this will not lead to roads being built on these remaining railway track beds? He will know from reading my recently published book that once the infrastructure has been built on, the opportunity to reopen railways on it is lost for ever. There are a number of heritage railways—I declare an interest as president of the HRA—that are looking at long-disused lines as future potential routes. We may also wish one day to restore some lines to the national network, as the demand for rail travel grows. That will not be possible if the infrastructure is converted into a road and we must not close down those options. I hope that the Minister will agree.
My Lords, I add my appreciation to that expressed by the Minister and my noble friend Lord Faulkner of Worcester for the work done by BRBR, and for the staff of that organisation. I thank the Minister for explaining the background to the order and the reasons for abolishing BRB (Residuary) Ltd, and transferring its functions to the Secretary of State for Transport and Network Rail (Assets) Ltd. The property rights and liabilities of BRBR will then be transferred to successor bodies in the transfer scheme, so I understand that it will be laid before Parliament after being made.
BRB (Residuary) Ltd is wholly owned by the British Railways Board. Perhaps the Minister can say what will happen to the BRB following the abolition of BRB (Residuary) Ltd, what functions and responsibilities it will continue to have, and for how long. The Explanatory Memorandum says that liability for handling claims in respect of industrial injuries, employment and environment-related claims, resulting from BRB activities as an operator of trains, ships and hotels, will transfer to the Secretary of State. Can the Minister give an undertaking that this will not result in a harder or a more long-drawn-out approach being adopted to such claims as a result of this transfer? How many claims are still in the pipeline and how many individuals do they cover?
I also support the request of my noble friend Lord Faulkner of Worcester that the assurance given in the Explanatory Memorandum that the abolition of BRB (Residuary) Ltd will not result in any change in the current process for releasing land designated for rail use, disposal, or for alternative non-transport use should be repeated by the Minister and thus placed on the record, including in the very specific terms that the noble Lord, Lord Faulkner, was seeking.
The order deals with the abolition of one body. How many other bodies for which the Department for Transport has overall responsibility are still awaiting the outcome of a review of whether they should remain in existence or be abolished? A few weeks after we questioned whether taxpayers were getting value for money with four separate publicly funded motoring bodies, the Government announced that they were reducing the number of agencies from four to three. Is the department now looking at other issues concerning the number of bodies for which it is responsible, including whether we need even three separate government agencies delivering services to motorists, and whether we need a separate company to deliver HS2 when we already have Network Rail, which is responsible for rail infrastructure? In view of the fact that some rights and liabilities of BRB (Residuary) are being transferred to LCR, do the Government see a long-term future for London and Continental Railways Ltd and, if so, is that in its current role or a changed role?
We are certainly not opposed to the order and I hope that the noble Earl will be able to provide the answers and assurances that have been sought by my noble friend Lord Faulkner of Worcester and me.
My Lords, I am grateful to the noble Lords, Lord Faulkner of Worcester and Lord Rosser, for their comments. It is right to pay tribute to the work of the BRBR. I did not take the Public Bodies Bill through the House; my noble friend Lord Taylor of Holbeach did. As the noble Lord, Lord Faulkner, said, I was acting behind the scenes in respect of the RHC and I am proud of what we achieved.
Both noble Lords talked about former employees of the railway industry with long-latency illnesses such as mesothelioma and asbestosis. I assure noble Lords that they will be properly looked after. The staff, including some of the legal staff, will transfer. I do not know the numbers but I suspect that, by and large, they arise when someone is, for example, diagnosed with mesothelioma and the case is handled. Those employees have the advantage that their former employer was BR or a railway company and they are backed up by the Government. Sadly, a lot of other people are not properly covered, and that is why we are taking the Mesothelioma Bill through your Lordships’ House.
The noble Lord, Lord Faulkner of Worcester, paid tribute to Peter Trewin, and I join him in that respect.
The noble Lord, Lord Rosser, talked about the transfer of some structures to the Highways Agency and the burdensome estate. There is no intention to build on those structures. The abolition of BRBR will not result in any change to the current process for releasing land designated for rail use for disposal or for alternative transport use. The current process requires BRBR to seek the approval of the Department for Transport before land retained for transport use can be sold.
To put things into perspective, BRBR has only 33 miles of former track bed, the breakdown of which is as follows: 8.5 miles is retained for access to structures within the burdensome estate; 22.5 miles is retained for possible transport use; and 2 miles is in the course of sale across the number of sites. Of those, 28.5 miles will transfer to the Secretary of State, 1.5 miles will transfer to LCR and 3 miles, mostly relating to Glazebrook to Partington, will transfer to Network Rail.
I was also asked about BRB and what happens to the board when BRBR is abolished, given that the current directors of the board will cease to be directors once BRBR is abolished. It may be helpful if I say a few words about this. The British Railways Board is a statutory corporation set up originally under the Transport Act 1962. It will continue to exist after BRBR is abolished, as it is one of the signatories to the rail usage contract. That contract is expressed to be made under French law and cannot be novated without the agreement of the other signatories to the contract, Eurotunnel and SNCF.
Since 2001, the board has had only two members. Previously, there had to be a chairman and between nine and 15 members. Its chairman, Terence Jenner, and its remaining director, Peter Trewin, are also directors of BRBR and they will both cease to be its chairman and director when BRBR is abolished.
The Secretary of State has the power under Section 241(3) of the Transport Act 2000 to remove a member of the board from office or to vary his terms of appointment. Replacement members of the board, including a replacement chairman, will be appointed by the Secretary of State under Section 1 of the Transport Act 1962.
The noble Lord, Lord Rosser, asked about the future of LCR. The best way of dealing with that would be if I write to him.