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Transport Act 2000

Chapter Ii: Other Provisions about Railways
Sections 223: Directions to provide railway facilities

228.Section 223 gives new powers to the Rail Regulator, on the application of the Authority (or other person with the consent of the Authority) to give a direction for the improvement of railway facilities (such as track or stations) or for the provision of new facilities. The section provides that the person directed is to be the person who is an appropriate person to carry out the direction. The Regulator may only give a direction if he is satisfied that the person directed will be adequately rewarded for these improvements and facilities and the Regulator must consult the person, and others as he thinks fit, before giving the direction. The Regulator may grant an application to revoke or vary a direction, again subject to adequate reward, or compensation for abortive work. The person directed must do all that he reasonably can to comply with the direction made by the Regulator. The section sets out the procedures which must be followed before a direction can be made. This new power of direction does not affect any existing obligations (eg licence conditions) or powers. The Secretary of State may, after consulting the Regulator, exempt specified railway services from the Regulator’s direction making power.

Section 224: Objectives of the Regulators and the Secretary of State

229.Section 224 amends the 1993 Act so as to require the Regulator to facilitate futherance of the strategies of the Authority, and to contribute to integrated transport and sustainable development. His duty to promote competition is redefined to be for the benefit of users of railway services. The section also amends the duties of the Secretary of State to reflect the fact that he is no longer exercising privatisation functions under the 1993 Act. The Rail Regulator has a new duty to take account of general guidance from the Secretary of State about railway services or other matters relating to railways. This general guidance must be published.

Sections 225 and 226: Enforcement Regime

230.Section 225 and 226 modify the enforcement regime available under the 1993 Act.

231.Monetary penalties may be imposed by the Regulator or the Authority for contraventions of licence conditions, franchise requirements and the provisions of orders made to secure compliance with an operating licence or passenger service franchise. In contrast with the 1993 Act, these will cover past breaches as well as those which are continuing. There are limitation periods, after which past breaches of licences may not be penalised. There is no specific limit on the penalty which may be imposed, but it must be of a reasonable amount and may not exceed 10% of the relevant operator’s turnover (with turnover being determined in accordance with an order made by statutory instrument by the Secretary of State). In calculating a penalty the appropriate authority (the Rail Regulator or the Authority) must take account of policies which it has published with regard to such penalties. Such policies may include policies of having regard to the need to secure compliance, the consequences of the breach and deterrence of other breaches. A rail operator may apply to pay in instalments.

232.There are requirements as to the procedure, including the giving of notices with prescribed information.

233.The operator may make an application to the court to question the validity of a penalty order on prescribed grounds. The requirement to pay a penalty is suspended until a case is determined. The court may cancel or reduce the penalty or extend the timescale to pay. It may also require interest to be paid on a reduced penalty.

234.The 1993 Act is amended to allow the appropriate authority, if it thinks fit, to refrain from taking action requiring compliance with a relevant licence condition or franchise requirement where an operator is taking appropriate steps to comply or where a breach would not adversely affect railway users or lead to an increase in public expenditure.

235.Section 226 reduces the period for a rail operator to make representations or objections to enforcement action from not less than 28 to not less than 21 days; it reduces the period on modifications to a compliance order from not less than 28 days to not less than 7 days; and on revocation from not less than 28 days to not less than 21 days. But the Regulator or Authority can allow more time for representations to be made where that would be appropriate. The Regulator cannot make an enforcement order against a licence holder under the 1993 Act where he considers it more appropriate to proceed under the Competition Act 1998. Section 225 extends this provision so that a penalty may not be imposed by the Authority or the Regulator for breach of an obligation under the conditions of a licence, or a closure restriction, where the Regulator is satisfied that the most appropriate way of proceeding is by using his powers under the Competition Act.

Sections 227 to 229: Consultative Committees

236.Section 227 renames the Central Rail Users’ Consultative Committee as the Rail Passengers’ Council and renames the Rail Users’ Consultative Committees as the Rail Passengers’ Committees. Schedule 22 makes consequential amendments to legislative references.

237.Section 228 extends the functions of the renamed bodies. These will be extended to passenger services which are not provided under a franchise agreement. New duties include keeping under review matters affecting the interests of the public in relation to the passenger railway, making representations to an consulting such persons as they think appropriate and co-operating with other bodies representing public transport users. This might, for example, mean co-operating with a bus users’ group. The Secretary of State may exempt certain services from their remit or modify the ways in which the new provisions apply.

238.Schedule 23 makes new financial and procedural provisions for the bodies. This includes their financial relationship with the Authority.

Sections 230 to 233: Access agreements

239.Section 230 enables the Rail Regulator to give general approvals for access agreements of a specified class or description and makes provision for their publication and revocation.

240.Section 231 and Schedule 24 set out procedures relating to the review by the Rail Regulator of the terms of an access agreement or a linked licence as to the amounts payable under the access agreement by one of the parties to the other (an “access charges review”) for the use of a railway facility. Under paragraph 11 of Schedule 28 these procedures will apply to review of access charges currently being undertaken by the Rail Regulator, in the event that it has not been concluded when the new procedures comes into force on Royal Assent.

241.Where the Rail Regulator wishes to initiate an access charges review he must serve a notice on the parties to an access agreements and other persons with an interest in the facility setting out, among other things, his conclusions on the access charges review and the changes to the access agreement or linked licence which are necessary to bring these conclusions into force.

242.If the facility owner or the other person with an interest in the facility who is served with the review notice object to a review notice, the Rail Regulator must either serve a revised review notice or refer the questions raised in the access charges review to the Competition Commission, who must investigate and report on whether they operate or may be expected to operate against the public interest and whether any effects adverse to the public interests should be remedied or prevented. If the Competition Commission concludes that the matters so referred do operate against the public interest and that the adverse effects should be remedied or prevented there are procedures under which the Rail Regulator or the Competition Commission may effect the necessary changes to the relevant access agreement or linked licence.

243.If the access beneficiary – the person who uses the facility in question – objects to an access charges review or to any changes required by the Rail Regulator, or the Competition Commission in accordance with the provisions in Schedule 24, he may terminate the access agreement.

244.Section 232 enables the Regulator to direct that an access agreement or network installation contract be amended to permit more extensive use of the railway facility or network installation in question. The section also applies procedures in Schedule 4 of the 1993 Act to these new direction powers. The section makes it clear that the Regulator may give directions requiring the parties to an access agreement which are necessary in his opinion to give effect to the conditions of a licence.

245.Section 233 enables the Regulator to act in relation to contracts for the use of railway facilities or network installations which are proposed to be constructed or in the course of construction.

Sections 234 to 239: Closures

246.Sections 234 to 239 simplify the provisions in the 1993 Act relating to the closure of railway services, network, stations etc. In particular, the Rail Regulator’s functions in respect of major closures are transferred to the Secretary of State, so that when major closures are proposed these will be determined by the Secretary of State.

247.Section 235 places a new obligation on the Authority to publish any proposal for a major closure at stations in the area that would be affected by the closure, and on the Secretary of State similarly to publish closure decisions. Equivalent amendments are made to Schedule 5 of the 1993 Act in respect of services to which that Schedule applies, including services in Greater London.Section 236 gives a new power for conditions to be imposed on a minor closure. Section 237 widens the definition of minor closures (where less stringent procedures are required to be followed), so that it can include the track within stations and depots. Section 238 allows the Authority to make a general determination of a class or description that shall be considered minor closures, rather than having to determine each case separately. Where such a general determination is revoked this does not affect the validity of the status of a minor closure already determined by the general determination. The Authority is required to inform the Rail Regulator of a decision to allow a minor closure.

248.Section 239 makes it clear that where a non-franchised passenger service is to be closed, the operator must continue the service until closure. This will ensure that the burden of maintaining the service does not fall on the Authority.

Sections 240 and 241: The British Railways Board

249.Section 240 and Schedule 25 allow the transfer to the Secretary of State of any property, rights or liabilities of the BRB. This is in addition to the power to transfer to the Authority – where it is intended that most rights and liabilities will be transferred.

250.Section 241 provides for the winding down and the abolition of the BRB. Abolition will be effected when all residual liabilities, properties and rights have been transferred to the Authority or the Secretary of State.

Sections 242 and 243: Competition

251.Section 242 provides a power for the Competition Commission to veto amendments to licences proposed to be made by the Regulator following a reference to the Competition Commission. The conclusion of a reference to the Competition Commission in respect of modifications to the terms of a licence is effected, under the 1993 Act, by licence modifications directed by the Rail Regulator. Section 242 provides that the Competition Commission shall have four weeks following the Rail Regulator’s announcement of his intended licence amendments to veto those amendments, and instead substitute its own.

252.Section 243 makes it clear that the Rail Regulator may exercise functions under the Competition Act 1998 concurrently with the DGFT in relation to agreements etc for the supply of rolling stock and certain other railway related contracts and arrangements.

Sections 244 and 245: Pensions

253.The BRB has for many years past had a practice of making provision for indexation of certain pensions arising under very old pension schemes (largely schemes of the old pre-BRB railway companies), where the schemes themselves did not make adequate provision for such indexation. Section 244 converts the BRB’s customary practice of providing indexation for cost of living increases, into a binding obligation of the Authority.

254.Section 245 makes a number of changes to the pension protection provisions contained in the Railways Act 1993 and the Railway Pensions (Protection and Designation of Schemes) Order 1994 in order to ensure that pension protection continues after creation of the Authority and the dissolution of the British Railways Board. The section also addresses a problem that has been identified in relation to the existing arrangements under the 1993 Act. Schedule 11 to the 1993 Act and the Protection Order made under that Act are amended to provide certainty in relation to the protection of staff pensions in certain cases when there is a change of employer. Subsections (1) and (3) to (5) of this section (and subsections (2) and (8) in so far as they relate to those subsections) are given effect from the date of the Report Stage of the Act in the House of Commons (10th May 2000) (section 275(5)). This is done in order to ensure that no one can seek to exploit any ambiguity in the 1993 Act arrangements between the date on which the clarificatory amendments contained in those subsections became public knowledge and the date on which any Act resulting from the Act comes into force. Subsection (7) removes the requirement for certain disputes relating to railways pensions to be referred to arbitration. The effect will be that disputes may be referred to the Pensions Ombudsman, or (where appropriate) the Court, in accordance with newer procedures.

Section 246 to 251: Miscellaneous

255.PTEs may make statements to the Authority under section 34(5) of the 1993 Act specifying their passenger service requirements in their area.

256.Section 246 provides that the Authority must not, without a direction from the Secretary of State under section 34(18) of the 1993 Act, carry out the requirements in the statement if it would prevent or seriously hinder the Authority from complying with directions and guidance given by the Secretary of State or Scottish Ministers or from complying with their financial framework. The Authority need not comply with the statement if it would have an adverse effect on the provision of railway passenger or goods services or, unless there are special reasons for doing so, increase the amounts which the Authority must pay to franchise operators. Should there be a dispute between the PTE and the Authority on the statement, the Secretary of State has the power to resolve the dispute.

257.Section 247 will allow for the transposition of the EU Directive on the interoperability of the trans-European high-speed rail network. The Directive came into force in 1996. The section will also allow for the transposition of a similar Directive relating to the conventional rail network which is currently under discussion. The power is given to the Secretary of State to make regulations to cover the technical specifications which will be issued under the Directive.

258.Section 248 places a new obligation on railway passenger operators to ensure that any road services that are provided in substitution for railway services during periods of rail disruption are such as to allow disabled passengers to undertake their journeys in safety and reasonable comfort. The Secretary of State may, after consultation with the Disabled Persons Transport Advisory Committee, make exemptions from this requirement..

259.Section 249 gives powers to the Scottish Ministers and the NAW to provide financial assistance for freight in Scotland and Wales. These powers must be exercised in accordance with schemes which have been notified to them by the Authority.

260.Section 250 and Schedule 26 makes provision for the consequences for taxation of the various transfers and transfer schemes for which the Act provides.

261.Section 251 abolishes the requirements for certain Treasury approvals for the remuneration of the Rail Regulator’s officials and chairman and members of the rail users’ consultative bodies.

Sections 252 to 254: Supplementary

262.Chapter III and Schedules 27 and 28 make minor and consequential amendments to other enactments, provide for transitional provisions and interpretation

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