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Last Updated: Wednesday, 7 June 2006, 18:29 GMT 19:29 UK
Rail funding fear from watchdog
Railways
Chris Bolt fears private rail investors could be deterred
Investment in Britain's railways could be put at risk if new laws on red tape are passed, the rail regulator has warned the government.

The Office for Rail Regulation (ORR) is appealing for economic watchdogs such as itself to be exempt from the Legislative and Regulatory Reform Bill.

The bill allows regulations to be scrapped without full Commons scrutiny.

The rail regulator says private investors could be put off if there is uncertainty about the rules regime.

Compromise

Chris Bolt, chairman of the Office of Rail Regulation, initially kept his concerns confidential.

But in a sign of his unhappiness with the moves, he has published a letter spelling out his fears to Cabinet Office Minister Hilary Armstrong, as the House of Lords prepares to debate the bill next week.

The government has already backed down on some parts of the legislation, after claims it would give ministers power to change historic laws without consulting Parliament.

Economic watchdogs - such as the ones governing rail, water, telecoms, aviation, electricity and the post network - were brought in after nationalised monopolies were privatised.

They are meant to be independent of government and act to champion consumer interests and prevent price abuses.

'Very concerned'

Mr Bolt said he was reassured the rail regulator had been excluded from one part of the bill.

But in the letter, sent on Tuesday, he says he remains "very concerned" about the impact of the remaining measures on the UK's economic watchdogs.

"There is considerable scope for ministers to make fundamental changes to the functions of an independent economic regulator or to the structure of regulation generally," he says.

The Cabinet Office says it has only just received the letter and would reply "in due course".

In an earlier confidential letter, Mr Bolt stressed the importance of having a period of stability in the rail industry to deliver improved efficiency and performance and encourage further private investment.

Independence fear

He told the team drafting the legislation: "We would be concerned if the bill gave rise to any impression that ministers might now be able to change the balance of duties or ORR's functions without a full debate in Parliament.

"This would not only undermine the independence of economic regulation generally, but introduce uncertainty for ORR, the industry we regulate, and the private sector institutions which help fund it."

The bill is aimed at making it easier to remove burdensome regulation and bureaucracy on business.

At a meeting in Parliament about the bill earlier this year, former rail regulator Tom Winsor warned that the current bill gave ministers "breathtaking powers".

He said that in the run-up to the collapse of Railtrack, the then Transport Secretary Stephen Byers had threatened to introduce a bill to curb his independence.

Tory changes

Only the time needed for parliamentary scrutiny was a protection against such moves - something the current plans would remove, said Mr Winsor.

Conservative constitutional affairs spokesman Oliver Heald said proper safeguards were needed to ensure ministers could not remove the powers of regulators like Mr Winsor.

"Chris Bolt has done us a favour by bringing this up," he said, promising that the Tories would be looking to change the bill in the Lords.

But he believed economic regulators should not be exempt from parts of the bill setting down good practice for regulation, such as being transparent and open.




SEE ALSO:
Red tape law 'must not be abused'
06 Feb 06 |  UK Politics


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