Government power to curb Network Rail bonuses 'limited'
- 2 February 2012
- From the section Scotland
The UK transport minister has told MPs that the government's powers to prevent bonuses at Network Rail are "limited".
It comes as Network Rail's chief executive is under pressure to reject a potential £340,000 bonus.
Former Labour transport minister Tom Harris has tabled a motion calling on Sir David Higgins to turn down any payment.
Network Rail confirmed a meeting would be held later this month to decide on the structure of the bonus scheme.
Mr Harris, a Glasgow MP, also wants other directors at the firm to reject bonuses of more than £200,000.
Sir David's annual salary is £560,000, with other directors at Network Rail (NR) earning £338,000.
In the Commons motion, signed by 27 other MPs from his party, Mr Harris said Network Rail had been "found by the Office of Rail Regulation (ORR) to be in breach of its licence and that, according to the ORR, 'major asset failures, congested routes and poor management of track condition' contributed to poor performance of the UK rail network in 2011".
Following the ORR's ruling in December last year, Transport Secretary Justine Greening said: "We have been repeatedly clear that bonuses should only be awarded for exceptional performance.
"Passengers would be extremely surprised if NR attempted to award bonuses next year in the light of this action by the ORR."
But UK Transport Minister Norman Baker told MPs that the government's powers to prevent bonuses at Network Rail were "extremely limited".
Speaking during a Commons debate, Mr Baker said ministers recognised the concerns about Network Rail's governance - and said the government looked to the Office of Rail Regulation to hold the company to account.
He added: "We expect bonuses to be dealt with responsibly and sensibly by Network Rail."
Mr Harris's motion claimed that National Rail's members, at their meeting on 10 February, would be asked to confirm annual bonuses for directors "equivalent to 60% of their annual salary, resulting in a £340,000 bonus for its chief executive".
The motion calls on the company's directors "to reject these bonuses".
But a Network Rail spokesman said "no decision has been made on bonuses" and the meeting would "decide the shape of a scheme".
He added: "That does not mean a bonus will be paid. It will decide on a mechanism.
"Just like any other private company, the final decision will by made by the remuneration committee."
On Tuesday, Network Rail admitted health and safety breaches over the deaths of two teenagers killed at a level crossing.
Olivia Bazlinton, 14, and Charlotte Thompson, 13, were hit by a train in 2005 as they crossed the tracks at Elsenham station footpath crossing in Essex.
The firm also faces prosecution over the 2007 Grayrigg train crash in Cumbria in which one passenger died.