Passenger Railway Services (Public Ownership) Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Monday 29th July 2024 Commons Chamber

[The Secretary of State for Transport (Louise Haigh)]

I beg to move, That the Bill be now read a Second time.

At the general election, when millions of people called time on years of dysfunction, disruption and decline, they demanded change, not only in how the country is governed but in how it works, because for too many, from our economy to our public services, the country simply does not work any more. The things on which we rely are letting us down too often. Lifelines have turned into liabilities. That is why this Government have already started the work of rebuilding Britain, brick by brick, Bill by Bill. Five transport Bills in this year’s King’s Speech show not just the scale of our ambition, but how transport is at the heart of our plans for change. Growing the economy, becoming a clean energy superpower, making our streets safer, spreading opportunity, rebuilding our NHS—whatever this Government’s mission, transport is now mission critical.

[Alberto Costa (South Leicestershire) (Con)]

I am grateful to the Transport Secretary for giving way so early in her comments. There is a very controversial planning proposal for South Leicestershire, which is sitting on her desk as we speak—it is for the Hinckley national rail freight interchange. I am for rail freight interchanges, but the issue that has united Labour, Liberal Democrat and Conservative politicians in and around the area is that there are about five other rail freight interchanges within a 30-mile radius. Can she give a commitment from the Dispatch Box that whatever she says today will not ride roughshod over the views of Labour-led Rugby council and Conservative-led Blaby district council? Both have very serious concerns about this matter.

[Louise Haigh]

I am grateful to the hon. Member for putting his views on the record. He will know that I have a quasi-judicial role in determining the development consent order for that project. He is right to say that it is on my desk now, and I am considering it carefully. Nothing in today’s Bill will influence that decision.

National renewal requires nothing less than the biggest overhaul of our public transport in a generation. That starts with improving performance on our railways and kick-starting reform, which brings us to today’s Bill. It should surprise no one in this House when I say that our railways are not fit for purpose. For two and a half years, I said as much from the Opposition Benches to no fewer than three Tory Transport Secretaries. I would like to take this opportunity to welcome the new shadow Transport Secretary, the hon. Member for Faversham and Mid Kent (Helen Whately), to her place. I should note that my three predecessors, who sat on this side of the House, are no longer Members—I am not sure whether it is her job or mine that is cursed, but I wish her luck in the role.

Under three Tory Transport Secretaries, we were promised reform, yet, three years after Keith Williams’s review, little has changed. We were promised better services, yet some of the worst-performing operators were rewarded with new, lengthy contracts and handed performance bonuses.

[Mike Amesbury (Runcorn and Helsby) (Lab)]

When can we expect to see the shambles that is Avanti West Coast kicked into touch and returned to public ownership? I would certainly welcome that, and so would lots of northerners up and down the country.

[Louise Haigh]

I had a feeling that my hon. Friend might mention Avanti, and he knows my views. One of the first meetings I held as Secretary of State was with Avanti. I called in representatives of its Network Rail business unit for being one of the worst-performing operators—a meeting that was not held by any of my three predecessors while I was shadow Secretary of State. I made it clear that Avanti’s level of performance will not be tolerated, and we will use all measures under its national rail contract to hold it to account. That does not exclude terminating the contract before it expires if Avanti defaults.

We were promised High Speed 2 to Manchester, yet that was axed—in Manchester, no less—leaving a west coast main line that is now bursting at the seams. Meanwhile, passengers continue to suffer, with overcrowded trains and poor facilities, record-high cancellations—almost one in three trains is late—some of the most expensive fares in Europe, and regular bouts of industrial action.

[Jim Shannon (Strangford) (DUP)]

May I welcome the Minister to her place and wish her well in her new role? I thank her for bringing forward a Bill to modernise the railways.

I make a plea on behalf of those who are disabled. Whenever we have had debates on the railways in this Chamber, including Adjournment debates, the issue of disabled access has come up over and over again. Does the Secretary of State agree that disabled access at all railway stations should be a bare minimum and must be a priority, given that we have commuters who must still take private taxis to get to a wheelchair-friendly station? Further, does she agree that rural communities should not be disadvantaged by the closure of small stops in order to provide more streamlined timings?

[Louise Haigh]

I marvel, as always, at the hon. Gentleman’s ability to find something of interest and relevance to the debate at hand. He is absolutely right to say that accessibility is far too often overlooked, and we made it clear in the plans we set out ahead of the general election that accessibility would be one of the key measures against which we would eventually hold Great British Railways to account. The way in which people with accessibility needs are treated by our public transport system is undignified.

The broken model that our railways rely on is holding back talent, holding back opportunity and holding back Britain. It must be fixed, and we are wasting no time in doing so. By amending the Railways Act 1993, today’s Bill will fulfil one of our central manifesto commitments: to bring rail passenger services into public ownership. It overturns the privatisation by the John Major Government and allows us to take action as soon as contracts expire, or earlier if operators default on their contracts. It is a sensible approach, ensuring that taxpayers do not fork out huge sums to compensate operating companies for ending contracts early. Public ownership will become the default option for delivering passenger services, instead of the last resort.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I congratulate my right hon. Friend on her appointment as Secretary of State and thank her for bringing in this excellent Bill. Since coming under the operator of last resort, TransPennine Express, which had been one of the worst-performing rail companies, became the most improved operator, so will this Bill mean that passengers on South Western Railway will see the same level of improvement, and how long will it take?

[Louise Haigh]

My hon. Friend is absolutely right to say that we have seen immediate improvements on bringing previously privately run operators into public ownership, but we can go further still, and that is the benefit of taking the two-pronged approach that I will set out later in my speech. She should be in no doubt that South Western will be brought into public ownership, as will all remaining contracts within the first term of this Government, and ideally within the first three years of this Bill receiving Royal Assent. We will act swiftly. I have no doubt that we will hear plenty of voices from the Opposition Benches labelling this an ideological move. Those accusations are way off the mark. There is nothing ideological about fixing what is broken and reforming what does not work.

[Nadia Whittome (Nottingham East) (Lab)]

I very much welcome this Bill and I congratulate my right hon. Friend on all her work in getting us to this point. Since our railways were taken out of public ownership, tens of billions of pounds have been lost to shareholder dividends and the inefficiency of a privatised system, all while ticket prices have soared. Does she agree that it is high time that we put passengers before profiteers?

[Louise Haigh]

My hon. Friend is exactly right, and that is what is at the heart of these proposals. This is an opportunity to genuinely reform our railways from top to bottom, to ensure that passengers and growing the railways are the only objectives that they should serve—not private operators, not shareholders, not the whims of the engineers that run Network Rail. This is a once in a generation opportunity to make sure that our public transport system serves the public, so it is not ideological. What was ideological was the previous Government sitting back and presiding over a broken system while passengers and the economy paid a heavy price. I know that the Tories have been trying to pretend that the last 14 years of failure have not happened, but they cannot deny that after 30 years of privatisation we find ourselves in a position where taxpayers are responsible for 50% of the rail industry’s income and underwrite almost every penny spent, while profits are siphoned off to shareholders.

[Rachael Maskell (York Central) (Lab/Co-op)]

I congratulate my right hon. Friend on her appointment as Secretary of State. I note that clause 2 of the Bill talks about the extension of the current contracts. Could she set out the circumstances in which that could occur, because we know that rail safety is best when track and train are brought together, as they would be under Great British Railways?

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[Louise Haigh]

Clause 2 is purely a fail-safe if, for whatever reason, DOHL—the operator of last resort—does not have the capacity to take in a private operator’s contract at the moment it expires. We have allowed ourselves that flexibility if taking on a contract is not practically possible but, to demonstrate that it is not enabling franchising or private operations by the back door, we have also included the provision to remove that power again, to make sure that public ownership remains the default. It will happen only in exceptional circumstances for a very limited time.

As the railways’ passenger-in-chief, I am acting decisively today. This is the only response to the failure of privatisation to deliver reliable and affordable services for passengers. It also makes financial sense, saving tens of millions of pounds each year in private sector fees. That money can now be reinvested in the railways. Running the railways in the interest of passengers and taxpayers, not to the benefit of shareholders, also makes operational sense.

[Kim Johnson (Liverpool Riverside) (Lab)]

Will my right hon. Friend give way?

[Louise Haigh]

Yes, and I will then make some progress.

[Kim Johnson]

I congratulate my right hon. Friend on her new position.

As a long-suffering Avanti West Coast passenger, I welcome the Government’s prioritisation of this Bill, but does my right hon. Friend agree that railway workers should not be outsourced? Will she say a little about what she intends to do to ensure that they are not?

[Louise Haigh]

Network Rail has done a considerable amount of work on insourcing over the last few years, and I will ask it to do a more comprehensive review to see whether there is further it can do. As private operators are brought in, their contracts and supply chains will be considered, to ensure that they are delivering the best possible service for passengers. My hon. Friend raises a very important point.

The case for public ownership should not be controversial. After all, rail infrastructure was brought into public ownership by the last Labour Government following private sector failure. Germany, France and Spain, our European neighbours, all have models of public ownership. Indeed, the architect of the previous Government’s rail reform plan endorsed Labour’s plans ahead of the general election.

As has been said, four franchises—Northern, TransPennine, Southeastern and London and North Eastern Railway—are already in public hands and have seen some improvements. As someone who relies on TransPennine, I accept that it is still far from perfect, but cancellations have fallen from 20% in January 2023 to around 5% since it was taken into public ownership. LNER recently achieved a financial surplus, which was returned to the taxpayer.

Bringing the remaining 10 operators under public control will take time but, as passenger-in-chief, I am putting them on notice. I will not tolerate the status quo, I will not hesitate to demand improvements, and I will not be afraid to rip up contracts early if operators default on their obligations to the public.

The Bill means that the railways will finally be run for the public by the public, but owning the house is just the first step. Next, we must fix the crumbling foundations. That means fundamental reform, no ifs and no buts. We will set up Great British Railways as a new directing mind. Running the network, both track and train, as one integrated system will finally put an end to the fragmentation and waste that make our railways among the least efficient because of their spiralling costs and falling revenues, competing interests and industry inertia.

We will build a growing, innovative railway that is relentlessly and single-mindedly focused on passengers. There is no questioning the benefits at stake. Because GBR will take a whole-system view, we will be able to simplify the overly complex fare system so passengers can be confident that they are getting the best value. We will take aim at overcrowding by moving rolling stock to where it is needed in the network. We will end the piecemeal approach to innovation and roll out benefits such as digital pay-as-you-go and digital season tickets, and we will put accessibility at the core of our rail offer so that passengers with disabilities can expect a consistent level of service.

Of course, such change does not happen overnight. That is why setting up GBR and delivering our plans in full will be the focus of separate legislation later in the Session. But we will not sit back and wait for that legislation to be on the statute book; we plan to use every lever available to us urgently to improve services for passengers. That includes creating shadow Great British Railways, which will focus squarely on driving improvements in the short term, from ticketing to better services. This is a crucial next step, putting passengers back at the heart of the railways and firing the starting gun for reform.

[Ben Maguire (North Cornwall) (LD)]

What benefit will this Bill bring to my North Cornwall constituents who currently do not have a single railway station? Will the Secretary of State please explain to them what mainline train services will be coming to towns in North Cornwall such as Bude, Bodmin, Wadebridge and Launceston?

[Louise Haigh]

As the Chancellor has set out today, we will not only be reviewing the previous Government’s unfunded, underfunded and, in some places, cancelled capital projects, but we will be taking forward an integrated long-term infrastructure strategy. I would be delighted to meet the hon. Gentleman to talk about his constituents’ needs.

When I became Transport Secretary, I told the Department that we had a new motto: “Move fast and fix things.” The Passenger Railway Services (Public Ownership) Bill, the first major piece of legislation under this Labour Government, shows we are doing exactly that. The 30-year privatisation experiment has failed. Passenger satisfaction remains too low, while costs soar. Even before the pandemic, half of all trains in the north of England were late. All of this failure has consequences—communities cut off, talent stifled and ambition limited. It leaves Britain stuck in the sidings, unable to realise this Government’s mission of economic growth.

Today we start the work of repair, bringing our railways back into public service, restoring pride to an industry we should be proud of, and taking back control so that our railways finally work for everyone, wherever they live. In this mission, I am absolutely determined. I commend the Bill to the House.

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[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

May I first congratulate you on your election, Madam Deputy Speaker? It is a pleasure to close the debate with you in the Chair.

It may have escaped the notice of Opposition Members, but there was a general election, and there is a reason for the fact that they are sitting on that side and we are sitting on this side. However, I have enjoyed listening to the many maiden speeches that have been made today. It has been just over two years since I made my own maiden speech, and I found it extremely nerve-racking, so I am greatly impressed and, I have to say, somewhat intimidated, by the quality of the speeches made today. I am also grateful to colleagues for their considered contributions, and I will attempt to respond to as many questions and concerns as possible. Where I have not been able to do so, I will follow those up with a letter.

Let me begin by dealing with the issue of public ownership. According to the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), we have no proof that it will improve outcomes for passengers, but that is clearly not the case. We know for a fact that this Bill will save tens of millions of pounds in fees, and if that is not a good start, I do not know what is.

Furthermore, as the Secretary of State explained earlier, this reform is based on solid evidence. In fact, the public sector has an incredibly strong record of successful delivery, including increased reliability—even when dealing with operators that were previously failing financially, or otherwise failing to deliver for passengers.

I am confident that public ownership will provide the right foundations to drive forward improvements for passengers—be it simplifying the arcane fares system, integrating rail with other transport or improving accessibility. First and foremost, it will deliver the standards of reliability that the travelling public have every right to expect. I remind the House that this is one of two Bills, and that the second will deliver the Government’s wider plans for rail. As my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins) says, those wider plans are absolutely designed to put passengers back at the heart of the railways and will introduce new measures to protect their interests.

Let me assure the shadow Secretary of State that the wider railways Bill is absolutely a priority for this Government, unlike the previous Government, who had years to bring forward legislation to reform the railways and only got as far as a draft Bill. We are not delaying; rather, we are taking the time to develop the much larger Bill properly, so that it delivers the benefits that we have promised. I look forward to bringing it before the House later in this Session when parliamentary time allows. Under that Bill, the Secretary of State will be the passenger-in-chief and hold Great British Railways to account for delivering for passengers and freight. We will also create a powerful passenger-focused watchdog, the Passenger Standards Authority, to independently monitor standards and champion improvement in service performance against a range of measures.

I am glad that the issue of freight has been raised today. Alongside the overall growth targets set by the Secretary of State, the wider railways Bill will include a statutory duty on Great British Rail to promote the use of rail freight, to ensure that freight remains a key priority.

My hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) is absolutely right to say that it is shameful that the previous Government’s approach to industrial relations was a failure, which inflicted two years of disruption and misery on millions of passengers. By contrast, this Government will work with unions to mediate disputes. In her first weeks in office, my right hon. Friend the Secretary of State has met representatives of the relevant unions.

My hon. Friend the Member for Hertford and Stortford (Josh Dean), in an excellent maiden speech, raised a very important point about staff shortages on our railways. That is a result of the previous Government’s failure to plan properly for the future, leading to skills and recruitment gaps. It is, of course, important that the right staff with the right skills are in the right place at the right time to provide the level of service that passengers expect and deserve. My ministerial colleagues and I look forward to working with train operators and trade unions on this issue. I wish my hon. Friend well in his endeavours to bring more young people into politics—something we should all be passionate about.

On ticket fares, I share the shadow Secretary of State’s ambition for lower fares for all passengers. We are taking pragmatic steps towards that and are committed to reviewing the overly complicated fares system, with a view to simplifying it and introducing digital innovations. We will explore the options for expanding ticket innovations such as digital pay-as-you-go and digital season tickets across the network. We are aware that increasing passenger numbers is critical to this plan, and that is what our simplified system will aim to do.

The shadow Secretary of State and the hon. Member for Bexhill and Battle (Dr Mullan) raised concerns about the ideology of our approach. I can assure them that our plans are not a return to the days of British Rail and that our approach is not ideological; it is pragmatic. We will take the best lessons from the public and private operation of railways. It is about making sure that the system is right, with checks and balances, growth incentives and proper accountability. We have been clear that our approach means a relentless focus on the interests of passengers and the taxpayer above all else. The same applies to the shadow Secretary of State’s claim that the Government’s plans are about putting politicians in charge, which could not be further from the truth. The point of Great British Railways is to get day-to-day decisions out of the hands of politicians and into the hands of those who are best placed to make such decisions, with the needs of the passenger and the freight user at the heart of the whole system.

The shadow Secretary of State mentioned the Chancellor’s statement. The Chancellor has made some very hard decisions on the basis of the dire financial situation that we have inherited from the previous Government, but this does not change the fact that providing better transport for our citizens is an absolute priority, and we will not waver in our pursuit of better rail services for all.

I also thank the hon. Member for Bath (Wera Hobhouse) for her comments and share her view that intervention is needed. However, let me assure her that we are well aware that this cannot come at the expense of other vital services. I assure her that our plan to fix Britain’s railways is fully costed and will be delivered within our fiscal rules. It will improve services and reduce costs to the public purse.

The hon. Members for Bath and for Moray West, Nairn and Strathspey (Graham Leadbitter) and my hon. Friend the Member for Easington (Grahame Morris) also highlighted the role of the rolling stock leasing companies. This is another area where the Government’s approach is pragmatic, delivering value for the taxpayer and not driven by ideology. It would not be responsible to spend billions of pounds of taxpayers’ money buying up existing rolling stock, especially when, as my right hon. Friend the Chancellor of the Exchequer has set out this afternoon, we face a £22 billion black hole in the public finances created by the Conservatives.

I completely agree with the right hon. Member for Aldridge-Brownhills (Wendy Morton) on the importance of rail links to local communities, and I welcome her constructive attitude to this debate. I deeply sympathise with the points she made, and those made by the hon. Member for Didcot and Wantage (Olly Glover), my hon. Friend the Member for Liverpool Wavertree (Paula Barker) and others, about the Avanti West Coast service. As my right hon. Friend the Secretary of State set out, she has already met with Avanti to make her expectations clear. However, the right hon. Member for Aldridge-Brownhills will appreciate the need to bring services into public ownership as existing contracts expire, to avoid the need to pay a penny in compensation to the operators for earlier termination. That does not change the fact that the Government care deeply about performance and will hold private operating companies to account for the remainder of their contracts.

To reassure my hon. Friend the Member for Derby North (Catherine Atkinson), I will also highlight that contracts can be terminated early if the relevant contractual conditions are met, and we will not hesitate to do so if needed. She also raised the important issue of ticket office closures, as did the hon. Member for Taunton and Wellington (Mr Amos) in his excellent maiden speech. I confirm that this Government have no plans to close ticket offices.

The right hon. Member for Aldridge-Brownhills and the hon. Member for Bexhill and Battle also asked about open access services. We have been clear that there will remain a role for open access services, with existing operators continuing to operate on the network alongside publicly owned services, where they add value and capacity to the network.

Finally, the hon. Member for Brighton Pavilion (Siân Berry) highlighted the role of Transport for London and Merseytravel. How to secure the delivery of services in those areas will remain a matter for local leaders. The wider railways Bill will give local leaders a statutory role in governing, managing, planning and developing the rail network. This, along with our plans to give local authorities more control over bus services through our better buses Bill, will make it more straightforward to integrate the railways with other forms of transport.

I would like to thank hon. Members again for an excellent and considered debate on this “Cinderella topic”, as the hon. Member for Didcot and Wantage called it, and I welcome further engagement from both sides of the House as the Bill progresses. With that, Madam Deputy Speaker, I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

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21:48

Division 6

Ayes: 351

Noes: 84

Bill read a Second time.