Lords Grand Committee
Tuesday 8th September 2026
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15:45
15:46
Speaker 2
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Speaker 2
My Lords, may I start by saying that in the course of preparing for this committee, I've had a number of meetings with the minister and with his officials. And I'd like to thank both Minister and officials for making themselves available for those meetings. I say that now because I shall almost certainly forget to say it at more appropriate times later on. But if I do, it's not because I. I don't mean quite seriously how grateful I am for what? For the for the contribution and the effort they've made.
My Lords, we're here on the first day of the committee to create a Soviet style railway in the United Kingdom and to go back. And we now know explicitly it's the government's intention. It's the intention of the Prime Minister to go back to the warm and fuzzy 1970s. The 1970s is now the paradigm of where our nation should be. Those of us who remember the 1970s, there may be a number of them in the room don't have such fond memories of the standard of public services in the 1970s.
Compared to what we have today. We don't today have bodies unburied. We don't have refuse piled high in the streets as a result of government folly. And we do have railways that run broadly on time compared to the. I see the noble Lord. Lord Bradshaw isn't here to be annoyed by this, but the relative catastrophe of British Rail in its worst days is. It trundled towards as it trundled towards its final station.
But now it is to be resuscitated and we are to get great British Rail Great British Railways in place of British Rail, and we are going to have it on a totally nationalised basis. Now there are two separate things going on here. The first is that the government makes a case. The minister makes a case that the railways would operate more efficiently if, as he puts it, track and train were united. That is an argument which can be debated.
I don't wholly accept it, but it can be debated. But it is not necessary in order for track and train to be united, that they should all be owned by the government in a single company. And we know that because the Williams review, which was warmly welcomed by the noble Lord, the minister when he was chairman of Network Rail, the Williams Review, which was also supported by the Conservative Party, the conservative government at the time gave an alternative way forward.
So the decision to nationalise the whole thing is, is, is a particularly spiteful decision, and it is the only explanation for it because it's not necessary for the purpose of achieving the government's stated objectives. The only explanation for it is that has been done to pay off the trades unions , who made such generous contributions to Labour's victory at the polls in 2024. We know that privatisation has been a huge success on the railways.
That passenger numbers have increased enormously after privatisation. It would be astonishing if the government, nationalising the railways achieved anything like that. Increase in passenger numbers. And new operators entered the market and competition stimulated improvements. My amendment. I have three amendments in this group for. But one of them is consequential. Three that I intend to speak to my . Amendment number two. Addresses a particularly vicious little clause in this bill, which says that a future.
That which which says, first of all, that the body which is designated as Great British Railways has to be owned wholly by the Crown. In other words, a future minister, a future minister, would have to pass primary legislation in order to designate or to designate a different body in the private sector to carry out Great British Rail's activities. What is the need for that? What is the need for that? It is simply to gratify the trades unions and the second part of it, which almost seems to make it impose a penalty of some sort on any minister who makes even a suggestion that that great British Railways should be transferred to the private sector.
My amendment number two deletes that part. It doesn't stop Great British Railways going ahead as a nationalised body, but it does allow a future Secretary of State without the need for primary legislation to redesignate a different body, not necessarily owned by the Crown, to carry out the role of Great British Railways. Amendment number one really is addressed more, I think, at sloppy drafting than anything else. The the the the bill talks about a body corporate being designated as Great British Railways, whereas later in the next clause it is.
It is implicit that the body corporate should be a company constituted under the Companies Act. But the bill doesn't actually say that the body corporate has to be constituted under the Companies Act. It only says that it has to be wholly owned by the Crown. Other body corporates could be there, could be designated as long as they're wholly owned by the Crown. And it simply sloppy drafting, not to say at this point that it is to be a body that is constituted under the under the Companies Act.
Now, I say this. The minister, when I mentioned this to him, says to me, oh, well, everybody knows it's going to be a company constituted under the Companies Act. Well, they don't if they read the act, it needs to be read into the act by him that that's what the intention is. But I think it should say it quite explicitly that that's what you intend to do. We'll come back to this when we discuss amendments later in committee that relate to the board of this company.
I think there are some from the noble Baroness, lady Pidgeon, to which I've added my name about the board of this company and how this corporate structure works, because the bill is very silent on this. And I think that that needs to be done. Finally, amendment eight is there to probe Great British Railways organisational structure. We still have to this day, no idea at all. Maybe the minister has no idea at all how great British Railways is going to be.
Structure. Let me give you a couple of legislation that's two and a half years on and transforming an organization as at least six months away, I should guess, from seeing the enactment of this necessary complex as Network Rail and all of the companies that are being brought into this group. This is something that is going to take years. So let me change the question. Is the noble Lord able to say, before we conclude this debate, what at what time he expects that structure to be in place, which he has described to us even in woolly terms? And just to develop that a little bit further.
It said throughout the industry that has acknowledged that nobody has written this down, that the intended designation date for GBR is October 2027. That's 12 months from now. Say six months after the enactment of the bill, if it goes through in its current form, according to current plans, is that date valid? And does the noble Lord believe that the structure that he's described, in whatever woolly terms, is going to be in place in time for that designation date? Or is it all going to muddle on for years afterwards being put in place? Finally, can I say on the second important point I think was discussed in this short debate, may I express my gratitude to the noble Baroness? I'm going to try this to do this correctly now.
The noble Baroness, Lady Jones of Moulsecoomb. And so don't don't minute that Hansard. But I'm very grateful to her because she did put her finger on one of the key issues in this group, which is the question of the justification for private ownership. She has said effectively that it is party policy in her case, and that she is going to stick to it for that reason, if if not for others as well. But we didn't get a clear answer from the noble Lord.
The Minister, to my question, what is his justification for wholesale nationalisation for the purpose of achieving his objectives, which could have been achieved by a Williams Report approach? And it's wholly irrelevant whether the last government did anything about it. For heaven's sake, what's the point of making a comment about like that? Last government was all over the place. That's why it lost the election. Is that the party? Is that the standard? Standard the noble Lord is setting for government? We are better than Sue.
We're just about better than Sunak, if that. Is that it? Is that the point of making that remark? But let me just let me just come back. Let me just come laughing at my point. The noble Lord has one opportunity before he sits down to give us a clear explanation, because the only explanation he's given is that it is in the manifest. And if that is the sole explanation, and that's very helpful to us, because it makes it very much easier knowing that there is no rational basis for the decision, it makes it very much easier for an incoming government to advance the argument that the necessary measures should be taken at pace to reverse it.
My Lords, we're here on the first day of the committee to create a Soviet style railway in the United Kingdom and to go back. And we now know explicitly it's the government's intention. It's the intention of the Prime Minister to go back to the warm and fuzzy 1970s. The 1970s is now the paradigm of where our nation should be. Those of us who remember the 1970s, there may be a number of them in the room don't have such fond memories of the standard of public services in the 1970s.
Compared to what we have today. We don't today have bodies unburied. We don't have refuse piled high in the streets as a result of government folly. And we do have railways that run broadly on time compared to the. I see the noble Lord. Lord Bradshaw isn't here to be annoyed by this, but the relative catastrophe of British Rail in its worst days is. It trundled towards as it trundled towards its final station.
But now it is to be resuscitated and we are to get great British Rail Great British Railways in place of British Rail, and we are going to have it on a totally nationalised basis. Now there are two separate things going on here. The first is that the government makes a case. The minister makes a case that the railways would operate more efficiently if, as he puts it, track and train were united. That is an argument which can be debated.
I don't wholly accept it, but it can be debated. But it is not necessary in order for track and train to be united, that they should all be owned by the government in a single company. And we know that because the Williams review, which was warmly welcomed by the noble Lord, the minister when he was chairman of Network Rail, the Williams Review, which was also supported by the Conservative Party, the conservative government at the time gave an alternative way forward.
So the decision to nationalise the whole thing is, is, is a particularly spiteful decision, and it is the only explanation for it because it's not necessary for the purpose of achieving the government's stated objectives. The only explanation for it is that has been done to pay off the trades unions , who made such generous contributions to Labour's victory at the polls in 2024. We know that privatisation has been a huge success on the railways.
That passenger numbers have increased enormously after privatisation. It would be astonishing if the government, nationalising the railways achieved anything like that. Increase in passenger numbers. And new operators entered the market and competition stimulated improvements. My amendment. I have three amendments in this group for. But one of them is consequential. Three that I intend to speak to my . Amendment number two. Addresses a particularly vicious little clause in this bill, which says that a future.
That which which says, first of all, that the body which is designated as Great British Railways has to be owned wholly by the Crown. In other words, a future minister, a future minister, would have to pass primary legislation in order to designate or to designate a different body in the private sector to carry out Great British Rail's activities. What is the need for that? What is the need for that? It is simply to gratify the trades unions and the second part of it, which almost seems to make it impose a penalty of some sort on any minister who makes even a suggestion that that great British Railways should be transferred to the private sector.
My amendment number two deletes that part. It doesn't stop Great British Railways going ahead as a nationalised body, but it does allow a future Secretary of State without the need for primary legislation to redesignate a different body, not necessarily owned by the Crown, to carry out the role of Great British Railways. Amendment number one really is addressed more, I think, at sloppy drafting than anything else. The the the the bill talks about a body corporate being designated as Great British Railways, whereas later in the next clause it is.
It is implicit that the body corporate should be a company constituted under the Companies Act. But the bill doesn't actually say that the body corporate has to be constituted under the Companies Act. It only says that it has to be wholly owned by the Crown. Other body corporates could be there, could be designated as long as they're wholly owned by the Crown. And it simply sloppy drafting, not to say at this point that it is to be a body that is constituted under the under the Companies Act.
Now, I say this. The minister, when I mentioned this to him, says to me, oh, well, everybody knows it's going to be a company constituted under the Companies Act. Well, they don't if they read the act, it needs to be read into the act by him that that's what the intention is. But I think it should say it quite explicitly that that's what you intend to do. We'll come back to this when we discuss amendments later in committee that relate to the board of this company.
I think there are some from the noble Baroness, lady Pidgeon, to which I've added my name about the board of this company and how this corporate structure works, because the bill is very silent on this. And I think that that needs to be done. Finally, amendment eight is there to probe Great British Railways organisational structure. We still have to this day, no idea at all. Maybe the minister has no idea at all how great British Railways is going to be.
Structure. Let me give you a couple of legislation that's two and a half years on and transforming an organization as at least six months away, I should guess, from seeing the enactment of this necessary complex as Network Rail and all of the companies that are being brought into this group. This is something that is going to take years. So let me change the question. Is the noble Lord able to say, before we conclude this debate, what at what time he expects that structure to be in place, which he has described to us even in woolly terms? And just to develop that a little bit further.
It said throughout the industry that has acknowledged that nobody has written this down, that the intended designation date for GBR is October 2027. That's 12 months from now. Say six months after the enactment of the bill, if it goes through in its current form, according to current plans, is that date valid? And does the noble Lord believe that the structure that he's described, in whatever woolly terms, is going to be in place in time for that designation date? Or is it all going to muddle on for years afterwards being put in place? Finally, can I say on the second important point I think was discussed in this short debate, may I express my gratitude to the noble Baroness? I'm going to try this to do this correctly now.
The noble Baroness, Lady Jones of Moulsecoomb. And so don't don't minute that Hansard. But I'm very grateful to her because she did put her finger on one of the key issues in this group, which is the question of the justification for private ownership. She has said effectively that it is party policy in her case, and that she is going to stick to it for that reason, if if not for others as well. But we didn't get a clear answer from the noble Lord.
The Minister, to my question, what is his justification for wholesale nationalisation for the purpose of achieving his objectives, which could have been achieved by a Williams Report approach? And it's wholly irrelevant whether the last government did anything about it. For heaven's sake, what's the point of making a comment about like that? Last government was all over the place. That's why it lost the election. Is that the party? Is that the standard? Standard the noble Lord is setting for government? We are better than Sue.
We're just about better than Sunak, if that. Is that it? Is that the point of making that remark? But let me just let me just come back. Let me just come laughing at my point. The noble Lord has one opportunity before he sits down to give us a clear explanation, because the only explanation he's given is that it is in the manifest. And if that is the sole explanation, and that's very helpful to us, because it makes it very much easier knowing that there is no rational basis for the decision, it makes it very much easier for an incoming government to advance the argument that the necessary measures should be taken at pace to reverse it.
16:43
Speaker 3
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Speaker 3
My Lords, just briefly. Firstly, I should say the operative date for GBR will be sometime in 2027, but it depends, of course, on the passage of this bill. Secondly, I can I can give a very sound explanation for being in favour of public ownership, which is that progressively, as we've taken recent train operating companies into public ownership, we've been able to put both the track and the infrastructure and the operations into the the management of the same person that is delivering results that no previous arrangement under for over 30 years.
Has. Been able. To
Has. Been able. To
16:43
16:43
Speaker 3
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Speaker 3
The I shall continue with with with with with what I'm saying. It hasn't been possible to put in any previous iteration of the railway since since the early 1990s , to have both under the same control. There was such an arrangement in South Western railways in the in the 20 tens, and it collapsed because the commercial arrangements were incompatible. And actually we are making steady progress in improving the railway in some pretty difficult circumstances in companies that haven't been particularly well managed as a consequence of being able to manage them together.
That, to my mind, is a very good reason for public ownership.
That, to my mind, is a very good reason for public ownership.
16:44
Speaker 4
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Speaker 4
My Lords, before we proceed. The Deputy Chairman calls, I think, probably behaving for me. It is the we are in committee. It is, you know, the first group of seven days worth of committee, I would say six minutes worth of summation when you're. I'll. All I'd point out to all members of the committee is that the companion is very clear about brevity being the quality we're looking for when members who have lead amendments are summing up, whether they're pressing or whatever they're doing with that amendment.
So I just urge committee members to bear that in mind for future groups. Please.
So I just urge committee members to bear that in mind for future groups. Please.
16:45
Speaker 2
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Speaker 2
My Lords, I'm very happy as far as that's directed at me, to bear it in mind. Of course, I would be quicker in challenging the minister. When I sum up, I am not summing up. Of course, I'm actually testing him on his response to the points I've made in moving my amendments, and it would be a great deal quicker, of course, if he had properly addressed them. My satisfaction in the course of his speech, and when ministers do that, I shall, of course be brief.
But if they don't, if the Minister doesn't do that, then with every respect to the noble Lord, I shall take exactly as long as is needed, because we are in committee, and those rules do not apply. And we are. We. I will not be curtailed. And after all, thanks to the noble Lord and the whips, we have five hours, not four to play with. Indeed.
But if they don't, if the Minister doesn't do that, then with every respect to the noble Lord, I shall take exactly as long as is needed, because we are in committee, and those rules do not apply. And we are. We. I will not be curtailed. And after all, thanks to the noble Lord and the whips, we have five hours, not four to play with. Indeed.
16:46
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16:46
Speaker 5
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Speaker 5
Amendment three. Lord Lansley not moved. Not moved. Then the question is that clause one stand part of the content. content content content is have it. That brings us on to clause two. Amendment four. Lord Lindsay. Not moved. Not moved. Not moved. Baroness Johnson, amendment five. Not moved. Not moved. Brings us to six.
Lord Moylan. Not moved. Not moved. Not moved. The question is that clause two stand part of the bill is that content. content content content have it. We come to before clause three, amendment seven, which is a new group. Lord Moylan.
Lord Moylan. Not moved. Not moved. Not moved. The question is that clause two stand part of the bill is that content. content content content have it. We come to before clause three, amendment seven, which is a new group. Lord Moylan.
16:47
Speaker 2
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Speaker 2
My Lords, I rise to speak with my customary brevity to amendment seven and to open the debate on this second group. I have a large number of amendments in this group. Therefore, I shall speak only briefly to each of them, because I don't want to provoke any noble lords to start waving their hands at me again, which is only intended to distract and doesn't promote debate. Amendment seven, although it starts the group, is one I intend to return to towards the end of my remarks, if I may.
I'm going to start with amendment nine. Amendment 9th May appear to be pernickety, but perhaps if I explain to noble Lords. Who. Many of whom will know I have a background in local government, but I don't think it's entirely a local government matter. I think it applies to legislation more broadly that we are well familiar with the notion of powers. Local government is given powers to do things, and so is the Secretary of State periodically.
And we're also familiar with the notion of duties. Duties can be placed on local government. We're very clear what the distinction is. And similarly on the Secretary of State, but I don't think I have I don't claim huge experience, but I've never really come across a question of functions. And I don't understand what a function is. Why? Again, it's sloppy. Drafting is a function, a power, a legal power.
We understand what that is. Is it a duty? When does a function slip over into being a duty and vice versa? But then I go to a second level of refinement. This clause, clause three refers to, I think as clause three refers to . Yes refers to the general functions of Great British Railways. Now, if I'm unclear what a function is, I'm doubly unclear what a general function is.
A general function could mean this is a fuzzy notion. It's a it's a general thing. I'm not quite clear what it is, in which case it's not very satisfactory as a piece of legislation. Or it could seek to set out a hierarchy of functions. So these are the general functions. And there are other more minor functions that sit under them. But the point is that they should those minor functions have to conform to, to contribute to, to be ancillary to the general function .
Is that what general functions is meant to mean? Or is the word general simply redundant? And I ask that because later in the bill, the bill refers to the functions of Great British Railways on several occasions, and the expression general functions never reappears. Now, as I say, I suspect this is not a very complex issue. I suspect it's just sloppy drafting, but I don't think we can put up with sloppy drafting. We actually need to know what is meant by functions.
How many duties are being imposed on Great British Rail that we can hold them to account for how many powers are being given to them by statute that they have to explain and justify when they are used and when they are not used, and and whether general is actually creating a hierarchy with subordinate functions that must comply or not. And I don't think this is going to be settled necessarily today. It's very likely that we're going to come back on this so that we really understand what the bill is doing.
The next amendment, number 13, excludes rail safety advice and standards from Great British Railways. So Great British Railways is going to be under three one little G publishing advice on standards on matters related to railways and railway services. I really don't know why they're doing this. Publishing advice and standards is normally the function either of a regulator or of a an independent board which set an independent standards board.
I don't know why British Rail is doing this insofar as they're doing it to themselves. I think that's okay. They can set their own internal standards. I don't have any objection to that. But I have another amendment coming up, number 14 in this group, which says that they should not be able to create standards and issue advice to non GB r actors on the Great British Rail Network. Internal standards, no problem.
But if they're going to be standard set, they should be set by an independent board or a regulator or the or. Finally, on this point, returning to amendment 13. Amendment 13 excludes safety standards entirely from that scope. Now, I say this because, first of all, safety on British Railways has been at a very, very high standard. And it's a common view. It's a common view that the role of the Office of Rail and Road as safety regulator has been an important contributor to that, and I do not want to see that role as safety regulator diluted.
And I don't know anybody in the industry who does. And the danger here is that the power being given to GBR to set standards implicitly for other people operating on the railway, implicitly including safety standards, creates that tension with the role of the R only be destructive of and damaging to the effectiveness and reputation of safety on Great British Railways. If I come to amendment 18. This.
Relates back to the question of functions, and it removes the Secretary of State power to confer additional railway related functions on Great British Railways . If it requires an Act of Parliament to set up the general functions of Great British Railways, why should we want to give to the Secretary of State the undiluted, unrestricted power to create new functions to add to them? I do not think this is the correct way of doing it.
If there is a requirement for future for further functions in the future, it should be at the very least by way of statutory instrument. If the power is to be granted at all, I then turn, if I may, finally to amendment 80. Now, my noble friend Lord Grayling, with his very considerable experience of being transport Sector Secretary and Railways, has tabled a number of amendments, but unfortunately is unable to be in the House in the course of this week.
But I had signed amendment number 80 and supported it, so I would like to speak to that. It's slightly out of place, I think, in this group. And we'll come back to this topic again. The amendment requires charges imposed by Great British Railways for certain railway services to be reasonable. Who can object to that? Who can want charges that are not reasonable? But that is not the power given to Great British Railways by the Bill.
The power to make these charges is relatively unconstrained. I agree it may be constrained by competition law, but it's relatively unconstrained and effectively allows GBR to set charges as it sees fit. That is too much latitude, and the power should be constrained by the ability, by the. By the necessity to. To be reasonable and 81 which in fact is in my name, but goes closely. But the last one gives to the Secretary of State, gives to an individual that might be a company who is aggrieved by the charge or the term, or the conditions imposed by Great British Railways.
A right of appeal to the Office of Rail and Road. Again, who can think that this constraint, this very modest constraint on the absolute discretion of Great British Railways, can be anything other than reasonable and indeed necessary? My Lords, I beg to move.
I'm going to start with amendment nine. Amendment 9th May appear to be pernickety, but perhaps if I explain to noble Lords. Who. Many of whom will know I have a background in local government, but I don't think it's entirely a local government matter. I think it applies to legislation more broadly that we are well familiar with the notion of powers. Local government is given powers to do things, and so is the Secretary of State periodically.
And we're also familiar with the notion of duties. Duties can be placed on local government. We're very clear what the distinction is. And similarly on the Secretary of State, but I don't think I have I don't claim huge experience, but I've never really come across a question of functions. And I don't understand what a function is. Why? Again, it's sloppy. Drafting is a function, a power, a legal power.
We understand what that is. Is it a duty? When does a function slip over into being a duty and vice versa? But then I go to a second level of refinement. This clause, clause three refers to, I think as clause three refers to . Yes refers to the general functions of Great British Railways. Now, if I'm unclear what a function is, I'm doubly unclear what a general function is.
A general function could mean this is a fuzzy notion. It's a it's a general thing. I'm not quite clear what it is, in which case it's not very satisfactory as a piece of legislation. Or it could seek to set out a hierarchy of functions. So these are the general functions. And there are other more minor functions that sit under them. But the point is that they should those minor functions have to conform to, to contribute to, to be ancillary to the general function .
Is that what general functions is meant to mean? Or is the word general simply redundant? And I ask that because later in the bill, the bill refers to the functions of Great British Railways on several occasions, and the expression general functions never reappears. Now, as I say, I suspect this is not a very complex issue. I suspect it's just sloppy drafting, but I don't think we can put up with sloppy drafting. We actually need to know what is meant by functions.
How many duties are being imposed on Great British Rail that we can hold them to account for how many powers are being given to them by statute that they have to explain and justify when they are used and when they are not used, and and whether general is actually creating a hierarchy with subordinate functions that must comply or not. And I don't think this is going to be settled necessarily today. It's very likely that we're going to come back on this so that we really understand what the bill is doing.
The next amendment, number 13, excludes rail safety advice and standards from Great British Railways. So Great British Railways is going to be under three one little G publishing advice on standards on matters related to railways and railway services. I really don't know why they're doing this. Publishing advice and standards is normally the function either of a regulator or of a an independent board which set an independent standards board.
I don't know why British Rail is doing this insofar as they're doing it to themselves. I think that's okay. They can set their own internal standards. I don't have any objection to that. But I have another amendment coming up, number 14 in this group, which says that they should not be able to create standards and issue advice to non GB r actors on the Great British Rail Network. Internal standards, no problem.
But if they're going to be standard set, they should be set by an independent board or a regulator or the or. Finally, on this point, returning to amendment 13. Amendment 13 excludes safety standards entirely from that scope. Now, I say this because, first of all, safety on British Railways has been at a very, very high standard. And it's a common view. It's a common view that the role of the Office of Rail and Road as safety regulator has been an important contributor to that, and I do not want to see that role as safety regulator diluted.
And I don't know anybody in the industry who does. And the danger here is that the power being given to GBR to set standards implicitly for other people operating on the railway, implicitly including safety standards, creates that tension with the role of the R only be destructive of and damaging to the effectiveness and reputation of safety on Great British Railways. If I come to amendment 18. This.
Relates back to the question of functions, and it removes the Secretary of State power to confer additional railway related functions on Great British Railways . If it requires an Act of Parliament to set up the general functions of Great British Railways, why should we want to give to the Secretary of State the undiluted, unrestricted power to create new functions to add to them? I do not think this is the correct way of doing it.
If there is a requirement for future for further functions in the future, it should be at the very least by way of statutory instrument. If the power is to be granted at all, I then turn, if I may, finally to amendment 80. Now, my noble friend Lord Grayling, with his very considerable experience of being transport Sector Secretary and Railways, has tabled a number of amendments, but unfortunately is unable to be in the House in the course of this week.
But I had signed amendment number 80 and supported it, so I would like to speak to that. It's slightly out of place, I think, in this group. And we'll come back to this topic again. The amendment requires charges imposed by Great British Railways for certain railway services to be reasonable. Who can object to that? Who can want charges that are not reasonable? But that is not the power given to Great British Railways by the Bill.
The power to make these charges is relatively unconstrained. I agree it may be constrained by competition law, but it's relatively unconstrained and effectively allows GBR to set charges as it sees fit. That is too much latitude, and the power should be constrained by the ability, by the. By the necessity to. To be reasonable and 81 which in fact is in my name, but goes closely. But the last one gives to the Secretary of State, gives to an individual that might be a company who is aggrieved by the charge or the term, or the conditions imposed by Great British Railways.
A right of appeal to the Office of Rail and Road. Again, who can think that this constraint, this very modest constraint on the absolute discretion of Great British Railways, can be anything other than reasonable and indeed necessary? My Lords, I beg to move.
16:56
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16:56
Speaker 7
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Speaker 7
Amendment 15 were placed on Great British Railways, the duty to act as a single employer for the staff transferring into it from Network Rail and those coming from the train operating companies as they move into public ownership. The starting point is that the bill is silent on this question. It creates Great British Railways, sets out its functions, deals in some detail, the machine you transfer. But it says nothing about who will employ the people who run the railway.
Now there's well over 100,000 people involved, more than 40,000 directly employed by Network Rail and more than 6000 across the train operating companies. They are no clearer today about who their employer will be and when than they were before the bill was published. This matters more than might. It might appear the operators are coming into public ownership on a staggered basis, contract by contract. Over several years.
The uncertainty is therefore not settled by a single moment in transition. It is spread out and repeated, and staff in one company would inevitably, inevitably draw conclusions from what happens in another. In the absence of a stated employment model, people will assume the least favourable one, that subsidiary companies will be retained, that terms and conditions will diverge, and that the integrated railway will turn out to be a holding company with much of the same fragmentation underneath it.
I hope that this is not what the government plan. Now, the founding document here is getting Britain moving, and those who are interested in the reason for taking the railways into public ownership would find their term well served by consulting that document, which addresses the issues which have been put into contention today. And that document was explicit that Great British Railways would be a new single employer, and that the workforce would be treated as an asset to be nurtured rather than a cost to be cut.
That was a clear commitment. These amendments asked for it to be put in the bill or, failing that, restated from the despatch box, the case is not only about reassurance for our valued employees, though that would be worth having on its own account. There is also a productivity argument, and it is in some ways the stronger of the two. A report commissioned by the RMT from doctor Nina Jordan at Cambridge University, the that's been shared with the government puts it in measured terms.
The key argument is that a workforce that's spread across multiple employers faces barriers to the stability, mobility and shared learning on which a successful railway will depend. Where staff work under different structures, incentives and planning horizons, it becomes harder to build the relationships and operational knowledge that a tightly coupled system requires. The report is not is careful not to over claim, and I will not overclaim on its behalf. It does not say a single employer is always the better model.
What it says that employment structure belongs inside the productivity question rather than alongside it. That is a proposition the government has not so far engaged with, and it ought to be tested before the structure is settled before rather than after we proceed. The practical consequences are concrete enough. A single employer removes duplicated management structures and the costs that arise whenever one company must contract with another to do something that could be done internally, it makes the movement of staff between routes easier, and it makes movement through an integrated career structure built in to the system.
That is what produces flexibility in the usual sense, being able to move people and knowledge to where they are needed. A structure that retains or proliferates subsidiary companies does the opposite. It reproduces inside the public sector the boundaries privatisation created with the transaction costs and decoupling demarcation arguments that go with them. Having gone to the trouble of ending fragmentation in the ownership of the railway, it would be an odd result to preserve it in the employment of the people who operate it.
I should be clear about what the amendment does not do is limited to the transfers set out in the bill. Staff coming from Network Rail and from the operators contracted by the department. It does not deal with the operators in Scotland and Wales. I could have tackled those, but keep the issue clear. I left them out at this stage. In any event, these are matters for the devolved governments.
It also does not touch open access or freight. That's amendment . The Second Amendment, amendment 330, which is associated, does no more than ensure that it applies to any such transfer. From my own account, I feel that it probably applies in any event, but it would be good to provide some level of reassurance and should in any event be uncontroversial. And it seems appropriate to put it on the face of the bill.
Now, these amendments were tabled in the Commons and debated debated in the committee there, but the issue was not addressed directly in the Minister's reply. Members of the Rmts parliamentary group wrote asking for a meeting on this and related matters, and that meeting has not taken place. So the question I asked the minister is a straightforward one. If the government able to end the uncertainty facing rail workers and confirm that it remains its intention, as set out in Labour's plan for rail, that Great British Railways will be a new single employer.
If that confirmation cannot be given today, will the Minister agree to meet to discuss the matter before report?
Now there's well over 100,000 people involved, more than 40,000 directly employed by Network Rail and more than 6000 across the train operating companies. They are no clearer today about who their employer will be and when than they were before the bill was published. This matters more than might. It might appear the operators are coming into public ownership on a staggered basis, contract by contract. Over several years.
The uncertainty is therefore not settled by a single moment in transition. It is spread out and repeated, and staff in one company would inevitably, inevitably draw conclusions from what happens in another. In the absence of a stated employment model, people will assume the least favourable one, that subsidiary companies will be retained, that terms and conditions will diverge, and that the integrated railway will turn out to be a holding company with much of the same fragmentation underneath it.
I hope that this is not what the government plan. Now, the founding document here is getting Britain moving, and those who are interested in the reason for taking the railways into public ownership would find their term well served by consulting that document, which addresses the issues which have been put into contention today. And that document was explicit that Great British Railways would be a new single employer, and that the workforce would be treated as an asset to be nurtured rather than a cost to be cut.
That was a clear commitment. These amendments asked for it to be put in the bill or, failing that, restated from the despatch box, the case is not only about reassurance for our valued employees, though that would be worth having on its own account. There is also a productivity argument, and it is in some ways the stronger of the two. A report commissioned by the RMT from doctor Nina Jordan at Cambridge University, the that's been shared with the government puts it in measured terms.
The key argument is that a workforce that's spread across multiple employers faces barriers to the stability, mobility and shared learning on which a successful railway will depend. Where staff work under different structures, incentives and planning horizons, it becomes harder to build the relationships and operational knowledge that a tightly coupled system requires. The report is not is careful not to over claim, and I will not overclaim on its behalf. It does not say a single employer is always the better model.
What it says that employment structure belongs inside the productivity question rather than alongside it. That is a proposition the government has not so far engaged with, and it ought to be tested before the structure is settled before rather than after we proceed. The practical consequences are concrete enough. A single employer removes duplicated management structures and the costs that arise whenever one company must contract with another to do something that could be done internally, it makes the movement of staff between routes easier, and it makes movement through an integrated career structure built in to the system.
That is what produces flexibility in the usual sense, being able to move people and knowledge to where they are needed. A structure that retains or proliferates subsidiary companies does the opposite. It reproduces inside the public sector the boundaries privatisation created with the transaction costs and decoupling demarcation arguments that go with them. Having gone to the trouble of ending fragmentation in the ownership of the railway, it would be an odd result to preserve it in the employment of the people who operate it.
I should be clear about what the amendment does not do is limited to the transfers set out in the bill. Staff coming from Network Rail and from the operators contracted by the department. It does not deal with the operators in Scotland and Wales. I could have tackled those, but keep the issue clear. I left them out at this stage. In any event, these are matters for the devolved governments.
It also does not touch open access or freight. That's amendment . The Second Amendment, amendment 330, which is associated, does no more than ensure that it applies to any such transfer. From my own account, I feel that it probably applies in any event, but it would be good to provide some level of reassurance and should in any event be uncontroversial. And it seems appropriate to put it on the face of the bill.
Now, these amendments were tabled in the Commons and debated debated in the committee there, but the issue was not addressed directly in the Minister's reply. Members of the Rmts parliamentary group wrote asking for a meeting on this and related matters, and that meeting has not taken place. So the question I asked the minister is a straightforward one. If the government able to end the uncertainty facing rail workers and confirm that it remains its intention, as set out in Labour's plan for rail, that Great British Railways will be a new single employer.
If that confirmation cannot be given today, will the Minister agree to meet to discuss the matter before report?
17:04
17:04
Speaker 8
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Speaker 8
My Lord, I want principally just to refer to my amendment in this group, amendment 19. I apologise to the noble Lord, Lord Davis of Brixton, that I'm not really in a position to comment on the points he makes, but I do think the discussion we had previously about the corporate structure and organisational structure of Great British Railways does give force to the points that. He's asking about how the employment of the railways is to be structured in future as well.
So I look forward to hearing the minister's response on that so far. So far, I just want to make a quick point in relation to the amendment from my noble friend, Lord Moylan, about creating a purpose clause for the Bill. I'm generally speaking in favour of purpose clauses, where we're not principally legislating in order to change existing legislation where the purposes are already set out. And of course, actually this bill will effectively get rid of the purpose which is set out at the front of Railways Act 1993.
And therefore, I think it is a pity that there isn't a purpose clause at the front of this piece of legislation to tell us what it is that is intended to be achieved. What what is it we're trying to achieve? Because that is, in my view, distinct, as I think my noble friend was saying from simply a description of what is it that Great British Railways is going to do? And what should it think about? Because as a member, I think it's paragraph 13 of the explanatory notes sets out that the view that the purpose can be defined simply by what it is that other functions of great British Railways, and to what must it have regard under the general duties.
But functions and duties does not. Is not in itself sufficient to constitute purpose, and I think for my money I would have been in favour of a drafting of a purpose clause up front as clause one , that would have told us what it is we're trying to achieve. I think that makes rather good drafting these days. But anyway, leave that aside. Clause 19. I'll get down into the into the nitty gritty a bit now with with amendment 19 in my name, there is a bit in amendment 19 relates to clause three.
I think it is where in clause three, where the functions have just been set out for Great British Railways. And then there is an interesting moment when the functions are replaced by this little subclause that tells us what the. In inverted commas, statutory functions are to be. And the statutory functions are all the functions that we've just been told about, and the ones that the Secretary of State might give Great British Railways at any time in the future, but not anything relating to service facilities or the supply of services under the 2016 regulations.
That, of course, sends me off to look at the 2016 regulations to see, well, what are the service facilities and the supply of services. And essentially, I, I'll I'll minimize it for the purposes of this debate, provision of freight, access to freight and international traffic by an infrastructure manager, on the one hand, under the access rights and then by supply of service facilities, is essentially service providers giving, again, freight of other railway undertakings and international access to services, things like stations and depots and so on and so on.
Now, what is interesting is, as far as I can see, those bits relating to access to the infrastructure and provision of services in the 2016 regulations are intended to be substantially replaced by the access policies set out later in clause 59. But the regulations in five and six and schedule schedule two, I think it is of the 2016 regulations are not to be repealed. But the interesting thing is that Great British Railways will be expressly taken out of the definition of an infrastructure manager.
So Great British Railways will not have the requirements of the requirements to provide access to infrastructure, nor a requirement to provide services that are implied by regulations five and six, even though they remain in place. And so I'm in a sense I am in a probing issue here. So who is going to provide take the responsibility for the provision of infrastructure to freight and international. If it is not great British Railways and insofar as supply of services are concerned, things like stations and depots and so on, if it's not great British Railways who have a responsibility for providing those, and the minimum access package that is specified in regulation six of the 2016 regulations, whose responsibility is it to provide those services? Because it's not set out in this bill.
All we know from this bill as a result of clause 70, when you go and look at it, is that it's not Great British Railways. Well, then who is it who will do those things?
So I look forward to hearing the minister's response on that so far. So far, I just want to make a quick point in relation to the amendment from my noble friend, Lord Moylan, about creating a purpose clause for the Bill. I'm generally speaking in favour of purpose clauses, where we're not principally legislating in order to change existing legislation where the purposes are already set out. And of course, actually this bill will effectively get rid of the purpose which is set out at the front of Railways Act 1993.
And therefore, I think it is a pity that there isn't a purpose clause at the front of this piece of legislation to tell us what it is that is intended to be achieved. What what is it we're trying to achieve? Because that is, in my view, distinct, as I think my noble friend was saying from simply a description of what is it that Great British Railways is going to do? And what should it think about? Because as a member, I think it's paragraph 13 of the explanatory notes sets out that the view that the purpose can be defined simply by what it is that other functions of great British Railways, and to what must it have regard under the general duties.
But functions and duties does not. Is not in itself sufficient to constitute purpose, and I think for my money I would have been in favour of a drafting of a purpose clause up front as clause one , that would have told us what it is we're trying to achieve. I think that makes rather good drafting these days. But anyway, leave that aside. Clause 19. I'll get down into the into the nitty gritty a bit now with with amendment 19 in my name, there is a bit in amendment 19 relates to clause three.
I think it is where in clause three, where the functions have just been set out for Great British Railways. And then there is an interesting moment when the functions are replaced by this little subclause that tells us what the. In inverted commas, statutory functions are to be. And the statutory functions are all the functions that we've just been told about, and the ones that the Secretary of State might give Great British Railways at any time in the future, but not anything relating to service facilities or the supply of services under the 2016 regulations.
That, of course, sends me off to look at the 2016 regulations to see, well, what are the service facilities and the supply of services. And essentially, I, I'll I'll minimize it for the purposes of this debate, provision of freight, access to freight and international traffic by an infrastructure manager, on the one hand, under the access rights and then by supply of service facilities, is essentially service providers giving, again, freight of other railway undertakings and international access to services, things like stations and depots and so on and so on.
Now, what is interesting is, as far as I can see, those bits relating to access to the infrastructure and provision of services in the 2016 regulations are intended to be substantially replaced by the access policies set out later in clause 59. But the regulations in five and six and schedule schedule two, I think it is of the 2016 regulations are not to be repealed. But the interesting thing is that Great British Railways will be expressly taken out of the definition of an infrastructure manager.
So Great British Railways will not have the requirements of the requirements to provide access to infrastructure, nor a requirement to provide services that are implied by regulations five and six, even though they remain in place. And so I'm in a sense I am in a probing issue here. So who is going to provide take the responsibility for the provision of infrastructure to freight and international. If it is not great British Railways and insofar as supply of services are concerned, things like stations and depots and so on, if it's not great British Railways who have a responsibility for providing those, and the minimum access package that is specified in regulation six of the 2016 regulations, whose responsibility is it to provide those services? Because it's not set out in this bill.
All we know from this bill as a result of clause 70, when you go and look at it, is that it's not Great British Railways. Well, then who is it who will do those things?
17:09
Speaker 2
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Speaker 2
My Lords, I welcome these probing amendments, and I look forward to the Minister's response on some very important general issues. I do think it is right that the staff in all the operating companies that will be affected by this should have early idea from the government about what is planned for their future employment, and I am one of those who welcome the idea that we want a well-paid profession serving on the railways. But I also think for the sake of taxpayers who are putting in substantial grant in aid and capital monies and for the sake of fare paying passengers who often have to pay very high fares, that we need to have a system in place for negotiation between staff and Great British Rail, which is more likely to achieve the increase in productivity, which could justify the higher pay for the staff without imposing an ever higher charge on both taxpayer and fare paying passengers.
So I think this is more than a detail that can be left open, that we need to know who is going to be the employer and what is the status of the current contracts, and how will they be put into transition to new contracts going forward for the staff when their employment changes? And is there anything the government can tell us about how they might, they hope, have better relations with the unions in future, so that we could look forward to a better experience in getting that balance of better pay for better delivery, for smarter working, for adopting work practices and being willing to operate new capital investment in a way which delivered that higher productivity and higher quality of service.
I also welcome Lord Moylan's draft of what the purposes should and could be, which may not entirely match with all of the government's aims. It would be interesting to hear from the government which of his suggestions are going to be intended or are implied in the current legislation, so that we can have some earlier indication of what the mission statement of the new railway might be. I think what taxpayers and railway users are expecting is more services, not less, and that has not been the early experience of the last two years.
They are expecting better punctuality and timeliness, which would also be welcome. And I think what the new railway will definitely require is more feel for where more passenger movements are required or possible, because, as in the early days of privatisation, surely what the early days of full nationalisation might want to achieve is a trend of rising passenger numbers, which privatisation achieved very well, and the ability of companies then to develop timetables and services which were more suited to modern travel needs, and therefore fuelled the continuing progress of providing more more growth in passengers and more revenue.
And if a new railway management, the controlling mind of GBR knows how, how to do that, it's going to make everything a lot easier if the background of the completion of these arrangements is rising. Passion to use rising revenues, greater flexibility over timetables and thinking about growth rather than thinking about cost cutting, elimination of less profitable routes which can easily get you into a spiral of downturn. As the nationalised railway experienced for most of its time post the war until privatisation.
Reverse those those difficult trends, and I would hope that the Minister would not rule out one of the modest successes of recent years, which is the ability to have a competitive challenge to the monopolist, because there are times when people outside could see ways of harnessing people , talent, capital to provide a additional and better service using the existing track, and for that, they will clearly need fair terms for access, and that will provide an innovative stimulus to the nationalised monopoly.
But I fear the government won't want to do that. And so I think they will find it that much more difficult to innovate and improve the timetables without that stimulus or spur from others generating such ideas and providing such a challenge and opportunity for the growth of the railway.
So I think this is more than a detail that can be left open, that we need to know who is going to be the employer and what is the status of the current contracts, and how will they be put into transition to new contracts going forward for the staff when their employment changes? And is there anything the government can tell us about how they might, they hope, have better relations with the unions in future, so that we could look forward to a better experience in getting that balance of better pay for better delivery, for smarter working, for adopting work practices and being willing to operate new capital investment in a way which delivered that higher productivity and higher quality of service.
I also welcome Lord Moylan's draft of what the purposes should and could be, which may not entirely match with all of the government's aims. It would be interesting to hear from the government which of his suggestions are going to be intended or are implied in the current legislation, so that we can have some earlier indication of what the mission statement of the new railway might be. I think what taxpayers and railway users are expecting is more services, not less, and that has not been the early experience of the last two years.
They are expecting better punctuality and timeliness, which would also be welcome. And I think what the new railway will definitely require is more feel for where more passenger movements are required or possible, because, as in the early days of privatisation, surely what the early days of full nationalisation might want to achieve is a trend of rising passenger numbers, which privatisation achieved very well, and the ability of companies then to develop timetables and services which were more suited to modern travel needs, and therefore fuelled the continuing progress of providing more more growth in passengers and more revenue.
And if a new railway management, the controlling mind of GBR knows how, how to do that, it's going to make everything a lot easier if the background of the completion of these arrangements is rising. Passion to use rising revenues, greater flexibility over timetables and thinking about growth rather than thinking about cost cutting, elimination of less profitable routes which can easily get you into a spiral of downturn. As the nationalised railway experienced for most of its time post the war until privatisation.
Reverse those those difficult trends, and I would hope that the Minister would not rule out one of the modest successes of recent years, which is the ability to have a competitive challenge to the monopolist, because there are times when people outside could see ways of harnessing people , talent, capital to provide a additional and better service using the existing track, and for that, they will clearly need fair terms for access, and that will provide an innovative stimulus to the nationalised monopoly.
But I fear the government won't want to do that. And so I think they will find it that much more difficult to innovate and improve the timetables without that stimulus or spur from others generating such ideas and providing such a challenge and opportunity for the growth of the railway.
17:15
Speaker 9
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Speaker 9
I rise to move amendments 305 in this group. Lords may think it's a long way away from where we started in this group, but it's here, so it's looks at the clause 87, which is a charge for removing road vehicles from, let's call it railway property. Before going into too much detail. And it did seem to me that if the government thought this was a good idea, then we should at least they should extend it to.
Dealing financially with the very many lorries these days who hit pit bridges and of course, endless delays to not just road traffic, but also to passengers and freight. Network Rail's. Websites on what they call bridge bashing is that in the year from April 2024 to March 2025, there were 1666 bridge strikes . Over five years. It was 8300. Of course, some bridges get it all the time and others don't.
And it costs Network Rail. They say 23 million to repair over a year. It seems to me to be quite cheap, but that's not really the point. Who pays? One of the statistic is that it causes the equivalent of 120 days delay. The rail passengers or freight. And it's. It occurs to me that rarely it should be down to the lorry.
The truck. It's usually the truck or a bus, either the driver or the owner or whatever should be required to fund, not just the cost of remedial work, but the some compensation for delay to the rail traffic and road traffic. I mean, this it's something which has been going on for years, and I suppose I and many others have been saying to Network Rail, they've got to do something about this. They're putting up all kinds of barriers, warning signs and everything, and they're doing a great job at it.
But I think it would be very helpful if you're going to if the government wants to charge people for parking on railway property or even as it says, I think in the, in the in the in the bill, a road vehicle includes a bicycle or other conveyance. Now, if they're going to charge me for parking my bicycle at the station, they can surely they can they can surely charge the lorries or the buses which do a great deal of damage.
And so I hope that my noble friend will. He'll probably say that the. The wording in my amendment needs improvement, and I'm very happy to look at improvement. But it seems to me that there's something which needs to be done to make it a bit more equitable. Status of the relationship between road vehicles and trains.
Dealing financially with the very many lorries these days who hit pit bridges and of course, endless delays to not just road traffic, but also to passengers and freight. Network Rail's. Websites on what they call bridge bashing is that in the year from April 2024 to March 2025, there were 1666 bridge strikes . Over five years. It was 8300. Of course, some bridges get it all the time and others don't.
And it costs Network Rail. They say 23 million to repair over a year. It seems to me to be quite cheap, but that's not really the point. Who pays? One of the statistic is that it causes the equivalent of 120 days delay. The rail passengers or freight. And it's. It occurs to me that rarely it should be down to the lorry.
The truck. It's usually the truck or a bus, either the driver or the owner or whatever should be required to fund, not just the cost of remedial work, but the some compensation for delay to the rail traffic and road traffic. I mean, this it's something which has been going on for years, and I suppose I and many others have been saying to Network Rail, they've got to do something about this. They're putting up all kinds of barriers, warning signs and everything, and they're doing a great job at it.
But I think it would be very helpful if you're going to if the government wants to charge people for parking on railway property or even as it says, I think in the, in the in the in the bill, a road vehicle includes a bicycle or other conveyance. Now, if they're going to charge me for parking my bicycle at the station, they can surely they can they can surely charge the lorries or the buses which do a great deal of damage.
And so I hope that my noble friend will. He'll probably say that the. The wording in my amendment needs improvement, and I'm very happy to look at improvement. But it seems to me that there's something which needs to be done to make it a bit more equitable. Status of the relationship between road vehicles and trains.
17:19
Speaker 8
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Speaker 8
My Lords, I'll just start by referring to that amendment Lord Barclays talked to only because it just so happened on Monday, as I was travelling to London, there was a bridge strike by a car actually on the bridge at Burnham. And just to illustrate, I see noble Lord nodding as well. Perhaps he was on the same train. The reason why it is important, though, is the reason why it's important, though, is because I suspect the most significant loss.
I don't think there was significant damage to the bridge, but what it did do is that train was significantly late, which meant that every single person on it was entitled to delay repay to a significant refund from their fare. So actually, the cost of the taxpayer and wasn't the only train affected, it was lots of trains. So the cost of the taxpayer of that single incident was actually probably very significant. And it doesn't seem unreasonable that the person who did the strikes, their insurance company, should have to reimburse the taxpayer for the cost of, of, of that, of that significant damage.
So I'm instinctively having had that experience on Monday, not that, you know, yesterday. I am instinctively supportive of that amendment. Just before I go on to talk about the other amendments on the paper, I am just going to do a teensy defence of the Sunak administration, given what.
I don't think there was significant damage to the bridge, but what it did do is that train was significantly late, which meant that every single person on it was entitled to delay repay to a significant refund from their fare. So actually, the cost of the taxpayer and wasn't the only train affected, it was lots of trains. So the cost of the taxpayer of that single incident was actually probably very significant. And it doesn't seem unreasonable that the person who did the strikes, their insurance company, should have to reimburse the taxpayer for the cost of, of, of that, of that significant damage.
So I'm instinctively having had that experience on Monday, not that, you know, yesterday. I am instinctively supportive of that amendment. Just before I go on to talk about the other amendments on the paper, I am just going to do a teensy defence of the Sunak administration, given what.
17:20
Speaker 8
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Speaker 8
Given I was a member of it, I won't do an extensive one, because that's not the purpose of why we're here. On this specific issue, though, the point I would make is we we got the Williams review, which the noble Lord referred to, and then we did set in train the work that effectively has come to fruition with this bill in terms of setting up and starting the process of setting up GBR. A lot of that work took place when we were in government, and so all that preparatory work and there was a lot of agreement, I think, between how we would have done it and how the minister is doing it today.
The big difference, of course, is the ownership of the companies, but in terms of bringing together a guiding mind, however, one wishes to describe it in bringing together a more seamless operation of track and train. That certainly is something that we had intended to do and had started the process of doing so. So that will be my my little bit of defense there of what we did when we were in government. Let me now address the amendments.
Amendment seven and clause three. The problem with purpose clauses, but also with the list of functions. The danger. Of course. I think this is what parliamentary draftsman calls undue specificity. As soon as you have lists, then the problem is things that aren't on the list. There's a question then about whether you are or aren't allowed to do them. And as I was looking at the list, the things that are not in the the government's list of functions which my noble friend Lord Moylan has in his list, he has things like providing value for money for passengers and taxpayers, for example, which is not in the government's list.
But the thing that's not in either of them is what we've already talked about, which is the work that the that Network Rail currently does and GBR will continue to do on not just on operating passenger services or freight or facilitating freight services, but on maximising the benefit of its property portfolio, not not just for generating revenue to offset the cost of providing rail services, but also, as my noble friend Lord Lansley has mentioned, in actually generating quite a significant amount of economic development and growth in significant parts of the country.
And one of the things the government has in terms of its housebuilding strategy, where it is woefully behind its targets, but one of its priorities is developing housing around rail stations. And some of that land will be owned by Network Rail and in due course, GBR. So what I would say in relation to the amendment and the functions is, is just whether it's asking the minister whether the functions are set out, are sufficiently extensive to give GBR the powers it needs to do its work.
The Second Amendment or group of amendments I wanted to talk about was amendment 12 and also, I think, linked amendments 80 and 81, which is about fair and non-discriminatory decisions, which I think is very important to put on the face of the legislation, because GBR will now be making very important decisions about freight access for private freight companies to the network, open access operators, and I won't label this point here, because we're going to come on to it in the next group.
But on ticketing, and I think given that GBR is going to be making decisions, unlike with the earlier where it didn't have any skin in the game, GBR is going to be making decisions on freight access, for example, or open access, where it itself is both a decision maker and a provider of services which are in competition. And that is also true on ticket retailing. And I think when it makes those decisions, it should have a legal duty to do that in a fair and non-discriminatory way, which is why I support that amendment.
And that has two effects. One, it it governs how GBR would operate, but it also then provides the opportunity for others to challenge it if it doesn't behave in that way. An amendment 80 and 81 are linked, I think, because they're about the charges that GBR can make for services where it's a monopoly supplier and therefore people don't have any choices. And amendment 81 provides an appeal mechanism. If it charges in a way that people don't think are reasonable.
And I think both of those are very sensible in ensuring that it behaves in a reasonable way. Two two other amendments I wanted to comment on amendment 15, which Lord Davis of Brixton set out. On the face of it, it sounds sensible, but I just wanted to flag three issues with it. One is I think they're potentially when you move employers, there are potentially pension implications. And I understand the company that provides pensions to rail workers has just flagged up the time that will be required to do the pension transition in a sensible way.
And we've seen in other areas of the public sector, if you get that wrong, that can cause some significant issues. The second issue is one which we've seen, and he, noble Lord, Lord Davis, I think, touched on this in his remarks. I suspect that at the moment, because a lot of these companies, they're all separate companies, there will be a range of pay structures. And we have already seen the government, to its own cost, has already seen this in what it's doing with NHS England.
It originally said it wanted to bring NHS, NHS England and all its staff into the Department of Health and Social Care what it has discovered, as it has set out. Doing that process, is because people in NHS England are paid significantly more than people in the Department for Health and Social Care. In many cases, it's discovered that either can't do that or doing that would be very expensive, or it would require the Secretary of State or the Chief secretary of the Treasury signing off the move of every single employee who's above a certain pay band, and it's discovered it's all very complicated and effectively it's having to do the NHS England, DHS change in a different way.
So my concern would be if you stick everyone in a single company and you have to equalise all their pay and conditions, and one concern is that you would take you would you do that in a downwards direction, which would clearly not be advantageous to those employees who lose out if you do it in upwards direction? That's clearly damaging for the taxpayer, who then has to pay all this increased cost without getting any productivity. And the final thing, which I just wanted to flag but not go into at length because we have a group some way down the group of amendments where we'll cover this in more detail.
And I think David and Brits are slightly gave the game away when he referred to a letter from the Rmts parliamentary group. This is, of course, the point of this is to have a single national rail employer so that the trade unions can increase their power and once again be able to deliver national rail strikes, closing down the entire railway network, which they haven't been able to do with different rail operating companies where you couldn't have a strike on one of them in response to a dispute at another one.
And so people should just be very clear if there's a single employer and I have some amendments to test this, then we will be back in the days where we have single rail, we have national rail strikes. We increase the bargaining power of those trade unions. And the experience over history is that that power is not used for the benefit of the passenger and the customer. It's used to extract money from the taxpayer, and I think that will be a very damaging thing.
So I'll just flag that. Now, I won't go into that in any more detail, and I'll come back to that later. The final point, just very briefly, I'm attracted to amendment 20, which the noble lady, Lady Pigeon has. The only point I would make to her is, and I think I said this at second reading, the reason why I, when I was Secretary of State, set up a freight target. And there is, of course, reference to a freight target in the bill was to try and balance the fact that all the conversation we have about railways always is about passengers.
So the reason for the freight target was to slightly rebalance the conversation and have more of a level playing field. My worry if you then put the freight the passenger target in the bill is you. You reweight it back towards it all being about passengers again. So I'm I absolutely agree with her. We want to increase the number of passengers and reduce the taxpayer subsidy. But as I say, the reason for having the freight target was a slightly balanced and have a more of a level playing field, but that.
I will draw my remarks to a close.
The big difference, of course, is the ownership of the companies, but in terms of bringing together a guiding mind, however, one wishes to describe it in bringing together a more seamless operation of track and train. That certainly is something that we had intended to do and had started the process of doing so. So that will be my my little bit of defense there of what we did when we were in government. Let me now address the amendments.
Amendment seven and clause three. The problem with purpose clauses, but also with the list of functions. The danger. Of course. I think this is what parliamentary draftsman calls undue specificity. As soon as you have lists, then the problem is things that aren't on the list. There's a question then about whether you are or aren't allowed to do them. And as I was looking at the list, the things that are not in the the government's list of functions which my noble friend Lord Moylan has in his list, he has things like providing value for money for passengers and taxpayers, for example, which is not in the government's list.
But the thing that's not in either of them is what we've already talked about, which is the work that the that Network Rail currently does and GBR will continue to do on not just on operating passenger services or freight or facilitating freight services, but on maximising the benefit of its property portfolio, not not just for generating revenue to offset the cost of providing rail services, but also, as my noble friend Lord Lansley has mentioned, in actually generating quite a significant amount of economic development and growth in significant parts of the country.
And one of the things the government has in terms of its housebuilding strategy, where it is woefully behind its targets, but one of its priorities is developing housing around rail stations. And some of that land will be owned by Network Rail and in due course, GBR. So what I would say in relation to the amendment and the functions is, is just whether it's asking the minister whether the functions are set out, are sufficiently extensive to give GBR the powers it needs to do its work.
The Second Amendment or group of amendments I wanted to talk about was amendment 12 and also, I think, linked amendments 80 and 81, which is about fair and non-discriminatory decisions, which I think is very important to put on the face of the legislation, because GBR will now be making very important decisions about freight access for private freight companies to the network, open access operators, and I won't label this point here, because we're going to come on to it in the next group.
But on ticketing, and I think given that GBR is going to be making decisions, unlike with the earlier where it didn't have any skin in the game, GBR is going to be making decisions on freight access, for example, or open access, where it itself is both a decision maker and a provider of services which are in competition. And that is also true on ticket retailing. And I think when it makes those decisions, it should have a legal duty to do that in a fair and non-discriminatory way, which is why I support that amendment.
And that has two effects. One, it it governs how GBR would operate, but it also then provides the opportunity for others to challenge it if it doesn't behave in that way. An amendment 80 and 81 are linked, I think, because they're about the charges that GBR can make for services where it's a monopoly supplier and therefore people don't have any choices. And amendment 81 provides an appeal mechanism. If it charges in a way that people don't think are reasonable.
And I think both of those are very sensible in ensuring that it behaves in a reasonable way. Two two other amendments I wanted to comment on amendment 15, which Lord Davis of Brixton set out. On the face of it, it sounds sensible, but I just wanted to flag three issues with it. One is I think they're potentially when you move employers, there are potentially pension implications. And I understand the company that provides pensions to rail workers has just flagged up the time that will be required to do the pension transition in a sensible way.
And we've seen in other areas of the public sector, if you get that wrong, that can cause some significant issues. The second issue is one which we've seen, and he, noble Lord, Lord Davis, I think, touched on this in his remarks. I suspect that at the moment, because a lot of these companies, they're all separate companies, there will be a range of pay structures. And we have already seen the government, to its own cost, has already seen this in what it's doing with NHS England.
It originally said it wanted to bring NHS, NHS England and all its staff into the Department of Health and Social Care what it has discovered, as it has set out. Doing that process, is because people in NHS England are paid significantly more than people in the Department for Health and Social Care. In many cases, it's discovered that either can't do that or doing that would be very expensive, or it would require the Secretary of State or the Chief secretary of the Treasury signing off the move of every single employee who's above a certain pay band, and it's discovered it's all very complicated and effectively it's having to do the NHS England, DHS change in a different way.
So my concern would be if you stick everyone in a single company and you have to equalise all their pay and conditions, and one concern is that you would take you would you do that in a downwards direction, which would clearly not be advantageous to those employees who lose out if you do it in upwards direction? That's clearly damaging for the taxpayer, who then has to pay all this increased cost without getting any productivity. And the final thing, which I just wanted to flag but not go into at length because we have a group some way down the group of amendments where we'll cover this in more detail.
And I think David and Brits are slightly gave the game away when he referred to a letter from the Rmts parliamentary group. This is, of course, the point of this is to have a single national rail employer so that the trade unions can increase their power and once again be able to deliver national rail strikes, closing down the entire railway network, which they haven't been able to do with different rail operating companies where you couldn't have a strike on one of them in response to a dispute at another one.
And so people should just be very clear if there's a single employer and I have some amendments to test this, then we will be back in the days where we have single rail, we have national rail strikes. We increase the bargaining power of those trade unions. And the experience over history is that that power is not used for the benefit of the passenger and the customer. It's used to extract money from the taxpayer, and I think that will be a very damaging thing.
So I'll just flag that. Now, I won't go into that in any more detail, and I'll come back to that later. The final point, just very briefly, I'm attracted to amendment 20, which the noble lady, Lady Pigeon has. The only point I would make to her is, and I think I said this at second reading, the reason why I, when I was Secretary of State, set up a freight target. And there is, of course, reference to a freight target in the bill was to try and balance the fact that all the conversation we have about railways always is about passengers.
So the reason for the freight target was to slightly rebalance the conversation and have more of a level playing field. My worry if you then put the freight the passenger target in the bill is you. You reweight it back towards it all being about passengers again. So I'm I absolutely agree with her. We want to increase the number of passengers and reduce the taxpayer subsidy. But as I say, the reason for having the freight target was a slightly balanced and have a more of a level playing field, but that.
I will draw my remarks to a close.
17:29
Speaker 10
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Speaker 10
My Lords amendments 20 and 110 in my name require Great British Railways to increase passengers on the railways and to set a passenger target rather like there is a freight target as has just been referred to. And one could easily argue this isn't necessary, as of course any government will want the railway to grow and passengers and freight to increase. Yet that is not necessarily the case. The Bill, as it is currently written, does not create a clear statutory duty to grow passenger use, nor to set measurable targets.
The reform of the railway shouldn't simply be to sort of stabilize the current system as it is, it should be to actively grow, demand and ensure access to the network, to support the shift to sustainable modes of transport. Now, clause 17 provides a clear rail freight target, as we've just discussed. But in clause 18 it states that, and I quote, railway service performance includes in particular performance and securing each of the following in relation to railway services reliability, including punctuality and be the avoidance or mitigation of passenger overcrowding.
Now, this all sounds fine if you approach this from the point of view of many of us in this room where we want to grow the railways and see more people using them and with better onboard conditions. However, another way to reduce overcrowding and to make services more reliable is to run far fewer trains and to increase prices to price people off the railways. Then trains won't be as crowded, and there'll be more reliable if you're running fewer of them.
So you would meet the requirements as set out in the legislation. But that's not what we want. This is not what I think the government's intention is within this bill. So my amendments are to ensure a passenger growth target in order that we can make sure passengers, as well as freight are considered, and we don't have that sort of perverse incentive by what is actually written on the face of the bill. And I hope the government will consider this carefully, as I believe it has support on all sides of the House and certainly did at the Commons end.
In terms of the other amendments within this group. Lord Moylan's, amendment seven, about the purpose of the Bill. There's much in it that I agree with, and it's reflected in some of my other amendments that we'll discuss throughout committee stage, though I think the theme of reducing subsidy and taxpayer's contribution to the railway is of concern. Our railways will always need some form of public subsidy, and I don't think it should be that written on the face of the bill.
But there's some other important points of clarity and other amendments within the group, including Lord Davies of Brixton's amendment about whether staff transfer to a single employer, something I recall my noble friend Baroness Randerson raising in debate on the public ownership of the railways legislation some two years ago. There are so many different terms and conditions that exist and understand and understanding for rail staff would be welcome, but I think there are some serious worries as Lord Harper set out, and particular, the example of NHS England, I think is very, very relevant here.
And people have. Many members across the House have commented that I'm covering both health and railways. There are many similarities between both bills and that is just one of them. I just have to switch passengers and patients around. Lord Barclay's amendment, I think does raise a really important point because lorries and other vehicles are damaging infrastructure, and there is that huge cost not just to repair the infrastructure, but to the wider network and compensation.
So I think that's interesting to hear how the government will respond to that amendment 114, which would require a private sector growth target, to me, goes against the whole of this legislation. This structure is about enabling a publicly owned railway, supplemented by open access operations in part, and a thriving railway freight sector. So I look forward to the minister's response and consideration, in particular, of my amendments around the passenger growth target, to make sure that what's written in this bill is something we can all support.
The reform of the railway shouldn't simply be to sort of stabilize the current system as it is, it should be to actively grow, demand and ensure access to the network, to support the shift to sustainable modes of transport. Now, clause 17 provides a clear rail freight target, as we've just discussed. But in clause 18 it states that, and I quote, railway service performance includes in particular performance and securing each of the following in relation to railway services reliability, including punctuality and be the avoidance or mitigation of passenger overcrowding.
Now, this all sounds fine if you approach this from the point of view of many of us in this room where we want to grow the railways and see more people using them and with better onboard conditions. However, another way to reduce overcrowding and to make services more reliable is to run far fewer trains and to increase prices to price people off the railways. Then trains won't be as crowded, and there'll be more reliable if you're running fewer of them.
So you would meet the requirements as set out in the legislation. But that's not what we want. This is not what I think the government's intention is within this bill. So my amendments are to ensure a passenger growth target in order that we can make sure passengers, as well as freight are considered, and we don't have that sort of perverse incentive by what is actually written on the face of the bill. And I hope the government will consider this carefully, as I believe it has support on all sides of the House and certainly did at the Commons end.
In terms of the other amendments within this group. Lord Moylan's, amendment seven, about the purpose of the Bill. There's much in it that I agree with, and it's reflected in some of my other amendments that we'll discuss throughout committee stage, though I think the theme of reducing subsidy and taxpayer's contribution to the railway is of concern. Our railways will always need some form of public subsidy, and I don't think it should be that written on the face of the bill.
But there's some other important points of clarity and other amendments within the group, including Lord Davies of Brixton's amendment about whether staff transfer to a single employer, something I recall my noble friend Baroness Randerson raising in debate on the public ownership of the railways legislation some two years ago. There are so many different terms and conditions that exist and understand and understanding for rail staff would be welcome, but I think there are some serious worries as Lord Harper set out, and particular, the example of NHS England, I think is very, very relevant here.
And people have. Many members across the House have commented that I'm covering both health and railways. There are many similarities between both bills and that is just one of them. I just have to switch passengers and patients around. Lord Barclay's amendment, I think does raise a really important point because lorries and other vehicles are damaging infrastructure, and there is that huge cost not just to repair the infrastructure, but to the wider network and compensation.
So I think that's interesting to hear how the government will respond to that amendment 114, which would require a private sector growth target, to me, goes against the whole of this legislation. This structure is about enabling a publicly owned railway, supplemented by open access operations in part, and a thriving railway freight sector. So I look forward to the minister's response and consideration, in particular, of my amendments around the passenger growth target, to make sure that what's written in this bill is something we can all support.
17:34
Speaker 3
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Speaker 3
My Lords, I thank Noble Lords for these amendments and for the contributions of the noble Lord Redwood and the noble Lord Harper. I will start with amendment seven, which will introduce a purpose for GBR into the bill. The bill already provides a purpose for GBR, just as we promised the Liberal Democrats it would. During the passage of the Public Ownership Act. The Bill's purpose is set out through its functions and duties.
The functions tell us what GBR must do and the duties tell us what GBR must consider and achieve whilst doing it. Much like the Noble Lords amendment, the duties provide a list of objectives for GBR, which it must bear in mind when undertaking every decision and its railway activity. I hope the noble Lord can see that the duties are in fact similar to the breadth of outcomes his amendment is seeking. The duties already require GBR to prioritise the needs of passengers and disabled passengers to consider value for money.
High standards of performance, including reliability, social and economic benefits, the environment to grow freight and to advance the public interest. We do not need a new purpose clause to provide GBR with these objectives. The Bill already does so. Unlike the proposed purpose clause, the functions and duties are supported by the Secretary of State's long term rail strategy, which will also provide clear long term objectives. That strategy is how ministers will communicate to GBR what it should consider whilst planning, expanding and improving the network over the next 30 years.
And GBR will develop its own pipeline of projects in response to that. So rather than a static requirement in the bill, which is not set in the context of wider priorities or funding expectations, we have a system that might actually work better to make our railway better. Instead of setting out a clear purpose, this new clause duplicates many of the provisions already in the bill, making outcomes less clear and overall and less likely to be deliverable.
Turning to the next amendment nine, which is seeking clarification of what general means. A general function is an umbrella term for an activity which a body can undertake by doing lots of different things. For example, running passenger services involves a large number of intermediate actions, such as procuring and operating rolling stock, employing train drivers and other staff, and selling tickets. The bill requires GBR to run passenger services, a general function, and therefore it does not prescribe exactly what actions it should take in which order to do that.
In comparison, a specific function would be an individual action that the bill requires GBR to do at a certain point or in a certain way. An example of this would be the requirement on GBR to draft an issue the access and use policy in clause 59. This is a specific requirement to kick off the access process and not a general function. The term general is therefore helpful in distinguishing between a specific activity GBR is required to perform and the continuing business of GBR and running the railways.
I can assure the noble Lord that functions are a standard drafting approach used also. For example, in the Communications Act 2009, the Climate Change Act and others. I hope this explanation provides the clarity he seeks and that the noble Lord can withdraw his amendment.
The functions tell us what GBR must do and the duties tell us what GBR must consider and achieve whilst doing it. Much like the Noble Lords amendment, the duties provide a list of objectives for GBR, which it must bear in mind when undertaking every decision and its railway activity. I hope the noble Lord can see that the duties are in fact similar to the breadth of outcomes his amendment is seeking. The duties already require GBR to prioritise the needs of passengers and disabled passengers to consider value for money.
High standards of performance, including reliability, social and economic benefits, the environment to grow freight and to advance the public interest. We do not need a new purpose clause to provide GBR with these objectives. The Bill already does so. Unlike the proposed purpose clause, the functions and duties are supported by the Secretary of State's long term rail strategy, which will also provide clear long term objectives. That strategy is how ministers will communicate to GBR what it should consider whilst planning, expanding and improving the network over the next 30 years.
And GBR will develop its own pipeline of projects in response to that. So rather than a static requirement in the bill, which is not set in the context of wider priorities or funding expectations, we have a system that might actually work better to make our railway better. Instead of setting out a clear purpose, this new clause duplicates many of the provisions already in the bill, making outcomes less clear and overall and less likely to be deliverable.
Turning to the next amendment nine, which is seeking clarification of what general means. A general function is an umbrella term for an activity which a body can undertake by doing lots of different things. For example, running passenger services involves a large number of intermediate actions, such as procuring and operating rolling stock, employing train drivers and other staff, and selling tickets. The bill requires GBR to run passenger services, a general function, and therefore it does not prescribe exactly what actions it should take in which order to do that.
In comparison, a specific function would be an individual action that the bill requires GBR to do at a certain point or in a certain way. An example of this would be the requirement on GBR to draft an issue the access and use policy in clause 59. This is a specific requirement to kick off the access process and not a general function. The term general is therefore helpful in distinguishing between a specific activity GBR is required to perform and the continuing business of GBR and running the railways.
I can assure the noble Lord that functions are a standard drafting approach used also. For example, in the Communications Act 2009, the Climate Change Act and others. I hope this explanation provides the clarity he seeks and that the noble Lord can withdraw his amendment.
17:37
Speaker 6
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Speaker 6
My Lords, if the noble would be so good. This really is very important. So I didn't think he would adopt that approach, but it's one of the two approaches I offered him, and he's chosen to adopt that one, which say that this is essentially hierarchical. So the general function set out in the bill, of course, subsume a whole load of subsidiary and ancillary functions. Now, I'm still not clear whether these functions are powers or duties.
Does GBR have some choice over whether to carry out these functions, in which case they'd be akin to powers, or are they obliged to do so? But my key question at the moment, now that we've established this, is granted that, of course, to carry out a general function, there were a whole load of subsidiary and ancillary functions you may have to carry out to. I understand that completely. He didn't have to give examples, but he did very helpfully.
But I understand that completely is the functionality, so to speak, of Great British Railways, therefore limited to the functions set out in this clause. In other words, can they do anything else? Are they limited to doing the things that are general functions here? Do they have the power to carry out any other activity? These are really important questions which may end up being tested in court .
And because unfamiliar, I know he's quoted some examples, but generally unfamiliar language is being used. It's unclear to me whether we're talking as the general functions, as being the full scope of gbr's activities or not.
Does GBR have some choice over whether to carry out these functions, in which case they'd be akin to powers, or are they obliged to do so? But my key question at the moment, now that we've established this, is granted that, of course, to carry out a general function, there were a whole load of subsidiary and ancillary functions you may have to carry out to. I understand that completely. He didn't have to give examples, but he did very helpfully.
But I understand that completely is the functionality, so to speak, of Great British Railways, therefore limited to the functions set out in this clause. In other words, can they do anything else? Are they limited to doing the things that are general functions here? Do they have the power to carry out any other activity? These are really important questions which may end up being tested in court .
And because unfamiliar, I know he's quoted some examples, but generally unfamiliar language is being used. It's unclear to me whether we're talking as the general functions, as being the full scope of gbr's activities or not.
17:39
Speaker 3
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Speaker 3
I think I thank the noble Lord for that. I I'm, I'm, I'm at least clear about this, that the functions are more like powers. The duties are the things that GBR must do when when doing the functions. But it isn't limited to those general functions. And indeed, we've already discussed quite extensively what it might do, for example, in property development and with third parties, which because it's a Companies Act act, it can do.
Now, I think I think that's reasonably clear. I, I, I would be happy to discuss this with the noble Lord in, in, in more detail, because I think we're getting tied up in nomenclature. And I think it's, I think it's reasonably clear what, what GBR functions are, which are described in that clause three and described running the railways. But it's also clear that it has in the in the process of of running the railway because of its activity has and is able to do a number of other things.
Let me carry on to amendment 12 if I if I may, amendment 12 would require GBR function to facilitate the provision and use of railway services to be carried out in a fair and non-discriminatory manner. I absolutely agree that GBR should act fairly. However, the duties in the Bill already require that GB acts in the interests of the public, the taxpayers, passengers and freight customers. GBR will act fairly and in accordance with its duties not only when exercising this function, but across the full range of its statutory functions.
We will no doubt discuss this more when we discuss ticket retailing and access, but for now, suffice it to say that there are already protections in the Bill and indeed in wider statutes such as public law principles and the Competition Law. The Competition Act, which applies in full to Great British Railways, that will require GBR to act in a manner that's fair, non-discriminatory and not anti-competitive. This additional requirement would only duplicate the Competition Act requirements, adding uncertainty and administrative burden without increasing protection for non GBR operators.
Amendments 13 and 14 relate to the publishing advice and standards for the railways. I thank the noble Lord for this probing amendment, and I can reassure him, firstly, that the author is absolutely the sole safety regulator for the railway. The Bill does not transfer the safety regulatory functions to GBR, nor does it change the current railway safety regime at all. The RL will continue to exercise its independent safety, regulatory and enforcement functions, including its ability to ensure that GBR and other operators comply in full with all safety legislation requirements.
Comparatively, GBR function to publish standards is a reference to technical standards, which GBR would publish and share with industry as a method of promoting best practice. This is similar to diet, present Network Rail and the train operating companies develop and publish technical standards covering many aspects of their operation. These standards include operation and maintenance protocols, design specifications and engineering guidelines. This does not in any way prevent it from adhering to the safety regime, which is required by law, which is which it is required by law to comply with.
This also does not give GBR any remit over safety regulation. The standards are non-binding and simply designed to support shared learning across the industry. My Lord.
Now, I think I think that's reasonably clear. I, I, I would be happy to discuss this with the noble Lord in, in, in more detail, because I think we're getting tied up in nomenclature. And I think it's, I think it's reasonably clear what, what GBR functions are, which are described in that clause three and described running the railways. But it's also clear that it has in the in the process of of running the railway because of its activity has and is able to do a number of other things.
Let me carry on to amendment 12 if I if I may, amendment 12 would require GBR function to facilitate the provision and use of railway services to be carried out in a fair and non-discriminatory manner. I absolutely agree that GBR should act fairly. However, the duties in the Bill already require that GB acts in the interests of the public, the taxpayers, passengers and freight customers. GBR will act fairly and in accordance with its duties not only when exercising this function, but across the full range of its statutory functions.
We will no doubt discuss this more when we discuss ticket retailing and access, but for now, suffice it to say that there are already protections in the Bill and indeed in wider statutes such as public law principles and the Competition Law. The Competition Act, which applies in full to Great British Railways, that will require GBR to act in a manner that's fair, non-discriminatory and not anti-competitive. This additional requirement would only duplicate the Competition Act requirements, adding uncertainty and administrative burden without increasing protection for non GBR operators.
Amendments 13 and 14 relate to the publishing advice and standards for the railways. I thank the noble Lord for this probing amendment, and I can reassure him, firstly, that the author is absolutely the sole safety regulator for the railway. The Bill does not transfer the safety regulatory functions to GBR, nor does it change the current railway safety regime at all. The RL will continue to exercise its independent safety, regulatory and enforcement functions, including its ability to ensure that GBR and other operators comply in full with all safety legislation requirements.
Comparatively, GBR function to publish standards is a reference to technical standards, which GBR would publish and share with industry as a method of promoting best practice. This is similar to diet, present Network Rail and the train operating companies develop and publish technical standards covering many aspects of their operation. These standards include operation and maintenance protocols, design specifications and engineering guidelines. This does not in any way prevent it from adhering to the safety regime, which is required by law, which is which it is required by law to comply with.
This also does not give GBR any remit over safety regulation. The standards are non-binding and simply designed to support shared learning across the industry. My Lord.
17:42
17:43
Speaker 3
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Speaker 3
I thank my noble friend. I think I can the RSS be the rail standards and safety organisation. It creates standards applicable across the railway generally on some subjects, whereas actually there are a number of. There are a number of standards, technical, more technical standards, for example, with pieces of machinery, pieces of trains, pieces of railway infrastructure which GBR, as a successor to Network Rail, would publish, which are not subject to discussion at RSS.
And indeed train operating companies do that too, with specific fleets of trains. So I think there is a difference. And he's right to draw attention to the rspb's function to do that as well. But this, that. But that doesn't exclude the current activities of Network Rail and train operating companies, which would translate into Great British Railways. The standards include operation and maintenance protocols, design specifications and engineering guidelines. This does not in any way prevent it from adhering to IRR safety regime, which is required by law to comply with.
It also doesn't give GBR any remit over safety regulation. The standards are non-binding and simply designed to support shared learning across the industry. Amendment 14 would limit this same function, so it applied only to services managed by GBR. However, as I've explained, I hope this function does not allow GBR to set binding standards on other operators. There is no need to limit the application of the standards to GBR services alone.
Other operators can ignore them if they really wish to, but equally, allowing standards to be shared promotes best practice and supports a high performing safe railway. I can't see the issue with this, so I hope the noble Lord can withdraw his amendment. I turn to Amendment Amendments 15 and 330, which would add a function for GBR to be a single employer and would mandate a related transfer scheme. As plans progress for the establishment of GBR, we are giving careful consideration to the structure and legal character of the new organisation to ensure delivers not only for passengers and taxpayer, but also for railway staff.
I recognise the huge contribution of the workforce who keep our railways running every day, whether in stations, on trains, signalling, maintenance or in the back office and in management. They they make a huge con con contribution. Whilst I'm determined that GBR works for our staff, the bill is drafted deliberately to give GBR the flexibility to arrange its business as it sees fit. What GBR looks like on day one is not necessarily what it will look like forever, and given the need to transfer train companies and DFT on Tupe principles, which we acknowledge will apply wherever relevant, it would be impossible for GBR to initially be a single employer for from day one, so it is right that the Bill allows GBR to structure its business in response to future changes, rather than fixing this in enduring statute, this amendment would prejudice the continuing process of designing GBR and would reduce the flexibility for GBR to have a phased implementation or to restructure in the future.
I also recognise that railway workers affected by the transition to GBR and their trade unions are looking for clarity. Of course, we've passed a crucial point for many staff, which is that they are now working for a company that is publicly owned and that ownership will endure. The government will continue to keep trade union leaders updated through the Rail Engagement Group, which is the regular forum of engagement between the government and the unions.
And whilst for those reasons, I can't accept this amendment, I would be happy to meet with my noble friend to discuss the transition to GBR and what that means for rail staff in more detail, if that would be helpful. If I can turn to amendment 19 from the noble Lord Lansley, which would amend the definition of GBR functions in relation to service facilities. The bill exempts the provision of service facilities for use by other train operators from GBR.
New access regime. These facilities will be things like maintenance depots, freight terminals and sidings, and they are provided in a wider market in which other suppliers may also participate. For that reason, access to these service facilities will continue to be governed by the existing HRR access regime rather than GBR new one, so that GBR and other providers operate on a level playing field, and third parties can gain fair access to these facilities.
Consistent with that principle, clause three makes it clear that the provision of these service facilities is not a statutory function of GBR, and the bill already provides, therefore already provides the parity of treatment that I believe this amendment is trying to achieve. I would, however, be happy to meet the noble Lord if that would be helpful
And indeed train operating companies do that too, with specific fleets of trains. So I think there is a difference. And he's right to draw attention to the rspb's function to do that as well. But this, that. But that doesn't exclude the current activities of Network Rail and train operating companies, which would translate into Great British Railways. The standards include operation and maintenance protocols, design specifications and engineering guidelines. This does not in any way prevent it from adhering to IRR safety regime, which is required by law to comply with.
It also doesn't give GBR any remit over safety regulation. The standards are non-binding and simply designed to support shared learning across the industry. Amendment 14 would limit this same function, so it applied only to services managed by GBR. However, as I've explained, I hope this function does not allow GBR to set binding standards on other operators. There is no need to limit the application of the standards to GBR services alone.
Other operators can ignore them if they really wish to, but equally, allowing standards to be shared promotes best practice and supports a high performing safe railway. I can't see the issue with this, so I hope the noble Lord can withdraw his amendment. I turn to Amendment Amendments 15 and 330, which would add a function for GBR to be a single employer and would mandate a related transfer scheme. As plans progress for the establishment of GBR, we are giving careful consideration to the structure and legal character of the new organisation to ensure delivers not only for passengers and taxpayer, but also for railway staff.
I recognise the huge contribution of the workforce who keep our railways running every day, whether in stations, on trains, signalling, maintenance or in the back office and in management. They they make a huge con con contribution. Whilst I'm determined that GBR works for our staff, the bill is drafted deliberately to give GBR the flexibility to arrange its business as it sees fit. What GBR looks like on day one is not necessarily what it will look like forever, and given the need to transfer train companies and DFT on Tupe principles, which we acknowledge will apply wherever relevant, it would be impossible for GBR to initially be a single employer for from day one, so it is right that the Bill allows GBR to structure its business in response to future changes, rather than fixing this in enduring statute, this amendment would prejudice the continuing process of designing GBR and would reduce the flexibility for GBR to have a phased implementation or to restructure in the future.
I also recognise that railway workers affected by the transition to GBR and their trade unions are looking for clarity. Of course, we've passed a crucial point for many staff, which is that they are now working for a company that is publicly owned and that ownership will endure. The government will continue to keep trade union leaders updated through the Rail Engagement Group, which is the regular forum of engagement between the government and the unions.
And whilst for those reasons, I can't accept this amendment, I would be happy to meet with my noble friend to discuss the transition to GBR and what that means for rail staff in more detail, if that would be helpful. If I can turn to amendment 19 from the noble Lord Lansley, which would amend the definition of GBR functions in relation to service facilities. The bill exempts the provision of service facilities for use by other train operators from GBR.
New access regime. These facilities will be things like maintenance depots, freight terminals and sidings, and they are provided in a wider market in which other suppliers may also participate. For that reason, access to these service facilities will continue to be governed by the existing HRR access regime rather than GBR new one, so that GBR and other providers operate on a level playing field, and third parties can gain fair access to these facilities.
Consistent with that principle, clause three makes it clear that the provision of these service facilities is not a statutory function of GBR, and the bill already provides, therefore already provides the parity of treatment that I believe this amendment is trying to achieve. I would, however, be happy to meet the noble Lord if that would be helpful
17:48
17:48
17:48
Speaker 9
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Speaker 9
noble Lord. And of course, that just begs the question, why in clause 70? Perhaps we could discuss it before we arrive at that point. Why? In clause 70, Great British Railways is taken out of the definition of being an infrastructure manager for the purposes of the access rights under the 2000 regulations. But while I have the committee's attention for a moment, can I just say my noble friend was asking about what functions Great British Railways can undertake? Of course it.
The clause makes it clear that the statutory functions are distinct from those things that Great British Railways can do as a company. And of course, some of the things we're discussing, like property development, are indeed things that it is doing as a company. But I think we have to bear in mind, and the minister will tell me if I'm wrong about this. We go on to hear about the Secretary of State giving directions to Great British Railways and giving guidance to Great British Railways, but those are in relations to its functions, its statutory functions.
So by definition, it will not extend to the actions that GBR undertakes as a company. I think we need to be very aware that there is that territory called being a company, which is outside the scope of the Secretary of State's directions and guidance.
The clause makes it clear that the statutory functions are distinct from those things that Great British Railways can do as a company. And of course, some of the things we're discussing, like property development, are indeed things that it is doing as a company. But I think we have to bear in mind, and the minister will tell me if I'm wrong about this. We go on to hear about the Secretary of State giving directions to Great British Railways and giving guidance to Great British Railways, but those are in relations to its functions, its statutory functions.
So by definition, it will not extend to the actions that GBR undertakes as a company. I think we need to be very aware that there is that territory called being a company, which is outside the scope of the Secretary of State's directions and guidance.
17:49
17:49
Speaker 4
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Speaker 4
I refute that comment. And for the record, the noble Lord is correct there. And it is an important distinction, as I said. Let. Let me meet him on that. He referred to clause 70. I I'm I I'm I'm not equipped to go into that just now as as he'll appreciate. So I'll, I'll talk to him further about it. Amendment 18 removes the delegated power to add to the list of functions of GBR, whilst the functions listed in clause three cover the breadth of activities we expect GBR to undertake as the directing mind for the railways, it is sensible to provide the flexibility to add functions should the railways change significantly enough to warrant a new function being added.
For example, due to technological development such as in the artificial intelligence space, the power is not expected to be used frequently, if at all, but it future proofs the bill in the event that new activities need to be brought within the scope of the functions. Bringing activity within the functions of the in the bill are several benefits, including that the function then becomes subject to GBR s duties and monitoring. This legislation is expected to govern the railways for a long time as the 1993 act did, so this is a responsible and sensible power.
This power is also reviewed, reviewed by the Delegated Powers Committee, who deemed it acceptable and did not draw it to the attention of the House and in their report on the Bill, which I welcome and look forward to in response to responding to formally in due course, the power can't be used to change or remove functions and is subject to the affirmative resolution. It's also not unprecedented. The National Health Service Act 2006 allows functions to be added to special health authorities via regulations.
I hope that the noble Lord will therefore feel able to withdraw this amendment. Amendments 20 and 110 from the noble Baroness pigeon relate to passenger growth, and I very much agree with her that growing passenger numbers on the railways is vital. It supports economic growth, jobs and homes. It encourages modal shift and can reduce the level of taxpayer subsidy required for the railways. However, GBR general duties in clause 18 already include a duty to promote not only the interests of passengers but also potential passengers.
Excuse me. This already bless you. This already requires GBR to consider how best to encourage new users onto the railways. GBR business plan will also reflect the government's ambitions for passenger growth, including measurable outcomes against which GBR can be held to account. Gbr's other duties, including promoting high performance such as reliability and punctuality, will also contribute to making the railways more appealing to passengers. Transport focused recently found reliability to be the single most important issue for passengers.
GBR will be able to improve reliability by making better whole system decisions on issues such as the choreography of maintenance works. As a commercially minded organisation, GBR will also be naturally incentivised to attract more people to travel by rail, because increasing passenger numbers will increase its own revenue. By contrast, there's no intrinsic motivation for GBR to increase rail freight when there is limited network capacity and freight services are in the clear minority of services.
That's why the bill already includes a freight duty and a freight target. To ensure that freight is given equal weight to passengers and a system where passengers may have naturally taken priority. Otherwise, a stronger or additional passenger equivalent duty or target could actually undermine our ambitions on freight. So I hope the noble Baroness will agree with me that that's not the right outcome. Amendments 80 and 81. Both
For example, due to technological development such as in the artificial intelligence space, the power is not expected to be used frequently, if at all, but it future proofs the bill in the event that new activities need to be brought within the scope of the functions. Bringing activity within the functions of the in the bill are several benefits, including that the function then becomes subject to GBR s duties and monitoring. This legislation is expected to govern the railways for a long time as the 1993 act did, so this is a responsible and sensible power.
This power is also reviewed, reviewed by the Delegated Powers Committee, who deemed it acceptable and did not draw it to the attention of the House and in their report on the Bill, which I welcome and look forward to in response to responding to formally in due course, the power can't be used to change or remove functions and is subject to the affirmative resolution. It's also not unprecedented. The National Health Service Act 2006 allows functions to be added to special health authorities via regulations.
I hope that the noble Lord will therefore feel able to withdraw this amendment. Amendments 20 and 110 from the noble Baroness pigeon relate to passenger growth, and I very much agree with her that growing passenger numbers on the railways is vital. It supports economic growth, jobs and homes. It encourages modal shift and can reduce the level of taxpayer subsidy required for the railways. However, GBR general duties in clause 18 already include a duty to promote not only the interests of passengers but also potential passengers.
Excuse me. This already bless you. This already requires GBR to consider how best to encourage new users onto the railways. GBR business plan will also reflect the government's ambitions for passenger growth, including measurable outcomes against which GBR can be held to account. Gbr's other duties, including promoting high performance such as reliability and punctuality, will also contribute to making the railways more appealing to passengers. Transport focused recently found reliability to be the single most important issue for passengers.
GBR will be able to improve reliability by making better whole system decisions on issues such as the choreography of maintenance works. As a commercially minded organisation, GBR will also be naturally incentivised to attract more people to travel by rail, because increasing passenger numbers will increase its own revenue. By contrast, there's no intrinsic motivation for GBR to increase rail freight when there is limited network capacity and freight services are in the clear minority of services.
That's why the bill already includes a freight duty and a freight target. To ensure that freight is given equal weight to passengers and a system where passengers may have naturally taken priority. Otherwise, a stronger or additional passenger equivalent duty or target could actually undermine our ambitions on freight. So I hope the noble Baroness will agree with me that that's not the right outcome. Amendments 80 and 81. Both
17:53
Speaker 2
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Speaker 2
Lord moves on. He hasn't really addressed the point that I made that in clause 18. I think there's a perverse incentive that somebody coming in with a different mindset to many of us in this room, could reduce the frequency of trains and hike up fares and still meet what's in this legislation. So even if the noble Lord doesn't agree with my amendment about a passenger target, and I accept the debate on that, could he could the government agree to look at whether there's some other wording that could be put in there to strengthen this, to make sure this legislation does what we all want to see more passengers on the railway? Yeah.
17:54
Speaker 4
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Speaker 4
I think I'd say to the noble Baroness this, which is that the the obligations placed on GBR by the long term rail strategy and and the consequent approval by the Secretary of State of the business plan should very adequately deter Great British Railways from seeking to achieve that by diminishing services. And indeed, there was an example in the franchising era of the government being loose with its definition of train services, only to discover that the franchisee had remarkably reduced the subsidy by withdrawing a number of services on, on, on rural branch lines that clearly would not be possible with a decent long term rail strategy and a consequent business plan to which a government should agree.
If I may, I'll just finish on amendments 80 and 81. Both relate to the clause 13 provision, allowing GBR to charter its functions. Amendment 81 I agree that GBR must act reasonably whilst setting charges, and I assure the noble Lord there already . Safeguards in the bill to ensure charges are reasonable. GBR has a duty to ensure that railway service providers, such as other operators, can plan, invest and make decisions about their own businesses.
So GBR must set charges that are consistent with this and don't undermine other people's ability to run viable and successful businesses. Competition will law, as I've said, will apply to GBR, ensuring that charges it sets are not anti-competitive and in this context, an additional reasonable test reasonable reasonableness test is duplicative without delivering any material additional protection. It is also important that GBR can recover appropriate costs and those who access and benefit from the services it provides, and if it were prevented from doing so, the burden would ultimately fall on taxpayer and passengers.
Amendment 81 would provide an appeal route, but all I would say to noble Lord is an appeal route to the IRR is would across every possible charge that GBR could levy is disproportionate, and I've already mentioned the safeguards in existing law to ensure that those charges are fair. The private sector growth target referred to in amendment 114. Nothing in the Bill seeks to exclude or marginalize the contribution of the private sector, but I don't agree that the statutory target is the right approach.
The Bill is absolutely the opportunity for the supply chain, but actually we have to let, in that case the market determine what its contribution is. And finally, on amendment 100 305 from the noble Lord, my noble friend Lord Berkeley, I can assure my noble friend that existing legal rules already allow railway operators to seek recovery of costs and other losses through civil law. A very substantial amount of cost recovery is achieved already, and the limit to it is not to do with legal powers, but the identification of perpetrators who who drive off.
Given what I've set out, I encourage noble lords and baronesses to withdraw their amendments.
If I may, I'll just finish on amendments 80 and 81. Both relate to the clause 13 provision, allowing GBR to charter its functions. Amendment 81 I agree that GBR must act reasonably whilst setting charges, and I assure the noble Lord there already . Safeguards in the bill to ensure charges are reasonable. GBR has a duty to ensure that railway service providers, such as other operators, can plan, invest and make decisions about their own businesses.
So GBR must set charges that are consistent with this and don't undermine other people's ability to run viable and successful businesses. Competition will law, as I've said, will apply to GBR, ensuring that charges it sets are not anti-competitive and in this context, an additional reasonable test reasonable reasonableness test is duplicative without delivering any material additional protection. It is also important that GBR can recover appropriate costs and those who access and benefit from the services it provides, and if it were prevented from doing so, the burden would ultimately fall on taxpayer and passengers.
Amendment 81 would provide an appeal route, but all I would say to noble Lord is an appeal route to the IRR is would across every possible charge that GBR could levy is disproportionate, and I've already mentioned the safeguards in existing law to ensure that those charges are fair. The private sector growth target referred to in amendment 114. Nothing in the Bill seeks to exclude or marginalize the contribution of the private sector, but I don't agree that the statutory target is the right approach.
The Bill is absolutely the opportunity for the supply chain, but actually we have to let, in that case the market determine what its contribution is. And finally, on amendment 100 305 from the noble Lord, my noble friend Lord Berkeley, I can assure my noble friend that existing legal rules already allow railway operators to seek recovery of costs and other losses through civil law. A very substantial amount of cost recovery is achieved already, and the limit to it is not to do with legal powers, but the identification of perpetrators who who drive off.
Given what I've set out, I encourage noble lords and baronesses to withdraw their amendments.
17:57
17:57
17:57
Speaker 10
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Speaker 10
The avoidance of doubt at the last general election been fought solely on the question of his conduct of the office of Secretary of State for transport, that I am sure the result would have been very different and more favourable to the conservative cause. I'm. I'm not going to refer here to the at any length to the question of functions, except to say that I think it's a mess. And I think the. At the end of this debate, probably everybody in the room has thought about it can see that it's a mess.
However, the noble Lord, the minister has offered, kindly offered a meeting with me, and I. I think Lord Lansley is now very much included in that invitation, and possibly other noble lords, to discuss this. Can I ask that that meeting take place reasonably promptly, because I think these issues will return when we, at later stages in committee, rather than being left to the end of committee stage and sort of rush through just ahead of report.
So a meeting on that issue, I think is sensible meeting could be very valuable. I did want to make a comment about the noble Lord, Lord Davis of Brixton. I don't agree that there should be a single employer as such. I think there will be a single employer because I think the unions will get their way. But my noble friend Lord Harper explained the danger to the public of going down that route.
But I do just want to say that I fully expected and was disappointed that the noble Lord, given his background, would have referred to the difficulty with pensions and in particular, the fact that all of these organisations currently have individual pension schemes within the Rail Pension Group, and is the noble Lord the Minister satisfied that it is going to be possible in the timescale he's working towards, namely the designation of GBR in the second half of next year for the Rail Pension Board, trustees and Railpen to achieve a smooth and lawful transition of pension arrangements in that time.
And he may not be able to answer that question now, but I think we must find some way of coming back and discussing this, because pensions are a very important aspect of the remuneration of the employees. Finally, I was looking the minister did give me what I was looking for on the question of safety, and that is an unambiguous assurance, as I understood it, from the despatch box, that the Office of Rail and Road remains the sole safety standard setter.
That's what I was hoping to hear him say. That's what I think he did say. I only say that given the confusion generated by the wording in clause three, the bill would be improved if it spelt out what standards he was referring to to ensure they could not be taken as being safety standards. Since his comments here today in committee, though deathless in one sense because they're in Hansard, may be forgotten by others because because of the squalid circumstances in which this meeting is being held, my Lords, I.
I beg leave to withdraw the amendment.
However, the noble Lord, the minister has offered, kindly offered a meeting with me, and I. I think Lord Lansley is now very much included in that invitation, and possibly other noble lords, to discuss this. Can I ask that that meeting take place reasonably promptly, because I think these issues will return when we, at later stages in committee, rather than being left to the end of committee stage and sort of rush through just ahead of report.
So a meeting on that issue, I think is sensible meeting could be very valuable. I did want to make a comment about the noble Lord, Lord Davis of Brixton. I don't agree that there should be a single employer as such. I think there will be a single employer because I think the unions will get their way. But my noble friend Lord Harper explained the danger to the public of going down that route.
But I do just want to say that I fully expected and was disappointed that the noble Lord, given his background, would have referred to the difficulty with pensions and in particular, the fact that all of these organisations currently have individual pension schemes within the Rail Pension Group, and is the noble Lord the Minister satisfied that it is going to be possible in the timescale he's working towards, namely the designation of GBR in the second half of next year for the Rail Pension Board, trustees and Railpen to achieve a smooth and lawful transition of pension arrangements in that time.
And he may not be able to answer that question now, but I think we must find some way of coming back and discussing this, because pensions are a very important aspect of the remuneration of the employees. Finally, I was looking the minister did give me what I was looking for on the question of safety, and that is an unambiguous assurance, as I understood it, from the despatch box, that the Office of Rail and Road remains the sole safety standard setter.
That's what I was hoping to hear him say. That's what I think he did say. I only say that given the confusion generated by the wording in clause three, the bill would be improved if it spelt out what standards he was referring to to ensure they could not be taken as being safety standards. Since his comments here today in committee, though deathless in one sense because they're in Hansard, may be forgotten by others because because of the squalid circumstances in which this meeting is being held, my Lords, I.
I beg leave to withdraw the amendment.
18:00
18:01
18:01
Speaker 2
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Speaker 2
My lords are. I rise quite nervously as I am definitely not a rail expert. And this group of amendments actually isn't really about the railways. And the room is full of people who are huge rail enthusiasts. There are quite a lot of, of, of amendments in this group, and they are all, I think, aiming to do the same thing, which is to make sure that in creating great British Railways, we don't adversely affect the current competitive market for online retail ticketing services.
So I rise to speak to a series of amendments in my name. 1050 253 136 and 139 also to speak to amendments in the name of my noble friend Lord young, whose amendments 48, 117 and 211, to which I've added my name, and also to support some other amendments, that I was just not organized enough to put my name to. Amendments. 11 131 sorry. 113149 5180 181, 182, 212, and 328.
So, my Lords, if you will humor me, I'd like to start by trying to set a bit of context for the whole group to try and explain why I think we should be worried about this, why those of you that are not interested in digital as I am, should care about the importance of this group. First of all, the Competition and Markets Authority has said they are worried. In April 2025, their consultation response to the government's consultation on the future of the railways was very, very clear that this is a problem.
They're concerned that the risks of actual and perceived self-preferencing are likely to be greater the more closely ticketing is integrated with Gbr's core activities, and on the face of the bill, ticketing is very closely integrated into Gbr's activities. The CMA was very clear that it was important to send the right signals to both independent retailers and investors that this would remain an open, competitive market. So the CMA's worried. Secondly, prior experience in other networked markets shows that we should all be worried.
Now, my personal experience, as I said at second reading, is from the telecoms market, where we know that BT's ownership of Openreach led to very clear self-preferencing for BT retail and along consumer campaign to separate out Openreach, to force clarity and transparency. And actually retail competition in telecoms has been hugely helpful, while at the same time acknowledging the need for that single Openreach infrastructure organisation. That only happened because of very clear competition regulation overseen by Ofcom.
So we know that if you don't have that, you actually get bad behaviour from the integrated virtual network monopoly. And then thirdly, the other reason we should be worried about this is this is actually already happening. Anyone who is used to having to use delay repay will notice that it is only very recently that DeLay repay has been integrated and it's only partially integrated into the Trainline app. That's because the train operating companies refuse to do it because it was.
They wanted to keep control of that. Only in the last two months. GWR and transport for Wales have both announced new ticket products that can't be sold by third party retailers. Not in principle. They're much cleverer than that, my Lords. It's in practice. There are technical reasons why those products can't be sold by other retailers, because the systems integration isn't quite there or the data isn't gathered.
In one case, it's because the independent retailers don't capture date of birth. This isn't by accident, my Lord. This is what integrated, vertically integrated monopolies do. They design products that make it very hard for their competitors to, to, to, to, to replicate. So we should worry about this as we debate this bill, even if we're not that interested in digital retailing. So I would like to thank my the noble Lord, the Minister, for his time on this.
I think we had a very constructive meeting yesterday, and I know he's had constructive meetings with with other noble Lords, both he and his team. I came away from my meeting with him, as I did from his speech at second reading, with the impression that he does agree that competition in retail ticketing is a good thing, and I think we would all welcome him putting that very firmly and clearly on the record today. The question is whether there are sufficient safeguards and signals on the face of this bill to make that actually the case.
I personally don't think there are. And just to try and decode this quite large, complex group, I think there are three areas that the amendments in this group are seeking to get clarity on where without it, there is a real risk that what I think is actually genuine consensus that we don't want to nationalise ticketing, we want to have an open competitive market in ticketing won't happen. The first area is getting clarity on the face of the bill that GBR will be required to compete on the same economic terms as independent retailers.
I don't think that is currently clear, and there are a number of amendments attempting to make that clear in this group. The second area is getting clarity that O R will have a competition duty as it relates to enforcing the retail code of practice. So there are real ex-ante safeguards to prevent anti-competitive behaviour from GBR. And then the third area is that independent retailers will be able to appeal the decisions of of the Orer as it relates to the retail Code of conduct.
So if you think, my Lords, those are three layers of the onion. First of all, is GBR required to create a level playing field? Secondly, has the Or got an obligation to oversee that level playing field? And thirdly, have independent retailers got a means of appealing if it goes wrong? So if we take each of those in turn, starting with is there a level playing field? My experience from telecoms, my Lords, is that by far the best way to do this is functional separation of the network from the competitive retail market.
Having spent a decade trying to make that happen in telecoms, I'm pretty certain that it is better than trying to design the regulations. So I have considerable sympathy with my noble friend beside me, Lord Holmes's Amendment 182, but I. And I think if you read in detail the CMA's response to the consultation last year, so do they. But I do appreciate that the government and the noble Lord. The Minister has consistently rejected that organisational solution, and if the government is going to reject that solution, we really do need hard and fast guarantees that the obvious risk of abuse of that vertically integrated power can be mitigated.
So actually, by refusing functional separation, it makes all the more important that we get onto the face of the bill. The requirements of GBR to create economic parity. So as the CMA themselves said, the less functionally separate, the more important it is that these rules are clear. There are a number of amendments in this group, specifically amendments ten, 11, 31, 48, 49, 50, 117, and 181, which all separately try and achieve this.
I accept we don't need all of those amendments, my Lords. And I think it's actually a function of the strength of feeling across the House that you've got so many competing amendments attempting to do the same thing. If I was to choose, I actually think amendment 48, in the name of my noble friend Lord young, is the most important and the strongest, putting it very clearly into Gbr's licence. But I very much hope that we can have a constructive debate with the noble Lord, the Minister, on how we do this.
And I. I'd like to ask him a few questions about this. I fear he will say that we don't need to do this, because it will all be set out in the retail code of conduct, but as that's not been published even in draft form, it's. It's impossible to be sure. So can the noble Lord the Minister, confirm when the Retail Code of Conduct will the draft code of conduct will be published? Can you confirm that it will state clearly that Gbr's retail ticketing operation will be subject to the Subsidy Control Act? Can he confirm that GBR will be required to publish separate accounts for their retail operations? I understand that he has indicated that it won't, but I really am flabbergasted because just to manage the retail operations well, surely GBR will need to know whether it's making money or not.
So those accounts should exist. It's just a question of whether they're willing to be transparent about it. Can he confirm that the that the that the state's. Sorry, I've lost my train of thought here. Can you confirm that it will state clearly that the retail code of conduct will state clearly that GBR retail ticketing operations will be subject to the Subsidy Control Act? And could he explain why it's better not to be clear in this that the.
That Parliament's clear intention is that GBR should not adversely affect competition in retail ticketing. So I can't understand why you wouldn't put one of these amendments on the face of the bill. My Lord, if, as I am sure the noble Lord, the minister does agree, we want to have a competitive market. So the other digital areas we've learned to our cost and we've learnt it very recently in online safety, even when there is real cross-party support for for a position, if we don't get it in the bill, the regulator is capable of misinterpreting it.
And as the noble Lord, the minister has said himself, this is a once in a generation piece of legislation. I think it's really important that we get the structure of this market right. So that's the first group. I promise I will be quicker on the second two. The second group of amendments within this group are aim to make sure that we're clear about the role of the Orer. These are amendments 136 and 139, both in my my name, that make it clear that the competition duty should apply to the enforcement of Gbr's license condition as it relates to the Retail Code of practice, and when ORR assesses Gbr's performance to the extent it concerns retail ticketing.
Now, I know that the government will say that this isn't necessary, that it will all be set out in the code of conduct, and it's already clear that this is a job, in which case, let's just make it clear on the face of the bill. And I would say there are a number of reasons why we really need to be clear about this. This is not our job at the moment. They don't have the skills and the experience needed in retail ticketing, and they're going to need encouragement to build it, especially when there is so much for them to do in their core area of expertise of running the railways.
So I'm sure they have the best possible intentions. But we know that actually running these regulators is really quite hard. And you need to make sure that as we create one of the country's largest quangos in GBRORR, knows that this is one of their jobs to keep it honest. And if I don't think if you don't have this on the face of the bill, I really worry that as a retail code of conduct is amended in five years or ten years or 15 years, it just gently softens the amount of focus the O, r, r needs to have on this.
And before you know it, you actually have another monopoly market where consumers are the ones who pay the price. It seems unnecessarily risky to to not make these quite simple changes. And then this takes us to the third group, which is let's assume that with the best possible intentions, even though we've got it on the face of the bill, the ORR doesn't get regulation right. Regulations hard, particularly when it's new. So amendments 52 and 53 in my name provide for a merit based appeal of orders decisions as currently drafted.
There are the. There are two means of appealing anti-competitive actions in this market for independent retailers. They can use judicial review to appeal the process by which order has come to its decisions, or they can follow Standard Competition Act ex post complaints procedures and complain to the CMA. The problem with the latter is that it is incredibly costly and all the harm is done before you get any redress. And the problem with the former is that this is new, and it's entirely possible that it's not the process that the ORR gets wrong.
It's actually the detailed technical solution. Now I get almost sort of PTSD when I think about this from my telecoms days, because we used to spend hours and hours arguing with Ofcom and with DCMs about merit based appeal versus judicial review. Now the risks of a merits based appeal is when you have big tech with completely unlimited legal budgets, fighting against minnows, in which case actually merits based appeal can really slow down the work of a regulator.
We don't have that in this case. My Lords, I sincerely hope that GBR isn't going to have enormous legal budgets funded by the taxpayer to fight competition cases, and the independent retailers we're talking about are not of the scale of the tech titans. So I don't think that a merits based appeal is as dangerous. And my experience from telecoms is that actually in the beginning of a new regime, merits based appeals can make the difference between the small independent surviving and them being killed while they win the argument in the courts.
So with that, my Lords, I know I've used every second of my time available. I promise I will sit down and beg leave to move my amendments.
So I rise to speak to a series of amendments in my name. 1050 253 136 and 139 also to speak to amendments in the name of my noble friend Lord young, whose amendments 48, 117 and 211, to which I've added my name, and also to support some other amendments, that I was just not organized enough to put my name to. Amendments. 11 131 sorry. 113149 5180 181, 182, 212, and 328.
So, my Lords, if you will humor me, I'd like to start by trying to set a bit of context for the whole group to try and explain why I think we should be worried about this, why those of you that are not interested in digital as I am, should care about the importance of this group. First of all, the Competition and Markets Authority has said they are worried. In April 2025, their consultation response to the government's consultation on the future of the railways was very, very clear that this is a problem.
They're concerned that the risks of actual and perceived self-preferencing are likely to be greater the more closely ticketing is integrated with Gbr's core activities, and on the face of the bill, ticketing is very closely integrated into Gbr's activities. The CMA was very clear that it was important to send the right signals to both independent retailers and investors that this would remain an open, competitive market. So the CMA's worried. Secondly, prior experience in other networked markets shows that we should all be worried.
Now, my personal experience, as I said at second reading, is from the telecoms market, where we know that BT's ownership of Openreach led to very clear self-preferencing for BT retail and along consumer campaign to separate out Openreach, to force clarity and transparency. And actually retail competition in telecoms has been hugely helpful, while at the same time acknowledging the need for that single Openreach infrastructure organisation. That only happened because of very clear competition regulation overseen by Ofcom.
So we know that if you don't have that, you actually get bad behaviour from the integrated virtual network monopoly. And then thirdly, the other reason we should be worried about this is this is actually already happening. Anyone who is used to having to use delay repay will notice that it is only very recently that DeLay repay has been integrated and it's only partially integrated into the Trainline app. That's because the train operating companies refuse to do it because it was.
They wanted to keep control of that. Only in the last two months. GWR and transport for Wales have both announced new ticket products that can't be sold by third party retailers. Not in principle. They're much cleverer than that, my Lords. It's in practice. There are technical reasons why those products can't be sold by other retailers, because the systems integration isn't quite there or the data isn't gathered.
In one case, it's because the independent retailers don't capture date of birth. This isn't by accident, my Lord. This is what integrated, vertically integrated monopolies do. They design products that make it very hard for their competitors to, to, to, to, to replicate. So we should worry about this as we debate this bill, even if we're not that interested in digital retailing. So I would like to thank my the noble Lord, the Minister, for his time on this.
I think we had a very constructive meeting yesterday, and I know he's had constructive meetings with with other noble Lords, both he and his team. I came away from my meeting with him, as I did from his speech at second reading, with the impression that he does agree that competition in retail ticketing is a good thing, and I think we would all welcome him putting that very firmly and clearly on the record today. The question is whether there are sufficient safeguards and signals on the face of this bill to make that actually the case.
I personally don't think there are. And just to try and decode this quite large, complex group, I think there are three areas that the amendments in this group are seeking to get clarity on where without it, there is a real risk that what I think is actually genuine consensus that we don't want to nationalise ticketing, we want to have an open competitive market in ticketing won't happen. The first area is getting clarity on the face of the bill that GBR will be required to compete on the same economic terms as independent retailers.
I don't think that is currently clear, and there are a number of amendments attempting to make that clear in this group. The second area is getting clarity that O R will have a competition duty as it relates to enforcing the retail code of practice. So there are real ex-ante safeguards to prevent anti-competitive behaviour from GBR. And then the third area is that independent retailers will be able to appeal the decisions of of the Orer as it relates to the retail Code of conduct.
So if you think, my Lords, those are three layers of the onion. First of all, is GBR required to create a level playing field? Secondly, has the Or got an obligation to oversee that level playing field? And thirdly, have independent retailers got a means of appealing if it goes wrong? So if we take each of those in turn, starting with is there a level playing field? My experience from telecoms, my Lords, is that by far the best way to do this is functional separation of the network from the competitive retail market.
Having spent a decade trying to make that happen in telecoms, I'm pretty certain that it is better than trying to design the regulations. So I have considerable sympathy with my noble friend beside me, Lord Holmes's Amendment 182, but I. And I think if you read in detail the CMA's response to the consultation last year, so do they. But I do appreciate that the government and the noble Lord. The Minister has consistently rejected that organisational solution, and if the government is going to reject that solution, we really do need hard and fast guarantees that the obvious risk of abuse of that vertically integrated power can be mitigated.
So actually, by refusing functional separation, it makes all the more important that we get onto the face of the bill. The requirements of GBR to create economic parity. So as the CMA themselves said, the less functionally separate, the more important it is that these rules are clear. There are a number of amendments in this group, specifically amendments ten, 11, 31, 48, 49, 50, 117, and 181, which all separately try and achieve this.
I accept we don't need all of those amendments, my Lords. And I think it's actually a function of the strength of feeling across the House that you've got so many competing amendments attempting to do the same thing. If I was to choose, I actually think amendment 48, in the name of my noble friend Lord young, is the most important and the strongest, putting it very clearly into Gbr's licence. But I very much hope that we can have a constructive debate with the noble Lord, the Minister, on how we do this.
And I. I'd like to ask him a few questions about this. I fear he will say that we don't need to do this, because it will all be set out in the retail code of conduct, but as that's not been published even in draft form, it's. It's impossible to be sure. So can the noble Lord the Minister, confirm when the Retail Code of Conduct will the draft code of conduct will be published? Can you confirm that it will state clearly that Gbr's retail ticketing operation will be subject to the Subsidy Control Act? Can he confirm that GBR will be required to publish separate accounts for their retail operations? I understand that he has indicated that it won't, but I really am flabbergasted because just to manage the retail operations well, surely GBR will need to know whether it's making money or not.
So those accounts should exist. It's just a question of whether they're willing to be transparent about it. Can he confirm that the that the that the state's. Sorry, I've lost my train of thought here. Can you confirm that it will state clearly that the retail code of conduct will state clearly that GBR retail ticketing operations will be subject to the Subsidy Control Act? And could he explain why it's better not to be clear in this that the.
That Parliament's clear intention is that GBR should not adversely affect competition in retail ticketing. So I can't understand why you wouldn't put one of these amendments on the face of the bill. My Lord, if, as I am sure the noble Lord, the minister does agree, we want to have a competitive market. So the other digital areas we've learned to our cost and we've learnt it very recently in online safety, even when there is real cross-party support for for a position, if we don't get it in the bill, the regulator is capable of misinterpreting it.
And as the noble Lord, the minister has said himself, this is a once in a generation piece of legislation. I think it's really important that we get the structure of this market right. So that's the first group. I promise I will be quicker on the second two. The second group of amendments within this group are aim to make sure that we're clear about the role of the Orer. These are amendments 136 and 139, both in my my name, that make it clear that the competition duty should apply to the enforcement of Gbr's license condition as it relates to the Retail Code of practice, and when ORR assesses Gbr's performance to the extent it concerns retail ticketing.
Now, I know that the government will say that this isn't necessary, that it will all be set out in the code of conduct, and it's already clear that this is a job, in which case, let's just make it clear on the face of the bill. And I would say there are a number of reasons why we really need to be clear about this. This is not our job at the moment. They don't have the skills and the experience needed in retail ticketing, and they're going to need encouragement to build it, especially when there is so much for them to do in their core area of expertise of running the railways.
So I'm sure they have the best possible intentions. But we know that actually running these regulators is really quite hard. And you need to make sure that as we create one of the country's largest quangos in GBRORR, knows that this is one of their jobs to keep it honest. And if I don't think if you don't have this on the face of the bill, I really worry that as a retail code of conduct is amended in five years or ten years or 15 years, it just gently softens the amount of focus the O, r, r needs to have on this.
And before you know it, you actually have another monopoly market where consumers are the ones who pay the price. It seems unnecessarily risky to to not make these quite simple changes. And then this takes us to the third group, which is let's assume that with the best possible intentions, even though we've got it on the face of the bill, the ORR doesn't get regulation right. Regulations hard, particularly when it's new. So amendments 52 and 53 in my name provide for a merit based appeal of orders decisions as currently drafted.
There are the. There are two means of appealing anti-competitive actions in this market for independent retailers. They can use judicial review to appeal the process by which order has come to its decisions, or they can follow Standard Competition Act ex post complaints procedures and complain to the CMA. The problem with the latter is that it is incredibly costly and all the harm is done before you get any redress. And the problem with the former is that this is new, and it's entirely possible that it's not the process that the ORR gets wrong.
It's actually the detailed technical solution. Now I get almost sort of PTSD when I think about this from my telecoms days, because we used to spend hours and hours arguing with Ofcom and with DCMs about merit based appeal versus judicial review. Now the risks of a merits based appeal is when you have big tech with completely unlimited legal budgets, fighting against minnows, in which case actually merits based appeal can really slow down the work of a regulator.
We don't have that in this case. My Lords, I sincerely hope that GBR isn't going to have enormous legal budgets funded by the taxpayer to fight competition cases, and the independent retailers we're talking about are not of the scale of the tech titans. So I don't think that a merits based appeal is as dangerous. And my experience from telecoms is that actually in the beginning of a new regime, merits based appeals can make the difference between the small independent surviving and them being killed while they win the argument in the courts.
So with that, my Lords, I know I've used every second of my time available. I promise I will sit down and beg leave to move my amendments.
18:16
18:16
18:16
18:16
Speaker 6
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Speaker 6
My Lords, I've added my name to five amendments in this group. I'm the lead name on amendment 31, which requires the Secretary of State to issue direction to promote fair competition. And I'm the lead name on amendment 48, which my noble friend referred to. It has the same objective as all the other amendments, particularly those ably moved by my noble friend. But it does so by making it a condition of GBR license that GBR does not distort the market in ticket sales.
And the advantage of that amendment is that it is upstream. It is proactive in that GBR won't get its license until they have satisfied not just amendment 48, but in conjunction with amendment 47 that the CMA have signed off before they get the licence. The necessary precautions and provisions that my noble friend has just referred to to make sure that any competition is is fair. The other amendments promote a duty on GBR to compete fairly, but they only bite if it is alleged that they're not doing that.
So the advantage of amendment 48, in conjunction with 47 and 49, is that it is upstream in hopes to avoid the problem. I'm grateful to the Minister for the meeting, which he held on September the 3rd, when he confirmed again that he wanted a fair and open market when it came to retailing tickets. There was some good news at that meeting and that the minister confirmed that GBR will not be selling tickets that only GBR can sell a practice my noble friend referred to.
He confirmed that anything that GBR sells will be available to online retailers, and it would be helpful if we could have that on the record. The have already done a review of the benefits of active retail market, and this is what they said in 2015. Third party retailers play a key role in improving ticketing for passengers. They offer different ways to access information about rail fares and journeys, provide more choice in where and how to buy tickets.
They also play a role in expanding the rail market to the benefit of the train operators and taxpayers, and in putting competitive pressure on the talks to improve their offering, including by innovating. That's the end of that quote. Then there was a recent review by a firm called Teleios, and they estimated that third party retailers added an extra £450 million per year in additional revenue for the rail industry by attracting new customers, reducing friction in the rail journey and supporting revenue protection.
It's the independent sector that actually pioneered digital ticketing. They paid 70% of the 30 million upgrade to the new barcode infrastructure. Now those benefits can carry through to GBR, but only if there is fair and open competition. Now, the independent retailers are used to competing with train operating companies. At the moment, they are actually prevented from unconstrained subsidy. Their retailing by the public service obligations in transport, and they're happy to continue to compete with GBR, but they're anxious that there should be a level playing field.
As my noble friend has just explained, she quoted from the CMA. But the following sentence adds force to her argument. What they said about the risks is this in a more closely integrated model, additional safeguards are likely to be required in order to ensure the government's aim to ensure the sector benefits from the effects of fair and open competition between the GBR and the Tpas, and it is those additional safeguards that are actually the subject of all these amendments.
Now, one possible solution would have been to adopt the SNCF model, a publicly owned French railway company. Their website is a separately owned company, but the minister has made it absolutely clear that he doesn't want that option. He wants an integrated GDPR, so I won't pursue it in that particular form. But insisting on an integrated model doesn't mean that the costs of online retailing should not be identified. A point made by my noble friend.
Separate and transparent financial accounting should be a cornerstone of the safeguards that the CMA and the author wants. My noble friend referred to British Telecom, and there is a parallel here. Both GBR and British Telecom owned the network, but sold services using that network in competition with others. And the solution is my noble friend referred to insisted on by the regulators was clear separation. Can I draw on my own experience as a former treasurer in an external.
Indeed a former transport Secretary, to outline the risks that I see ahead in the next few years, there's going to be enormous pressure on the Department of Transport. They are an unprotected department, and the IFS have estimated that they'll have to cut their budget by 3%. in between now and 2029. And so they will get a letter from the Treasury asking them to identify savings of between 5 and 10% in cash terms in order to keep the government within its fiscal target.
And the Secretary of State will reply, thanking the Treasury and courteous terms, saying that they can only meet that target, thereby cutting investment, cutting the rolling stock programme which impacts on growth, all by putting up ticket prices, which impacts on the CPI, or by cutting branch lines that run through a whole lot of ministerial constituencies. The Treasury will then go through the department's budget line by line and suggest savings. They will ask why so much has been spent on first class travel, why they have so many press officers.
But in relation to this debate, they will say to GBR, why are you paying £200 million in commission to independent retailers when GBR has its own website and they will suggest to the Department of Transport that they cut the commission from 4.5% to 2%, and they will say historically it was 10% and it was cut and it was cut again by the RDG to 4.5% in, I think, 2021. And the Treasury will argue that the pain should be shared not just by the Department of Transport, but by the independent retailers and with AI.
Why seeking new markets, doing more advertising, they can reduce their costs. They. The online retailers will say this totally destroys our business model. There's no way we can survive on 2%. It will drive us out of business. There will then be no pressure to innovate, there will be no consumer choice, and we will be left with a GBR monopoly. As I said, with no pressure to innovate or improve passenger passenger standards, they may actually go further and say the website that should be taken down is actually GBR.
They will say there's no way GBR could survive on 2%. They may well allege that the website costs far too much to set up, but it's overstaffed that the costs of the premises occupied by the website aren't accurately reflected in the cost. Now, I don't take sides in that great debate, but the only way it's going to be resolved by the author or the CMA is if there is some figures, some facts which identify exactly what the costs are involved in GB exercise.
Now, the Minister may argue that these amendments aren't needed because GBR will already be bound by competition law, which it is, and there's already a statutory obligation to do what I've said. And what we're doing simply duplicates that obligation. But how will that competition law be enforced if we don't have the data? He may also argue that GBR is an integral entity, quite different from an online retailer, that online retailing is lumped together with the ticket offices and the call centres, and it is quite impractical for GBR to identify one means of selling their ticket from the other ones.
And it makes no sense to regulate online retailing separately from all the others. What they want to do is lump it all together. So Gbr's online harm online arm. Sorry. Can hide inside the retail function. And again, that argument sits uneasily with a commitment to fair and open competition. The station ticket offices and the call centres don't compete with the online market. The website does, online retailing does, and treating all retailing as one function allows GBR to claim its online arm is merely part of a retail, a broader retail activity, enabling it to argue that competition duties don't apply to the online part .
And, crucially, it allows the cross-subsidy from infrastructure budgets to be buried inside retailing and enables GBR to avoid the cost of sale parity by hiding online costs. So I notice that these amendments are not just signed by conservatives, by Liberal Democrats and indeed by Labour members. So I think there is a real imperative on the minister to indicate some flexibility on this matter, some willingness to have further discussions and, crucially, a willingness to table some of the amendments or variations on them.
The assurances that all those who signed the amendments are after.
And the advantage of that amendment is that it is upstream. It is proactive in that GBR won't get its license until they have satisfied not just amendment 48, but in conjunction with amendment 47 that the CMA have signed off before they get the licence. The necessary precautions and provisions that my noble friend has just referred to to make sure that any competition is is fair. The other amendments promote a duty on GBR to compete fairly, but they only bite if it is alleged that they're not doing that.
So the advantage of amendment 48, in conjunction with 47 and 49, is that it is upstream in hopes to avoid the problem. I'm grateful to the Minister for the meeting, which he held on September the 3rd, when he confirmed again that he wanted a fair and open market when it came to retailing tickets. There was some good news at that meeting and that the minister confirmed that GBR will not be selling tickets that only GBR can sell a practice my noble friend referred to.
He confirmed that anything that GBR sells will be available to online retailers, and it would be helpful if we could have that on the record. The have already done a review of the benefits of active retail market, and this is what they said in 2015. Third party retailers play a key role in improving ticketing for passengers. They offer different ways to access information about rail fares and journeys, provide more choice in where and how to buy tickets.
They also play a role in expanding the rail market to the benefit of the train operators and taxpayers, and in putting competitive pressure on the talks to improve their offering, including by innovating. That's the end of that quote. Then there was a recent review by a firm called Teleios, and they estimated that third party retailers added an extra £450 million per year in additional revenue for the rail industry by attracting new customers, reducing friction in the rail journey and supporting revenue protection.
It's the independent sector that actually pioneered digital ticketing. They paid 70% of the 30 million upgrade to the new barcode infrastructure. Now those benefits can carry through to GBR, but only if there is fair and open competition. Now, the independent retailers are used to competing with train operating companies. At the moment, they are actually prevented from unconstrained subsidy. Their retailing by the public service obligations in transport, and they're happy to continue to compete with GBR, but they're anxious that there should be a level playing field.
As my noble friend has just explained, she quoted from the CMA. But the following sentence adds force to her argument. What they said about the risks is this in a more closely integrated model, additional safeguards are likely to be required in order to ensure the government's aim to ensure the sector benefits from the effects of fair and open competition between the GBR and the Tpas, and it is those additional safeguards that are actually the subject of all these amendments.
Now, one possible solution would have been to adopt the SNCF model, a publicly owned French railway company. Their website is a separately owned company, but the minister has made it absolutely clear that he doesn't want that option. He wants an integrated GDPR, so I won't pursue it in that particular form. But insisting on an integrated model doesn't mean that the costs of online retailing should not be identified. A point made by my noble friend.
Separate and transparent financial accounting should be a cornerstone of the safeguards that the CMA and the author wants. My noble friend referred to British Telecom, and there is a parallel here. Both GBR and British Telecom owned the network, but sold services using that network in competition with others. And the solution is my noble friend referred to insisted on by the regulators was clear separation. Can I draw on my own experience as a former treasurer in an external.
Indeed a former transport Secretary, to outline the risks that I see ahead in the next few years, there's going to be enormous pressure on the Department of Transport. They are an unprotected department, and the IFS have estimated that they'll have to cut their budget by 3%. in between now and 2029. And so they will get a letter from the Treasury asking them to identify savings of between 5 and 10% in cash terms in order to keep the government within its fiscal target.
And the Secretary of State will reply, thanking the Treasury and courteous terms, saying that they can only meet that target, thereby cutting investment, cutting the rolling stock programme which impacts on growth, all by putting up ticket prices, which impacts on the CPI, or by cutting branch lines that run through a whole lot of ministerial constituencies. The Treasury will then go through the department's budget line by line and suggest savings. They will ask why so much has been spent on first class travel, why they have so many press officers.
But in relation to this debate, they will say to GBR, why are you paying £200 million in commission to independent retailers when GBR has its own website and they will suggest to the Department of Transport that they cut the commission from 4.5% to 2%, and they will say historically it was 10% and it was cut and it was cut again by the RDG to 4.5% in, I think, 2021. And the Treasury will argue that the pain should be shared not just by the Department of Transport, but by the independent retailers and with AI.
Why seeking new markets, doing more advertising, they can reduce their costs. They. The online retailers will say this totally destroys our business model. There's no way we can survive on 2%. It will drive us out of business. There will then be no pressure to innovate, there will be no consumer choice, and we will be left with a GBR monopoly. As I said, with no pressure to innovate or improve passenger passenger standards, they may actually go further and say the website that should be taken down is actually GBR.
They will say there's no way GBR could survive on 2%. They may well allege that the website costs far too much to set up, but it's overstaffed that the costs of the premises occupied by the website aren't accurately reflected in the cost. Now, I don't take sides in that great debate, but the only way it's going to be resolved by the author or the CMA is if there is some figures, some facts which identify exactly what the costs are involved in GB exercise.
Now, the Minister may argue that these amendments aren't needed because GBR will already be bound by competition law, which it is, and there's already a statutory obligation to do what I've said. And what we're doing simply duplicates that obligation. But how will that competition law be enforced if we don't have the data? He may also argue that GBR is an integral entity, quite different from an online retailer, that online retailing is lumped together with the ticket offices and the call centres, and it is quite impractical for GBR to identify one means of selling their ticket from the other ones.
And it makes no sense to regulate online retailing separately from all the others. What they want to do is lump it all together. So Gbr's online harm online arm. Sorry. Can hide inside the retail function. And again, that argument sits uneasily with a commitment to fair and open competition. The station ticket offices and the call centres don't compete with the online market. The website does, online retailing does, and treating all retailing as one function allows GBR to claim its online arm is merely part of a retail, a broader retail activity, enabling it to argue that competition duties don't apply to the online part .
And, crucially, it allows the cross-subsidy from infrastructure budgets to be buried inside retailing and enables GBR to avoid the cost of sale parity by hiding online costs. So I notice that these amendments are not just signed by conservatives, by Liberal Democrats and indeed by Labour members. So I think there is a real imperative on the minister to indicate some flexibility on this matter, some willingness to have further discussions and, crucially, a willingness to table some of the amendments or variations on them.
The assurances that all those who signed the amendments are after.
18:27
18:27
18:27
18:27
Speaker 11
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Speaker 11
My Lords, can I first apologise to everyone for not being here at the start of proceedings? Noble Lords puts me on to the Economic Affairs Committee yesterday. It had its inaugural meeting this afternoon and they demanded my presence. So I am so sorry to have missed the first two groupings, but have been here for this one. I rise to speak to the two amendments, which I have added my name to number 117, that Lord young has just referred to, and to 136 in Baroness Harding's name, and my reasons for supporting them parallel closely the arguments that we've heard.
I didn't have the distinguished history of being a real minister in the way Lord young has had, at least not in Westminster. But I did have that role in the Scottish Parliament, and I understand the risks of unprotected departments, and therefore we have a duty in the Bill to consider how do we protect the incredible digital innovation that we have seen in the provision of retailing services that have been widely welcomed by passengers across the country, and Baroness Harding and I share a common interest, as she has said, in the whole area of digital regulation and the risk of leaving ambiguity surrounding the role of regulator and not having the obligations on the face of the bill may lead to unintended consequences down the line.
I would like to thank the minister and officials for the recent engagement that they've had with noble Lords around the intent in these areas of rail retailing, and I do appreciate that. Prior to the report stage, the retail Code of Practice will be published, and that will go some way to allowing all parties to assess if the code meets the government's stated objective of fair competition in retailing. Can I, in the time available to me, just touch on three specific areas of concern that we've.
These. These amendments speak to. The first one is the effective route of appeal, where people feel Self-preferencing has happened and as is recognised in the Bill, the retail retail market will be a new area for the ORR and can I suggest to the Minister that he might think again about whether an appeal to the order shouldn't just be on the basis of process, but on the merits of the case of how the decision is taken, not least because the evidence from the CMA and indeed from Europe, is that there is a material risk of a state based entity engaging in self-preferencing.
And therefore, if our objective here is to uphold a route of appeal, perhaps an entirely ex post process, as we've heard, is not the most effective approach to market regulation. In the case where there was any distorting market competition, a remedy of that kind could perhaps take years, and that may merit further consideration. Secondly, there is, I think, a debate to be had about who subsidizes our retailing, because if you look back to your what is the the what is the the way in which we'll establish how subsidize the issue or otherwise of subsidy takes place, whether that is via the Subsidy Act? There is concern, I think, that we have known GB are a very different body from that which has existed for the last 30 years.
It is a single vertically integrated entity. And so understandably, I think there is a desire for the appropriate safeguards to ensure that GB s own online retailing will not have more advantageous terms than other retailers. Thirdly, and finally, I think to demonstrate competition, as others have suggested, it would be helpful to have transparent and separate accounting. And in making that request, I recognise that that is something that is now standard practice in a range of other sectors, including telecoms, the BBC energy.
And so the request for separate accounting is not necessarily a bureaucratic one, but one that builds confidence in the basis of competition and perhaps addresses the CMA's conclusion that the risks of self-preferencing, as we've heard, are real in retail and additional safeguards may be required. That said, I am very grateful for the collaborative spirit which the Minister has brought to the consideration of this bill. I welcome the fact that the code is to be forthcoming before the report stage, and I look forward to the Minister giving consideration as to what is the balance of what appears in the code and what might appear on the face of the bill to provide a solution in an area where I think there is a common commitment to fair competition, to continue innovation as we move forward? Thank you.
I didn't have the distinguished history of being a real minister in the way Lord young has had, at least not in Westminster. But I did have that role in the Scottish Parliament, and I understand the risks of unprotected departments, and therefore we have a duty in the Bill to consider how do we protect the incredible digital innovation that we have seen in the provision of retailing services that have been widely welcomed by passengers across the country, and Baroness Harding and I share a common interest, as she has said, in the whole area of digital regulation and the risk of leaving ambiguity surrounding the role of regulator and not having the obligations on the face of the bill may lead to unintended consequences down the line.
I would like to thank the minister and officials for the recent engagement that they've had with noble Lords around the intent in these areas of rail retailing, and I do appreciate that. Prior to the report stage, the retail Code of Practice will be published, and that will go some way to allowing all parties to assess if the code meets the government's stated objective of fair competition in retailing. Can I, in the time available to me, just touch on three specific areas of concern that we've.
These. These amendments speak to. The first one is the effective route of appeal, where people feel Self-preferencing has happened and as is recognised in the Bill, the retail retail market will be a new area for the ORR and can I suggest to the Minister that he might think again about whether an appeal to the order shouldn't just be on the basis of process, but on the merits of the case of how the decision is taken, not least because the evidence from the CMA and indeed from Europe, is that there is a material risk of a state based entity engaging in self-preferencing.
And therefore, if our objective here is to uphold a route of appeal, perhaps an entirely ex post process, as we've heard, is not the most effective approach to market regulation. In the case where there was any distorting market competition, a remedy of that kind could perhaps take years, and that may merit further consideration. Secondly, there is, I think, a debate to be had about who subsidizes our retailing, because if you look back to your what is the the what is the the way in which we'll establish how subsidize the issue or otherwise of subsidy takes place, whether that is via the Subsidy Act? There is concern, I think, that we have known GB are a very different body from that which has existed for the last 30 years.
It is a single vertically integrated entity. And so understandably, I think there is a desire for the appropriate safeguards to ensure that GB s own online retailing will not have more advantageous terms than other retailers. Thirdly, and finally, I think to demonstrate competition, as others have suggested, it would be helpful to have transparent and separate accounting. And in making that request, I recognise that that is something that is now standard practice in a range of other sectors, including telecoms, the BBC energy.
And so the request for separate accounting is not necessarily a bureaucratic one, but one that builds confidence in the basis of competition and perhaps addresses the CMA's conclusion that the risks of self-preferencing, as we've heard, are real in retail and additional safeguards may be required. That said, I am very grateful for the collaborative spirit which the Minister has brought to the consideration of this bill. I welcome the fact that the code is to be forthcoming before the report stage, and I look forward to the Minister giving consideration as to what is the balance of what appears in the code and what might appear on the face of the bill to provide a solution in an area where I think there is a common commitment to fair competition, to continue innovation as we move forward? Thank you.
18:32
Speaker 7
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Speaker 7
My Lord. It's a pleasure to take part in day one of committee stage. In doing so, I declare my interest is set out in the registers adviser variously to the Crown Estate and Simmons LLP as non-executive director of Avalanche Foundation and Avalanche BVI Inc. What a group to be part of. If anybody who thought that competition isn't a good idea. Arrival of a second Secretary of State for transport has demonstrated clearly that competition is the way forward, as I'm sure we'll see in a moment when I sit down, fundamentally, what is there left for me to say with Baroness Harding's forensic introduction, which took apart all of the reasons for the current construction of these sections in the bill, followed by my noble friend Lord Young's intervention.
And I think in many ways, Lord young inadvertently but highly accurately sum this completely up when he said harm rather than arm, because that is where we are at when he looked forward into the future, into, as he said, how this may develop, I would go further. There's no crystal ball gazing going on there. This is not a potential as you set out. This is an inevitability.
This will happen. How can we know that this will happen? Because it's already happened in other departments in very recent history. We don't need to go into the details. But last year there was a case in point where when the growth pressure came along, a particular government department saw a piece of work they were involved in where for years they'd worked collaboratively with the private sector to build particular solutions.
Then they saw there was some potential wedge that they could throw into the pot to put into their departmental contribution. Suddenly, a screeching change of direction was taken and a monopoly play was deployed. This is inevitable if we progress with the bill as currently constructed. I'd say to the minister, what is his response? The CMA's submission. They know competition. They do it every day.
Their submission was conclusive. Why would the government want to construct something so clearly monstrously problematic at this stage, which will only cause them pain within such a short space of time when it is so avoidable, either through functional separation, as I've suggested, or indeed through the eminently sensible alternatives offered by my noble friends, why would the government choose such a problematic path forward at this stage, when it's more than reasonably foreseeable, where the problems will come? In fact, as I've already said, it's inevitable.
So competition absolutely critical. But the other element within competition, that of innovation, this is not going to lead to optimal innovation. Imagine, for example, not just the potential plurality of ticket retail sellers, but imagine the kind of products that they could bring on stream, where we could see tokenized tickets that could transform the passenger experience and contain so many details in that token that there wouldn't be a need for passengers to explain, for example, their needs, whatever they may be, they would all be contained in that tokenized ticket.
Truly transformational. But that requires a level playing field and for a crowding in of competition. And through that crowding in of innovation. And that moves on to my Second Amendment when we go broader and look at the huge array of data, what.
And I think in many ways, Lord young inadvertently but highly accurately sum this completely up when he said harm rather than arm, because that is where we are at when he looked forward into the future, into, as he said, how this may develop, I would go further. There's no crystal ball gazing going on there. This is not a potential as you set out. This is an inevitability.
This will happen. How can we know that this will happen? Because it's already happened in other departments in very recent history. We don't need to go into the details. But last year there was a case in point where when the growth pressure came along, a particular government department saw a piece of work they were involved in where for years they'd worked collaboratively with the private sector to build particular solutions.
Then they saw there was some potential wedge that they could throw into the pot to put into their departmental contribution. Suddenly, a screeching change of direction was taken and a monopoly play was deployed. This is inevitable if we progress with the bill as currently constructed. I'd say to the minister, what is his response? The CMA's submission. They know competition. They do it every day.
Their submission was conclusive. Why would the government want to construct something so clearly monstrously problematic at this stage, which will only cause them pain within such a short space of time when it is so avoidable, either through functional separation, as I've suggested, or indeed through the eminently sensible alternatives offered by my noble friends, why would the government choose such a problematic path forward at this stage, when it's more than reasonably foreseeable, where the problems will come? In fact, as I've already said, it's inevitable.
So competition absolutely critical. But the other element within competition, that of innovation, this is not going to lead to optimal innovation. Imagine, for example, not just the potential plurality of ticket retail sellers, but imagine the kind of products that they could bring on stream, where we could see tokenized tickets that could transform the passenger experience and contain so many details in that token that there wouldn't be a need for passengers to explain, for example, their needs, whatever they may be, they would all be contained in that tokenized ticket.
Truly transformational. But that requires a level playing field and for a crowding in of competition. And through that crowding in of innovation. And that moves on to my Second Amendment when we go broader and look at the huge array of data, what.
18:37
18:37
Speaker 7
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Speaker 7
Available to GDPR? We've always had a huge volume of data across transport, not least in the railways, and it's never had the opportunity to truly drive the transformation, which it could. Take just one example. We've talked tickets. Take the rolling stock itself. Imagine what innovation third party crowded in businesses could bring if they had those data at their fingertips. Well, the great good news is GBR nor this committee.
None of us have to imagine what that innovation could be. All that has to be done is to put those data out there on a level playing field, equally available through the technologies that exist and the innovation and the transformation and the improvements will simply flow. So for reasons of competition, of innovation, of taking all of the advantage of these new technologies, I constantly mention the problematic nature that the government have because they flatly refuse to pass a cross sector , cross economy, AI regulation bill.
We see it here. We see it in the cyber bill for those who've been in committee on that bill, because that could lay out a framework which could work absolutely in this rail context, as it would in all other sections of our economy and our society. But if that's not going to be in place, how are these advantages of these technologies going to be felt by passengers, by rail workers, by everybody involved in this entity coming into being of GBR? I think we need to see these changes if we're going to feel and be availed of that transformational potential and the economic benefit which will flow, the government would benefit through adopting changes set out in this suite of amendments.
I look forward to the minister's response.
None of us have to imagine what that innovation could be. All that has to be done is to put those data out there on a level playing field, equally available through the technologies that exist and the innovation and the transformation and the improvements will simply flow. So for reasons of competition, of innovation, of taking all of the advantage of these new technologies, I constantly mention the problematic nature that the government have because they flatly refuse to pass a cross sector , cross economy, AI regulation bill.
We see it here. We see it in the cyber bill for those who've been in committee on that bill, because that could lay out a framework which could work absolutely in this rail context, as it would in all other sections of our economy and our society. But if that's not going to be in place, how are these advantages of these technologies going to be felt by passengers, by rail workers, by everybody involved in this entity coming into being of GBR? I think we need to see these changes if we're going to feel and be availed of that transformational potential and the economic benefit which will flow, the government would benefit through adopting changes set out in this suite of amendments.
I look forward to the minister's response.
18:39
Speaker 10
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Speaker 10
My Lords, it's been a fascinating debate and I fully support comments made by the noble Baroness Harding from her experience in telecom. I suffered a bit myself from them , and it's. It's no surprise what she's. What she's told the committee, and noble Lord, Lord Holmes is also absolutely right that we need level playing fields, and I think. Level. The noble Lord, Lord young is is probably hit the nail on the head when he.
So the sooner we do this with. So I would definitely support his amendment 48. But I think it's worth reminding ourselves that there's not just one big private sector retailer and all the ones that are retail for the talks at the moment, but there's lots and lots of smaller ones as well, and something that the RR will have to look at is to make sure that the fair competition between the big ones and the little ones is, is made well, is kept in line with competition policy, and we don't have one of them running away with everything else.
But it would be no good having one private sector company becoming a private sector monopoly, when you might as well have a GBR monopoly. And we don't want monopolies. I mean, that's my message. So one noble Lord who has spoken was concerned about the workload that is coming or maybe coming to the. I've had many experiences with the over the years , they try very hard, but they. They need to be prepared for an extension to their scope.
But one thing I know is that they are capable of doing it and they'll be interested in doing it. I'm sure many noble Lords have have talked to them in the last few months, and they're also, I think, quite relaxed about the involvement of the CMA because the CMA needs to be there as well. But possibly the second line of defence. It's just not going to work unless unless level playing fields are separated from the great work that GBR is going to do in running trains and making sure the infrastructure works and things like that.
But I think having a separation, including the accounts of some noble lords, have said is really important. So I hope we can, my noble friend will come back with some positive views on competition, and we maybe even have another have to have a meeting or two before report stage. Yeah.
So the sooner we do this with. So I would definitely support his amendment 48. But I think it's worth reminding ourselves that there's not just one big private sector retailer and all the ones that are retail for the talks at the moment, but there's lots and lots of smaller ones as well, and something that the RR will have to look at is to make sure that the fair competition between the big ones and the little ones is, is made well, is kept in line with competition policy, and we don't have one of them running away with everything else.
But it would be no good having one private sector company becoming a private sector monopoly, when you might as well have a GBR monopoly. And we don't want monopolies. I mean, that's my message. So one noble Lord who has spoken was concerned about the workload that is coming or maybe coming to the. I've had many experiences with the over the years , they try very hard, but they. They need to be prepared for an extension to their scope.
But one thing I know is that they are capable of doing it and they'll be interested in doing it. I'm sure many noble Lords have have talked to them in the last few months, and they're also, I think, quite relaxed about the involvement of the CMA because the CMA needs to be there as well. But possibly the second line of defence. It's just not going to work unless unless level playing fields are separated from the great work that GBR is going to do in running trains and making sure the infrastructure works and things like that.
But I think having a separation, including the accounts of some noble lords, have said is really important. So I hope we can, my noble friend will come back with some positive views on competition, and we maybe even have another have to have a meeting or two before report stage. Yeah.
18:42
Speaker 12
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Speaker 12
My Lords, I will speak to amendments 208 and 3.39 which stands my name in this group. I set out the case for automatic delay repay at second reading. So I'll not repeat that grind today save to say that I doubt I'm alone in having abandoned a claim because the process took longer than than the journey was late. Instead, I'd like to use the stage to explain what these two amendments would do. Amendment 208 replace duty on GBR and open access operators to pay delay.
Repay compensation automatically wherever they hold enough information to identify that a passenger's journey was delayed by 15 minutes or more, and the means to pay them. Where an operator doesn't hold that information, it would still have to take reasonable steps to let the passenger know they're entitled to claim. So the burden of finding out doesn't fall on the passenger alone. No one would receive less under the automatic route than under operators .
Existing schemes, and payment would default to digital means to reflect the way that most fares were already bought and refunded. Today, none of this asked GBR to invent a new right. It asks operators to use data that they already have to give effect to a right that passengers already have, and I'm open to a different mechanism. If the noble Lord, the minister has one in mind, but the underlying case is straightforward. Whether a passenger gets money back that they're owed shouldn't depend on which operator runs their line or on their persistence.
Persistence with a claim form. A right that exists on paper but is rarely exercised in practice isn't really much of a right at all. My new clause also leaves Secretary of State flexibility to set timescales, notification methods and exceptions by regulation. Amendment 339 follows from that, as drafted, those regulations would be subject only to the negative procedure taking effect unless the House objected. Amendment 339 would instead require debate and approval by both houses under the affirmative procedure.
Given how much of this scheme's substance would sit in regulations rather than on the face of the Bill, Parliament should scrutinise and approve them properly, not simply have the chance to object afterwards. My Lords, I'm grateful to the Minister and his officials for the time he gave me before summer to discuss these amendments and for the care he took in explaining the government's thinking. He told me then that he wanted to ensure consistency of approach on delay repay, which I took as recognition that operators today handle compensation very differently.
Some of them do it well, some of them do it considerably less well. So I share that objective entirely. But on the government's own timetable, all operators will be absorbed into the GBR next year, and consolidation alone doesn't guarantee consistent practice. Legacy systems and habits can persist inside a single organisation unless something requires otherwise, and I haven't found that requirement in the bill, nor in the explanatory notes. So I'd welcome the Minister's help in understanding whether he intends consistency
Repay compensation automatically wherever they hold enough information to identify that a passenger's journey was delayed by 15 minutes or more, and the means to pay them. Where an operator doesn't hold that information, it would still have to take reasonable steps to let the passenger know they're entitled to claim. So the burden of finding out doesn't fall on the passenger alone. No one would receive less under the automatic route than under operators .
Existing schemes, and payment would default to digital means to reflect the way that most fares were already bought and refunded. Today, none of this asked GBR to invent a new right. It asks operators to use data that they already have to give effect to a right that passengers already have, and I'm open to a different mechanism. If the noble Lord, the minister has one in mind, but the underlying case is straightforward. Whether a passenger gets money back that they're owed shouldn't depend on which operator runs their line or on their persistence.
Persistence with a claim form. A right that exists on paper but is rarely exercised in practice isn't really much of a right at all. My new clause also leaves Secretary of State flexibility to set timescales, notification methods and exceptions by regulation. Amendment 339 follows from that, as drafted, those regulations would be subject only to the negative procedure taking effect unless the House objected. Amendment 339 would instead require debate and approval by both houses under the affirmative procedure.
Given how much of this scheme's substance would sit in regulations rather than on the face of the Bill, Parliament should scrutinise and approve them properly, not simply have the chance to object afterwards. My Lords, I'm grateful to the Minister and his officials for the time he gave me before summer to discuss these amendments and for the care he took in explaining the government's thinking. He told me then that he wanted to ensure consistency of approach on delay repay, which I took as recognition that operators today handle compensation very differently.
Some of them do it well, some of them do it considerably less well. So I share that objective entirely. But on the government's own timetable, all operators will be absorbed into the GBR next year, and consolidation alone doesn't guarantee consistent practice. Legacy systems and habits can persist inside a single organisation unless something requires otherwise, and I haven't found that requirement in the bill, nor in the explanatory notes. So I'd welcome the Minister's help in understanding whether he intends consistency
18:45
18:46
Speaker 14
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Speaker 14
My Lords, I didn't add my name either, but there's a limited number of names you can add, and I think many of us feel very supportive of Baroness Lehman's recommendations and those two amendments. I simply want to give some context to the reasons for the amendments, such as those of Lord young being considered for the bill or something based on them being considered in order to secure that there is a genuinely fair and free market in the retail sales of sales of train tickets.
I think it's worth remembering how much difference the private operators made to the price you had to pay for many kinds of journey. We've been discussing it in theoretical terms, but there was a time when, if you wanted to travel from Edinburgh to Penzance on the cross country train, which makes that journey, the cost was enormous. What changed it? Split ticket operators demonstrating that they could get 4 or 5 different tickets, including when I did it on one occasion a West West Yorkshire Rover ticket, which carried me one small piece of the journey.
But this accumulation of tickets, a handful of tickets gave you a price less than half the cost that you would have been quoted originally for that journey. And not only did that cheapen tickets for a lot of people making difficult journeys, it also changed the attitude of many of the operating companies because it's now the case. Certainly when I go to the station to buy a ticket, I'm always asked, do I want this cheaper ticket I could get if I got the next train or the one before it? There's an alertness to the customers need to know what the options are for a reasonably priced ticket, which has been brought into the system by the private operators.
So I don't really advocate these amendments because competition is a good liberal value. Experience has proved that to be the case. But the one other point I would make is that all this has to exist in a world in which very rapid change will take place. At the moment, operators issue their own tickets. The result of that is there's an interaction and a kind of invisible interaction between the person selling the ticket, the retailer and the revenue protection officer on the train whose decision it is, whether that ticket will be valid on that train.
And if you've missed one and you're getting the next one, it may well not be. If you've actually chosen to change your journey pattern, it may well not be. Now, the minister may fondly believe that we've talked about this in a very helpful discussion, that all this will fall away, because when GB are the only people providing the trains, there won't be these difficulties. I am not convinced of that. I think old habits will die hard, and if we're not very careful, we'll still have a situation where the retailer gives you the impression that he's retailing a piece of paper or an email, which will enable you to travel on one of several trains, or you're actually doing is buying a rather limited line, which is limited by the the policies and practice of the operator.
Now, that is maybe one operator in in principle, but it will still be different regions under different regional management. So we do have to have methods of ensuring that. And I hope to return to that second point later in the committee's proceedings. But we should understand the context and the value of what we're discussing.
I think it's worth remembering how much difference the private operators made to the price you had to pay for many kinds of journey. We've been discussing it in theoretical terms, but there was a time when, if you wanted to travel from Edinburgh to Penzance on the cross country train, which makes that journey, the cost was enormous. What changed it? Split ticket operators demonstrating that they could get 4 or 5 different tickets, including when I did it on one occasion a West West Yorkshire Rover ticket, which carried me one small piece of the journey.
But this accumulation of tickets, a handful of tickets gave you a price less than half the cost that you would have been quoted originally for that journey. And not only did that cheapen tickets for a lot of people making difficult journeys, it also changed the attitude of many of the operating companies because it's now the case. Certainly when I go to the station to buy a ticket, I'm always asked, do I want this cheaper ticket I could get if I got the next train or the one before it? There's an alertness to the customers need to know what the options are for a reasonably priced ticket, which has been brought into the system by the private operators.
So I don't really advocate these amendments because competition is a good liberal value. Experience has proved that to be the case. But the one other point I would make is that all this has to exist in a world in which very rapid change will take place. At the moment, operators issue their own tickets. The result of that is there's an interaction and a kind of invisible interaction between the person selling the ticket, the retailer and the revenue protection officer on the train whose decision it is, whether that ticket will be valid on that train.
And if you've missed one and you're getting the next one, it may well not be. If you've actually chosen to change your journey pattern, it may well not be. Now, the minister may fondly believe that we've talked about this in a very helpful discussion, that all this will fall away, because when GB are the only people providing the trains, there won't be these difficulties. I am not convinced of that. I think old habits will die hard, and if we're not very careful, we'll still have a situation where the retailer gives you the impression that he's retailing a piece of paper or an email, which will enable you to travel on one of several trains, or you're actually doing is buying a rather limited line, which is limited by the the policies and practice of the operator.
Now, that is maybe one operator in in principle, but it will still be different regions under different regional management. So we do have to have methods of ensuring that. And I hope to return to that second point later in the committee's proceedings. But we should understand the context and the value of what we're discussing.
18:49
Speaker 12
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Speaker 12
My Lords, I don't have my name on on these amendments, but I can I just interject to say that I thoroughly agree with pretty much everything that's been said, and especially support what my noble friend Baroness Harding was saying in introducing this group, and indeed very much entirely in agreement with my noble friend Lord Young of Cookham, and in particular, I don't want to get into the question of appeals, because I think we'll come back on to the whole question of how appeal the appeal processes should be structured later on.
I did want to just say that I think what is particularly important is in amendment. I think it's 4048 relating to the is it 46, 48 around there relating to the approval, and it's 47 in the name of my noble friend as well. 47 about the approval, the approved document. I've not I'm assuming that the code of practice that we are promised that the noble lady, Baroness Alexander, was talking about is the equivalent of the approved document or some part of the approved document point.
It seems to me, is we have at the moment this ticketing and settlement agreement, and we need something in the future that we know, and we have to know how this is going to work in the future. We don't know that yet. The only point I want to add to the debate is to say this. If we don't, it seems to me that we should expect indeed, call for the Competition and Markets Authority to step in because as things stand at the moment, the relevant aspects of the ticketing and settlement agreement constitute a part of a block exemption against a chapter one prohibition under the Competition Act.
It is, on the face of it, potentially an anti-competitive agreement. But the block exemption exists. The question is , does the agreement satisfy the requirements of the block exemption? And we have to look at the agreement in order to know whether that is the case, which is why amendment 47 is right. We have to ask the Competition and Markets Authority whether the code of practice or the approved document, whatever it turns out, the approved document under the bill satisfies the requirements of the block exemption or not.
The other thing I would say is the fact is GBR will be in a dominant position and under the competition acts, in addition to the prohibition on anti-competitive agreements, is the prohibition on the abuse of a dominant position. And I think much of this debate is saying, given that we know that GBR will be in a dominant position, it should be. We should be actively looking for the Office of Rail, Road and Rail, either by way of market investigations in this area if necessary, or the Competition and Markets Authority stepping in and current jurisdictions and enables them to do so, and countering any abuse.
And we know, because we've already covered clause two one, that Great British Railways does have has no crown immunity under section 73 of the Competition Act, there is a crown immunity from the constraints, remedies and directions of the Competition Markets Authority. So GBR does not want to be in a position where the Competition and Markets Authority comes after it in order to prevent its abuse of a dominant position. So I think for all those reasons, the government would be well advised to put into the legislation measures which will prevent GBR being tempted to abuse its dominant position and to ensure that the the approved document will satisfy the CMA's requirements for a block exemption.
I did want to just say that I think what is particularly important is in amendment. I think it's 4048 relating to the is it 46, 48 around there relating to the approval, and it's 47 in the name of my noble friend as well. 47 about the approval, the approved document. I've not I'm assuming that the code of practice that we are promised that the noble lady, Baroness Alexander, was talking about is the equivalent of the approved document or some part of the approved document point.
It seems to me, is we have at the moment this ticketing and settlement agreement, and we need something in the future that we know, and we have to know how this is going to work in the future. We don't know that yet. The only point I want to add to the debate is to say this. If we don't, it seems to me that we should expect indeed, call for the Competition and Markets Authority to step in because as things stand at the moment, the relevant aspects of the ticketing and settlement agreement constitute a part of a block exemption against a chapter one prohibition under the Competition Act.
It is, on the face of it, potentially an anti-competitive agreement. But the block exemption exists. The question is , does the agreement satisfy the requirements of the block exemption? And we have to look at the agreement in order to know whether that is the case, which is why amendment 47 is right. We have to ask the Competition and Markets Authority whether the code of practice or the approved document, whatever it turns out, the approved document under the bill satisfies the requirements of the block exemption or not.
The other thing I would say is the fact is GBR will be in a dominant position and under the competition acts, in addition to the prohibition on anti-competitive agreements, is the prohibition on the abuse of a dominant position. And I think much of this debate is saying, given that we know that GBR will be in a dominant position, it should be. We should be actively looking for the Office of Rail, Road and Rail, either by way of market investigations in this area if necessary, or the Competition and Markets Authority stepping in and current jurisdictions and enables them to do so, and countering any abuse.
And we know, because we've already covered clause two one, that Great British Railways does have has no crown immunity under section 73 of the Competition Act, there is a crown immunity from the constraints, remedies and directions of the Competition Markets Authority. So GBR does not want to be in a position where the Competition and Markets Authority comes after it in order to prevent its abuse of a dominant position. So I think for all those reasons, the government would be well advised to put into the legislation measures which will prevent GBR being tempted to abuse its dominant position and to ensure that the the approved document will satisfy the CMA's requirements for a block exemption.
18:53
Speaker 13
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Speaker 13
My Lords, I start my contribution to this group by thanking my noble friend Baroness Harding of Winscombe for her excellent opening of this group and the comprehensive way in which she did it, but also, and I think this is a very powerful point, her real experience of a similar process and what actually happens in practice. One of the values of this House particularly, is not just having these theoretical debates, but we have members who have real experience of how these things work in practice.
It's no good just legislating for what we think might happen, but it's what will actually happen. That was particularly valuable now. This is an area where, unlike I think, some of the areas in this bill, I think the broad consistency with everybody that's spoken so far. But also, if I go back to what the minister has said, both at second reading , in other fora and in writing, he is also set out that the government wants a competitive retail landscape, recognises the benefits of that.
So what we're actually debating here is not the principle. We're debating about how best to achieve that shared goal. In practice. And so what I would try and add to this debate is this first of all, I think just practically the suggestion that is in my noble friend Lord Holmes's Amendment 182, which is functional separation, which Baroness Harding also raised, is the cleanest and most sensible solution, because that means that GBR isn't in a position where it's tempted to abuse a dominant market position.
It's got a separate retailing arm. It the rules can can operate in a transparent way. You avoid a lot of trouble, and then you don't have to set up a complicated mechanism to deal with that abuse. And, and I but I understand that the government has said its face against that, but I would just reinforce that would be the best solution. I think a lot of these problems, if the government doesn't want to do that for whatever reason, then I think we absolutely do need to make sure, first of all, there is transparency, because if all of this is hidden away, it makes it very difficult for whatever mechanisms are put in place, whether it's the CMA, whether it's the or whether it's the whatever legal process is the independent retailers have to do.
And as Baroness said, they're not huge companies with bottomless pits able to put some money to be able to do this. If you don't have the transparency, people don't know what's going on. And I would make a slightly different argument bringing in our friends from the Treasury than the one that my noble friend Lord Young of Cookham made, and this is one where I think the Treasury should be on our side. One of the really important things the Treasury wants to achieve is to reduce the subsidy that's paid to the rail network, because post-COVID, the rail network doesn't send money to the Treasury.
It sucks money away from the Treasury. And the only way that is going to change on the operating side is if there is innovation. There are more passengers using the rail network and the ticketing retailers are one of the ways in their innovative ways, they retail tickets. And also importantly, if leisure travel is going to be a growth area, the partnerships that they strike with providers of leisure opportunities, which you can then combine with travel to produce innovative packages.
Now, if you're going to do all of that, you need that thriving competitive retailing operation. So the Treasury should want that to be successful. The other thing the Treasury should want is that the operating cost Gbr's own ticketing operation should be as low as possible if the costs of running that operation, and this is where I would just challenge what your Lord young said. The. We know what the third party retailers get because we know what the Percentage Commission is.
If Gbr's retailing operation is not able to run its services for less money than that, then it shouldn't be in business, frankly, because it's adding no value at all. It shouldn't be running at all. My my hunch is it won't be able to, which is why when I was Secretary of State, I said that it shouldn't really get involved in this business at all because there were lots of competing providers who are much better at it.
And frankly, it should just get those to do it. But for reasons I don't quite understand, ministers want the department to be or GBR to be involved in this process. So it's critical that the accounting and I declare my interest here as a chartered accountant.
It's no good just legislating for what we think might happen, but it's what will actually happen. That was particularly valuable now. This is an area where, unlike I think, some of the areas in this bill, I think the broad consistency with everybody that's spoken so far. But also, if I go back to what the minister has said, both at second reading , in other fora and in writing, he is also set out that the government wants a competitive retail landscape, recognises the benefits of that.
So what we're actually debating here is not the principle. We're debating about how best to achieve that shared goal. In practice. And so what I would try and add to this debate is this first of all, I think just practically the suggestion that is in my noble friend Lord Holmes's Amendment 182, which is functional separation, which Baroness Harding also raised, is the cleanest and most sensible solution, because that means that GBR isn't in a position where it's tempted to abuse a dominant market position.
It's got a separate retailing arm. It the rules can can operate in a transparent way. You avoid a lot of trouble, and then you don't have to set up a complicated mechanism to deal with that abuse. And, and I but I understand that the government has said its face against that, but I would just reinforce that would be the best solution. I think a lot of these problems, if the government doesn't want to do that for whatever reason, then I think we absolutely do need to make sure, first of all, there is transparency, because if all of this is hidden away, it makes it very difficult for whatever mechanisms are put in place, whether it's the CMA, whether it's the or whether it's the whatever legal process is the independent retailers have to do.
And as Baroness said, they're not huge companies with bottomless pits able to put some money to be able to do this. If you don't have the transparency, people don't know what's going on. And I would make a slightly different argument bringing in our friends from the Treasury than the one that my noble friend Lord Young of Cookham made, and this is one where I think the Treasury should be on our side. One of the really important things the Treasury wants to achieve is to reduce the subsidy that's paid to the rail network, because post-COVID, the rail network doesn't send money to the Treasury.
It sucks money away from the Treasury. And the only way that is going to change on the operating side is if there is innovation. There are more passengers using the rail network and the ticketing retailers are one of the ways in their innovative ways, they retail tickets. And also importantly, if leisure travel is going to be a growth area, the partnerships that they strike with providers of leisure opportunities, which you can then combine with travel to produce innovative packages.
Now, if you're going to do all of that, you need that thriving competitive retailing operation. So the Treasury should want that to be successful. The other thing the Treasury should want is that the operating cost Gbr's own ticketing operation should be as low as possible if the costs of running that operation, and this is where I would just challenge what your Lord young said. The. We know what the third party retailers get because we know what the Percentage Commission is.
If Gbr's retailing operation is not able to run its services for less money than that, then it shouldn't be in business, frankly, because it's adding no value at all. It shouldn't be running at all. My my hunch is it won't be able to, which is why when I was Secretary of State, I said that it shouldn't really get involved in this business at all because there were lots of competing providers who are much better at it.
And frankly, it should just get those to do it. But for reasons I don't quite understand, ministers want the department to be or GBR to be involved in this process. So it's critical that the accounting and I declare my interest here as a chartered accountant.
18:59
18:59
Speaker 13
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Speaker 13
The accounting should be absolutely transparent so that we can see what it costs. Because from the Treasury's point of view, as I said, it wants to be sure there's no subsidy going into the ticketing operation from the rest of the thing. Given given that there are competitive operators who can deliver this, I suspect more cost effectively. So that's an argument for the Treasury supporting some of these amendments. On the subsidy point, I believe there is a question that is not resolved, which the independent retailers are concerned about.
In written correspondence with the independent rail retailers. I understand the department has asserted that GBR online retailer will not be subject to the Subsidy Control Act 2022, arguing instead that it will be governed solely by the Public Service Obligations in Transport Regulations 2023. Now, that approach is inconsistent with the legal framework and with the assurances given by ministers during the passage of the bill so far that GBR would remain subject to public law, competition and subsidy control requirements, and the bill apparently confirms that distinction.
Schedule two, part three excludes only GBR infrastructure function from the Subsidy Control Act, leaving ticket retailing fully subject to it. So given that confusion and that's at least the view of the independent rail retailers, it would be helpful in his response if the minister could clear that up and make it clear that the GBR retailing operation is absolutely subject to the Subsidy Control Act. If it is, though, for anybody to enforce that, we need transparent accounting data to show that that subsidy is not taking place if the operation is buried within GBR overall activities and there is no transparent data, then nobody will be able to tell whether it is being subsidised or not.
The final thing I would say is that it's been very clear, listening to this debate, that there's cross-party support from conservative members, from Labour members, from crossbenchers and from Liberal Democrats about this issue and an extraordinary amount of unanimity. The only point I would finish with is, which I hope is helpful to the Minister. There are, as Baroness Harding said in her comprehensive introduction, there are a range of solutions provided in these amendments.
I've set out the one I think is best, but there are a range of solutions. So I'm apart from that, which is that operational separation. There are a range of ways of delivering the competition enforcement and the appeal mechanisms. So I would say to the minister, we're not wedded to a particular solution, but I think there is common agreement that the bill as drafted will not guarantee and deliver a competitive landscape, a level playing field for the private sector operators, which, as my noble friend Lord Holmes has said, have invested a significant amount of money, have innovative and this is the point I'll finish on is and delivered better services to passengers.
That is the key point we should all focus on what is the regime is going to deliver best outcome for passengers, not just today with today's technology, but also deliver that investment in a new technology as it comes along to continue developing that fantastic passenger and customer experience. That's what I want to make sure we guarantee. I know that's what the minister wants to deliver. So this is an argument about how best to do that rather than an argument about principle.
And I look forward to what I hope will be a thoughtful, constructive and response from the minister, which at least shows that he's open to to thinking about some of the ways of delivering on the concerns that have been raised by the committee.
In written correspondence with the independent rail retailers. I understand the department has asserted that GBR online retailer will not be subject to the Subsidy Control Act 2022, arguing instead that it will be governed solely by the Public Service Obligations in Transport Regulations 2023. Now, that approach is inconsistent with the legal framework and with the assurances given by ministers during the passage of the bill so far that GBR would remain subject to public law, competition and subsidy control requirements, and the bill apparently confirms that distinction.
Schedule two, part three excludes only GBR infrastructure function from the Subsidy Control Act, leaving ticket retailing fully subject to it. So given that confusion and that's at least the view of the independent rail retailers, it would be helpful in his response if the minister could clear that up and make it clear that the GBR retailing operation is absolutely subject to the Subsidy Control Act. If it is, though, for anybody to enforce that, we need transparent accounting data to show that that subsidy is not taking place if the operation is buried within GBR overall activities and there is no transparent data, then nobody will be able to tell whether it is being subsidised or not.
The final thing I would say is that it's been very clear, listening to this debate, that there's cross-party support from conservative members, from Labour members, from crossbenchers and from Liberal Democrats about this issue and an extraordinary amount of unanimity. The only point I would finish with is, which I hope is helpful to the Minister. There are, as Baroness Harding said in her comprehensive introduction, there are a range of solutions provided in these amendments.
I've set out the one I think is best, but there are a range of solutions. So I'm apart from that, which is that operational separation. There are a range of ways of delivering the competition enforcement and the appeal mechanisms. So I would say to the minister, we're not wedded to a particular solution, but I think there is common agreement that the bill as drafted will not guarantee and deliver a competitive landscape, a level playing field for the private sector operators, which, as my noble friend Lord Holmes has said, have invested a significant amount of money, have innovative and this is the point I'll finish on is and delivered better services to passengers.
That is the key point we should all focus on what is the regime is going to deliver best outcome for passengers, not just today with today's technology, but also deliver that investment in a new technology as it comes along to continue developing that fantastic passenger and customer experience. That's what I want to make sure we guarantee. I know that's what the minister wants to deliver. So this is an argument about how best to do that rather than an argument about principle.
And I look forward to what I hope will be a thoughtful, constructive and response from the minister, which at least shows that he's open to to thinking about some of the ways of delivering on the concerns that have been raised by the committee.
19:03
Speaker 5
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Speaker 5
My Lords, this really has been a very strong debate, and it really is an important issue. It's about ensuring passengers have a wide range of retailers from which to buy their tickets and other associated services, whether it's leisure, onward travel and so on, and that there is a level playing field between Great British Railways retail arm and the third sector providers. Baroness Harding made the case very, very clearly and Lord young about about the issues at the start of this group and it clearly is uniting members from across the House and throughout all the amendments in these groups.
It's a desire for genuine and fair choice. For passengers. It's about promoting a competitive retail market and equal access to systems, data and products in a way that start ups and others can use, as well as established practitioners in this area. And the latter point is very important and is part of amendment 211 from Lord Young of Cookham and supported by a number of other members, including my noble friend Lord Dixon of Jericho.
And I want to spell out why these are so important. I was really interested to hear the recent product launched in Wales earlier, that not all third party retailers were able to promote. In the last week, South West Railways has had a special discount some kind of flash sale on rail tickets on its services. Now, I was not able to find these on my usual app, Trainline, though others are available, but only on the South West Rail website, which is what I had to use to purchase these really super discounted tickets.
Now, it may well be it was just my technological limitations here failing me, but I had not. If I had not seen an email from Southwest Rail, I would not have known about the special tickets, and I would have ended up paying 3 to 4 times the amount for my travel. Now there has to be a genuine level playing field with all retailers can sell the same tickets and discounted tickets, and use their skills and innovations to drive more traffic through their sites and apps, and different people read data and information in different ways.
And that's why we have such a range of apps, because we all look at things differently and have different ways we want to purchase tickets, and it's important this can thrive. And also the jobs and innovation that this creates. Now, members from different parties are in the same area on this issue. Some go further. Amendment 17 from Lord Moylan, which is to prevent Great British Railways from having any retail website or application until Parliament has had a say over its full life costs.
And this sounds a little bit like Lord Harper was talking about when he was in the department saying, why is actually, you know, Great British Railways getting into this space at all. And we've already heard if you look internationally, SNCF has a retail arm in France, but it's kept separate to the main SNCF network. So there is no conflict. In some ways, that's a bit like the regeneration and planning functions of a local authority. You know that they are a part of the same body, but actually they have to be kept separate because of their distinct functions.
Amendment 182 from Lord Holmes of Richmond suggests a way to do this, which I think may help with this concern. Now, my noble friend Lord Dixon of Jericho spoke eloquently at second reading about this area, and I know he's held several meetings with officials to discuss his concerns about not just the existing third party retailers about, but the ease for new entrants start ups to come into this marketplace and to offer the quality services that passengers really desire.
And finally, I want to pick up on amendments 208 and 339, moved by my noble friend Baroness Lehman. This is so important for passengers. It would ensure automatic delay, repay compensation, whichever retailer you have bought your tickets with. And it really is about putting the passenger front and centre. So if something does go wrong, they are compensated without having to jump through hoop after hoop. It's a basic right. If we are to transform our railways into the modern, passenger focused service that we all desire.
And I really look forward to the minister's response on this really strong debate, and I hope that it's far more than simply saying, well, the retail code of practice as an approved document will deal with all of these issues. I think the minister will have heard loudly and clearly, and not just from the transport enthusiast. Many of us that are here in this House. Noble Lords are rightly concerned about this area, and we must get this right.
It's a desire for genuine and fair choice. For passengers. It's about promoting a competitive retail market and equal access to systems, data and products in a way that start ups and others can use, as well as established practitioners in this area. And the latter point is very important and is part of amendment 211 from Lord Young of Cookham and supported by a number of other members, including my noble friend Lord Dixon of Jericho.
And I want to spell out why these are so important. I was really interested to hear the recent product launched in Wales earlier, that not all third party retailers were able to promote. In the last week, South West Railways has had a special discount some kind of flash sale on rail tickets on its services. Now, I was not able to find these on my usual app, Trainline, though others are available, but only on the South West Rail website, which is what I had to use to purchase these really super discounted tickets.
Now, it may well be it was just my technological limitations here failing me, but I had not. If I had not seen an email from Southwest Rail, I would not have known about the special tickets, and I would have ended up paying 3 to 4 times the amount for my travel. Now there has to be a genuine level playing field with all retailers can sell the same tickets and discounted tickets, and use their skills and innovations to drive more traffic through their sites and apps, and different people read data and information in different ways.
And that's why we have such a range of apps, because we all look at things differently and have different ways we want to purchase tickets, and it's important this can thrive. And also the jobs and innovation that this creates. Now, members from different parties are in the same area on this issue. Some go further. Amendment 17 from Lord Moylan, which is to prevent Great British Railways from having any retail website or application until Parliament has had a say over its full life costs.
And this sounds a little bit like Lord Harper was talking about when he was in the department saying, why is actually, you know, Great British Railways getting into this space at all. And we've already heard if you look internationally, SNCF has a retail arm in France, but it's kept separate to the main SNCF network. So there is no conflict. In some ways, that's a bit like the regeneration and planning functions of a local authority. You know that they are a part of the same body, but actually they have to be kept separate because of their distinct functions.
Amendment 182 from Lord Holmes of Richmond suggests a way to do this, which I think may help with this concern. Now, my noble friend Lord Dixon of Jericho spoke eloquently at second reading about this area, and I know he's held several meetings with officials to discuss his concerns about not just the existing third party retailers about, but the ease for new entrants start ups to come into this marketplace and to offer the quality services that passengers really desire.
And finally, I want to pick up on amendments 208 and 339, moved by my noble friend Baroness Lehman. This is so important for passengers. It would ensure automatic delay, repay compensation, whichever retailer you have bought your tickets with. And it really is about putting the passenger front and centre. So if something does go wrong, they are compensated without having to jump through hoop after hoop. It's a basic right. If we are to transform our railways into the modern, passenger focused service that we all desire.
And I really look forward to the minister's response on this really strong debate, and I hope that it's far more than simply saying, well, the retail code of practice as an approved document will deal with all of these issues. I think the minister will have heard loudly and clearly, and not just from the transport enthusiast. Many of us that are here in this House. Noble Lords are rightly concerned about this area, and we must get this right.
19:08
Speaker 15
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Speaker 15
My Lords, I have a number of amendments in this group, but I'm not going to speak to them because right at the outset, my noble friend, Lady Harding, said that there were quite a lot of amendments in this group which offered different means of achieving the same thing, and it was hard to say which were the better ones. I'm not claiming that mine are better than others. I think the noble Lord, my noble friend Lord Harper, said something along the same lines.
We've put them down because we feel strongly about a very important issue. We want it debated. We want the government to take notice, to take note. We want the government to do something about it before we get to report stage. Essentially, though, whether they do what my amendment says or somebody else's amendment says is something we might have a chance to debate and discuss privately before we get to that point, I don't know, but I'm not wedded to my particular solutions, and therefore I'm not going to speak directly to them.
I will say that everything that has been said, we on our side support in that. We're curious about why GBR is doing this. Well, I'm going to come back to this point. I'm going to make the minister's case for him in a moment, rather against my own interests, but curious why the minister wants to do this in the first place. But if he's going to do it, there has to be a level playing field for those who are already in the field and other new entrants, because they've demonstrated the advantages they can bring to passengers.
The difficulty here that's going to arise in the next group is that what GBR is effectively as a huge bear sitting in your front room, and that bear is both a competitor and a regulator , and its slightest twitch, even unintentionally, could do serious damage to your business. And there are a lot of private sector businesses, not just in ticket retailing, but those who want to have access to freight and for other purposes, which we'll come to later, open access and so forth, who are very, very worried about what's being created.
And the only assurance we're getting from the minister is essentially, we are decent, professional people. We will do this well, and that's fine. The noble Lord is a decent and professional person, and having worked with him for many years, I'm happy if it's of any value to him at all to. Give him.
We've put them down because we feel strongly about a very important issue. We want it debated. We want the government to take notice, to take note. We want the government to do something about it before we get to report stage. Essentially, though, whether they do what my amendment says or somebody else's amendment says is something we might have a chance to debate and discuss privately before we get to that point, I don't know, but I'm not wedded to my particular solutions, and therefore I'm not going to speak directly to them.
I will say that everything that has been said, we on our side support in that. We're curious about why GBR is doing this. Well, I'm going to come back to this point. I'm going to make the minister's case for him in a moment, rather against my own interests, but curious why the minister wants to do this in the first place. But if he's going to do it, there has to be a level playing field for those who are already in the field and other new entrants, because they've demonstrated the advantages they can bring to passengers.
The difficulty here that's going to arise in the next group is that what GBR is effectively as a huge bear sitting in your front room, and that bear is both a competitor and a regulator , and its slightest twitch, even unintentionally, could do serious damage to your business. And there are a lot of private sector businesses, not just in ticket retailing, but those who want to have access to freight and for other purposes, which we'll come to later, open access and so forth, who are very, very worried about what's being created.
And the only assurance we're getting from the minister is essentially, we are decent, professional people. We will do this well, and that's fine. The noble Lord is a decent and professional person, and having worked with him for many years, I'm happy if it's of any value to him at all to. Give him.
19:10
19:10
19:10
19:10
Speaker 15
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Speaker 15
He may do that. He lacks the ability in himself to give us the level of assurance that we and various aspects of the industry, not just retail, want. I will say something that the noble Lord, I'm grateful to the noble Lord for having held a meeting which was open to all interested peers last week. I will say something that I raised then, and I have to say I have to slip out briefly during the noble, my noble friend Lord Holmes speech.
He may have said something along these lines. I know he spoke about data. He
He may have said something along these lines. I know he spoke about data. He
19:11
19:11
Speaker 15
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Speaker 15
It was it was a very good speech. But I'm going to read several times in Hansard before tomorrow is out. But I just wanted to say that if I were if I were in his position and he and I have been in a similar position together, when we were responsible for transport for London and transport for London. One of the interests you have as a business in operation, you want the direct contact with your customers.
You want the direct customers contact partly because you want the data. And the noble Lord has said this. We've had some conversations both privately and also in this meeting. You want their data. This is perfectly obvious in my pocket. Now I have a nectar card and I have a BP card, and I'm carrying these things around, not really for my benefit, but for the benefit of the, of the, of the company, which wants lots of data and information about me.
And GBR is going to be in no different a position. So in one sense it does want to be like TfL, a monopoly supplier of its own tickets. The temptation to be a monopoly supplier of its own tickets is going to be huge, quite apart from any pressure that might come from the Treasury or anywhere else, because it wants that data. And yet the position of the noble Lord seems to me to be slightly incoherent, because he could step forth boldly and say, we want that data, we need to be a monopoly supplier.
And all these private companies, whatever they do, they have to go because they're getting in the way of what we want. You can't buy your groceries from Sainsbury's through a third party retailer. You go and you buy them from Sainsbury's. So he could say that that would be a coherent position, not a politically very easy one in current circumstances, I have to say. Or he could say, which is what he seems to be saying, that he's happy to have a large amount of competition.
Now, my understanding is that something like, can I be corrected if I'm wrong? But I've heard this figure without absolute certainty in it. Something like close to 90% of tickets are currently sold by third party retailers on the railways. So when he starts, he'll starting from a very low base to get any useful data at all on his customers, he's going to have to build up a huge customer base from a very low start. Is that his intention? Does he regard that as a business goal? And if so, what does it say about his strategy for dealing with the private sector? I don't know what the answers to these are.
I think it's difficult. It's right to look at this from the point of view of the benefits of the customer, but it's also worth thinking about the commercial imperatives that GBR is going to have, and whether they should be allowed to pursue those commercial imperatives, or whether they should be constrained in order to benefit a competitive field. These are the sort of questions to which the noble Lord has not so far, I think it's fair to say, given compelling.
Or perhaps he hasn't been asked the questions until now. So that would be a good reason for him not having given those answers. But this is what I really want to hear, because it's going to affect the entire direction of where GBR goes as a business. This is very much this whole question of data from ticketing sales is very much at the heart of this.
You want the direct customers contact partly because you want the data. And the noble Lord has said this. We've had some conversations both privately and also in this meeting. You want their data. This is perfectly obvious in my pocket. Now I have a nectar card and I have a BP card, and I'm carrying these things around, not really for my benefit, but for the benefit of the, of the, of the company, which wants lots of data and information about me.
And GBR is going to be in no different a position. So in one sense it does want to be like TfL, a monopoly supplier of its own tickets. The temptation to be a monopoly supplier of its own tickets is going to be huge, quite apart from any pressure that might come from the Treasury or anywhere else, because it wants that data. And yet the position of the noble Lord seems to me to be slightly incoherent, because he could step forth boldly and say, we want that data, we need to be a monopoly supplier.
And all these private companies, whatever they do, they have to go because they're getting in the way of what we want. You can't buy your groceries from Sainsbury's through a third party retailer. You go and you buy them from Sainsbury's. So he could say that that would be a coherent position, not a politically very easy one in current circumstances, I have to say. Or he could say, which is what he seems to be saying, that he's happy to have a large amount of competition.
Now, my understanding is that something like, can I be corrected if I'm wrong? But I've heard this figure without absolute certainty in it. Something like close to 90% of tickets are currently sold by third party retailers on the railways. So when he starts, he'll starting from a very low base to get any useful data at all on his customers, he's going to have to build up a huge customer base from a very low start. Is that his intention? Does he regard that as a business goal? And if so, what does it say about his strategy for dealing with the private sector? I don't know what the answers to these are.
I think it's difficult. It's right to look at this from the point of view of the benefits of the customer, but it's also worth thinking about the commercial imperatives that GBR is going to have, and whether they should be allowed to pursue those commercial imperatives, or whether they should be constrained in order to benefit a competitive field. These are the sort of questions to which the noble Lord has not so far, I think it's fair to say, given compelling.
Or perhaps he hasn't been asked the questions until now. So that would be a good reason for him not having given those answers. But this is what I really want to hear, because it's going to affect the entire direction of where GBR goes as a business. This is very much this whole question of data from ticketing sales is very much at the heart of this.
19:15
Speaker 7
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Speaker 7
My Lords, this has been a very this has been a very powerful debate, and I'm grateful for all noble Lords who laid amendments and to the contributions the noble Baroness Alexander and noble Lord Beith. I would say to the noble Baroness Harding, to start with. About the only thing I disagree with her about is that this isn't railway related. I think it is. It's about selling railway travel. But I have huge respect for her experience from other markets, as I have for the noble Lord Holmes.
I should start by reassuring noble lords that we are absolutely aligned with the intentions of these amendments. We want an open and competitive retail market and we completely support the benefits independent retailers can bring. I may not have time to answer the noble Lord Boylan's points that he's just made, but if I don't now, I will later, because there are other ways in which the railway can derive data about its customers. And I don't think the acquisition of data is sufficient justification for the railway only to sell to be the only people who sell it, to be the only person who sells its product.
But I must have a railway that is able to sell its own product, because I want its staff and its managers and directors to care about its income and about its passengers. So once GBR is established, it will have a retail function as provided by clause three. And crucially, this will be accessible via all channels, by station, ticket offices, by ticket vending machines, on board trains, by means of access through gates, ticket inspectors and so on and online, ensuring that it serves passengers however they buy their tickets.
GBR Future online Retailer, its website and app will operate in a fair, open and competitive market and to be clear, independent retailers help drive innovation, improve passenger experience and increase choice for customers purchasing rail tickets. We realise that the dual role as a retailer and the provider of certain cross-industry systems and services could create potential conflict of interest risks. That's why we've announced a robust package of safeguards specifically designed to address these concerns.
And indeed, in response to the CMA report in 2025 mentioned by Noble Lords in the course of the debate, we are proposing the Industry Retail Code of Practice, owned by the Office of Rail Road and Back with the force of GBR licence condition, ensuring that the RR will enforce GBR compliance with it for the. For the record schedule one, paragraph five is the place where the RR is required to create the code and enforce it. I can confirm today that the draft code will require GBR to adhere to a range of principles.
These include ensuring access to products, providing services and data on fair, transparent and non-discriminatory terms, and supporting new market entrants. We are determined that all retailers can sell all tickets. The draft code will also require safeguards around our decision to separate decision making between GBR retail activity and its cross-industry systems and services, supported by appropriate information provisions protections. This provides more protection for third party retailers than exists today when competing with a myriad of train operators.
If GBR doesn't comply with the code, the IRR can can employ enforcement measures up to and including a legally binding mandatory order for GBR to change its actions. These enforcement measures can be employed both in response to a third party raising an issue with the regulator, or where order identifies an issue through its own routine monitoring. The full draft code will be published when the IRR launches its consultation before the end of recess.
The next recess. For the avoidance of doubt, this follows extensive engagement they have already undertaken with industry. It will consider feedback from the consultation informing the final draft of the Code of Practice in 2027 and in. In answer to the noble Lord Lansley, we are expecting the CMA to respond to the consultation on that. The IRR will launch, as noble Lords have suggested. We want the IRR to be adequately resourced to carry out these functions.
Those noble Lords who came to the session we had last week, referred to by the noble Lord, Lord young, will have heard reassurance from senior leadership of RR that they intend to do this and are prepared to do it. I should also be clear that GBR will be required to comply with competition law. The order and the Competition and Markets Authority will continue to oversee the market, and both already have powers to act where anti-competitive behaviour is identified.
Alongside that existing framework, the code will create a framework that represents a more extensive form of regulatory assurance than is currently found in most comparable European rail markets. The government, therefore, believes that the objectives of these amendments are already being being delivered. The code will provide meaningful protection for independent retailers and can adapt as the market develops. Turning to amendments 49 and 181, tabled by the noble Lord Moylan and concerning Cross-subsidisation.
I should start by reassuring noble lords that we are absolutely aligned with the intentions of these amendments. We want an open and competitive retail market and we completely support the benefits independent retailers can bring. I may not have time to answer the noble Lord Boylan's points that he's just made, but if I don't now, I will later, because there are other ways in which the railway can derive data about its customers. And I don't think the acquisition of data is sufficient justification for the railway only to sell to be the only people who sell it, to be the only person who sells its product.
But I must have a railway that is able to sell its own product, because I want its staff and its managers and directors to care about its income and about its passengers. So once GBR is established, it will have a retail function as provided by clause three. And crucially, this will be accessible via all channels, by station, ticket offices, by ticket vending machines, on board trains, by means of access through gates, ticket inspectors and so on and online, ensuring that it serves passengers however they buy their tickets.
GBR Future online Retailer, its website and app will operate in a fair, open and competitive market and to be clear, independent retailers help drive innovation, improve passenger experience and increase choice for customers purchasing rail tickets. We realise that the dual role as a retailer and the provider of certain cross-industry systems and services could create potential conflict of interest risks. That's why we've announced a robust package of safeguards specifically designed to address these concerns.
And indeed, in response to the CMA report in 2025 mentioned by Noble Lords in the course of the debate, we are proposing the Industry Retail Code of Practice, owned by the Office of Rail Road and Back with the force of GBR licence condition, ensuring that the RR will enforce GBR compliance with it for the. For the record schedule one, paragraph five is the place where the RR is required to create the code and enforce it. I can confirm today that the draft code will require GBR to adhere to a range of principles.
These include ensuring access to products, providing services and data on fair, transparent and non-discriminatory terms, and supporting new market entrants. We are determined that all retailers can sell all tickets. The draft code will also require safeguards around our decision to separate decision making between GBR retail activity and its cross-industry systems and services, supported by appropriate information provisions protections. This provides more protection for third party retailers than exists today when competing with a myriad of train operators.
If GBR doesn't comply with the code, the IRR can can employ enforcement measures up to and including a legally binding mandatory order for GBR to change its actions. These enforcement measures can be employed both in response to a third party raising an issue with the regulator, or where order identifies an issue through its own routine monitoring. The full draft code will be published when the IRR launches its consultation before the end of recess.
The next recess. For the avoidance of doubt, this follows extensive engagement they have already undertaken with industry. It will consider feedback from the consultation informing the final draft of the Code of Practice in 2027 and in. In answer to the noble Lord Lansley, we are expecting the CMA to respond to the consultation on that. The IRR will launch, as noble Lords have suggested. We want the IRR to be adequately resourced to carry out these functions.
Those noble Lords who came to the session we had last week, referred to by the noble Lord, Lord young, will have heard reassurance from senior leadership of RR that they intend to do this and are prepared to do it. I should also be clear that GBR will be required to comply with competition law. The order and the Competition and Markets Authority will continue to oversee the market, and both already have powers to act where anti-competitive behaviour is identified.
Alongside that existing framework, the code will create a framework that represents a more extensive form of regulatory assurance than is currently found in most comparable European rail markets. The government, therefore, believes that the objectives of these amendments are already being being delivered. The code will provide meaningful protection for independent retailers and can adapt as the market develops. Turning to amendments 49 and 181, tabled by the noble Lord Moylan and concerning Cross-subsidisation.
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Speaker 7
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Speaker 7
I'm about to get there. Turning to amendments 49 181 concerning Cross-subsidization subsidy control, I can offer further reassurance. As a public body. The advantage of interventions is you make your point. The disadvantage is you stop hearing. As a public body, GBR is required to comply with managing public money principles and relevant subsidy control legislation for retail, specifically, the public service obligations in transport regulations is the relevant subsidy control legislation which applies to retail GBR passenger services business will therefore operate within a clear financial framework, ensuring that public funding is used appropriately and fairly.
GBR will be required through its business plan to set out its activities, such as its broad retailing function, the cost of these activities and how it proposes these costs are met. The business plan must cover everything GBR does, so there should be no concern about transparency, but it is very important indeed to note that GBR is operating a transport service in which retailing of which retailing is part, and it will have to use all available channels to serve passengers.
However , they buy their tickets. If it's allocated more funding for retail than it would be, would be needed for a simple online retail platform that, simply because it has an obligation also to provide physical ticket sales. I listed those activities before and by people who pay cash, which are far more costly to provide and which other retailers do not and are most unlikely to provide. In answer to the noble your young.
It will not be possible for GBR to subsidise retail from infrastructure budgets, for example, as ticket offices are not classed as infrastructure, so it won't be overcompensated to deliver retail functions in a way that distorts the market. Funding will be allocated based on the cost of delivering those services to passengers. It will also be subject to the oversight of the IRR as the sector specialist competition regulator, alongside the Competition and Markets Authority, and in that role, the Or will be able to take additional steps against GBR should it suspect that GBR is using public funds to act in an anti-competitive way.
GBR will be required through its business plan to set out its activities, such as its broad retailing function, the cost of these activities and how it proposes these costs are met. The business plan must cover everything GBR does, so there should be no concern about transparency, but it is very important indeed to note that GBR is operating a transport service in which retailing of which retailing is part, and it will have to use all available channels to serve passengers.
However , they buy their tickets. If it's allocated more funding for retail than it would be, would be needed for a simple online retail platform that, simply because it has an obligation also to provide physical ticket sales. I listed those activities before and by people who pay cash, which are far more costly to provide and which other retailers do not and are most unlikely to provide. In answer to the noble your young.
It will not be possible for GBR to subsidise retail from infrastructure budgets, for example, as ticket offices are not classed as infrastructure, so it won't be overcompensated to deliver retail functions in a way that distorts the market. Funding will be allocated based on the cost of delivering those services to passengers. It will also be subject to the oversight of the IRR as the sector specialist competition regulator, alongside the Competition and Markets Authority, and in that role, the Or will be able to take additional steps against GBR should it suspect that GBR is using public funds to act in an anti-competitive way.
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Speaker 13
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Speaker 13
Just before the minister moves on? Can I just press him on the two two of the things he said already? So the first thing in his opening of the sort of summary is he set out what the government's view is. The problem is, if the retailers don't buy it, which they don't at the moment, then whatever he thinks, they're not going to be investing and innovating and developing because they're not going to be able to justify that to their shareholders.
So part of the problem here is he needs to take some steps that persuade the retailers that they're going to be completed fairly. The second point is, and I think he inadvertently made this point about the accounting himself. I accept that some of what the GBR has to do, and I know about the ticket and services agreement to my cost and some of the way you have to do retailing, if they're going to be effectively doing different things, they're going to have an online operation, but they're going to have to do all this other stuff.
It's even more important that there's clear accounting and transparency about where the money is going, because otherwise it will be impossible to work out whether they're subsidising their online operations, which are what's competing with the third party retailers by having more money in for their other services. And frankly, it's really important for the taxpayer that we also know how much it costs to retail through ticket offices and how cost effective that is, because at some point ministers are going to have to grasp the issue, which I started to grasp, had to grasp in the end, which is that providing things through ticket offices when hardly anyone buys tickets that way, is going to have to change at some point in the future.
And there has to be some clear, transparent cost information to enable the right decisions to be taken to. To
So part of the problem here is he needs to take some steps that persuade the retailers that they're going to be completed fairly. The second point is, and I think he inadvertently made this point about the accounting himself. I accept that some of what the GBR has to do, and I know about the ticket and services agreement to my cost and some of the way you have to do retailing, if they're going to be effectively doing different things, they're going to have an online operation, but they're going to have to do all this other stuff.
It's even more important that there's clear accounting and transparency about where the money is going, because otherwise it will be impossible to work out whether they're subsidising their online operations, which are what's competing with the third party retailers by having more money in for their other services. And frankly, it's really important for the taxpayer that we also know how much it costs to retail through ticket offices and how cost effective that is, because at some point ministers are going to have to grasp the issue, which I started to grasp, had to grasp in the end, which is that providing things through ticket offices when hardly anyone buys tickets that way, is going to have to change at some point in the future.
And there has to be some clear, transparent cost information to enable the right decisions to be taken to. To
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Speaker 7
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Speaker 7
which I simply say to the noble Lord, firstly, that there will have to be 100% transparency , because apart from anything else, GBR will have to put all of the costs into its business plan. The other point I'd make about his. His first point is that actually all the. There's been a lot of investment already with very little protection. And actually part of what we're doing is, is, is, is in greater protection for retailers in the future, which they need because they've invested.
And I think that's quite a valid point. Turning to the amendments, 47, 51, 52, 531, three six and 139 concerning oversight, the retail Code of Practice will be, as I've said, administered, enforced by the IRR. It is the appropriate body to assess complaints and determine whether GBR compared with complied with its obligations. But GBR will also be fully subject to competition law alongside the existing oversight of the Competition and Markets Authority.
Nothing in the bill prevents the CMA from acting on competition challenges in rail, and nothing prevents retailers from referring issues to the CMA or either competition issues relating to code of practice or wider competition issues. So there is always a second opinion available. And of course, if they wanted to appeal to the courts, they could judicially review those those, those those decisions further. Currently, at least, I believe that additional approval requirements and further statutory appeal routes simply duplicate existing regulatory arrangements without providing meaningful additional protections.
And transparency, as I've referred to already, is already baked into this framework. It's a core regulatory principle for the IRR , who have historically publicised the launching of and formal outcome of railway licence investigations, and I would expect them to continue to do so. They were. The bill retains the requirement for the author to give notice for any decision not to issue an enforcement order following a licence breach. Providing a legislative backstop for this transparency.
Moving to amendments 136 and 139, it would not be appropriate for the general duty to promote competition to apply to rail retailing wholesale. If it did, the competition duty would conflict with the role in fairly and objectively enforcing the safeguards that government has charged it to deliver via the code. Enforcement of the code should be a fair and evidence should be fair and evidence based, determined simply by whether GBR has complied with the code of practice or not.
It should not be subject to other goals which might cause the IRR to judge operators compliance unfairly. This is usual practice for enforcement provisions. However, I can reassure noble Baroness Lady Harding that the competition duty will absolutely apply to the IRR and its writing the Code of Practice, so the code itself will have competition principles embedded within it. And I think my officials wrote to her on that subject. The noble Baroness put to the committee a number of very clear propositions, which I will consider clearly, carefully, as a consequence of what she said.
I believe I've answered many of them. But I will look at what she said further. And, of course, the publication of the draft Code of Practice will considerably help. I will also consider what the noble young has said the noble Baroness Alexander and other noble lords, and as I've already said, we are expecting the CMA to respond to the consultation, so we'll see what they have to say . In respect to amendment 17. The government fully agrees that appropriate oversight and scrutiny of public spending is important.
However, the amendment is unnecessary. The government policy has long been that GBR will retail tickets online through a high quality website and app, app and app. As the as the train operating companies do now and have done for many for many years and without without fees to passengers, the programme to deliver this is already underway and like all major government projects, is subject to extensive business case approval, assurance and spending control to ensure value for money and compliance with managing public money principles, we are working closely with industry as the proposition is developing and the procurement preparations progress.
In fact, there's clearly an opportunity here for people in this market already to sell their back offices to GBR. Much of the detail will necessarily be commercially sensitive at this stage, as procurement bids are negotiated and funding will be provided through existing programme budgets. However, once the information is available, it will be published in in the usual way. The noble Lord Moylan raised some questions about data. Actually, the current situation for the information.
The committee is. 70% of online tickets are sold by third parties and 30% by train operating companies. Fine. Finally, on amendments 208 and 339, I welcome very much the noble Baroness lemon to the contemplation of the Railways Act. Good luck with that. And. But in particular, she raised the automatic delay repay compensation. We share the objective of making compensation as simple and accessible as possible for passengers.
The scheme is one of the most generous schemes in Europe. We have already made progress to improve the ease by which passengers can claim, delay, repay. With the majority of operators now offering automated one click compensation. And I can also confirm for the noble Baroness that the government has recently announced plans to consolidate all existing delay repay systems into one under into one under Great British Railways, making it more straightforward for passengers to claim, delay, repay as a result of this change.
As I think the committee has heard already, passengers will also be able to claim, delay repay through independent retailers which they couldn't before, which is another step towards a fair and open competitive market. So no matter where the ticket is bought, it will be much quicker and easier to access compensation than it is today. And given the progress already being made, I hope that noble Baroness will see that we are already aligned on shared outcomes here, and that will provide her with enough reassurance to withdraw her amendment.
And I think that's quite a valid point. Turning to the amendments, 47, 51, 52, 531, three six and 139 concerning oversight, the retail Code of Practice will be, as I've said, administered, enforced by the IRR. It is the appropriate body to assess complaints and determine whether GBR compared with complied with its obligations. But GBR will also be fully subject to competition law alongside the existing oversight of the Competition and Markets Authority.
Nothing in the bill prevents the CMA from acting on competition challenges in rail, and nothing prevents retailers from referring issues to the CMA or either competition issues relating to code of practice or wider competition issues. So there is always a second opinion available. And of course, if they wanted to appeal to the courts, they could judicially review those those, those those decisions further. Currently, at least, I believe that additional approval requirements and further statutory appeal routes simply duplicate existing regulatory arrangements without providing meaningful additional protections.
And transparency, as I've referred to already, is already baked into this framework. It's a core regulatory principle for the IRR , who have historically publicised the launching of and formal outcome of railway licence investigations, and I would expect them to continue to do so. They were. The bill retains the requirement for the author to give notice for any decision not to issue an enforcement order following a licence breach. Providing a legislative backstop for this transparency.
Moving to amendments 136 and 139, it would not be appropriate for the general duty to promote competition to apply to rail retailing wholesale. If it did, the competition duty would conflict with the role in fairly and objectively enforcing the safeguards that government has charged it to deliver via the code. Enforcement of the code should be a fair and evidence should be fair and evidence based, determined simply by whether GBR has complied with the code of practice or not.
It should not be subject to other goals which might cause the IRR to judge operators compliance unfairly. This is usual practice for enforcement provisions. However, I can reassure noble Baroness Lady Harding that the competition duty will absolutely apply to the IRR and its writing the Code of Practice, so the code itself will have competition principles embedded within it. And I think my officials wrote to her on that subject. The noble Baroness put to the committee a number of very clear propositions, which I will consider clearly, carefully, as a consequence of what she said.
I believe I've answered many of them. But I will look at what she said further. And, of course, the publication of the draft Code of Practice will considerably help. I will also consider what the noble young has said the noble Baroness Alexander and other noble lords, and as I've already said, we are expecting the CMA to respond to the consultation, so we'll see what they have to say . In respect to amendment 17. The government fully agrees that appropriate oversight and scrutiny of public spending is important.
However, the amendment is unnecessary. The government policy has long been that GBR will retail tickets online through a high quality website and app, app and app. As the as the train operating companies do now and have done for many for many years and without without fees to passengers, the programme to deliver this is already underway and like all major government projects, is subject to extensive business case approval, assurance and spending control to ensure value for money and compliance with managing public money principles, we are working closely with industry as the proposition is developing and the procurement preparations progress.
In fact, there's clearly an opportunity here for people in this market already to sell their back offices to GBR. Much of the detail will necessarily be commercially sensitive at this stage, as procurement bids are negotiated and funding will be provided through existing programme budgets. However, once the information is available, it will be published in in the usual way. The noble Lord Moylan raised some questions about data. Actually, the current situation for the information.
The committee is. 70% of online tickets are sold by third parties and 30% by train operating companies. Fine. Finally, on amendments 208 and 339, I welcome very much the noble Baroness lemon to the contemplation of the Railways Act. Good luck with that. And. But in particular, she raised the automatic delay repay compensation. We share the objective of making compensation as simple and accessible as possible for passengers.
The scheme is one of the most generous schemes in Europe. We have already made progress to improve the ease by which passengers can claim, delay, repay. With the majority of operators now offering automated one click compensation. And I can also confirm for the noble Baroness that the government has recently announced plans to consolidate all existing delay repay systems into one under into one under Great British Railways, making it more straightforward for passengers to claim, delay, repay as a result of this change.
As I think the committee has heard already, passengers will also be able to claim, delay repay through independent retailers which they couldn't before, which is another step towards a fair and open competitive market. So no matter where the ticket is bought, it will be much quicker and easier to access compensation than it is today. And given the progress already being made, I hope that noble Baroness will see that we are already aligned on shared outcomes here, and that will provide her with enough reassurance to withdraw her amendment.
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Speaker 5
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Speaker 5
My Lords, firstly, I'd like to thank everyone who has contributed to this really quite meaty debate. Multiple X sets of state, private sector, regional devolved experience, and I think real unanimity of of intent. So thank you to everyone. I'd also like to thank the noble Lord, the Minister, for. There's an awful lot in his response, which I suspect we will all need to read carefully to properly understand. And I really do take at face value his opening statement of being in line with the intentions of all of these amendments, but I do think there's quite a lot of work to do between now and report.
It's encouraging to know that we will see the draft code before the end of recess. I think that will require an awful lot of detailed thought and discussion, but I would just like to to close off by actually highlighting what my noble friends on the left and the right of me have just said. The noble Lord Moylan actually sets out exactly why I still think we are going to need to put more onto the face of the bill.
The very fact that he was able to question the you know, is and actually, my noble friend Lord Young of Cookham said the same thing, really, that governments in the future will want to protect the monopoly of the vertically integrated GBR. A good friend of mine in the tech world once told me, monopolies are like children. Until you've got one of your own, you don't realise how valuable they are. But once you have one, you will protect it with your life.
And I do think that therefore, we need to hear the wisdom of of everyone in this debate today, that without the clear guardrails on the front face of the bill and the signals to investors and to independent retailers that we really mean it, and this will live beyond this current government, I fear the noble Lord, the minister's great intent won't actually turn out into reality. So I'm obviously going to withdraw my amendment, but I expect there will be much debate and discussion between now and report.
It's encouraging to know that we will see the draft code before the end of recess. I think that will require an awful lot of detailed thought and discussion, but I would just like to to close off by actually highlighting what my noble friends on the left and the right of me have just said. The noble Lord Moylan actually sets out exactly why I still think we are going to need to put more onto the face of the bill.
The very fact that he was able to question the you know, is and actually, my noble friend Lord Young of Cookham said the same thing, really, that governments in the future will want to protect the monopoly of the vertically integrated GBR. A good friend of mine in the tech world once told me, monopolies are like children. Until you've got one of your own, you don't realise how valuable they are. But once you have one, you will protect it with your life.
And I do think that therefore, we need to hear the wisdom of of everyone in this debate today, that without the clear guardrails on the front face of the bill and the signals to investors and to independent retailers that we really mean it, and this will live beyond this current government, I fear the noble Lord, the minister's great intent won't actually turn out into reality. So I'm obviously going to withdraw my amendment, but I expect there will be much debate and discussion between now and report.
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Speaker 15
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Speaker 15
This group deals with no larger private sector concerns. One of the biggest fears of the private sector, particularly those who operate trains, is the question of access to the rails, access to the tracks. The current system is that an independent body, the Office of Rail and Road, decides on applications for access to the track. Network rail decides on what should be paid for that, but that is also supervised and approved by the Office of Rail and Road.
So there is an independent balancing authority in place that makes these crucial decisions. Who are we talking about? Well, about 75% of the train movements on the on Network Rail's track are G will be G, b, R movements. The other 25% are people who need access to that track, and they need an independent body. They value an independent body deciding whether they can have that access. They are freight operators.
They are what I'm going to call regional operators like transport for London with the London Overground network Merseyrail. They are the open access operators. And here I have to mention, although they're going to be debated separately, I have to mention the heritage railway sector as well, which has made representations to us and no doubt to other noble Lords about their need for access to the track. I said in the last group that Great British Rail was like a huge bear in the shape of the noble Lord, a friendly bear, but a huge bear sitting in your front room, and the slightest twitch could actually just wipe out your business, even inadvertently.
Now, the fact is that this bear is going to be a regulator making regulatory decisions about access, and it is going to be a direct competitor for use of some of those tracks. I say some because there will be some tracks where there is sufficient capacity and everyone can have a go and there's no problem about that. But in a lot of the network is congested and G BR is going to have a powerful incentive to allocate to itself.
Tracks that it needs for its growing passenger service. But when it's not doing that, it will be held up by the fact that it also has an objective to increase freight. And there's a number attached to it. I can't remember the number just now, but it does require freight to be increased fairly consistently over a period in order to hit that target. And so it's second thought, if it is considering who is to have access to congested track, its second thought will be if it's not going to be us that g br well, perhaps we're going to give it to freight, but not always.
Not all the freight people will get what they want. And then further down the line, only further down the line will they be thinking about the other players whom I mentioned. Amendment 16 is straightforward. It would leave the current situation as it is, and those decisions will be made on rail and road. Everybody would understand what was happening. Amendment 221 offers a fallback position. It says if you're going ahead with this, then there must be a right of appeal to the o r.
Now, at the moment, what the bill does amazingly, having created this huge insensitivity, it then says that you can appeal to the ORR, but their decisions will not be binding. They will in effect be advisory to Great British Rail. What this amendment does is say that the process will be binding and that it will be done not simply on judicial review grounds. That is whether GBR followed the right process, but on on the merits of the case.
And that, I think, would be a good fallback. Now, the noble Lord, in writing to noble Lord after a very lengthy and helpful letter after second reading, said that if you were to do this, if you were to have an independent appeal body, then it would create a what he called a second directing mind, and he is not willing to have a second directing mind. I just want to dwell on that for a second, because I think it shows the difficulties that we are all going to have with this problem, that it is true.
You could say that the ORR in that capacity would be a second directing mind, but there are many other second directing minds. The structure being created by the noble Lord. The minister will not have a single directing mind. After all, the courts could make decisions about matters subject to judicial review, which will be binding on on the minister. But the minister does not say, I wish to be excused supervision by the courts, because that would be a second directing mind.
Again, of course, the Secretary of State has huge powers of direction over GBR built into the act, but the minister doesn't say that is impermissible because the Secretary of State would be a second directing mind. So to say that a regulator is a second directing mind, and to some extent all regulators are second directing minds where the where they exist to stay, to say where that the regulator would be. A second directing mind is not a defence to the claim that there must be somebody capable of giving the assurances to the open access operators, to the to the municipal, the regional government operators, to the freight operators, that their case is going to be considered fairly and that the charges, when set, will be fair.
Here we come to another point. The. The bill requires GBR to set a scale of charges for access to the track, but then it gives GBR the power, the power to decide that to set a higher charge for access to the tracks. If it believes that an economically efficient operator can bear it. Of course, deciding what is an economically efficient operator requires a whole set of experts doing nothing but.
But that if you if you go to somewhere like the Civil Aviation Authority, which has. This has to make decisions about whether something is economically efficient. There's a whole suite of people working there who make these decisions. It's their expertise. They are economic utility regulators. The same thing happens with other utilities. There's no mention in the bill, however, or anywhere else that that that sorry, that GBR is going to recruit sorry smile there that GFR, GBR is going to recruit that capacity, but nonetheless, they're going to set themselves up to make the decision that that somebody is or is not an economically efficient operator and what they can bear, and they'll be able to set charges, limited, higher charges, limited only by that consideration.
None of this washes with the with the private or municipal or freight sector. They simply don't accept this any more than the retail sector accepts what the government is offering offering in relation to the competition with retail and as with the retail sector, the private sector operating on the railway. Very sad that the noble Baroness, Lady Jones of Moulsecoomb, isn't here to to disagree with me about this, but the private sector on the railway has added huge amounts.
The whole of the freight sector is privately owned, and nobody is suggesting there is any going to be any change to that, and the benefits offered by open access operators using white track spaces that the heritage sector brings in a modest but nonetheless very useful income to this country. It's part of our tourism industry, and it's very useful in that regard, as well as keep giving jobs and entertainment and value to people who live in the communities that are served by the heritage railways.
So that is the purpose of these two amendments. It's to open up a debate on this very important issue where the government has been obdurate, despite all the representations made to it, but which I think will have to be addressed by this House. I do not think this bill can leave this House with this structure in place. My Lords, I beg to move.
So there is an independent balancing authority in place that makes these crucial decisions. Who are we talking about? Well, about 75% of the train movements on the on Network Rail's track are G will be G, b, R movements. The other 25% are people who need access to that track, and they need an independent body. They value an independent body deciding whether they can have that access. They are freight operators.
They are what I'm going to call regional operators like transport for London with the London Overground network Merseyrail. They are the open access operators. And here I have to mention, although they're going to be debated separately, I have to mention the heritage railway sector as well, which has made representations to us and no doubt to other noble Lords about their need for access to the track. I said in the last group that Great British Rail was like a huge bear in the shape of the noble Lord, a friendly bear, but a huge bear sitting in your front room, and the slightest twitch could actually just wipe out your business, even inadvertently.
Now, the fact is that this bear is going to be a regulator making regulatory decisions about access, and it is going to be a direct competitor for use of some of those tracks. I say some because there will be some tracks where there is sufficient capacity and everyone can have a go and there's no problem about that. But in a lot of the network is congested and G BR is going to have a powerful incentive to allocate to itself.
Tracks that it needs for its growing passenger service. But when it's not doing that, it will be held up by the fact that it also has an objective to increase freight. And there's a number attached to it. I can't remember the number just now, but it does require freight to be increased fairly consistently over a period in order to hit that target. And so it's second thought, if it is considering who is to have access to congested track, its second thought will be if it's not going to be us that g br well, perhaps we're going to give it to freight, but not always.
Not all the freight people will get what they want. And then further down the line, only further down the line will they be thinking about the other players whom I mentioned. Amendment 16 is straightforward. It would leave the current situation as it is, and those decisions will be made on rail and road. Everybody would understand what was happening. Amendment 221 offers a fallback position. It says if you're going ahead with this, then there must be a right of appeal to the o r.
Now, at the moment, what the bill does amazingly, having created this huge insensitivity, it then says that you can appeal to the ORR, but their decisions will not be binding. They will in effect be advisory to Great British Rail. What this amendment does is say that the process will be binding and that it will be done not simply on judicial review grounds. That is whether GBR followed the right process, but on on the merits of the case.
And that, I think, would be a good fallback. Now, the noble Lord, in writing to noble Lord after a very lengthy and helpful letter after second reading, said that if you were to do this, if you were to have an independent appeal body, then it would create a what he called a second directing mind, and he is not willing to have a second directing mind. I just want to dwell on that for a second, because I think it shows the difficulties that we are all going to have with this problem, that it is true.
You could say that the ORR in that capacity would be a second directing mind, but there are many other second directing minds. The structure being created by the noble Lord. The minister will not have a single directing mind. After all, the courts could make decisions about matters subject to judicial review, which will be binding on on the minister. But the minister does not say, I wish to be excused supervision by the courts, because that would be a second directing mind.
Again, of course, the Secretary of State has huge powers of direction over GBR built into the act, but the minister doesn't say that is impermissible because the Secretary of State would be a second directing mind. So to say that a regulator is a second directing mind, and to some extent all regulators are second directing minds where the where they exist to stay, to say where that the regulator would be. A second directing mind is not a defence to the claim that there must be somebody capable of giving the assurances to the open access operators, to the to the municipal, the regional government operators, to the freight operators, that their case is going to be considered fairly and that the charges, when set, will be fair.
Here we come to another point. The. The bill requires GBR to set a scale of charges for access to the track, but then it gives GBR the power, the power to decide that to set a higher charge for access to the tracks. If it believes that an economically efficient operator can bear it. Of course, deciding what is an economically efficient operator requires a whole set of experts doing nothing but.
But that if you if you go to somewhere like the Civil Aviation Authority, which has. This has to make decisions about whether something is economically efficient. There's a whole suite of people working there who make these decisions. It's their expertise. They are economic utility regulators. The same thing happens with other utilities. There's no mention in the bill, however, or anywhere else that that that sorry, that GBR is going to recruit sorry smile there that GFR, GBR is going to recruit that capacity, but nonetheless, they're going to set themselves up to make the decision that that somebody is or is not an economically efficient operator and what they can bear, and they'll be able to set charges, limited, higher charges, limited only by that consideration.
None of this washes with the with the private or municipal or freight sector. They simply don't accept this any more than the retail sector accepts what the government is offering offering in relation to the competition with retail and as with the retail sector, the private sector operating on the railway. Very sad that the noble Baroness, Lady Jones of Moulsecoomb, isn't here to to disagree with me about this, but the private sector on the railway has added huge amounts.
The whole of the freight sector is privately owned, and nobody is suggesting there is any going to be any change to that, and the benefits offered by open access operators using white track spaces that the heritage sector brings in a modest but nonetheless very useful income to this country. It's part of our tourism industry, and it's very useful in that regard, as well as keep giving jobs and entertainment and value to people who live in the communities that are served by the heritage railways.
So that is the purpose of these two amendments. It's to open up a debate on this very important issue where the government has been obdurate, despite all the representations made to it, but which I think will have to be addressed by this House. I do not think this bill can leave this House with this structure in place. My Lords, I beg to move.
19:44
19:44
Speaker 2
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Speaker 2
On. My Lords, I'm grateful to the noble Lord, Lord Moylan, for putting down these two amendments. I too have had many representations from all kinds of people and companies who already operate trains or would like to. We're not talking here about the the branch lines, which are on the whole private and are not covered here anyway. But there's an awful lot of what some people might call excursion trains or, or dining trains or whatever.
And of course, there's the Jack Jacobin train going to Mallaig, which is a highly successful, I'm told. But as well as freight who all need access to the network, and even at the moment there are stories of that people applying to get on the network for a path somewhere to be told that it's already full, and then they actually go back to, at the moment, Network Rail and say, well, if you did this and you did that, you could you could get you could get an extra train or two on.
So it's, it's also covers the issue of the risks and the penalties if something goes wrong, because that'll be at the moment, Network Rail will think, well, we don't want this because it'll, it could it could muck up the the service and cause delays elsewhere. So having the independent be what you might call an appeal body, I don't look upon it as a second, as a as a secondary directive directing mind, because actually the first directing mind is quite often a monopoly.
And we spent a lot of time this afternoon talking about monopolies and how we don't want them. And the minister said he he doesn't like monopolies either. So I think having this kind of catch all amendment , covering all the different types of train that might want to use the network and with an appeal body to the author is a very sensible solution. I fully support it.
And of course, there's the Jack Jacobin train going to Mallaig, which is a highly successful, I'm told. But as well as freight who all need access to the network, and even at the moment there are stories of that people applying to get on the network for a path somewhere to be told that it's already full, and then they actually go back to, at the moment, Network Rail and say, well, if you did this and you did that, you could you could get you could get an extra train or two on.
So it's, it's also covers the issue of the risks and the penalties if something goes wrong, because that'll be at the moment, Network Rail will think, well, we don't want this because it'll, it could it could muck up the the service and cause delays elsewhere. So having the independent be what you might call an appeal body, I don't look upon it as a second, as a as a secondary directive directing mind, because actually the first directing mind is quite often a monopoly.
And we spent a lot of time this afternoon talking about monopolies and how we don't want them. And the minister said he he doesn't like monopolies either. So I think having this kind of catch all amendment , covering all the different types of train that might want to use the network and with an appeal body to the author is a very sensible solution. I fully support it.
19:47
Speaker 9
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Speaker 9
But my Lord, I want to intervene briefly what my noble friend Lord Moylan's amendments on this. And in many ways this debate is similar in its nature to the one we've just had, in that it relates to how the GBR relates to an independent sector. In the previous debate, it was the independent retailers. In this case, it's the independent operators using an open access. And again the terms of trade are being changed.
If one looks at the consultation document on this, it says this GBR will become the decision maker for key decisions on access terms that are currently led by the Orer, the duration and form of access rights, developing an access and setting the Access Charges framework and the design of performance incentive regimes contained in track access regimes. And then it goes on to say, for GBR to have the space and authority to take access decisions on the best use of its network, the current role must change.
And at the moment, the Orer has the last word on an open access application and the department can't overrule it. And that's going to change. And we've had representations from the open access operators. Also, I've had representations about the Elizabeth Line and Heathrow Express, who are both anxious that they could be adversely affected by this change in responsibility at the noble Lord may remember a debate we had in the Moses Room about 18 months ago on this particular subject, which I introduced.
At that point I referred to another debate in the other place where there was a lot of support from Labour MPs for the principle of open access. Their constituents had benefited from it, and they were concerned that it might be curtailed. My noble friend Lord Moylan , referred to access charges and how changing the access charge could make it uneconomic. I want to approach this from a slightly different point of view, which concerns the criteria the author use to decide whether to grant open access.
If there isn't any capacity on the rail network, then it's quite clear the application should be refused. If there is capacity, the author then refers to the Nppa and the Nppa is the not primarily abstractive rate. And what that does, it means that if you want to open a new a new service, you must add at least £0.30 of new revenue for every £1 you abstract from the existing ones.
In other words, any new service must not rely on more than 70% of its revenue to justify its its application. Now, there is concern that that abstraction rate might be changed, and one assurance that the noble or the minister could give, which would reassure the operators of open access, is that GBR will not change the abstraction rate. The abstraction rate has been in operation for some time, and it balances, on the one hand the cost to the taxpayer, but on the other hand, the benefit to the traveller in terms of improved connectivity and in many cases simply lower fares.
Now we know the concern is justified by the letter that the Secretary of State, Heidi Alexander, wrote to the Orer back in January. Now, the Orer is already mindful of the cost to the taxpayer. That's reflected the abstraction rate, but the letter reminded him of the cost to the taxpayer and clear implication that not enough attention was being paid to that particular factor. Hence the concern, and hence the assurances that I hope the Minister will be able to give that.
Apart from the issues of access charges addressed by my noble friend, he will be able to give an assurance that the abstraction rate won't be altered either.
If one looks at the consultation document on this, it says this GBR will become the decision maker for key decisions on access terms that are currently led by the Orer, the duration and form of access rights, developing an access and setting the Access Charges framework and the design of performance incentive regimes contained in track access regimes. And then it goes on to say, for GBR to have the space and authority to take access decisions on the best use of its network, the current role must change.
And at the moment, the Orer has the last word on an open access application and the department can't overrule it. And that's going to change. And we've had representations from the open access operators. Also, I've had representations about the Elizabeth Line and Heathrow Express, who are both anxious that they could be adversely affected by this change in responsibility at the noble Lord may remember a debate we had in the Moses Room about 18 months ago on this particular subject, which I introduced.
At that point I referred to another debate in the other place where there was a lot of support from Labour MPs for the principle of open access. Their constituents had benefited from it, and they were concerned that it might be curtailed. My noble friend Lord Moylan , referred to access charges and how changing the access charge could make it uneconomic. I want to approach this from a slightly different point of view, which concerns the criteria the author use to decide whether to grant open access.
If there isn't any capacity on the rail network, then it's quite clear the application should be refused. If there is capacity, the author then refers to the Nppa and the Nppa is the not primarily abstractive rate. And what that does, it means that if you want to open a new a new service, you must add at least £0.30 of new revenue for every £1 you abstract from the existing ones.
In other words, any new service must not rely on more than 70% of its revenue to justify its its application. Now, there is concern that that abstraction rate might be changed, and one assurance that the noble or the minister could give, which would reassure the operators of open access, is that GBR will not change the abstraction rate. The abstraction rate has been in operation for some time, and it balances, on the one hand the cost to the taxpayer, but on the other hand, the benefit to the traveller in terms of improved connectivity and in many cases simply lower fares.
Now we know the concern is justified by the letter that the Secretary of State, Heidi Alexander, wrote to the Orer back in January. Now, the Orer is already mindful of the cost to the taxpayer. That's reflected the abstraction rate, but the letter reminded him of the cost to the taxpayer and clear implication that not enough attention was being paid to that particular factor. Hence the concern, and hence the assurances that I hope the Minister will be able to give that.
Apart from the issues of access charges addressed by my noble friend, he will be able to give an assurance that the abstraction rate won't be altered either.
19:51
19:51
Speaker 9
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Speaker 9
It's in terms of charges and access to the track and to the change. The role of the Office of Rail and Road will have to its current role. And this is something that since the publication of this bill over the last 18 months plus, there has been a big debate in the sector about Lord Moylan's 16 changes, Great British Railways functions to make decisions about access to and the use of railway infrastructure so that this is carried out by the Office of Rail and Road, he said.
As he said, as is the case now, an amendment 221, on the other hand, approaches this differently, with a subsequent right of appeal to the ORR after going through the dispute resolution process as set out in the bill. So still leaving the function with GBR, but bringing in more of an appeals function. The bill is a real change in terms of open access operations on the railway, and it's really right that we scrutinise how this is going to work in practice.
There are a number of innovative open access operators running really good services with competitive fares, as we've heard, and with the vast majority of passenger services being in public ownership, there does need to be confidence that Great British Railways is operating in a clear and transparent way, with an appropriate mechanism for challenge set at the right bar. And there is concern that removing the Office of Rail and Road from its current function with regards to access will mean Great British Railways will always prioritise its own services and may choose to not continue open access operations in the future, some that are very successful, but there is a fear out there.
So we do have some concerns over this shift in power between the Secretary of State and the Office of Rail and Road. We want to see decisions published and evidence that has supported any decisions, as well as real engagement with passengers and representative bodies. As timetables are developed and services changed. And of course, freight comes in here too. Freight is going to be critical to help move lorries off our roads and grow our regional economies.
The freight access is equally as important, so transparency and openness are needed in terms of track charges and access between Great British Railways and the other parties in this space. So I hope that the Minister will provide the assurance industry would like to hear on this important change in this legislation.
As he said, as is the case now, an amendment 221, on the other hand, approaches this differently, with a subsequent right of appeal to the ORR after going through the dispute resolution process as set out in the bill. So still leaving the function with GBR, but bringing in more of an appeals function. The bill is a real change in terms of open access operations on the railway, and it's really right that we scrutinise how this is going to work in practice.
There are a number of innovative open access operators running really good services with competitive fares, as we've heard, and with the vast majority of passenger services being in public ownership, there does need to be confidence that Great British Railways is operating in a clear and transparent way, with an appropriate mechanism for challenge set at the right bar. And there is concern that removing the Office of Rail and Road from its current function with regards to access will mean Great British Railways will always prioritise its own services and may choose to not continue open access operations in the future, some that are very successful, but there is a fear out there.
So we do have some concerns over this shift in power between the Secretary of State and the Office of Rail and Road. We want to see decisions published and evidence that has supported any decisions, as well as real engagement with passengers and representative bodies. As timetables are developed and services changed. And of course, freight comes in here too. Freight is going to be critical to help move lorries off our roads and grow our regional economies.
The freight access is equally as important, so transparency and openness are needed in terms of track charges and access between Great British Railways and the other parties in this space. So I hope that the Minister will provide the assurance industry would like to hear on this important change in this legislation.
19:54
Speaker 15
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Speaker 15
My Lords, I thank the noble Lord, Lord Moylan, for amendment 16 and for the short debate that we've had the in in the groupings of the Committee stage, the Bill. There are some very substantial numbers of amendments about accessing groups 26 to 31. So I was going to answer this, these amendments very briefly, because we will have, I'm sure, very detailed debate subsequently, and indeed, I will leave some of the points that noble Lords have made this evening in order to come back to them when we get to groups 26 and 31.
But I do want to be very clear that the existing access framework is in, in our view, not fit for purpose. It's built on 30 years of complex legislation, regulations, contracts and codes. It requires the Network Rail and the LRR to take decisions using inconsistent criteria based on differing duties and objectives with no common vision. And fundamentally, there's no single party who is responsible for planning the best overall use of the network and ensuring that access decisions deliver that plan.
The current system is too often characterised by fragmentation and delay, and it is clear that nobody's in overall charge, and that's led to inefficient use of capacity with decisions that serve neither passengers nor freight well. There are clear examples of the consequences, and the May 2018 timetable failure, the original catalyst for rail reform, saw punctuality and reliability plummet across large parts of the network. Keith Williams's review highlighted how this was the result of a complex, fragmented system with no single person in charge.
Timetables were often built by trying to piece together layers of past decisions and contractual rights. On the East Coast main line, the current system resulted in years of decision making paralysis with Network Rail. None of the Network Rail, the O, R, R and operators being able to agree a timetable service improvements that were supposed to result from £4 billion worth of taxpayers investment had been delayed for several years. The only way this could be resolved in the end was by me as rail minister, stepping in to make the decision that nobody else wanted to, and I don't think that's clearly that's an acceptable outcome at all.
Noble Lords will also recall last December, when the ORR ruled that the O 700 from Manchester Piccadilly to Euston would have to run fully staffed but with no passengers on it. Against the wishes, both of the operator and the network providers who agreed it should run the Ori itself acknowledged that it didn't have all the facts when it took that decision. The. The current system has also failed to unlock meaningful freight growth. Too often, the needs of freight operators and their customers have been put to the back of the queue paths labelled a strategic freight and not strategically planned at all, and may not even join up as they often just a mixed bag of surrendered paths and leftovers.
In the current system, there's no overarching strategy, no overall plan for how to make best use of the network, and where no single body has end to end authority, critical information can be missed, escalation is unclear, and blurred accountability leads to capacity being used in ways that increase disruption, letting down both passengers and freight customers. An integrated railway under Gbr's leadership is the only way to fix this, and as the single directing mind for the railway, GBR will proactively plan how to make best use of the network.
It will be empowered to ensure that access decisions take proper account of that plan, implementing an achievable and reliable timetable, which makes the very best use of the limited capacity available and better coordination. The timetable will minimise delays, improve reliability, reduce costs and may well open space for new routes and services and for freight operators. The new system will provide much greater certainty about the capacity available to them to grow their services. With GBR enabled and empowered to protect that capacity.
The truth is, if we leave it as it is, the system will never change. I will deal with the distinction between the crucial and important distinction between section 60 and section 63 of the bill when we get to the detailed debate. But in the meantime, I don't accept that amendment 16, which would fundamentally undermine the purpose of these reforms. It is acceptable, and I urge the noble Lord to withdraw it on amendment 221, which would require the access and use policy to set out not only a process for dealing with disputes, but a right of appeal.
Of course, I agree that GBR strong leadership under the new system must be accompanied by strong accountability. That's why the author will act as a robust and independent appeals body for access, capacity allocation and charging decisions made by GBR and its network. The appeals function will provide a clear, credible and accessible route to challenge those decisions. The bill also requires GBR to set out a procedure for resolving disputes relating to the working timetable in its access and use policy.
The mechanism will enable enable parties to address and resolve disagreements before matters are escalated to the IRR. Many, many of the issues that that the industry refers to are relatively small conflicts between individual train paths, and the right way of resolving them is to have a mechanism by which the parties discuss and agree, individual and very small changes with with with GBR and timetabling. I'm sure that noble Lords can agree that it makes sense for GBR and operators to try to come to an agreement in the first instance.
But to be clear, if such dispute resolution fails, the Bill already provides a further route of appeal to the ORR in disputes concerning the working timetable. The amendment would therefore duplicate an existing appeals route, creating the potential for unnecessary complexity, bureaucracy and confusion. And I hope noble Lords would agree that the right of appeal to the independent regulator already set out in the Bill is sufficient, given the Bill clearly already achieves the Noble Lords aims. I urge him to withdraw this amendment.
We look forward to substantive discussion about access when we get to. When we get when we get to sections 26 to 31. Before the
But I do want to be very clear that the existing access framework is in, in our view, not fit for purpose. It's built on 30 years of complex legislation, regulations, contracts and codes. It requires the Network Rail and the LRR to take decisions using inconsistent criteria based on differing duties and objectives with no common vision. And fundamentally, there's no single party who is responsible for planning the best overall use of the network and ensuring that access decisions deliver that plan.
The current system is too often characterised by fragmentation and delay, and it is clear that nobody's in overall charge, and that's led to inefficient use of capacity with decisions that serve neither passengers nor freight well. There are clear examples of the consequences, and the May 2018 timetable failure, the original catalyst for rail reform, saw punctuality and reliability plummet across large parts of the network. Keith Williams's review highlighted how this was the result of a complex, fragmented system with no single person in charge.
Timetables were often built by trying to piece together layers of past decisions and contractual rights. On the East Coast main line, the current system resulted in years of decision making paralysis with Network Rail. None of the Network Rail, the O, R, R and operators being able to agree a timetable service improvements that were supposed to result from £4 billion worth of taxpayers investment had been delayed for several years. The only way this could be resolved in the end was by me as rail minister, stepping in to make the decision that nobody else wanted to, and I don't think that's clearly that's an acceptable outcome at all.
Noble Lords will also recall last December, when the ORR ruled that the O 700 from Manchester Piccadilly to Euston would have to run fully staffed but with no passengers on it. Against the wishes, both of the operator and the network providers who agreed it should run the Ori itself acknowledged that it didn't have all the facts when it took that decision. The. The current system has also failed to unlock meaningful freight growth. Too often, the needs of freight operators and their customers have been put to the back of the queue paths labelled a strategic freight and not strategically planned at all, and may not even join up as they often just a mixed bag of surrendered paths and leftovers.
In the current system, there's no overarching strategy, no overall plan for how to make best use of the network, and where no single body has end to end authority, critical information can be missed, escalation is unclear, and blurred accountability leads to capacity being used in ways that increase disruption, letting down both passengers and freight customers. An integrated railway under Gbr's leadership is the only way to fix this, and as the single directing mind for the railway, GBR will proactively plan how to make best use of the network.
It will be empowered to ensure that access decisions take proper account of that plan, implementing an achievable and reliable timetable, which makes the very best use of the limited capacity available and better coordination. The timetable will minimise delays, improve reliability, reduce costs and may well open space for new routes and services and for freight operators. The new system will provide much greater certainty about the capacity available to them to grow their services. With GBR enabled and empowered to protect that capacity.
The truth is, if we leave it as it is, the system will never change. I will deal with the distinction between the crucial and important distinction between section 60 and section 63 of the bill when we get to the detailed debate. But in the meantime, I don't accept that amendment 16, which would fundamentally undermine the purpose of these reforms. It is acceptable, and I urge the noble Lord to withdraw it on amendment 221, which would require the access and use policy to set out not only a process for dealing with disputes, but a right of appeal.
Of course, I agree that GBR strong leadership under the new system must be accompanied by strong accountability. That's why the author will act as a robust and independent appeals body for access, capacity allocation and charging decisions made by GBR and its network. The appeals function will provide a clear, credible and accessible route to challenge those decisions. The bill also requires GBR to set out a procedure for resolving disputes relating to the working timetable in its access and use policy.
The mechanism will enable enable parties to address and resolve disagreements before matters are escalated to the IRR. Many, many of the issues that that the industry refers to are relatively small conflicts between individual train paths, and the right way of resolving them is to have a mechanism by which the parties discuss and agree, individual and very small changes with with with GBR and timetabling. I'm sure that noble Lords can agree that it makes sense for GBR and operators to try to come to an agreement in the first instance.
But to be clear, if such dispute resolution fails, the Bill already provides a further route of appeal to the ORR in disputes concerning the working timetable. The amendment would therefore duplicate an existing appeals route, creating the potential for unnecessary complexity, bureaucracy and confusion. And I hope noble Lords would agree that the right of appeal to the independent regulator already set out in the Bill is sufficient, given the Bill clearly already achieves the Noble Lords aims. I urge him to withdraw this amendment.
We look forward to substantive discussion about access when we get to. When we get when we get to sections 26 to 31. Before the
20:00
20:00
Speaker 15
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Speaker 15
I thank the noble Lord for his question. I, I, I won't give that now, but I will I will come back to that in the debate. I should also say, for the benefit of of the committee, that Network Rail is publishing the access and use policy consultation tomorrow. So it will address, apparently your comments, your questions on abstraction. But we I'm sure that I'm sure that we can debate the noble Lords points further when we get to the detailed debate.
20:01
Speaker 7
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Speaker 7
My Lords, it won't wash. The noble Lord did not give any explanation as to why it was that there should be an appeal system which a. Cannot look at the merits of the case, and B cannot bind GBR. Now, he says, we're going to come back and discuss this again. I'm sure we will. I hope we will. We shall be discussing it several times in the course of the committee, and we'll certainly be discussing it on report at the moment.
I beg leave to withdraw my amendment. But I'm absolutely clear that the noble Lord that this will not wash.
I beg leave to withdraw my amendment. But I'm absolutely clear that the noble Lord that this will not wash.
20:02
Speaker 18
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Speaker 18
Is it your lordships pleasure that this amendment be withdrawn is by leave withdrawn? Amendment 17 Lord Moylan not moved, not moved. Amendment 18. Lord Moylan not moved. Amendment 19. Lord Lansley not moved. not moved. Amendment 20. Baroness Bridgen not not moved. Question is that clause three stand part of the bill as many of that opinion shall say. Content.
Content not content. The contents have it. We now come to the group of amendments, beginning with amendment 21 clause for amendment 21. Lord Moylan.
Content not content. The contents have it. We now come to the group of amendments, beginning with amendment 21 clause for amendment 21. Lord Moylan.
20:02
Speaker 7
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Speaker 7
My Lords, we come now to clause four, which deals with relations with the devolved authorities, Scotland and Wales. I have a number of amendments here. Five. In fact, they all appear, in a sense to be relatively minor, but they go to the heart of the devolution settlement and they raise the question whether the Bill is in line with the new Prime Minister's. I know he hasn't been elected to anything, but he is the new Prime Minister with the new Prime Minister's policy of making devolution a reality.
And I'm going to run through the amendments fairly straightforwardly and then leave it to others to debate them and the minister to respond. One of the things that can be done is that anyone who is a combined authority or devolved authority has a right to request. I always find this slightly offensive because we're a free country. Everyone has a right to request something from a minister, but. But apparently this valued right to request is going to be given.
So you can go along and ask GBR if they'll run a service which might even be branded, you know, your way, but run a service local to you to which you might contribute some of the costs. That's the general idea. I can understand that in relation to English combined authorities. But when we go to the devolved administration, I don't understand at all why Scotland, for example, should be confined by statute to running that service using Great British Rail if the path is available and if the service can be run, why should they not make their own choice as to who the operator of that service should be? As I understand it, that would not be possible under the Bill.
It would have to be a GBR service. I think that's a bit insulting to Scottish devolution. The same applies to Wales, and my amendment 21 would correct that and allow them to exercise railway functions through a body corporate other than Great British Rail Amendment 145, which goes hand in hand with amendment 146 because they relate to Scotland and to Wales, relate to the fact that there is going to have to be a.
Under the Bill, a memorandum of understanding between Great British Rail and the Scottish Government and, respectively, the Welsh Government. And yet we never see this. A great deal of reliance in the Bill on memorandums of understanding. But we never see them. We have no entitlement to see them. I'm not saying they're not going to be published, but I'm not sure that the government is under an obligation to publish them. And it's so much part of this bill that the substance of it is being concealed from us here in Parliament and being wrapped up in documents which are ancillary to the main agreement.
So my amendment 145 and 146 would require those memorandums memoranda to be laid before Parliament. Before they could come into effect. And finally, I have two paired amendments two, nine four and 295. Again, one relates to Scotland and one relates to Wales. 294 relates to clause 82. There's something really fantastically cheeky in clause 82 where it reads Great British Railways must consult the Scottish Ministers before making a decision within subsection two that follows.
That's namely a decision about cross border services and additions to a part of the railway network operated by Great British Railways, which is situated in Scotland. It must make it must consult the Scottish Government, Scottish Ministers, if it appears to Great British Railways , that the decision will significantly affect the interests of Scotland's economy or of persons living and working in the area. First of all, I come back to a similar question I had in the last group what economic capacity is Great British Railways going to be employing in order to make disinterested decisions about whether something is going to have a significant effect on the interests of Scotland's economy.
And secondly, is it not more likely that the Scottish Government is the appropriate body to make a decision about whether something is to have, or will have significant effect on the interests of the Scottish economy? My amendment puts that right. It reverses that. And similarly, the Second Amendment does something similar for Wales. So I think we're here at the whole question of a certain arrogance, I think, in the Bill in regard to certainly regard to local government in England, but I think towards the Scottish and Welsh Government is really probably beyond the pale, given what the Prime Minister has been saying and what the Scottish and Welsh Government accept.
So I would have hoped, I would hope that when the Minister replies, he'll say that those things that I've drawn attention to are slips in the drafting and that he'll be happy to correct them, either through my amendments or through amendments of his own that he'll be drafting and submitting to us on report. My Lords, I beg to move.
And I'm going to run through the amendments fairly straightforwardly and then leave it to others to debate them and the minister to respond. One of the things that can be done is that anyone who is a combined authority or devolved authority has a right to request. I always find this slightly offensive because we're a free country. Everyone has a right to request something from a minister, but. But apparently this valued right to request is going to be given.
So you can go along and ask GBR if they'll run a service which might even be branded, you know, your way, but run a service local to you to which you might contribute some of the costs. That's the general idea. I can understand that in relation to English combined authorities. But when we go to the devolved administration, I don't understand at all why Scotland, for example, should be confined by statute to running that service using Great British Rail if the path is available and if the service can be run, why should they not make their own choice as to who the operator of that service should be? As I understand it, that would not be possible under the Bill.
It would have to be a GBR service. I think that's a bit insulting to Scottish devolution. The same applies to Wales, and my amendment 21 would correct that and allow them to exercise railway functions through a body corporate other than Great British Rail Amendment 145, which goes hand in hand with amendment 146 because they relate to Scotland and to Wales, relate to the fact that there is going to have to be a.
Under the Bill, a memorandum of understanding between Great British Rail and the Scottish Government and, respectively, the Welsh Government. And yet we never see this. A great deal of reliance in the Bill on memorandums of understanding. But we never see them. We have no entitlement to see them. I'm not saying they're not going to be published, but I'm not sure that the government is under an obligation to publish them. And it's so much part of this bill that the substance of it is being concealed from us here in Parliament and being wrapped up in documents which are ancillary to the main agreement.
So my amendment 145 and 146 would require those memorandums memoranda to be laid before Parliament. Before they could come into effect. And finally, I have two paired amendments two, nine four and 295. Again, one relates to Scotland and one relates to Wales. 294 relates to clause 82. There's something really fantastically cheeky in clause 82 where it reads Great British Railways must consult the Scottish Ministers before making a decision within subsection two that follows.
That's namely a decision about cross border services and additions to a part of the railway network operated by Great British Railways, which is situated in Scotland. It must make it must consult the Scottish Government, Scottish Ministers, if it appears to Great British Railways , that the decision will significantly affect the interests of Scotland's economy or of persons living and working in the area. First of all, I come back to a similar question I had in the last group what economic capacity is Great British Railways going to be employing in order to make disinterested decisions about whether something is going to have a significant effect on the interests of Scotland's economy.
And secondly, is it not more likely that the Scottish Government is the appropriate body to make a decision about whether something is to have, or will have significant effect on the interests of the Scottish economy? My amendment puts that right. It reverses that. And similarly, the Second Amendment does something similar for Wales. So I think we're here at the whole question of a certain arrogance, I think, in the Bill in regard to certainly regard to local government in England, but I think towards the Scottish and Welsh Government is really probably beyond the pale, given what the Prime Minister has been saying and what the Scottish and Welsh Government accept.
So I would have hoped, I would hope that when the Minister replies, he'll say that those things that I've drawn attention to are slips in the drafting and that he'll be happy to correct them, either through my amendments or through amendments of his own that he'll be drafting and submitting to us on report. My Lords, I beg to move.
20:08
20:09
Speaker 4
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Speaker 4
My Lords, I just want to talk to my amendment 22 in this group. But before I do that, if I might just say to my noble friend, I see the point he's driving at with amendment 21, but I think it's a little bit more complicated. It seems to me that the this is about the circumstances where that apply, where a Scottish. The Scottish or Welsh ministers wish to use Great British Railways or a company jointly owned by themselves or US and Great British Railways.
So effectively the. They're not subsidiaries of Great British Railways. We can already see in the Bill there is this distinction between GBR companies and a company that is jointly owned by Scottish and Welsh ministers and GBR. They can use that to provide services, but as far as I can see, they're not actually prevented. If you look at subsequent clauses, we've seen that whole process that those of us who did the public ownership bill will remember this process of designation of passenger services.
They have to designate passenger services with a public sector company. But the definition of a public sector company in a later clause isn't the same. It could be a company wholly owned by Scottish ministers or wholly owned by Welsh ministers, so they're not required to use Great British Railways, and even they could do the same thing that sector of state can, which is that exempt services from designation. And then, of course, they could do the same thing as the Secretary of State does in relation to TfL or.
And they could do so in relation to Glasgow or Cardiff, so on. So I think it's a little bit more complicated, but I in particular, I think putting any body corporate in here is not necessary. I think what's more to the point, if I may say to my noble friend, is to make sure. Is to re-enter, as I know he will do with further amendments later on the question of the scope of who might provide designated services, which I know he'll do at a later stage.
Amendment 22. My part is actually just to see whether there's really a problem that at the point at which Scottish and Welsh ministers are looking to make arrangements with Great British Railways to provide some services, there they are. And when they change those arrangements, they're required to consult with the Secretary of State and with Great British Railways. But it seems to me that necessarily those arrangements will lead to issues that need to be governed by the regulatory functions of the Office of Rail and Road and relate to the licensing of those operators through the Orer.
And it seems to me perfectly reasonable to require that Scottish and Welsh Ministers, at the point of making those arrangements or changing them, should also consult the Office of Rail and Road in order to ensure that there isn't a difficulty associated with what it is they're asking GBR to do on their behalf. So that's the purpose of amendment 22. To put that in that consultation with RR.
So effectively the. They're not subsidiaries of Great British Railways. We can already see in the Bill there is this distinction between GBR companies and a company that is jointly owned by Scottish and Welsh ministers and GBR. They can use that to provide services, but as far as I can see, they're not actually prevented. If you look at subsequent clauses, we've seen that whole process that those of us who did the public ownership bill will remember this process of designation of passenger services.
They have to designate passenger services with a public sector company. But the definition of a public sector company in a later clause isn't the same. It could be a company wholly owned by Scottish ministers or wholly owned by Welsh ministers, so they're not required to use Great British Railways, and even they could do the same thing that sector of state can, which is that exempt services from designation. And then, of course, they could do the same thing as the Secretary of State does in relation to TfL or.
And they could do so in relation to Glasgow or Cardiff, so on. So I think it's a little bit more complicated, but I in particular, I think putting any body corporate in here is not necessary. I think what's more to the point, if I may say to my noble friend, is to make sure. Is to re-enter, as I know he will do with further amendments later on the question of the scope of who might provide designated services, which I know he'll do at a later stage.
Amendment 22. My part is actually just to see whether there's really a problem that at the point at which Scottish and Welsh ministers are looking to make arrangements with Great British Railways to provide some services, there they are. And when they change those arrangements, they're required to consult with the Secretary of State and with Great British Railways. But it seems to me that necessarily those arrangements will lead to issues that need to be governed by the regulatory functions of the Office of Rail and Road and relate to the licensing of those operators through the Orer.
And it seems to me perfectly reasonable to require that Scottish and Welsh Ministers, at the point of making those arrangements or changing them, should also consult the Office of Rail and Road in order to ensure that there isn't a difficulty associated with what it is they're asking GBR to do on their behalf. So that's the purpose of amendment 22. To put that in that consultation with RR.
20:12
Speaker 10
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Speaker 10
Lords. These are interesting amendments. I've had several representations from the rail sector in Wales and Scotland, and they're clearly quite concerned. The first question I need, probably answering is who's going to be owning and operating the infrastructure in Wales and Scotland? Because at the moment it's in Scotland. It's it's done by probably Transport Scotland and in Wales it's I can't remember now, but I think it's different.
And then of course both those organisations may and do operate train passenger train services. So. Given the scope of this bill that we've been discussing at length today, will Transport Scotland and the Welsh Assembly Government be able to let their own contracts with GBR or an independent operator to run trains, and who will be responsible for managing the infrastructure if it goes wrong or it needs maintenance, as well as the issue and the amendment, which is coordinating with the the rest of the UK.
For me, it's not clear at the moment. I'd be grateful for if my noble friend could clarify it, because I've probably been stupid. But there we are.
And then of course both those organisations may and do operate train passenger train services. So. Given the scope of this bill that we've been discussing at length today, will Transport Scotland and the Welsh Assembly Government be able to let their own contracts with GBR or an independent operator to run trains, and who will be responsible for managing the infrastructure if it goes wrong or it needs maintenance, as well as the issue and the amendment, which is coordinating with the the rest of the UK.
For me, it's not clear at the moment. I'd be grateful for if my noble friend could clarify it, because I've probably been stupid. But there we are.
20:14
Speaker 5
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Speaker 5
My Lords. I just want to speak briefly about three groups of amendments in this group. So amendment 145, in the name of my noble friend Lord Boylan, I think has quite a lot to recommend it. The. The bill, as set out sensibly, says that that the UK government and the Scottish Government should have a memorandum of understanding about how cross-border rail services should work. That's very sensible, but it seems to me that you really want to have the documents published at the same time.
You want effectively, you want them on the same timeline because you want effectively a GB rail strategy to be produced. Given the the way the rail network works. And the whole point about GBR is bringing together track and train and having some consistency, it seems to me very sensible. If you're going to have this memorandum of understanding between UK ministers and Scottish and Welsh ministers, you actually want them on the same timeline. Then effectively what you publish is a GB rail strategy with a level of consistency.
If you publish the the Department for transport, the Secretary of State publishes her rail strategy first and then at some subsequent point in the future, you end up negotiating a memorandum of understanding and publishing that. I think that doesn't really give a very clear sense about what the. The joined up strategy is having the things published at the same time, not so much the publication. It's the fact what that will drive is a level of consistency and working between the governments that they'll have to do that, thinking about what their individual rail strategies look like and how they will fit together.
And I think that would actually be a very sensible thing to do and will promote a sensible level of working across borders. Question on amendment 146, or a question that arises from 146, which I hadn't thought of until I read Lord Moylan's amendment, which is about how you split ticket revenue, where you have services that cross border. And I have to confess, I probably should know this, but I don't I don't know quite exactly how it's done at the moment, but it comes back to the conversation we were having about how retailing is done and how the retail operations work and the transparency.
This is another area where actually the the Welsh ministers and the Welsh Government will clearly have a view about how that revenue is allocated and and shown, because it will absolutely go to the operators that they run and manage. And then the final point on amendments 294 and 295. I do strongly agree with my noble friend Lord Moylan. Well, it's I think , probably possible, I think about how many analysts there are economics analysts there are in the Department for transport.
I think the department and therefore GBR would be perfectly capable of doing economic analysis, which would produce the impact of changes to rail services on both the Welsh and the Scottish economies. But that isn't really the question. The question is a judgement call about what you do as a result of that economic analysis, and frankly, that is a judgement call that should properly be taken by democratically elected ministers who are accountable both to the Scottish Parliament and the Welsh Senate rather than by GBR.
And frankly, it was going to be taken by anyone that wasn't Welsh and Scottish Ministers. It should be taken by the UK Minister, because I think that is a decision that should be taken by a minister, not by GBR. So I think my noble friends amendment actually raises a very good point, and I think that would be worth if he isn't able to give us some clear answers today. I think worth the minister taking that away and just having a think, particularly as my final point, in the light of the increased focus on devolution that the new Prime Minister has set out, is one of the key objectives of his government.
You want effectively, you want them on the same timeline because you want effectively a GB rail strategy to be produced. Given the the way the rail network works. And the whole point about GBR is bringing together track and train and having some consistency, it seems to me very sensible. If you're going to have this memorandum of understanding between UK ministers and Scottish and Welsh ministers, you actually want them on the same timeline. Then effectively what you publish is a GB rail strategy with a level of consistency.
If you publish the the Department for transport, the Secretary of State publishes her rail strategy first and then at some subsequent point in the future, you end up negotiating a memorandum of understanding and publishing that. I think that doesn't really give a very clear sense about what the. The joined up strategy is having the things published at the same time, not so much the publication. It's the fact what that will drive is a level of consistency and working between the governments that they'll have to do that, thinking about what their individual rail strategies look like and how they will fit together.
And I think that would actually be a very sensible thing to do and will promote a sensible level of working across borders. Question on amendment 146, or a question that arises from 146, which I hadn't thought of until I read Lord Moylan's amendment, which is about how you split ticket revenue, where you have services that cross border. And I have to confess, I probably should know this, but I don't I don't know quite exactly how it's done at the moment, but it comes back to the conversation we were having about how retailing is done and how the retail operations work and the transparency.
This is another area where actually the the Welsh ministers and the Welsh Government will clearly have a view about how that revenue is allocated and and shown, because it will absolutely go to the operators that they run and manage. And then the final point on amendments 294 and 295. I do strongly agree with my noble friend Lord Moylan. Well, it's I think , probably possible, I think about how many analysts there are economics analysts there are in the Department for transport.
I think the department and therefore GBR would be perfectly capable of doing economic analysis, which would produce the impact of changes to rail services on both the Welsh and the Scottish economies. But that isn't really the question. The question is a judgement call about what you do as a result of that economic analysis, and frankly, that is a judgement call that should properly be taken by democratically elected ministers who are accountable both to the Scottish Parliament and the Welsh Senate rather than by GBR.
And frankly, it was going to be taken by anyone that wasn't Welsh and Scottish Ministers. It should be taken by the UK Minister, because I think that is a decision that should be taken by a minister, not by GBR. So I think my noble friends amendment actually raises a very good point, and I think that would be worth if he isn't able to give us some clear answers today. I think worth the minister taking that away and just having a think, particularly as my final point, in the light of the increased focus on devolution that the new Prime Minister has set out, is one of the key objectives of his government.
20:18
Speaker 9
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Speaker 9
My Lords, these amendments rightly question the impact of this legislation on Scotland and Wales and the role of Scottish and Welsh ministers in decisions including cross border ones. And what does. As the discussion we've had is about what does devolution really mean in this context and the democratic accountability point. I look forward to hearing what the minister has to say to these important points that have been raised by noble lords.
20:19
Speaker 15
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Speaker 15
I think I should firstly say about this group that , sorry, I lost my place, that the the Scottish and Welsh governments have been intensely involved in the drafting of the Bill, and that both governments are very supportive of it. Turning to amendment 21, clause four enables the Scottish and Welsh Ministers to make arrangements for their functions to be exercised by GBR, GBR subsidiary or a company jointly owned, and the noble Lord Lansley spotted that correctly.
He's he's he's absolutely right. It is an enabling power designed to support integration where it's considered beneficial. It doesn't prevent devolved ministers from continuing to exercise their functions themselves. Nor is it intended to provide a general power to delegate functions to any body corporate. Indeed, under clause 27, Welsh ministers will continue to designate Wales only services and Welsh components of cross border services, and under clause 31, Welsh Ministers may either provide those services themselves or secure their provision through the award of public service contracts.
Similar powers exist for Scottish Ministers under clauses 26 and 31. And, of course, Scottish Ministers can decide to run their services through GBR or indeed through their own operator. The government believes, therefore, that the Bill strikes an appropriate balance between preserving devolved responsibilities and enabling closer integration with GBR, where that's desired by Scottish and Welsh ministers. Amendment 22 in the name of the naval Lord. Lord Lansley requires the lrr to be consulted.
Clause four already requires consultation with both the Secretary of State and GBR before such arrangements are made, varied or revoked. And that's because GBR is the body which might be responsible, which will be responsible, may be responsible. I'm sorry for carrying out the function. While the Secretary of State has an interest in the wider operation and integration of the railway system, and because GBR will be operating devolved functions along reserved ones, they are therefore the parties best placed to provide input on these arrangements.
Whilst the LRR plays an important role as the railway's independent regulator, these arrangements concern the exercise of devolved functions and national versus devolved. government rather than regulatory matters. So we don't consider an additional statutory consultation requirement to be necessary on amendments 145 and 146. The government fully supports transparency and effective parliamentary scrutiny. That's precisely why we have already published the agreed Memorandum of Understanding with the Welsh Ministers, and a framework for the Memorandum of Understanding with Scottish Ministers.
That's enabled Parliament to consider the proposed arrangements . Alongside the Bill, the Memoranda of Understanding are intended to provide a basis for joint working between UK ministers and Scottish and Welsh Ministers on matters relating to rail services and funding. They are not legislative instruments, but practical agreements to support effective inter-governmental working. The amendments would require the MoU to be published at the same time as the rail strategy, and would impose a two month period before it could come into force.
However, the rail strategy and the MoU serve distinct and separate purposes. The rail strategy sets out long term priorities and objectives for the railway. Whilst the MoU supports collaborative working between the UK and Welsh or respectively, Scottish Government requiring the two documents to be published at the same time creates unnecessary friction and delay, similarly, requiring a two month waiting period before an MoU could take effect would add process without materially improving oversight or outcome.
Amendment 146 goes further.
He's he's he's absolutely right. It is an enabling power designed to support integration where it's considered beneficial. It doesn't prevent devolved ministers from continuing to exercise their functions themselves. Nor is it intended to provide a general power to delegate functions to any body corporate. Indeed, under clause 27, Welsh ministers will continue to designate Wales only services and Welsh components of cross border services, and under clause 31, Welsh Ministers may either provide those services themselves or secure their provision through the award of public service contracts.
Similar powers exist for Scottish Ministers under clauses 26 and 31. And, of course, Scottish Ministers can decide to run their services through GBR or indeed through their own operator. The government believes, therefore, that the Bill strikes an appropriate balance between preserving devolved responsibilities and enabling closer integration with GBR, where that's desired by Scottish and Welsh ministers. Amendment 22 in the name of the naval Lord. Lord Lansley requires the lrr to be consulted.
Clause four already requires consultation with both the Secretary of State and GBR before such arrangements are made, varied or revoked. And that's because GBR is the body which might be responsible, which will be responsible, may be responsible. I'm sorry for carrying out the function. While the Secretary of State has an interest in the wider operation and integration of the railway system, and because GBR will be operating devolved functions along reserved ones, they are therefore the parties best placed to provide input on these arrangements.
Whilst the LRR plays an important role as the railway's independent regulator, these arrangements concern the exercise of devolved functions and national versus devolved. government rather than regulatory matters. So we don't consider an additional statutory consultation requirement to be necessary on amendments 145 and 146. The government fully supports transparency and effective parliamentary scrutiny. That's precisely why we have already published the agreed Memorandum of Understanding with the Welsh Ministers, and a framework for the Memorandum of Understanding with Scottish Ministers.
That's enabled Parliament to consider the proposed arrangements . Alongside the Bill, the Memoranda of Understanding are intended to provide a basis for joint working between UK ministers and Scottish and Welsh Ministers on matters relating to rail services and funding. They are not legislative instruments, but practical agreements to support effective inter-governmental working. The amendments would require the MoU to be published at the same time as the rail strategy, and would impose a two month period before it could come into force.
However, the rail strategy and the MoU serve distinct and separate purposes. The rail strategy sets out long term priorities and objectives for the railway. Whilst the MoU supports collaborative working between the UK and Welsh or respectively, Scottish Government requiring the two documents to be published at the same time creates unnecessary friction and delay, similarly, requiring a two month waiting period before an MoU could take effect would add process without materially improving oversight or outcome.
Amendment 146 goes further.
20:23
Speaker 5
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Speaker 5
Just before the minister moves on. Can I just check then? So the rail strategy that the Secretary of State is going to be producing, that's a rail strategy for Great Britain, and then the memorandum of understanding is going to be about how that interacts, because if the if the Secretary of State's rail strategy is only for England, that that that doesn't really make sense. What he's just said implies that the Secretary of State is going to be doing a rail strategy for Great Britain.
Otherwise there wouldn't be any friction from ensuring those documents were done together.
Otherwise there wouldn't be any friction from ensuring those documents were done together.
20:23
Speaker 4
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Speaker 4
Well before before the minister responds to that point. I'm slightly confused because in the rail strategy clause 15, it says the Secretary of State may not include provision relating to the functions of the Scottish ministers, so it may be a rail strategy for Great Britain, but it can't deal with the functions of of the Scottish ministers.
20:24
20:24
20:34
Speaker 5
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Speaker 5
Thank you very much, as I. As I was just saying, before we resume, the advantage of of a break is that I had chance to slightly firm up my question. So what I was saying before we we broke for the division was that I thought it was a bit not not synchronising the rail strategy publication and the memorandum of understanding potentially meant that you weren't having a a clear joined up strategy for Great Britain.
And I was asking the minister whether. the strategy that the Secretary of State had produced was for Great Britain, and if so, wouldn't it make sense to synchronize that with the memorandum of understanding and having now had a chance just to look at the clause 15, it is indeed the case that the Secretary of State is producing a strategy for the rail network in Great Britain, so that includes Wales and Scotland, but it specifically mustn't contain provisions about functions of the Scottish ministers, because that's clearly what the memorandum of understanding is going to do, in which case, I do think the amendments tabled by Lord Moylan are very sensible, because otherwise you're going to be publishing a rail strategy for Great Britain, which does have quite important functions for Scottish ministers, because they make the call on what Network Rail does on infrastructure in Scotland, for example.
And it doesn't make sense to not have that joined up. So actually, I think if I'm very happy for the minister to take it away, because it obviously has consequences, but actually synchronizing those two events, I think , will drive very sensible and good behaviour in in the way the department interacts with the Scottish and Welsh governments, and I think it will be an improvement on having a better rail strategy for the whole of Great Britain.
And I was asking the minister whether. the strategy that the Secretary of State had produced was for Great Britain, and if so, wouldn't it make sense to synchronize that with the memorandum of understanding and having now had a chance just to look at the clause 15, it is indeed the case that the Secretary of State is producing a strategy for the rail network in Great Britain, so that includes Wales and Scotland, but it specifically mustn't contain provisions about functions of the Scottish ministers, because that's clearly what the memorandum of understanding is going to do, in which case, I do think the amendments tabled by Lord Moylan are very sensible, because otherwise you're going to be publishing a rail strategy for Great Britain, which does have quite important functions for Scottish ministers, because they make the call on what Network Rail does on infrastructure in Scotland, for example.
And it doesn't make sense to not have that joined up. So actually, I think if I'm very happy for the minister to take it away, because it obviously has consequences, but actually synchronizing those two events, I think , will drive very sensible and good behaviour in in the way the department interacts with the Scottish and Welsh governments, and I think it will be an improvement on having a better rail strategy for the whole of Great Britain.
20:36
Speaker 15
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Speaker 15
So I'm grateful to the noble Lord and I too have done a little bit of homework whilst whilst we had the division. I think the important thing he draws our attention to is clause 153, which is because the rail strategy may not contain provision about functions of Scottish ministers. In effect, it is a real strategy for England and Wales because. Because the. The rail strategy for Scotland is the function of Scottish ministers and they will publish a strategy to cover Scotland and it will reflect the devolution funding arrangements and the responsibility for the railway in each country.
We. We are working very closely with Scotland and GBR will have to work very closely with Scotland, as will the Secretary of State to ensure that the strategies make sense and that. Therefore the GBR business plan makes sense. Having said all of that, I'm still not sure that I can see the connection between the MOU and and the strategies. And indeed, we've been able to strike a memorandum of understanding and publish it with Welsh ministers and a framework for that in Scotland without a real long term rail strategy, because they are intended to provide a basis for joint working between UK ministers and Scottish and Welsh ministers on matters related to rail services and funding.
But they aren't the same as a strategy which sets out what the intentions of the government of those governments are, and and will form the basis on which GBR will write a business plan. So I think I think my contention is the same, which is that actually the rail strategy sets out long term priorities and objectives for the railway. The MOU support collaborative working between the respective UK and Welsh and Scottish governments, and I.
I don't see the difference. I don't see I see the difference between those those two instruments, the strategies and the MOU. And I don't see the need for a waiting period between taking effect or for them to be coordinated. And as I've said, we have published the the MOU with Wales already and the outline of that for Scotland.
We. We are working very closely with Scotland and GBR will have to work very closely with Scotland, as will the Secretary of State to ensure that the strategies make sense and that. Therefore the GBR business plan makes sense. Having said all of that, I'm still not sure that I can see the connection between the MOU and and the strategies. And indeed, we've been able to strike a memorandum of understanding and publish it with Welsh ministers and a framework for that in Scotland without a real long term rail strategy, because they are intended to provide a basis for joint working between UK ministers and Scottish and Welsh ministers on matters related to rail services and funding.
But they aren't the same as a strategy which sets out what the intentions of the government of those governments are, and and will form the basis on which GBR will write a business plan. So I think I think my contention is the same, which is that actually the rail strategy sets out long term priorities and objectives for the railway. The MOU support collaborative working between the respective UK and Welsh and Scottish governments, and I.
I don't see the difference. I don't see I see the difference between those those two instruments, the strategies and the MOU. And I don't see the need for a waiting period between taking effect or for them to be coordinated. And as I've said, we have published the the MOU with Wales already and the outline of that for Scotland.
20:38
Speaker 5
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Speaker 5
Two final point. Then Minister will be pleased to know he has , though, just, I think, perhaps inadvertently flagged that the drafting of the Bill in clause 15 then isn't correct because the Secretary isn't going to be producing a long term strategy for the development and use of the rail network in Great Britain and the railway services that she wishes to see in Great Britain. She's going to be doing those things for England and Wales. So actually, the Bill should really reflect that because it is an accurate.
So again, happy for him to take it away. But actually I think he's let on at the despatch box that the bill isn't correctly drafted.
So again, happy for him to take it away. But actually I think he's let on at the despatch box that the bill isn't correctly drafted.
20:39
Speaker 15
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Speaker 15
The noble Lord draws my attention to something which having having read it to you, I concluded that myself. So we will take that away. And and and it's very it's this is the purpose of committee, of course, which is to discover things that you hadn't thought about, and I'm as willing as the next as the next minister, perhaps to decide what what to do. So we will take that away. And I'm grateful to the noble Lord.
I, I still, for the avoidance of doubt, don't accept the contention about the connections between the MOU and the strategies. But I do accept that actually the points about the respective boundaries of the strategies could be much better placed than it is very good. Amendment 146 from the noble Lord Moylan goes further about the provisions on the allocation of ticket revenue from cross-border services were operated by transport for Wales. We don't think that's appropriate.
Such operational and commercial matters are more appropriately dealt with through established industry arrangements such as public service contracts and the Wales and Borders agreements, rather than through Intergovernmental Cooperation Agreement, which is fundamentally about the governance of GBR. So I urge the noble Lord to withdraw those amendments. Turning to amendments two, nine, four and 295. On the subject of consultation, the government fully recognises the importance of ensuring that Scottish and Welsh Ministers are consulted on decisions that have a significant impact in their on their nations.
And that's precisely why the bill already places a duty on GBR to consult them before making such decisions. The amendment would go further by requiring devolved ministers to determine whether consultation was required. That would add significant delay for no practical benefit, as Scottish and Welsh ministers would be required to review decisions that would often be irrelevant to them before steps can be taken. The approach will create uncertainty about when decisions can proceed, and risks shifting the focus from effective engagement to procedural questions about whether consultation is is required.
Scottish and Welsh ministers will also continue to have important mechanisms through which they can influence the railway, including their respective rail and transport strategies. Their powers will are strong and guidance. The government therefore considers these amendments unnecessary. Finally, turning to amendment 296 and the noble Lord, Lord Berkeley, which specifies that GBR should consult on access decisions where they impact Welsh ministers. Clause 82 already requires that GBR consult Wales on issues affecting them and that, and that requirement would also extend to access decisions.
Therefore, I can reassure the noble Lord that his intent has already been achieved by the Bill. But bearing in mind what the noble Lord said in support of his amendment, I will write to the noble Lord and copy it, to copy it to other noble Lords about the ownership and control of the infrastructure in. In both Scotland and Wales now and in the future. So he and other noble Lords can be clearer about how I see. The noble Lord is not in his place, but he can be.
He and other noble Lords can be clear about the present arrangements in the future arrangements, since I think what he said expressed a degree of a degree of confusion about them. So I will write to him about about that, and I will finish by finally saying again, as I started, that Scotland and Wales have been intensely involved in the drafting of the Bill. Both governments are very supportive of the Bill. I. Therefore, I urge the noble Lords to withdraw their amendment.
I, I still, for the avoidance of doubt, don't accept the contention about the connections between the MOU and the strategies. But I do accept that actually the points about the respective boundaries of the strategies could be much better placed than it is very good. Amendment 146 from the noble Lord Moylan goes further about the provisions on the allocation of ticket revenue from cross-border services were operated by transport for Wales. We don't think that's appropriate.
Such operational and commercial matters are more appropriately dealt with through established industry arrangements such as public service contracts and the Wales and Borders agreements, rather than through Intergovernmental Cooperation Agreement, which is fundamentally about the governance of GBR. So I urge the noble Lord to withdraw those amendments. Turning to amendments two, nine, four and 295. On the subject of consultation, the government fully recognises the importance of ensuring that Scottish and Welsh Ministers are consulted on decisions that have a significant impact in their on their nations.
And that's precisely why the bill already places a duty on GBR to consult them before making such decisions. The amendment would go further by requiring devolved ministers to determine whether consultation was required. That would add significant delay for no practical benefit, as Scottish and Welsh ministers would be required to review decisions that would often be irrelevant to them before steps can be taken. The approach will create uncertainty about when decisions can proceed, and risks shifting the focus from effective engagement to procedural questions about whether consultation is is required.
Scottish and Welsh ministers will also continue to have important mechanisms through which they can influence the railway, including their respective rail and transport strategies. Their powers will are strong and guidance. The government therefore considers these amendments unnecessary. Finally, turning to amendment 296 and the noble Lord, Lord Berkeley, which specifies that GBR should consult on access decisions where they impact Welsh ministers. Clause 82 already requires that GBR consult Wales on issues affecting them and that, and that requirement would also extend to access decisions.
Therefore, I can reassure the noble Lord that his intent has already been achieved by the Bill. But bearing in mind what the noble Lord said in support of his amendment, I will write to the noble Lord and copy it, to copy it to other noble Lords about the ownership and control of the infrastructure in. In both Scotland and Wales now and in the future. So he and other noble Lords can be clearer about how I see. The noble Lord is not in his place, but he can be.
He and other noble Lords can be clear about the present arrangements in the future arrangements, since I think what he said expressed a degree of a degree of confusion about them. So I will write to him about about that, and I will finish by finally saying again, as I started, that Scotland and Wales have been intensely involved in the drafting of the Bill. Both governments are very supportive of the Bill. I. Therefore, I urge the noble Lords to withdraw their amendment.
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Speaker 7
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Speaker 7
My Lords, we see a pattern which is that there's always an argument as to why the bear in the front room should be able to make the decisions without constraint, and here we go with Scotland and Wales. Now, if the noble Lord, the Minister, tells me that the Scottish and Wales ministers are happy, that great British Rail and unaccountable, largely unaccountable body , largely concerned with English railways, should make a determination as to what is of economic significance to Scotland and Wales, and that they've had that question put to them, that they've considered it squarely and that they've come back and said yes.
Then, of course, that's what the Bill should say. It strikes me as odd and not consistent with the general approach that Scottish and Welsh Government would take to these things. Beyond that, I congratulate my noble friend Lord Harper on drawing out various points. I feel a swathe of government amendments coming along, coming on for. only one report. If not, I think there will have to be others as well.
Nonetheless, for the moment I've done my best to defend the devolution settlement policy of the Prime Minister and to give Scotland Wales the say over the future of their own economies insofar as they're affected by public transport. Having done that, I will subside and beg leave to withdraw my amendment.
Then, of course, that's what the Bill should say. It strikes me as odd and not consistent with the general approach that Scottish and Welsh Government would take to these things. Beyond that, I congratulate my noble friend Lord Harper on drawing out various points. I feel a swathe of government amendments coming along, coming on for. only one report. If not, I think there will have to be others as well.
Nonetheless, for the moment I've done my best to defend the devolution settlement policy of the Prime Minister and to give Scotland Wales the say over the future of their own economies insofar as they're affected by public transport. Having done that, I will subside and beg leave to withdraw my amendment.
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Speaker 18
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Speaker 18
Thank you. Is it your lordships pleasure that this amendment be withdrawn? Amendment is by leave withdrawn. Amendment 22. Lord Lansley. not moved, not moved. The question is that clause four stand part of the bill, as many of that opinion shall say. Content. Content not content. The contents have it.
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