Lords Grand Committee
Thursday 10th September 2026
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12:16
12:16
Speaker 2
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Speaker 2
My Lords, the noble Lord Blunkett had hoped to be here today, but he's found himself with other commitments, and therefore he asked if I would move his amendment 22 a. It's one that I also support. I think that this amendment really is a probing amendment. Whether the provision in the bill, which enables Great British Railways to enter into partnerships with mayors and we'll debate whether it should be mayors or others later , could be strengthened, and I would be really keen to hear what the Minister has to say on that.
The Bill sets out this sort of partnership structure which enables collaborative working, local funding, commissioning and other benefits. But this wording change from May to must really strengthens that requirement for a partnership with mayors. So I hope the minister will agree that Great British Railways must treat mayors and others will come on to as genuine partners, and I hope the government will consider this amendment seriously. I'm going to take this opportunity to also talk to other amendments in this group, and I think it really is a very important group, not just because my background, like many noble Lords, is in local and regional government.
I'm very aware that, for example, transport for Greater Manchester, transport for London and others have been concerned about the Bill as drafted because it doesn't treat them as real partners at the table. It felt like a consultation tick box exercise rather than genuine equal partners. And just to remind noble Lords, the noble Lord, the minister said at report stage of the Passenger Railway Services Public Ownership Bill on the 6th of November 2024. In responding to my amendment on rail devolution, and I quote, I can reaffirm to your lordships House that the Railways Bill will include statutory role for devolved governments and mayoral combined authorities.
They will be involved in governing, managing, planning and developing the railways. And yet I believe and I think others here, hence all the amendments feel the bill as currently drafted, does not provide the statutory powers mayoral strategic authorities and others require. Now, since we have started, of course, on this bill through Parliament, we've seen a new Prime Minister, one who is committed to devolution to mayoral and strategic authorities. So I'm really hoping that some things will change.
I've already talked about the amendment that I've moved for Lord Blunkett, which I hugely support and think strengthens the Bill, and I hope the government will accept that. It would be useful if the Minister could set out how government sees clause five , enabling Great British Railways and these authorities to develop local commissioning partnerships, and for Greater Manchester, I want to stress that this clause is particularly important because the city region wants to take on a more meaningful role, similar to London, in shaping and commissioning rail services.
Now, many of the amendments in this group, which we will hear about, are trying in different ways to ensure that strong role for local and regional government, including Lord Lansley's sensible amendments bringing in the term strategic authorities from the recent devolution legislation. I hope the government will be sympathetic to many of them. Lord Blunkett is. In many ways, his amendment is the simplest way to strengthen regional and local government's hand. Lord Grayling has an amendment 147, which allows for an authority to declare a service wholly within their area as a mayoral concession service, which can then be run as a concession, rather like transport for London.
And I think that's an interesting one. And to date, transport for London and others have had to go with what feels like a begging bowl to government to take over Metro Railway services for their area. So this would shift the balance. So I think it's an interesting proposal to discuss Lord Moylan's amendment 159 expressly forbidding the Chancellor of TfL services to Great British Railways again highlights this tension between national and regional services and concerns about the powers of Great British Railways.
I look forward to the rest of the debate on this group and the Minister's response, and given this new government's agenda around devolution, I hope we'll start to see a shift and potentially some government amendments in this area. I beg to move.
The Bill sets out this sort of partnership structure which enables collaborative working, local funding, commissioning and other benefits. But this wording change from May to must really strengthens that requirement for a partnership with mayors. So I hope the minister will agree that Great British Railways must treat mayors and others will come on to as genuine partners, and I hope the government will consider this amendment seriously. I'm going to take this opportunity to also talk to other amendments in this group, and I think it really is a very important group, not just because my background, like many noble Lords, is in local and regional government.
I'm very aware that, for example, transport for Greater Manchester, transport for London and others have been concerned about the Bill as drafted because it doesn't treat them as real partners at the table. It felt like a consultation tick box exercise rather than genuine equal partners. And just to remind noble Lords, the noble Lord, the minister said at report stage of the Passenger Railway Services Public Ownership Bill on the 6th of November 2024. In responding to my amendment on rail devolution, and I quote, I can reaffirm to your lordships House that the Railways Bill will include statutory role for devolved governments and mayoral combined authorities.
They will be involved in governing, managing, planning and developing the railways. And yet I believe and I think others here, hence all the amendments feel the bill as currently drafted, does not provide the statutory powers mayoral strategic authorities and others require. Now, since we have started, of course, on this bill through Parliament, we've seen a new Prime Minister, one who is committed to devolution to mayoral and strategic authorities. So I'm really hoping that some things will change.
I've already talked about the amendment that I've moved for Lord Blunkett, which I hugely support and think strengthens the Bill, and I hope the government will accept that. It would be useful if the Minister could set out how government sees clause five , enabling Great British Railways and these authorities to develop local commissioning partnerships, and for Greater Manchester, I want to stress that this clause is particularly important because the city region wants to take on a more meaningful role, similar to London, in shaping and commissioning rail services.
Now, many of the amendments in this group, which we will hear about, are trying in different ways to ensure that strong role for local and regional government, including Lord Lansley's sensible amendments bringing in the term strategic authorities from the recent devolution legislation. I hope the government will be sympathetic to many of them. Lord Blunkett is. In many ways, his amendment is the simplest way to strengthen regional and local government's hand. Lord Grayling has an amendment 147, which allows for an authority to declare a service wholly within their area as a mayoral concession service, which can then be run as a concession, rather like transport for London.
And I think that's an interesting one. And to date, transport for London and others have had to go with what feels like a begging bowl to government to take over Metro Railway services for their area. So this would shift the balance. So I think it's an interesting proposal to discuss Lord Moylan's amendment 159 expressly forbidding the Chancellor of TfL services to Great British Railways again highlights this tension between national and regional services and concerns about the powers of Great British Railways.
I look forward to the rest of the debate on this group and the Minister's response, and given this new government's agenda around devolution, I hope we'll start to see a shift and potentially some government amendments in this area. I beg to move.
12:20
12:20
12:20
Speaker 1
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Speaker 1
I have three amendments in this group. 26. No. Four, 26, 64304 and 333 that are all to the same point, which is that in this bill, the the definition of relevant local government bodies is expressed as mayoral combined authorities, mayoral county combined authorities and passenger transport executives. Those first two mayoral county combined authorities and combined authorities are are based, I think on the proposition some months back that all of the strategic authorities would move over time towards being mayoral strategic authorities.
Now, where we are is that the since perhaps the original drafting of this legislation, we completed the English Devolution and Community Empowerment Act. Those of us who were on that on that legislation will recall section one of the. Of that act defines strategic authorities . And it doesn't define strategic authorities by reference to whether they have a mayor or not. They are basically combined authority, single foundation, single foundation.
Strategic authorities combined.
Now, where we are is that the since perhaps the original drafting of this legislation, we completed the English Devolution and Community Empowerment Act. Those of us who were on that on that legislation will recall section one of the. Of that act defines strategic authorities . And it doesn't define strategic authorities by reference to whether they have a mayor or not. They are basically combined authority, single foundation, single foundation.
Strategic authorities combined.
12:36
Speaker 3
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Speaker 3
So I would have hoped that the minister would have changed his mind in recent weeks and would be extremely will be redistributing power. This bill doesn't redistribute power to anybody in local government. The sympathetic to these amendments 28, 29 and 30, ensure that the Secretary of State remains properly involved in arrangements between GBR and TfL, rather than allowing those relations to be determined solely within GBR. This is the bear in the room.
Again, the GBR is going to be so huge they will make all the decisions. Everybody else is just a taker of decisions by GBR. They're not having a participation in them. Amendment 159 protects existing TfL in London Underground arrangements and ensures they cannot simply be displaced without proper process and consultation. Amendment 301 makes the principle even simpler that where GBR is creating a decision affecting TfL, it should inform TfL and allow TfL itself to determine whether the decision is sufficiently significant to require consultation, and that seems entirely consistent with the Prime Minister's philosophy.
And the same principle lies behind amendments 23, 24, 25, one, five, six and 297 in relation to mayors and local government more widely, to which I now turn amendments 23 and 24 give greater flexibility for railway functions to be exercised locally, and for the necessary financial arrangements to flow in either direction. At the moment, it allows local authorities, it allows GBR to collect money from local authorities. Why shouldn't it be the other way round? What if GBR makes a profit on a line? Why shouldn't they pay money to the local authority? Why is everything so one sided in this bill? Amendment 25 provides an independent route to the Or where agreement cannot be reached.
There is no way of resolving disagreements in the bill, so let's give them one. Let's have an appeal to an independent Orer. I mean, it's not that I think the order is tremendous. It's the. But it's the only available appeal body at the moment. If the minister said he's happy to have an appeal, but he would like a different structure, we'd be open to discussing that. But let us have an appeal route so that disagreements can be resolved independently.
Amendment 156 allow mayor and combined authorities to procure local passenger services through concession agreements, including using private operators, where that offers the best solution. At the moment, they're limited to using GBR to provide the services. And what if GBR is no good? I know what GBR is going to be managed beautifully and nothing will ever go wrong in the utopian vision we're looking forward to. But what about what if they're not actually very good? What if they're constantly on strike? What if the management is sloppy? Why shouldn't you be able to turn to a private train operator to manage your local service that you that this is not a question of track access or timetables because they've been agreed.
But why would you have to use GBR to provide these services if you are genuinely enjoying devolution and amendment 297 requires GBR to notify a mayor or combined authority, I accept here the point made by my friend, my noble friend Lord Lansley, that that terminology might be might be improved, but I'm not entering into that issue just at the moment. But to notify mayoral combined authority before taking a relevant decision, allowing the authority itself to judge whether it's sufficiently significant to require consultation, why should why should GBR be the body deciding whether should be consulted on.
When it's the local authority that has the. The knowledge of how sensitive or insensitive it might be with local communities, such as to require consultation and benefit from consultation. Anyway, these amendments test how far the government really intend to follow through on the Prime Minister's policy, and do they genuinely trust mayors and local authorities to shape local services? Do they support further rail devolution to London, where TfL can demonstrate it would improve services? And will they ensure that GBR becomes a partner in genuine devolution, not simply acquiring local authority customers, rather than just the national body through which decisions are centralised? And given the new Prime Minister's stated agenda.
I really am hoping that we're going to see a different approach from the noble Lord, the Minister, for the first time, the amendments from tabled by the Noble Lords, Lord Blunkett and Lord Berkeley, and by my noble friend Lord Lansley and Lord Grayling, are at the heart of many of the issues I've raised in this group, and they also sit squarely with what the Prime Minister himself advocated when he was mayor of Greater Manchester, a song which he has continued to sing on the whole since he's become Prime Minister about the importance of devolving power, giving local leaders greater control over transport and allowing places to shape growth around their own priorities.
So it's time for the noble Lord Minister to step up and get real and get with the swing of where Britain is going. Burnham Britain is going, we're told.
Again, the GBR is going to be so huge they will make all the decisions. Everybody else is just a taker of decisions by GBR. They're not having a participation in them. Amendment 159 protects existing TfL in London Underground arrangements and ensures they cannot simply be displaced without proper process and consultation. Amendment 301 makes the principle even simpler that where GBR is creating a decision affecting TfL, it should inform TfL and allow TfL itself to determine whether the decision is sufficiently significant to require consultation, and that seems entirely consistent with the Prime Minister's philosophy.
And the same principle lies behind amendments 23, 24, 25, one, five, six and 297 in relation to mayors and local government more widely, to which I now turn amendments 23 and 24 give greater flexibility for railway functions to be exercised locally, and for the necessary financial arrangements to flow in either direction. At the moment, it allows local authorities, it allows GBR to collect money from local authorities. Why shouldn't it be the other way round? What if GBR makes a profit on a line? Why shouldn't they pay money to the local authority? Why is everything so one sided in this bill? Amendment 25 provides an independent route to the Or where agreement cannot be reached.
There is no way of resolving disagreements in the bill, so let's give them one. Let's have an appeal to an independent Orer. I mean, it's not that I think the order is tremendous. It's the. But it's the only available appeal body at the moment. If the minister said he's happy to have an appeal, but he would like a different structure, we'd be open to discussing that. But let us have an appeal route so that disagreements can be resolved independently.
Amendment 156 allow mayor and combined authorities to procure local passenger services through concession agreements, including using private operators, where that offers the best solution. At the moment, they're limited to using GBR to provide the services. And what if GBR is no good? I know what GBR is going to be managed beautifully and nothing will ever go wrong in the utopian vision we're looking forward to. But what about what if they're not actually very good? What if they're constantly on strike? What if the management is sloppy? Why shouldn't you be able to turn to a private train operator to manage your local service that you that this is not a question of track access or timetables because they've been agreed.
But why would you have to use GBR to provide these services if you are genuinely enjoying devolution and amendment 297 requires GBR to notify a mayor or combined authority, I accept here the point made by my friend, my noble friend Lord Lansley, that that terminology might be might be improved, but I'm not entering into that issue just at the moment. But to notify mayoral combined authority before taking a relevant decision, allowing the authority itself to judge whether it's sufficiently significant to require consultation, why should why should GBR be the body deciding whether should be consulted on.
When it's the local authority that has the. The knowledge of how sensitive or insensitive it might be with local communities, such as to require consultation and benefit from consultation. Anyway, these amendments test how far the government really intend to follow through on the Prime Minister's policy, and do they genuinely trust mayors and local authorities to shape local services? Do they support further rail devolution to London, where TfL can demonstrate it would improve services? And will they ensure that GBR becomes a partner in genuine devolution, not simply acquiring local authority customers, rather than just the national body through which decisions are centralised? And given the new Prime Minister's stated agenda.
I really am hoping that we're going to see a different approach from the noble Lord, the Minister, for the first time, the amendments from tabled by the Noble Lords, Lord Blunkett and Lord Berkeley, and by my noble friend Lord Lansley and Lord Grayling, are at the heart of many of the issues I've raised in this group, and they also sit squarely with what the Prime Minister himself advocated when he was mayor of Greater Manchester, a song which he has continued to sing on the whole since he's become Prime Minister about the importance of devolving power, giving local leaders greater control over transport and allowing places to shape growth around their own priorities.
So it's time for the noble Lord Minister to step up and get real and get with the swing of where Britain is going. Burnham Britain is going, we're told.
12:42
Speaker 4
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Speaker 4
My Lords, before we move on, I'd like to briefly return to a point raised during Committee on Amendment 146 on Tuesday regarding the long term rail strategy and its relationship with devolved railway responsibilities. I was less than clear on this issue when we discussed it previously, and I thought it'd be helpful to make a point of order to provide clarity and correct the record for clarity. The government considers that clause 15 is correctly drafted and accurately reflects the devolution settlement.
The Secretary of State's long term rail strategy will cover Great Britain. It will cover all of England and Wales, and it will address the railway in Scotland. With regard to reserved matters only. Reserved matters include issues such as cross border services, technical standards and railway safety and security. Scottish ministers have devolved responsibility for matters such as Scottish passenger services and Scottish funded infrastructure, and accordingly, clause 15.3 prevents the long term rail strategy for making provisions about functions of the Scottish Ministers, and they will cover those matters in their own strategy.
I hope that explanation is helpful. The key point is that there is no inconsistency between describing the strategy as a Great Britain wide one and providing an appropriate carve out for devolved Scottish functions. I also reassure noble Lords. . Just
The Secretary of State's long term rail strategy will cover Great Britain. It will cover all of England and Wales, and it will address the railway in Scotland. With regard to reserved matters only. Reserved matters include issues such as cross border services, technical standards and railway safety and security. Scottish ministers have devolved responsibility for matters such as Scottish passenger services and Scottish funded infrastructure, and accordingly, clause 15.3 prevents the long term rail strategy for making provisions about functions of the Scottish Ministers, and they will cover those matters in their own strategy.
I hope that explanation is helpful. The key point is that there is no inconsistency between describing the strategy as a Great Britain wide one and providing an appropriate carve out for devolved Scottish functions. I also reassure noble Lords. . Just
12:43
12:43
Speaker 4
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Speaker 4
And the answer to the noble Lord about that is that the infrastructure arrangements in Wales are significantly different, and Wales does not have its own settlement in. In that respect. I will also reassure noble Lords that engagement between the Scottish and Welsh Ministers on both strategies is productive and will continue until their publication. I'm grateful to the noble Lords who raised this issue, and it has provided an opportunity to place my clarification on the record in respect to the noble Lord Moylan's.
Second point about an email from the Association of British Comedian. Just
Second point about an email from the Association of British Comedian. Just
12:44
Speaker 5
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Speaker 5
before the minister. May I respond? Since I was one of the members that raised this, can I just thank him for what he's just said, but also for the very helpful letter that he sent, which the noble Lord, Lord Moylan, referred to. And I did take the time to study it this morning, since I was the one that that raised the issue. And I'm grateful for him for just making that clarity. That strategy means something slightly different north of the border in Scotland because of that role of Scottish ministers.
And again, it's an asymmetrical position with Wales, as my noble friend Lord lands has just highlighted, because obviously in Wales Welsh Ministers don't have responsibilities. That's very helpful and I'm grateful for the minister's clarification. And the government doesn't have to come back with amendments to fix the bill.
And again, it's an asymmetrical position with Wales, as my noble friend Lord lands has just highlighted, because obviously in Wales Welsh Ministers don't have responsibilities. That's very helpful and I'm grateful for the minister's clarification. And the government doesn't have to come back with amendments to fix the bill.
12:45
Speaker 4
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Speaker 4
I'm grateful to the noble Lord. We thought we'd been saved by the bell, but actually we weren't. Of course they were, so I. I thought it was right to put it, put it right. Helpful, I should say to the Lord Moylan, I do not, to my knowledge, have any email from the Association of British Commuters. So I do get several a day. So if he sends it to me, I will talk to officials about what they suggest.
And I think that's the most I can say just just.
And I think that's the most I can say just just.
12:45
12:45
Speaker 4
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Speaker 4
Turning to group one. And and of course, this matter is of significant importance to this government with a new Prime Minister. And I firmly believe that the bill as drafted already empowers mayors and local areas. I am clear that GBR will not work unless it works for and with mayors and local communities. And in answer to noble Baroness pigeon, who quoted me, I stand by what I said and this is absolutely not a tick box exercise.
I'll turn to amendment 22 a in the name of my noble friend Lord blanket to. To which the noble Lord, noble Baroness, Lady Pigeon, has kindly spoken to today. I absolutely agree with him and with the noble Baroness that the partnership approach that the Bill sets out must be effective. GBR must engage with partnership offers seriously, and the bar for GBR to reject a partnership must be exceptionally high as we're in a aligned on the intent behind this amendment, and she described it as the principle amendment in this group, which I think covers all of the circumstances I commit to.
Absolutely to taking it away, and I will see what can be done after this debate. Turning to amendments 147 and 156, the government absolutely supports further rail devolution, where it's in the interests of passengers and the wider rail network. That's why the bill already provides a route for passenger rail services to be devolved through exemption from designation by the Secretary of State in clause 28. Where services are devolved, mayors already have flexibility to choose their approach to securing passenger services and may secure them via a concession contract, including to the private sector, if they so wish.
The bill doesn't change that. TfL, of course, as the noble Lord Moylan describes, operates on precisely this basis, so there's no need to duplicate the existing devolution provision in the Bill, which already achieves that intent in full on amendments 23 and 24. Clause five is already intended to support local commissioning arrangements. It enables mayors to contribute funding where they wish to secure services or improvements that reflect local priorities and go beyond the national railway offer.
This gives local leaders a mechanism to invest in additional rail outcomes for their area, where they choose to do so, providing the local input that we know is so important for enhancing our communities. The details of these arrangements, including revenue sharing options, will be agreed separately from legislation by collaborative partnerships between GBS and mayors. Work on developing this model has already begun using Greater Manchester as a pathfinder. Indeed, I'm going to meet the new mayor of Greater Manchester tomorrow.
The government absolutely supports greater local influence on over rail services, but allowing mayors to run rail services is a financially significant decision with safety and public interest impacts. And that's why it's right that the current process in the bill for devolving services to local leaders remains the route that's used for this. That route is well understood, familiar to industry and proven effective, allowing mayors to run GBR services outside the usual process isn't necessary and doesn't, doesn't and doesn't better serve local communities.
Turning to amendments 26, 64, 304 and 333, the bill is focused on mayoral strategic authorities to reflect their growth across England and the role that mayors can play to convene local partners and tackle regional challenges. Mayors have the most far reaching and flexible powers, and therefore, this level of authority is of the appropriate scale and capability to integrate rail with wider public transport, enabling them to engage effectively with Great British Railways. Furthermore, as outlined in the statement, the cabinet statement rewiring the state published in July, this government considers that mayors who are directly accountable to the residents that elect them can provide the best governance for their communities.
As a result, the suite of powers available to areas with mayors will be commensurately greater, recognising the role that they play as leaders in their regions. However, this is absolutely not to say that other levels of local government will be excluded from engagement with Great British Railways, and I take the point that it's important that no local authority is left out. As indeed the Prime Minister said a few days ago, the plan is for all tiers of local government to benefit from local GBR business units, and some existing authorities have worked very collaboratively, very collaboratively with the existing structure, including Devon with several new stations and Cornwall with recently the Mid Cornwall Metro.
So our approach is not intending to exclude anyone from working with the railway, but we think it's sensible to use mayors as a focal point for powers, responsibilities and representation in their local areas. That said, I am happy to see if there's anything we can do outside the bill to reassure foundation authorities that their views will be properly considered, and I'll reflect on that further.
I'll turn to amendment 22 a in the name of my noble friend Lord blanket to. To which the noble Lord, noble Baroness, Lady Pigeon, has kindly spoken to today. I absolutely agree with him and with the noble Baroness that the partnership approach that the Bill sets out must be effective. GBR must engage with partnership offers seriously, and the bar for GBR to reject a partnership must be exceptionally high as we're in a aligned on the intent behind this amendment, and she described it as the principle amendment in this group, which I think covers all of the circumstances I commit to.
Absolutely to taking it away, and I will see what can be done after this debate. Turning to amendments 147 and 156, the government absolutely supports further rail devolution, where it's in the interests of passengers and the wider rail network. That's why the bill already provides a route for passenger rail services to be devolved through exemption from designation by the Secretary of State in clause 28. Where services are devolved, mayors already have flexibility to choose their approach to securing passenger services and may secure them via a concession contract, including to the private sector, if they so wish.
The bill doesn't change that. TfL, of course, as the noble Lord Moylan describes, operates on precisely this basis, so there's no need to duplicate the existing devolution provision in the Bill, which already achieves that intent in full on amendments 23 and 24. Clause five is already intended to support local commissioning arrangements. It enables mayors to contribute funding where they wish to secure services or improvements that reflect local priorities and go beyond the national railway offer.
This gives local leaders a mechanism to invest in additional rail outcomes for their area, where they choose to do so, providing the local input that we know is so important for enhancing our communities. The details of these arrangements, including revenue sharing options, will be agreed separately from legislation by collaborative partnerships between GBS and mayors. Work on developing this model has already begun using Greater Manchester as a pathfinder. Indeed, I'm going to meet the new mayor of Greater Manchester tomorrow.
The government absolutely supports greater local influence on over rail services, but allowing mayors to run rail services is a financially significant decision with safety and public interest impacts. And that's why it's right that the current process in the bill for devolving services to local leaders remains the route that's used for this. That route is well understood, familiar to industry and proven effective, allowing mayors to run GBR services outside the usual process isn't necessary and doesn't, doesn't and doesn't better serve local communities.
Turning to amendments 26, 64, 304 and 333, the bill is focused on mayoral strategic authorities to reflect their growth across England and the role that mayors can play to convene local partners and tackle regional challenges. Mayors have the most far reaching and flexible powers, and therefore, this level of authority is of the appropriate scale and capability to integrate rail with wider public transport, enabling them to engage effectively with Great British Railways. Furthermore, as outlined in the statement, the cabinet statement rewiring the state published in July, this government considers that mayors who are directly accountable to the residents that elect them can provide the best governance for their communities.
As a result, the suite of powers available to areas with mayors will be commensurately greater, recognising the role that they play as leaders in their regions. However, this is absolutely not to say that other levels of local government will be excluded from engagement with Great British Railways, and I take the point that it's important that no local authority is left out. As indeed the Prime Minister said a few days ago, the plan is for all tiers of local government to benefit from local GBR business units, and some existing authorities have worked very collaboratively, very collaboratively with the existing structure, including Devon with several new stations and Cornwall with recently the Mid Cornwall Metro.
So our approach is not intending to exclude anyone from working with the railway, but we think it's sensible to use mayors as a focal point for powers, responsibilities and representation in their local areas. That said, I am happy to see if there's anything we can do outside the bill to reassure foundation authorities that their views will be properly considered, and I'll reflect on that further.
12:50
Speaker 1
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Speaker 1
Can I thank the Minister for the response in relation to my amendments? I should say so as to avoid a further returning to this issue. There are other amendments to exactly the same purpose that I didn't notice hadn't been grouped together in clause 16 and clause 83 and elsewhere in the Bill. So I hope we'll treat this as the one debate about that issue. I think the route ahead, if I may say to the minister, is a very straightforward is relevant local government bodies for the purpose of information sharing, taking advice, coordinating with transport strategies should be England wide and therefore it should be all strategic authorities.
If the minister wants to go and the government understandably wants to go further and have a category of strategic authorities with mayors who have the ability to go further in terms of working with GBR and taking responsibilities, the route would be to put in something for that purpose in relation to established mayoral strategic authorities, who clearly have the the the basis, the financial basis on which to do that. Distinguishing between those two would make this work much more effectively.
If the minister wants to go and the government understandably wants to go further and have a category of strategic authorities with mayors who have the ability to go further in terms of working with GBR and taking responsibilities, the route would be to put in something for that purpose in relation to established mayoral strategic authorities, who clearly have the the the basis, the financial basis on which to do that. Distinguishing between those two would make this work much more effectively.
12:51
Speaker 4
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Speaker 4
I'm grateful to the noble Lord. I'm particularly grateful for his suggestion that we only debate this once, actually, but I. I've listened carefully to what he's just said, and I will reflect on what he's just said. As I said I would on, on, on the rest of the subject. So I'm grateful to him for that. And indeed, the Hansard record is very useful in being able to cross-reference it.
Further to this committee session. Turning to the proposals on transport for London, amended amendment 27 seeks to provide all authorities with the same powers as TfL. Of course, the government supports rail devolution, where it can deliver better outcomes for passengers and local communities, but those arrangements should reflect the circumstances, capabilities and aspirations of individual areas rather than applying a single model everywhere. The TfL model has a distinct legislative and governance framework developed over many years, and it wouldn't be appropriate to automatically confer all existing or future TfL powers on every mayoral combined authority.
The other point worth noting is that the geography of London does in include several complete railway services. Unlike much of the geography of the rest of the combined authorities in in in England, the government has already published guidance on applications to rail devolution. And as I've already said, the bill includes a route to devolve rail services for those seeking that at clause 28. So therefore, should mayoral authorities want to pursue full devolution of certain services as TfL has, they're absolutely welcome to use those established routes to seek devolution.
Arrangements should be considered on their merits, taking account of local circumstances and the outcomes sought for passengers. A one size fits all approach will not serve all local communities. On amendments 28 to 30. Clause six of the Bill requires GBR and TfL to cooperate on railway matters, including coordinating passenger services and sharing relevant information to help integrate rail with the wider London network. As the directing mind for the railway, GBR will be responsible for those operational matters and how they'll be discharged when collaborating with TfL.
I don't believe that expanding the Secretary of State's role further would would reflect that clear division of responsibilities, but I can reassure the noble Lord that, via amendments that the government brought in at Commons report stage, the Secretary of State is still enabled to enter into arrangements with TfL to support future devolution of rail services where that is needed. So the government believes that this approach is sufficient to support TfL to integrate and cooperate with the wider rail network.
And on amendment 159. I reassure the noble Lord that the government is supportive of the success TfL has made of rail devolution and existing devolved arrangements will continue to that end. Existing exemption orders in relation to TfL concession services do not have an expiry date. The Bill also contains safeguards governing access decisions, including duties on GBR, a requirement to have regard to the Mayor of London's transport strategy, a requirement for GBR and TfL to cooperate in relation to all services and an independent route of appeal to the author.
Likewise, amendment 25, which seeks to enable mayors to appeal access decisions if they affect services in their area. Clauses 83 to 86 of the bill already allow GBR to request advice from mayoral authorities about services in their area. Require it to consult them if a decision will significantly affect their area and if a decision will affect the local area. GBR will work with local partners weighing up trade offs between local and national network priorities.
This enables issues to be resolved through collaboration, rather than requiring relevant local government bodies to challenge GBR through the Access Appeal Appeals regime. Despite this, all local authorities are absolutely able to appeal and access decision they are aggrieved by under the provision of the bill already on amendments 297298299 300 and 301. Clause 83 already requires GBR to consult mayoral authorities where relevant decision would significantly affect their local area, including the interests of the local economy or of people living, working or living in, working in or visiting the area.
This amendment will therefore add little practical benefit beyond further bureaucracy slowing down decision making. While mayors would have to review hundreds of decisions, often irrelevant to them, before any progress can be made on amendments 298 to 301, I reassure my noble friend that the bill is already clear through clause 83, that GBR will have to consult my oral authorities on its access and charging decisions where these relate to a GBR railway passenger service in the area, and would significantly affect the local region.
Alongside these legislative commitments, it is the government's clear intention for GBR to work in partnership with my oral authorities. I am determined that GBR will absolutely be a proactive partner of those authorities, maximizing the benefits of the bill, maximizing the benefits this bill can bring to local areas. As a result, I hope that noble Lords are reassured that the government shares their ambitions on local devolution, and I ask local lords to withdraw.
Further to this committee session. Turning to the proposals on transport for London, amended amendment 27 seeks to provide all authorities with the same powers as TfL. Of course, the government supports rail devolution, where it can deliver better outcomes for passengers and local communities, but those arrangements should reflect the circumstances, capabilities and aspirations of individual areas rather than applying a single model everywhere. The TfL model has a distinct legislative and governance framework developed over many years, and it wouldn't be appropriate to automatically confer all existing or future TfL powers on every mayoral combined authority.
The other point worth noting is that the geography of London does in include several complete railway services. Unlike much of the geography of the rest of the combined authorities in in in England, the government has already published guidance on applications to rail devolution. And as I've already said, the bill includes a route to devolve rail services for those seeking that at clause 28. So therefore, should mayoral authorities want to pursue full devolution of certain services as TfL has, they're absolutely welcome to use those established routes to seek devolution.
Arrangements should be considered on their merits, taking account of local circumstances and the outcomes sought for passengers. A one size fits all approach will not serve all local communities. On amendments 28 to 30. Clause six of the Bill requires GBR and TfL to cooperate on railway matters, including coordinating passenger services and sharing relevant information to help integrate rail with the wider London network. As the directing mind for the railway, GBR will be responsible for those operational matters and how they'll be discharged when collaborating with TfL.
I don't believe that expanding the Secretary of State's role further would would reflect that clear division of responsibilities, but I can reassure the noble Lord that, via amendments that the government brought in at Commons report stage, the Secretary of State is still enabled to enter into arrangements with TfL to support future devolution of rail services where that is needed. So the government believes that this approach is sufficient to support TfL to integrate and cooperate with the wider rail network.
And on amendment 159. I reassure the noble Lord that the government is supportive of the success TfL has made of rail devolution and existing devolved arrangements will continue to that end. Existing exemption orders in relation to TfL concession services do not have an expiry date. The Bill also contains safeguards governing access decisions, including duties on GBR, a requirement to have regard to the Mayor of London's transport strategy, a requirement for GBR and TfL to cooperate in relation to all services and an independent route of appeal to the author.
Likewise, amendment 25, which seeks to enable mayors to appeal access decisions if they affect services in their area. Clauses 83 to 86 of the bill already allow GBR to request advice from mayoral authorities about services in their area. Require it to consult them if a decision will significantly affect their area and if a decision will affect the local area. GBR will work with local partners weighing up trade offs between local and national network priorities.
This enables issues to be resolved through collaboration, rather than requiring relevant local government bodies to challenge GBR through the Access Appeal Appeals regime. Despite this, all local authorities are absolutely able to appeal and access decision they are aggrieved by under the provision of the bill already on amendments 297298299 300 and 301. Clause 83 already requires GBR to consult mayoral authorities where relevant decision would significantly affect their local area, including the interests of the local economy or of people living, working or living in, working in or visiting the area.
This amendment will therefore add little practical benefit beyond further bureaucracy slowing down decision making. While mayors would have to review hundreds of decisions, often irrelevant to them, before any progress can be made on amendments 298 to 301, I reassure my noble friend that the bill is already clear through clause 83, that GBR will have to consult my oral authorities on its access and charging decisions where these relate to a GBR railway passenger service in the area, and would significantly affect the local region.
Alongside these legislative commitments, it is the government's clear intention for GBR to work in partnership with my oral authorities. I am determined that GBR will absolutely be a proactive partner of those authorities, maximizing the benefits of the bill, maximizing the benefits this bill can bring to local areas. As a result, I hope that noble Lords are reassured that the government shares their ambitions on local devolution, and I ask local lords to withdraw.
12:57
12:57
Speaker 6
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Speaker 6
Well before the noble Lord session. I'm very grateful his his response to my amendments, but I'd just like to ask him, in relation to the relationships between local authorities and central government. We already have an example in the South West and I think South Wales, where the train operators and the local authorities have come together and developed a new Wi-Fi system so you can actually get Wi-Fi on the trains, which is quite important these days.
And they installed it in one one train and it worked beautifully. And many of us have tried that. And they said to they asked the Department of Transport whether they, as a regional authority, could take over the procurement of improved Wi-Fi on all the trains within the GW network and have it done more quickly. This has been refused by the Department of Transport, who have said that only they are capable of doing a procurement exercise on something as important as Wi-Fi and trains.
Now I hope that is just a one off. My noble friend is aware of it and the new GBR set up. There'll be more flexibility as to who does what.
And they installed it in one one train and it worked beautifully. And many of us have tried that. And they said to they asked the Department of Transport whether they, as a regional authority, could take over the procurement of improved Wi-Fi on all the trains within the GW network and have it done more quickly. This has been refused by the Department of Transport, who have said that only they are capable of doing a procurement exercise on something as important as Wi-Fi and trains.
Now I hope that is just a one off. My noble friend is aware of it and the new GBR set up. There'll be more flexibility as to who does what.
12:58
Speaker 4
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Speaker 4
In quick answer to my noble friend, the only reason why it should be procured centrally is because improve Wi-Fi is needed on every railway service in Britain, and therefore the Department is determined to deliver it on all on all those services, and fragmenting the procurement will otherwise only lead to increased costs and probably significant delay elsewhere. I've absolutely no intention of getting in the way of Wi-Fi for for the South west. I'd just like it to be delivered in other parts of Britain at the same time as well.
12:59
Speaker 3
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Speaker 3
My Lords, I think that illustrates a point. I just want to say the Noble Lords talks this devolution book, but everything is flowing one way. So I'll just come back to this point. And the point arose in relation to Scotland and I think Wales, but certainly Scotland. When we spoke on Tuesday, VBR will be obliged to consult with the local authorities on matters of significance that affect them significantly. Significant is the word, but it db are who decides what is significant and amendments that I table which allows the local area or in the case of Scotland, the Scottish Ministers decide what is significant for them.
A brushed aside on the grounds. Oh, they'd have to be far too difficult. They'd have to review hundreds of decisions. They couldn't possibly do that. I mean, of course, GBR has to review hundreds of decisions to decide whether they're significant and actually in really in local authority terms, one picks out very quickly what are the what are the significant decisions? Because one has the knowledge locally to know what's going to cause a terrible fuss, which GBR doesn't have.
So does he see that the bill really can't survive claiming a devolution. Mandate? On this basis of this mentality which keeps coming back? We want the minister wants to be a proactive partner. Actually, given GBR, I find that rather terrifying thing because it sort of suggests that the the other partner is going to be managed the whole time by GBR and then at the end of the process, declared a successful partnership.
It's the wrong mentality. It's got to change.
A brushed aside on the grounds. Oh, they'd have to be far too difficult. They'd have to review hundreds of decisions. They couldn't possibly do that. I mean, of course, GBR has to review hundreds of decisions to decide whether they're significant and actually in really in local authority terms, one picks out very quickly what are the what are the significant decisions? Because one has the knowledge locally to know what's going to cause a terrible fuss, which GBR doesn't have.
So does he see that the bill really can't survive claiming a devolution. Mandate? On this basis of this mentality which keeps coming back? We want the minister wants to be a proactive partner. Actually, given GBR, I find that rather terrifying thing because it sort of suggests that the the other partner is going to be managed the whole time by GBR and then at the end of the process, declared a successful partnership.
It's the wrong mentality. It's got to change.
13:01
Speaker 4
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Speaker 4
I think the noble Lord is, is is in a different place in his imagination of this. These proposals will generally originate with GBR, which will know through its structure, which I did at the first day of committee, will be organized locally and regionally, which will know how those proposals are going to affect local communities. There'll be timetable changes, there'll be station improvements, there'll be infrastructure improvements, and it's much easier for GBR to identify those in relationship to the local, the local and combined authorities that it deals with, than it would be for them to sift through what sadly is in many cases, railway ees in in describing what's going on.
So I, I, I don't agree with the noble Lord. I do believe this will work. And I do believe it will be a genuine, genuine partnership with those authorities.
So I, I, I don't agree with the noble Lord. I do believe this will work. And I do believe it will be a genuine, genuine partnership with those authorities.
13:02
13:02
Speaker 2
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Speaker 2
Thank you. I was really pleased to hear the Minister say how devolution is of significant importance to the government. We've had a really interesting debate. I'm glad he's committed to take away and see what can be done with the proposal. Amendment 22 A and also reflect on the strategic authorities point. I think they're both really relevant and will strengthen the bill, and on that basis, I agree to withdraw amendment 22.
13:02
13:02
Speaker 7
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Speaker 7
Lordships pleasure that this amendment be withdrawn? Amendment by leave withdrawn. Amendments 2325 Lord Moylan, Not moved. Amendment 26. Lord Lansley not moved, moved. The question is that clause five stand part of the bill, as many of that will say, content that's not content. The contents have it. Amendment 27 Lord Grayling not moved. Amendment 28 to 30. Lord Moylan not moved. The question is that clause six stand part of the bill, as many of that opinion will say.
Content. Content not content. The contents have it. Amendment 31 Lord Young of Cookham or is debated, not moved. Not
Content. Content not content. The contents have it. Amendment 31 Lord Young of Cookham or is debated, not moved. Not
13:03
13:03
13:03
Speaker 1
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Speaker 1
Thank you, my Lord. Sir. In this group I think there is some two sets of issues is terribly simple and I'll just it's by way of a question , really to to the Minister. Just to be clear, I don't understand why in clause seven, at the point at which the Secretary of State may give directions to Great British Railways about the activities in Scotland and Wales. In each case, the requirement to obtain consent from Scottish and Welsh Ministers is disapplied.
If those directions relate to what is in chapter one, part three, which is access, charging, timetable, capacity, these things like timetabling and so on, seems to me, on the face of it, something where if these are directions to GBR, which impact in Scotland and Wales, they should require the consent of the Scottish Ministers. And for reasons we touched on earlier, may be a different requirement rests in relation to Welsh ministers. But I'm surprised to see that the implication of clause seven is that.
Section eight can issue directions to GBR impacting on, for example, the timetable in Scotland, but doesn't require the consent of Scottish Ministers. So amendments 32 and 33 in my name are to probe why that seems to be the case. I beg to move. Amendment 32.
If those directions relate to what is in chapter one, part three, which is access, charging, timetable, capacity, these things like timetabling and so on, seems to me, on the face of it, something where if these are directions to GBR, which impact in Scotland and Wales, they should require the consent of the Scottish Ministers. And for reasons we touched on earlier, may be a different requirement rests in relation to Welsh ministers. But I'm surprised to see that the implication of clause seven is that.
Section eight can issue directions to GBR impacting on, for example, the timetable in Scotland, but doesn't require the consent of Scottish Ministers. So amendments 32 and 33 in my name are to probe why that seems to be the case. I beg to move. Amendment 32.
13:05
13:05
Speaker 5
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Speaker 5
My Lords, I'd like to briefly speak to amendments 35 and 36, which are in the names of Lord Grayling and Lord Moylan, and respectively. They deal with amending clause seven on the power to give directions and clause nine on the power to give guidance to GBR, and they specifically refer to some extra duties that would fall on GBR, on ministers if they were giving directions specifically around fares and the fare structure. And they set out that if ministers are giving directions or guidance about the level or structure of fares, they have to set out their assumptions, criteria and objectives used so that decisions can be assessed against passenger growth and affordability.
Now, I thought both of these amendments for the following reasons. One of the important decisions that ministers have to take about the railways is the balance of cost of running the railways, that is, and how that that cost is split between the fare payer, the person that actually uses the railways and and of course, not just the fare payer, but the. When it comes to track access charges, the other users of the railway network and also the taxpayer.
And that's a very important decision, given that most people in the country either never use the railways or don't use them very often. There's a relatively small number of people that use railways on a frequent basis, and it's important to get the balance of costs and how that split correctly. There's also an important decision that ministers have to make in terms of their negotiations with the Treasury around the cost that falls on the department, the taxpayer subsidy piece, and ministers have signed up to some, I think, quite challenging targets in the last spending review to reduce the taxpayer subsidy.
And the only real way I think you can do that. Well, there's two ways you can do that. Either you cut services significantly or you have to grow passenger numbers. And I think if ministers are making directions or guidance about fares, it's important to understand what is their model they're using, what are their assumptions? What is the evidence base for the fare structure, what that's going to do to passenger numbers and what it's ultimately going to do to revenue.
Any knock on impact on costs, what it effectively does to the GBR profit and loss account, and therefore the balance of costs that lands on fare payers versus the taxpayer. And I think having that level of transparency is, is helpful for the fare paying public and also for taxpayers. It's also, I think, helpful for ministers, because what it will do is it will force a level of rigor in the the modelling that's undertaken, the assumptions, importantly, that are made about how passenger numbers respond to fares.
And also it will enable us to have a grown up conversation about how we grow passenger numbers and some of the innovations and service changes that I suspect will be required, particularly in offering better services for leisure travellers, because I think that is where there is the potential for significant growth in passenger numbers and revenue, and therefore reducing the overall cost of the railway. So I think these two amendments, I think, are very well have a very sensible underpinning.
And I think they're not just helpful for taxpayers and fare payers. But I think in the end, they'll actually be helpful for the department because they'll force, as I said, a level of rigor and transparency in their financial modelling. And therefore, I think they should also commend themselves to our friends in the Treasury who I think like rigour and robustness in financial modelling, because I think this just gets it all above board. Everyone has to be very clear about their assumptions.
It also allows us to challenge the assumptions, and I think enables us to have a much better conversation publicly about how we drive up the usage of our railways and what flexibilities we will require in order to do so, and I think that will then provoke some helpful conversations, perhaps with the trade unions and about the necessary flexibilities that I think are going to be necessary in making sure we have a financially sustainable railway for the long term, which in effect is what you need to guarantee secure jobs on the railway.
That's the only way I think that you're going to do that in the long term, because I don't think taxpayers are going to continue wanting to subsidise the railway to the level they do now for the foreseeable future, given that so many taxpayers don't use railways on a frequent basis. So I commend these two amendments, and I look forward to the minister's response.
Now, I thought both of these amendments for the following reasons. One of the important decisions that ministers have to take about the railways is the balance of cost of running the railways, that is, and how that that cost is split between the fare payer, the person that actually uses the railways and and of course, not just the fare payer, but the. When it comes to track access charges, the other users of the railway network and also the taxpayer.
And that's a very important decision, given that most people in the country either never use the railways or don't use them very often. There's a relatively small number of people that use railways on a frequent basis, and it's important to get the balance of costs and how that split correctly. There's also an important decision that ministers have to make in terms of their negotiations with the Treasury around the cost that falls on the department, the taxpayer subsidy piece, and ministers have signed up to some, I think, quite challenging targets in the last spending review to reduce the taxpayer subsidy.
And the only real way I think you can do that. Well, there's two ways you can do that. Either you cut services significantly or you have to grow passenger numbers. And I think if ministers are making directions or guidance about fares, it's important to understand what is their model they're using, what are their assumptions? What is the evidence base for the fare structure, what that's going to do to passenger numbers and what it's ultimately going to do to revenue.
Any knock on impact on costs, what it effectively does to the GBR profit and loss account, and therefore the balance of costs that lands on fare payers versus the taxpayer. And I think having that level of transparency is, is helpful for the fare paying public and also for taxpayers. It's also, I think, helpful for ministers, because what it will do is it will force a level of rigor in the the modelling that's undertaken, the assumptions, importantly, that are made about how passenger numbers respond to fares.
And also it will enable us to have a grown up conversation about how we grow passenger numbers and some of the innovations and service changes that I suspect will be required, particularly in offering better services for leisure travellers, because I think that is where there is the potential for significant growth in passenger numbers and revenue, and therefore reducing the overall cost of the railway. So I think these two amendments, I think, are very well have a very sensible underpinning.
And I think they're not just helpful for taxpayers and fare payers. But I think in the end, they'll actually be helpful for the department because they'll force, as I said, a level of rigor and transparency in their financial modelling. And therefore, I think they should also commend themselves to our friends in the Treasury who I think like rigour and robustness in financial modelling, because I think this just gets it all above board. Everyone has to be very clear about their assumptions.
It also allows us to challenge the assumptions, and I think enables us to have a much better conversation publicly about how we drive up the usage of our railways and what flexibilities we will require in order to do so, and I think that will then provoke some helpful conversations, perhaps with the trade unions and about the necessary flexibilities that I think are going to be necessary in making sure we have a financially sustainable railway for the long term, which in effect is what you need to guarantee secure jobs on the railway.
That's the only way I think that you're going to do that in the long term, because I don't think taxpayers are going to continue wanting to subsidise the railway to the level they do now for the foreseeable future, given that so many taxpayers don't use railways on a frequent basis. So I commend these two amendments, and I look forward to the minister's response.
13:10
Speaker 2
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Speaker 2
My Lords, these amendments cover directions and guidance from the Secretary of State and push for greater transparency around these, something that we really support, information that has supported key decisions and directions should be placed in the public domain. And it's really important as Great British Railways develops an open culture right from the start, and it's clear where and how decisions have been made and are on the basis of what evidence Lord Grayling has particularly focused in his amendments on any Secretary of State relating to the level and structure of fares, which I think is of great interest to everyone.
Clarity on these points. The Minister will be helpful as we continue our scrutiny of the Bill.
Clarity on these points. The Minister will be helpful as we continue our scrutiny of the Bill.
13:11
Speaker 3
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Speaker 3
My Lords, I rise in the first place to speak to amendment 37 in my name. In this group, it is a probing amendment. It limits the power of the Scottish Ministers to issue directions to GBR, to circumstances. Where a KPI has been missed or performance has not been up to snuff. Now, I don't advance that, as I say, because I think that is an appropriate thing to put in the bill, particularly, it's a question of probing when the government thinks the powers should be used, because it's not clear when the government thinks these powers are likely to be used and were meant to have a single directing mind.
It's meant to be GBR of the single directive mind. But as I said on Tuesday, we've got several other directing minds going on, and one of them is the Secretary of State who can issue directions. Directions, after all, I think are exactly what her directing mind would be expected to, to, to, to produce. But now we also have the Scottish Ministers issuing directions, and it's not absolutely clear that they don't and can't open of the Secretary of State.
So I want to know what it is that the powers can be used for, how clashes and contradictions can be avoided, and how this is coherent with the minister's claim that what he's creating is a single directing mind in the shape of Great British Railways. I'd like to comment very briefly on the others. My noble friend Lord Grayling has tabled amendments 34, 35 and 36, to which I've added my name. It is important that directions issued by the Secretary of State are not only published, but laid before Parliament.
I think this is an important constitutional principle. I mean, the noble Lord, the minister will say, oh, well, you can't possibly expect MPs to read these things. They haven't got time. They might be full of railway ees. Why should they possibly be? What is the possible advantage in What is the possible advantage in putting them in front of MPs? But I think MPs and peers would value the fact of having these important directions put before them, so that the Secretary of State can be held accountable for his or her actions in the management of the .
My noble friend Lord Lansley is. Amendment 32 and 33 are also entirely reasonable. Where relevant functions have been delegated and the Secretary of State proposes to give GBR directions affecting infrastructure capacity, timetables, charging or performance in Scotland or Wales. And surely right that the Scottish or Welsh Ministers are consulted.
It's meant to be GBR of the single directive mind. But as I said on Tuesday, we've got several other directing minds going on, and one of them is the Secretary of State who can issue directions. Directions, after all, I think are exactly what her directing mind would be expected to, to, to, to produce. But now we also have the Scottish Ministers issuing directions, and it's not absolutely clear that they don't and can't open of the Secretary of State.
So I want to know what it is that the powers can be used for, how clashes and contradictions can be avoided, and how this is coherent with the minister's claim that what he's creating is a single directing mind in the shape of Great British Railways. I'd like to comment very briefly on the others. My noble friend Lord Grayling has tabled amendments 34, 35 and 36, to which I've added my name. It is important that directions issued by the Secretary of State are not only published, but laid before Parliament.
I think this is an important constitutional principle. I mean, the noble Lord, the minister will say, oh, well, you can't possibly expect MPs to read these things. They haven't got time. They might be full of railway ees. Why should they possibly be? What is the possible advantage in What is the possible advantage in putting them in front of MPs? But I think MPs and peers would value the fact of having these important directions put before them, so that the Secretary of State can be held accountable for his or her actions in the management of the .
My noble friend Lord Lansley is. Amendment 32 and 33 are also entirely reasonable. Where relevant functions have been delegated and the Secretary of State proposes to give GBR directions affecting infrastructure capacity, timetables, charging or performance in Scotland or Wales. And surely right that the Scottish or Welsh Ministers are consulted.
13:14
Speaker 4
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Speaker 4
My Lords are grateful to noble Lords for their contributions in this. In this group. On amendments, the noble Lord Landes's amendments 32 and 33. Access to railway infrastructure is a reserved matter. It's important that access and timetabling decisions make sense across the entire railway network, and therefore there must be one central decision maker to avoid fragmented and disparate decision making, which increases delays, cancellations and disruption. However, GBR must consult Scottish and Welsh ministers before issuing, revising or replacing its access and use policy.
It must consult them on other decisions if it if it may affect their effect, if those decisions may affect their interests and must take into account their transport plans when making access decisions. There are therefore already adequate safeguards for devolved governments in relation to the access regime. Scottish Ministers can also issue directions to GBR as to the exercise of its statutory functions in Scotland. So this also provides protection. The MOU previously referred to will set out ways of working to ensure the respective direction powers are not used in opposing or disjointed ways.
And of course, as I've previously said, Scottish and Welsh Ministers are content with the drafting of the directions consent clause on amendment 37. The amendment from the noble Lord Moylan is in the opposite direction, which seeks to limit the circumstances in which Scottish.
It must consult them on other decisions if it if it may affect their effect, if those decisions may affect their interests and must take into account their transport plans when making access decisions. There are therefore already adequate safeguards for devolved governments in relation to the access regime. Scottish Ministers can also issue directions to GBR as to the exercise of its statutory functions in Scotland. So this also provides protection. The MOU previously referred to will set out ways of working to ensure the respective direction powers are not used in opposing or disjointed ways.
And of course, as I've previously said, Scottish and Welsh Ministers are content with the drafting of the directions consent clause on amendment 37. The amendment from the noble Lord Moylan is in the opposite direction, which seeks to limit the circumstances in which Scottish.
13:16
13:16
Speaker 4
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Speaker 4
May issue guidance to GBR in to situations in which GBR is failing to meet a key performance indicator. I don't consider this amendment necessary, as guidance is intended to be a flexible tool. It helps Scottish Ministers communicate priorities and provide clarity on their expectations for Scottish railway activities, which, as local leader unders is absolutely in their right to do. Neither guidance nor directions are intended to operate solely as a mechanism for addressing performance failures.
The bill already requires the previously referred to Memorandum of Understanding between Secretary of State and Scottish Ministers under clause 23, which ensures that the two ministers work together when issuing guidance to ensure clarity and sensible strategic decision making for GBR. Ultimately, GBR is not effective if it can't deliver on the goals of the government, devolved ministers and local leaders. It will be absolutely empowered to be in charge of the railway, but it must run the railway by trying to achieve the priorities of the respective governments of the day.
Guidance should help it do that effectively. We therefore consider that the Bill strikes the right right balance in enabling Scottish Ministers to provide strategic guidance , whilst respecting the operational independence of GBR. On amendment 34, the Secretary of State is already required under the Bill to publish any direction issued to GBR, including when these are amended or revoked. This means that any issued direction will be made publicly available, reflecting the government's commitment to ensuring that these powers are used transparently.
For the record, I also absolutely agree that GBR must be empowered to operate at arm's length from the government and trusted to take charge of the railway. If GBR is micromanaged by politicians, as the railway is by necessity today, it won't be effective. A truly empowered GBR is absolutely. The government's intention and direction should never be routine step. Whilst we expect this power will be rarely used, it is necessary.
In instances of serious operational failure or unforeseen crises where it would be responsible . Democratically elected Secretary of State to take action in the form of a direction. For example, the Oil and Gas Authority has only received one ministerial direction in its ten year history. I don't recall receiving any in the nine years that I chaired Network Rail, and I would also reflect on the fact that the last government's reform bill, which was published for parliamentary scrutiny, had exactly the same power, and it expressed in exactly the same words.
In those cases, or in an emergency, the requirement to lay a direction before Parliament could delay the ability of government to act swiftly, especially if a crisis occurs during prorogation or a long recess. Nevertheless, as I've explained already, all directions have been published transparently, and I've no doubt parliamentarians will be well able to hold the government to account for them in the usual way via questions debates through the Transport Select Committee and other established methods of scrutiny.
The noble Lord Harper talked to amendments 35 and 36 on fares, so I should first confirm that it's not the government's intention to set limits or guardrails on fares using the directions and guidance powers. Instead, the public service contract between GBR and the Secretary of State is the appropriate legal and practical mechanism to set out fares parameters for GBR. The public service contract will be published, as will GBR Business Plan, where it will set out its plans in relation to fare setting.
Directions are, as I said at all, only to be used in exceptional circumstances where urgent correction is required and and therefore their use for fares setting wouldn't be an appropriate use of those powers. I will also reassure the noble Lord, however, that the government will absolutely publish the objectives, criteria and assessments used to set parameters for fares and that this will be published within or alongside the Public services contract. I hope noble lords feel reassured enough to withdraw their amendments.
The bill already requires the previously referred to Memorandum of Understanding between Secretary of State and Scottish Ministers under clause 23, which ensures that the two ministers work together when issuing guidance to ensure clarity and sensible strategic decision making for GBR. Ultimately, GBR is not effective if it can't deliver on the goals of the government, devolved ministers and local leaders. It will be absolutely empowered to be in charge of the railway, but it must run the railway by trying to achieve the priorities of the respective governments of the day.
Guidance should help it do that effectively. We therefore consider that the Bill strikes the right right balance in enabling Scottish Ministers to provide strategic guidance , whilst respecting the operational independence of GBR. On amendment 34, the Secretary of State is already required under the Bill to publish any direction issued to GBR, including when these are amended or revoked. This means that any issued direction will be made publicly available, reflecting the government's commitment to ensuring that these powers are used transparently.
For the record, I also absolutely agree that GBR must be empowered to operate at arm's length from the government and trusted to take charge of the railway. If GBR is micromanaged by politicians, as the railway is by necessity today, it won't be effective. A truly empowered GBR is absolutely. The government's intention and direction should never be routine step. Whilst we expect this power will be rarely used, it is necessary.
In instances of serious operational failure or unforeseen crises where it would be responsible . Democratically elected Secretary of State to take action in the form of a direction. For example, the Oil and Gas Authority has only received one ministerial direction in its ten year history. I don't recall receiving any in the nine years that I chaired Network Rail, and I would also reflect on the fact that the last government's reform bill, which was published for parliamentary scrutiny, had exactly the same power, and it expressed in exactly the same words.
In those cases, or in an emergency, the requirement to lay a direction before Parliament could delay the ability of government to act swiftly, especially if a crisis occurs during prorogation or a long recess. Nevertheless, as I've explained already, all directions have been published transparently, and I've no doubt parliamentarians will be well able to hold the government to account for them in the usual way via questions debates through the Transport Select Committee and other established methods of scrutiny.
The noble Lord Harper talked to amendments 35 and 36 on fares, so I should first confirm that it's not the government's intention to set limits or guardrails on fares using the directions and guidance powers. Instead, the public service contract between GBR and the Secretary of State is the appropriate legal and practical mechanism to set out fares parameters for GBR. The public service contract will be published, as will GBR Business Plan, where it will set out its plans in relation to fare setting.
Directions are, as I said at all, only to be used in exceptional circumstances where urgent correction is required and and therefore their use for fares setting wouldn't be an appropriate use of those powers. I will also reassure the noble Lord, however, that the government will absolutely publish the objectives, criteria and assessments used to set parameters for fares and that this will be published within or alongside the Public services contract. I hope noble lords feel reassured enough to withdraw their amendments.
13:20
Speaker 3
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Speaker 3
My Lords, before the noble Lords sits down and in relation to my amendment 37, if. If the noble Lord insists on responding to explicitly probing amendments seeking, in this case, to try to work out how a conflict in directions between Scottish Ministers and Secretary of State, for example, might be addressed and resolved. He continues to respond to them solely in the literal sense. Then all he does is encourage further amendments to be tabled to the Bill, to raise the subject, to bring the subject back so it can be debated.
One has to just one has to keep finding wording that will make that happen. I, Jenny, would would like to know how he sees these multiple directors producing directions, operating together and whether they collaborate, what happens in the case of contradictions and so forth. Because these are questions to which Parliament is entitled to an answer on.
One has to just one has to keep finding wording that will make that happen. I, Jenny, would would like to know how he sees these multiple directors producing directions, operating together and whether they collaborate, what happens in the case of contradictions and so forth. Because these are questions to which Parliament is entitled to an answer on.
13:21
Speaker 4
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Speaker 4
Well, I believe I did answer the noble Lord, because the memorandum, the memoranda of understanding between Scottish Ministers and and and and this government and Welsh Ministers in this government are the are the are the set out the processes by which these things will be coordinated and were there to be any real difficulty in in the circumstances he's describing, we would not have been able to get as far as we could in drafting the MOSOUS, which we have done, and in the agreement of Scottish and Welsh Ministers to the provisions of the.
We
We
13:21
13:21
Speaker 1
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Speaker 1
I think we're grateful to the Minister for the explanations he's given. For my part, in relation to 32 amendments, 32 and 33. I think the the. The Minister has explained why the bill says that the reason of reserved powers that the consent of Scottish or Welsh Ministers is not required. I think it's an opportunity, perhaps, just to make it clear that if we were in the exceptional situation of the Secretary of State issuing directions that impacted in Scotland or Wales, I think it might be reasonable that the Secretary of State would consult Scottish or Welsh ministers.
Nothing, I heard the Minister say said that such a consultation would not take place. So I think on that basis I'd be happy to withdraw amendment 32.
Nothing, I heard the Minister say said that such a consultation would not take place. So I think on that basis I'd be happy to withdraw amendment 32.
13:22
Speaker 9
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Speaker 9
Is it your lordships pleasure that amendment 32 be withdrawn? Amendment is by leave withdrawn. Amendment 33, Lord Lansley not moved. Amendment 34. Lord Grayling not moved. 35 not moved. The question is that clause seven stand part of the bill. As many as are of that opinion will say content not content for content's habit. Question at clause eight stand part of the bill.
As many as are of that opinion will say content, content content. Content for contents. Habit. Clause nine. Amendment 36. Lord Moylan not moved. Moved. The question is clause nine. Stamford bill. As many as are of that opinion will say content. Content not content for content's habit in clause ten. Amendment 37 not moved.
And the question is clause ten and clause 11 stand part of the bill. As many as our opinion of that opinion will say content. Content not content for content's habit in schedule one. Amendment 38, Lord Evans of Guisborough.
As many as are of that opinion will say content, content content. Content for contents. Habit. Clause nine. Amendment 36. Lord Moylan not moved. Moved. The question is clause nine. Stamford bill. As many as are of that opinion will say content. Content not content for content's habit in clause ten. Amendment 37 not moved.
And the question is clause ten and clause 11 stand part of the bill. As many as our opinion of that opinion will say content. Content not content for content's habit in schedule one. Amendment 38, Lord Evans of Guisborough.
13:23
Speaker 1
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Speaker 1
My Lords, I rise to move amendment 38 and also to speak briefly to amendments 39, 41, 42 and 44. My name in this group, this group of amendments concerns schedule one of the legislation, which itself concerns the granting of the licence to Great British Railways and possible granting of licences to persons other than Great British Railways to operate railway assets. The purpose of of my amendments is to strengthen the role of the Office of Rail and Road and of the Passengers Council who are mentioned in this list of procedures, but are largely regarded as consultees rather than having any any larger role.
These are supposed to be and have been sold to us by the government, as they're supposed to be bodies which have significant powers to to represent passengers and to work to assist with the with the regulation of the of the licence. And I'm afraid the legislation, as it is, amounts to an invitation to consult rather than anything stronger. So amendment 38 seeks to ensure that the Secretary of State will obtain a formal recommendation, rather than just a consultation from the Office of Rail and Road in relation particularly to safety and standards, before granting Great British Railways licence, and also ensures there is a consultation there with the Passengers Council as a part of that process.
Just moving on to to the other amendments. Briefly. Amendment 39. Addresses the the same part of the process and requires a an agreement rather than a consultation. Again, a . A consultation is a rather weak term in in legal circles. And agreement requires a much a much greater input from the on from the Passengers Council. And it requires the minister to work, to listen and to work with them to a greater extent than just a mere consultation.
Looking at the the later amendments 41, 42 and 44. These concern the grant of licences to persons other than Great British Railways, and again, they seek to replace the consultation with a process of agreement and to strengthen the input from the Passengers Council. This is mainly around around subclause four in. In section eight and the two the two earlier amendments are consequential on the change to subsection four.
So so I'm I beg to move clause amendment 38, and I urge the committee to support these amendments and the other amendments here in the names of my Noble Friends.
These are supposed to be and have been sold to us by the government, as they're supposed to be bodies which have significant powers to to represent passengers and to work to assist with the with the regulation of the of the licence. And I'm afraid the legislation, as it is, amounts to an invitation to consult rather than anything stronger. So amendment 38 seeks to ensure that the Secretary of State will obtain a formal recommendation, rather than just a consultation from the Office of Rail and Road in relation particularly to safety and standards, before granting Great British Railways licence, and also ensures there is a consultation there with the Passengers Council as a part of that process.
Just moving on to to the other amendments. Briefly. Amendment 39. Addresses the the same part of the process and requires a an agreement rather than a consultation. Again, a . A consultation is a rather weak term in in legal circles. And agreement requires a much a much greater input from the on from the Passengers Council. And it requires the minister to work, to listen and to work with them to a greater extent than just a mere consultation.
Looking at the the later amendments 41, 42 and 44. These concern the grant of licences to persons other than Great British Railways, and again, they seek to replace the consultation with a process of agreement and to strengthen the input from the Passengers Council. This is mainly around around subclause four in. In section eight and the two the two earlier amendments are consequential on the change to subsection four.
So so I'm I beg to move clause amendment 38, and I urge the committee to support these amendments and the other amendments here in the names of my Noble Friends.
13:27
Speaker 9
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Speaker 9
Amendment amendment proposed the schedule one, page 64. Line ten leave out from May to the. In line 11 and insert at the recommendations of the Office of Rail and Road in relation to matters related to safety and standards, and after consultation with. I should advise the Committee that if this amendment is agreed to. I am unable to call amendments 39 or 40 for reasons of preemption.
13:27
13:27
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13:27
Speaker 1
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Speaker 1
Amendment 43 and 45 both go to the same purpose, which is to explore the question of the circumstances in which the Secretary of State or the Office of Rail or Road were granting a licence to a person other than Great British Railways to operate railway assets, and those railway assets are in Scotland or Wales. Now, under those circumstances, as the Bill is presently structured, there would be a requirement to undertake consultation with the passengers council if that is a passenger licence or a station licence.
There is no other requirement for consultation. Let's think of a practical example. So I know licensing isn't about operating the railway. It's about. Or it. It gives one. The licence to operate doesn't bestow any ownership over these things, but core valley lines, for example in South Wales, is quite a significant. Set of stations, 57 stations. I think I managed to read caught so core valley lines.
There it is. It is not Network Rail owned. It's not operated by Great British Railways. Presumably it is therefore the subject of a licence. Now, if there were the issuing of such a licence or a change to that licence in Wales, it seems to me inherent that one would want the granting of that licence to be subject to a consultation requirement with Welsh ministers, and at the moment there's nothing in the legislation that would require that to happen.
So amendment 45 would introduce such a requirement for consultation before those assets in Scotland and Wales are the subject of a licence to someone other than GBR.
There is no other requirement for consultation. Let's think of a practical example. So I know licensing isn't about operating the railway. It's about. Or it. It gives one. The licence to operate doesn't bestow any ownership over these things, but core valley lines, for example in South Wales, is quite a significant. Set of stations, 57 stations. I think I managed to read caught so core valley lines.
There it is. It is not Network Rail owned. It's not operated by Great British Railways. Presumably it is therefore the subject of a licence. Now, if there were the issuing of such a licence or a change to that licence in Wales, it seems to me inherent that one would want the granting of that licence to be subject to a consultation requirement with Welsh ministers, and at the moment there's nothing in the legislation that would require that to happen.
So amendment 45 would introduce such a requirement for consultation before those assets in Scotland and Wales are the subject of a licence to someone other than GBR.
13:29
Speaker 5
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Speaker 5
My Lords, I want to speak briefly to amendment 46, which is in the names of Lord Grayling and Lord Moylan, which I think is a probing amendment, and it would remove section subsection six of section eight of schedule one, which is the bit that says the Office of Rail and Road may not grant a licence unless the Secretary of State consents to it, or it's granted in accordance with the general authority. And what I wanted just to probe was in what circumstances the Minister envisages the Secretary of State affected have a block.
So. So my preference would be that the office for Road and Rail can issue those licences. The section envisages a general authority, having been given by the Secretary of State to the Office of Road and Rail to issue those licences. The only circumstance in which the Secretary of State is required to grant something is if the. Or is trying to do something outside that general authority. So I really just wanted to understand from the minister, given it's a general authority that rather suggests it will give the office of Road and Rail some broad powers to issue licences.
So I'm really just trying to understand what what are the circumstances in which the minister would envisage that the general authority that the Office of Road and Rail has would not empower it to issue a licence, and therefore, when is the Secretary of State's veto effectively going to be effective? Because the whole point about this, I think, is we're trying to have GBR operating without, as I think the minister said in his answer to the previous group, without excessive micromanagement by ministers.
And again, if the Office of Road and Rail has been given a general authority to grant operating licences, it would seem to me not helpful if it had to be second guessed a lot by the Secretary of State. So I'm really just trying to understand what is the what are the circumstances when effectively the general authority wouldn't run and when the Secretary of State would effectively have to give permission if. If it turns out that the general authority is very broad and there aren't really any circumstances, then that that power really may be otiose, but it really shouldn't therefore be in the in the bill.
But I'm really just trying to understand the limits effectively on that general authority that's given to the Office of Road and Rail. And I'd be grateful if the minister could set that out when he responds to this group.
So. So my preference would be that the office for Road and Rail can issue those licences. The section envisages a general authority, having been given by the Secretary of State to the Office of Road and Rail to issue those licences. The only circumstance in which the Secretary of State is required to grant something is if the. Or is trying to do something outside that general authority. So I really just wanted to understand from the minister, given it's a general authority that rather suggests it will give the office of Road and Rail some broad powers to issue licences.
So I'm really just trying to understand what what are the circumstances in which the minister would envisage that the general authority that the Office of Road and Rail has would not empower it to issue a licence, and therefore, when is the Secretary of State's veto effectively going to be effective? Because the whole point about this, I think, is we're trying to have GBR operating without, as I think the minister said in his answer to the previous group, without excessive micromanagement by ministers.
And again, if the Office of Road and Rail has been given a general authority to grant operating licences, it would seem to me not helpful if it had to be second guessed a lot by the Secretary of State. So I'm really just trying to understand what is the what are the circumstances when effectively the general authority wouldn't run and when the Secretary of State would effectively have to give permission if. If it turns out that the general authority is very broad and there aren't really any circumstances, then that that power really may be otiose, but it really shouldn't therefore be in the in the bill.
But I'm really just trying to understand the limits effectively on that general authority that's given to the Office of Road and Rail. And I'd be grateful if the minister could set that out when he responds to this group.
13:32
Speaker 2
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Speaker 2
My Lords, the amendments within this group are about strengthening the requirements for Great British Railways before it's able to be granted a licence and to strengthen the passenger council in areas such as safety and standards. And they would also strengthen the role of the Office of Rail and Road, which is something I think is on this government's agenda. Lord Evans flagged concerns about the sort of consultation only powers rather than real teeth, for the Passenger Council and Lord Lansley's.
I think query about ensuring Scottish and Welsh ministers are consulted and have that consultation in a licence, I think are both very relevant, and I look forward to the Minister's clarification on these issues.
I think query about ensuring Scottish and Welsh ministers are consulted and have that consultation in a licence, I think are both very relevant, and I look forward to the Minister's clarification on these issues.
13:33
Speaker 10
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Speaker 10
My Lords, I thank my noble friend Lord Evans of Guisborough, Lord Lansley and Lord Grayling for their amendments. In this group I will address amendments 41, 42 and 44. First, the government has repeatedly emphasized the importance of independent regulation under the new system. It tells us that the order will remain an independent and expert regulator. While describing the new passengers Council as a powerful new voice for passengers. Well, these amendments ask how much power these bodies will actually have under the bill.
The Secretary of State may modify Gbr's licence after consulting the author, and where the changes concern its functions, the passengers Council. But consultation is not agreement. The licence is fundamental to how GBR operates and to the conditions against which the order will ultimately regulate and enforce its performance. If the order is to be the robust and independent regulator, the government says it will be. Why can the Secretary of State alter that licence without its agreement? The same question applies to the Passengers Council.
The government describes it as a powerful new voice, but the bill requires only consultation. There is no express requirement in this provision for the Secretary of State to have regard to the council's consultation response. The Secretary of State must subsequently consider representations or objections made during the formal notice period, but that is not the same as giving the passenger watchdog a meaningful role in agreeing changes which may directly affect passenger interests. Turning to amendment 46, tabled by my noble friend Lord Grayling.
Under the Bill, the order may grant a licence to a non GBR operator only if the Secretary of State consents, or if the licence falls within a general authority previously given by the Secretary of State. As my noble friend Lord Harper asks, why is that ministerial veto necessary if the orer the independent regulator, which the government repeatedly tells us will remain robust and expert, has considered an application and concluded that a non GBR operator satisfies the relevant requirements, why should the Secretary of State have the final trump card if the government genuinely wants an independent regulator, unless day to day political interference in the operation of the railway, surely licensing decisions of this kind should rest with the regulator.
I would therefore be grateful if the Minister could explain in what circumstances the government envisages the Secretary of State refusing consent to a licence, which the author considered, considers should be granted, and why that power remains necessary. My Lords, amendment 45, tabled by my noble friend Lord Lansley, seems entirely reasonable. Where a GBR licence concerns railway assets located in Scotland or Wales, I see no good reason why the relevant Scottish or Welsh ministers should not be consulted.
The Secretary of State may modify Gbr's licence after consulting the author, and where the changes concern its functions, the passengers Council. But consultation is not agreement. The licence is fundamental to how GBR operates and to the conditions against which the order will ultimately regulate and enforce its performance. If the order is to be the robust and independent regulator, the government says it will be. Why can the Secretary of State alter that licence without its agreement? The same question applies to the Passengers Council.
The government describes it as a powerful new voice, but the bill requires only consultation. There is no express requirement in this provision for the Secretary of State to have regard to the council's consultation response. The Secretary of State must subsequently consider representations or objections made during the formal notice period, but that is not the same as giving the passenger watchdog a meaningful role in agreeing changes which may directly affect passenger interests. Turning to amendment 46, tabled by my noble friend Lord Grayling.
Under the Bill, the order may grant a licence to a non GBR operator only if the Secretary of State consents, or if the licence falls within a general authority previously given by the Secretary of State. As my noble friend Lord Harper asks, why is that ministerial veto necessary if the orer the independent regulator, which the government repeatedly tells us will remain robust and expert, has considered an application and concluded that a non GBR operator satisfies the relevant requirements, why should the Secretary of State have the final trump card if the government genuinely wants an independent regulator, unless day to day political interference in the operation of the railway, surely licensing decisions of this kind should rest with the regulator.
I would therefore be grateful if the Minister could explain in what circumstances the government envisages the Secretary of State refusing consent to a licence, which the author considered, considers should be granted, and why that power remains necessary. My Lords, amendment 45, tabled by my noble friend Lord Lansley, seems entirely reasonable. Where a GBR licence concerns railway assets located in Scotland or Wales, I see no good reason why the relevant Scottish or Welsh ministers should not be consulted.
13:36
Speaker 4
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Speaker 4
My Lords, great. I'm grateful to hear from Noble Lords on this group, and it's a special pleasure to hear from the noble Lord Ray. I'll start with amendments 38 and 39. These amendments would undermine one of the fundamental principles that the Bill seeks to establish. Secretary of state will set the overall strategic direction for GBR, and the bill provides the sole ability to issue GBR licence. This reflects that the Secretary of State, not the author of the passenger watchdog that is ultimately accountable for GBR both to Parliament and the wider public.
This aligns with the wider programme of regulatory reform this government is undertaking, where ministers set the strategic direction and regulators are empowered to enforce. Against this, regulators should not be making key strategic or political decisions for fundamental important sectors. However, regardless of who issues the licence, the order will enforce GBR compliance with it exactly as they do today. They have strong enforcement powers to ensure that GBR does not contravene the terms of its licence, including mandatory legally binding directions requiring GBR to change its behavior.
It wouldn't be appropriate to provide the order or the passenger watchdog with the power to veto the licence. Secretary of state will, however, consult both those bodies and consider their views before issuing an amendment 38. Specifically, let me reassure noble Lord Lords that safety remains fundamental to the operation of our railways and that the Bill does not weaken or alter the existing state rail railway safety regime, nor the author's role within it.
No licence will be issued that is not fully compliant with safety regulations and safety law. Furthermore, we expect GBR will have a licence condition to support the continuity of the safety and standards framework to preserve our world leading culture of safety. The Secretary of State will consult the law on the licence precisely to ensure that these kinds of conditions are fit for purpose. Amendment. Turning to amendments 41 to 46. Currently, the Secretary of State is the ultimate licensing authority for the railways under the Railways Act 1993, and the current bill does not change this as it does now.
The author will continue to issue all non GB licences under the general authority given to it by the Secretary of State, removing the Secretary of State from the process, or requiring the author to consent would not only undermine continuity and stability for the industry, but also be superfluous as in practice. In practice, as the author already issue these licences on behalf of the Secretary of State, let me also clarify that railway licensing is and will remain a reserved matter.
Scottish and Welsh Ministers are not licensing authorities under the current system and the Bill will not change this. However, it doesn't mean that Scottish and Welsh ministers are prevented from making their views known. The lrr is required under the Bill to provide notice prior to any licence being issued and to consider any representations made, including any by Scottish and Welsh Ministers. We therefore don't consider it necessary to create an additional consultation requirement specifically for Scottish and Welsh ministers.
I would also note that the government has spent long and productive hours discussing the provision of the Bill with the provisions of the Bill with Scottish and Welsh Ministers, and in both cases they are content with the licensing provisions as drafted. In fact, Scotland have already published their legislative consent motion. I therefore ask noble Lords to withdraw these amendments.
This aligns with the wider programme of regulatory reform this government is undertaking, where ministers set the strategic direction and regulators are empowered to enforce. Against this, regulators should not be making key strategic or political decisions for fundamental important sectors. However, regardless of who issues the licence, the order will enforce GBR compliance with it exactly as they do today. They have strong enforcement powers to ensure that GBR does not contravene the terms of its licence, including mandatory legally binding directions requiring GBR to change its behavior.
It wouldn't be appropriate to provide the order or the passenger watchdog with the power to veto the licence. Secretary of state will, however, consult both those bodies and consider their views before issuing an amendment 38. Specifically, let me reassure noble Lord Lords that safety remains fundamental to the operation of our railways and that the Bill does not weaken or alter the existing state rail railway safety regime, nor the author's role within it.
No licence will be issued that is not fully compliant with safety regulations and safety law. Furthermore, we expect GBR will have a licence condition to support the continuity of the safety and standards framework to preserve our world leading culture of safety. The Secretary of State will consult the law on the licence precisely to ensure that these kinds of conditions are fit for purpose. Amendment. Turning to amendments 41 to 46. Currently, the Secretary of State is the ultimate licensing authority for the railways under the Railways Act 1993, and the current bill does not change this as it does now.
The author will continue to issue all non GB licences under the general authority given to it by the Secretary of State, removing the Secretary of State from the process, or requiring the author to consent would not only undermine continuity and stability for the industry, but also be superfluous as in practice. In practice, as the author already issue these licences on behalf of the Secretary of State, let me also clarify that railway licensing is and will remain a reserved matter.
Scottish and Welsh Ministers are not licensing authorities under the current system and the Bill will not change this. However, it doesn't mean that Scottish and Welsh ministers are prevented from making their views known. The lrr is required under the Bill to provide notice prior to any licence being issued and to consider any representations made, including any by Scottish and Welsh Ministers. We therefore don't consider it necessary to create an additional consultation requirement specifically for Scottish and Welsh ministers.
I would also note that the government has spent long and productive hours discussing the provision of the Bill with the provisions of the Bill with Scottish and Welsh Ministers, and in both cases they are content with the licensing provisions as drafted. In fact, Scotland have already published their legislative consent motion. I therefore ask noble Lords to withdraw these amendments.
13:40
Speaker 1
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Speaker 1
Can I ask the Minister why? Therefore, if it's not necessary to create a statutory consultation requirement, why is it necessary to have a consultation requirement in relation to the passenger's Council? Can they not respond to the consultation on a licence in the same way as Scottish or Welsh Ministers could?
13:40
Speaker 4
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Speaker 4
Well, in response to noble Lord, I'm sure they could. But it. But but it. But it is desirable to mention the Passenger's Council, since we're. Since since since we're setting it up. And since it is an important body, I think the distinction that I'm seeking to draw is leaving the passenger's Council as a consultee rather than requiring it's permission.
13:41
Speaker 5
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Speaker 5
Can I can I just press the minister a bit on the question I asked him? I still don't quite understand that if if the as he said, yes, the Secretary of State is the holder of the licensing power, but it has given a general authority to the Office of Road and Rail to issue those licences for non GBR operators. I still don't understand what the purpose is in section six. A why there is that requirement for the Secretary of State to consent to the grant, because I don't understand in what circumstances the the Office of Road and Rail would be operating outside of its general authority.
It'd be just helpful if the Minister could give an example of where that Secretary of State veto would kick in, because I don't quite understand what the point of it is.
It'd be just helpful if the Minister could give an example of where that Secretary of State veto would kick in, because I don't quite understand what the point of it is.
13:42
13:42
13:42
13:42
13:42
Speaker 1
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Speaker 1
Lords, can I thank noble Lords for their contributions to this debate, which I think have been very helpful and largely supportive across party as well. I'm grateful to the Minister for his response. I think he's dealt with the questions from some of my my noble friends to their satisfaction. I'm not sure he's dealt with the issue, which I originally raised to my satisfaction. But for now, I'm happy to.
But to withdraw amendment 38, I beg leave to withdraw amendment 30.
But to withdraw amendment 38, I beg leave to withdraw amendment 30.
13:43
13:43
Speaker 2
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Speaker 2
My Lords, I am delighted to speak to move amendment 40 and the other amendments in this group about London travel. Watch now for those of you who don't know, and I do feel I'm in a room here, as we've said before, and joked about, it's a reunion of those of us who are involved in London government. But for those who don't know, London Travel Watch, officially known as the London Transport Users Committee, is the independent transport watchdog set up under statute speaking up for the travelling public in and around London.
And it was established in its current form under the Greater London Authority Act 1999, though actually its roots go back to the 1947 Transport Act and beyond, and its remit covers national rail issues within the London railway area, and those boundaries are defined under the Railways Act 2005 and go beyond what most of us think of as London. It also covers transport services under the responsibility of transport for London, such as buses and the tube and Eurostar services, which isn't just a service for those in London, as we know, and London Travel Watch shares a very similar kind of organisational background to its sister national watchdog, Transport Focus, officially known as the Passengers Council.
Now, in simple terms, under the Railways Act 2005, the functions of these former National Rail Passenger councils passed to a national RPC. Now the Passengers Council, apart from those within London which passed to what's now London Travel Watch and on a day to day basis, these two watchdogs work closely together. They share resources to support each other's activities, whether on issues of rail policy and delivery, or regarding passengers appeals against railway bodies, where these are passed on to the watchdog by the Rail Ombudsman and also the chair of London Travel Watch, sits on the Board of Transport Focus as it is now.
So there is that clear link. But there are three good reasons why the Bill should be amended to ensure that London Travel Watch is made a statutory consultee alongside the new passenger council, approximately 70% of all rail journeys in Great Britain start, end or go through London. So the geographical remit defined, as I've already explained, as the London railway area, it covers around 400 stations. A significant proportion of the around 2500 stations we have across the whole country, and it stretches north to south from Bedford to Gatwick Airport and west to east from Reading to Stansted Airport.
So national rail policies or decisions have significant potential to affect passengers in that wider London area. But also London Travel Watch is accountable to and funded by the London Assembly rather than the Department of Transport, which sponsors and funds the passenger Council, as well as being the sponsoring Whitehall department for National Rail. Now London Travel Watch is public accountability, combined with independence from the department is a really important factor in its ability to champion the interests of passengers in that wider London area, effectively so ensuring the bill includes explicit reference to, I call it London Travel Watch look as a consultee alongside the passengers.
Council offers as a really important opportunity to strengthen the overall independence of the passenger voice in future railway decision making. And thirdly, from a purely legislative point of view, it makes no sense to assign statutory consultee status to one existing statutory passenger watchdog and not to another, particularly when they share a similar background as a statutory passenger body with a rail remit. The London Travel Watch should have equal treatment as the passenger council under the bill.
When it comes to the consultation on rail policies and strategies which affect the capital and to do otherwise risk diluting the ability to represent rail passenger views in London in future industry decision making. But let me just give two relatively recent examples that demonstrate the value which London Travelwatch has brought to rail passengers working independently of. Yet, alongside the current transport focus in 2023, in one of the largest public consultations of its kind, the two watchdogs successfully secured the reversal of plans by rail operators to close ticket offices.
London Travelwatch alone analysed nearly 230,000 responses from the public to proposals for 269 stations in the London Travelwatch area, and there is no doubt that by working together, the watchdog secured the right outcome for a poorly thought through set of proposals which were deeply unpopular with the public. And in 2024, London Travelwatch spoke out publicly about long standing problems at Euston station, many of which I'm sure members in this room will have experienced.
London's main rail gateway to four of the other largest cities in the UK. And as a result of that, Network Rail and the then Secretary of State for transport may be in this room, I'm not sure. Committed to a five point action plan to improve the customer experience at Euston. So a number of modest but welcome improvements have been implemented since then, ahead of, obviously, the long term exciting plans for redevelopment at Euston.
So this was an example of London Travelwatch ability not just to speak out independently, but to do so to the benefit of the public, both within and outside the capital, and really working hand in hand with the other body. So I'm grateful to Lord Moylan for adding his name to my amendments in this group. I move my amendment 40, and I hope the minister will be positive in his response to fix this clear anomaly in the bill as set out before us today.
And it was established in its current form under the Greater London Authority Act 1999, though actually its roots go back to the 1947 Transport Act and beyond, and its remit covers national rail issues within the London railway area, and those boundaries are defined under the Railways Act 2005 and go beyond what most of us think of as London. It also covers transport services under the responsibility of transport for London, such as buses and the tube and Eurostar services, which isn't just a service for those in London, as we know, and London Travel Watch shares a very similar kind of organisational background to its sister national watchdog, Transport Focus, officially known as the Passengers Council.
Now, in simple terms, under the Railways Act 2005, the functions of these former National Rail Passenger councils passed to a national RPC. Now the Passengers Council, apart from those within London which passed to what's now London Travel Watch and on a day to day basis, these two watchdogs work closely together. They share resources to support each other's activities, whether on issues of rail policy and delivery, or regarding passengers appeals against railway bodies, where these are passed on to the watchdog by the Rail Ombudsman and also the chair of London Travel Watch, sits on the Board of Transport Focus as it is now.
So there is that clear link. But there are three good reasons why the Bill should be amended to ensure that London Travel Watch is made a statutory consultee alongside the new passenger council, approximately 70% of all rail journeys in Great Britain start, end or go through London. So the geographical remit defined, as I've already explained, as the London railway area, it covers around 400 stations. A significant proportion of the around 2500 stations we have across the whole country, and it stretches north to south from Bedford to Gatwick Airport and west to east from Reading to Stansted Airport.
So national rail policies or decisions have significant potential to affect passengers in that wider London area. But also London Travel Watch is accountable to and funded by the London Assembly rather than the Department of Transport, which sponsors and funds the passenger Council, as well as being the sponsoring Whitehall department for National Rail. Now London Travel Watch is public accountability, combined with independence from the department is a really important factor in its ability to champion the interests of passengers in that wider London area, effectively so ensuring the bill includes explicit reference to, I call it London Travel Watch look as a consultee alongside the passengers.
Council offers as a really important opportunity to strengthen the overall independence of the passenger voice in future railway decision making. And thirdly, from a purely legislative point of view, it makes no sense to assign statutory consultee status to one existing statutory passenger watchdog and not to another, particularly when they share a similar background as a statutory passenger body with a rail remit. The London Travel Watch should have equal treatment as the passenger council under the bill.
When it comes to the consultation on rail policies and strategies which affect the capital and to do otherwise risk diluting the ability to represent rail passenger views in London in future industry decision making. But let me just give two relatively recent examples that demonstrate the value which London Travelwatch has brought to rail passengers working independently of. Yet, alongside the current transport focus in 2023, in one of the largest public consultations of its kind, the two watchdogs successfully secured the reversal of plans by rail operators to close ticket offices.
London Travelwatch alone analysed nearly 230,000 responses from the public to proposals for 269 stations in the London Travelwatch area, and there is no doubt that by working together, the watchdog secured the right outcome for a poorly thought through set of proposals which were deeply unpopular with the public. And in 2024, London Travelwatch spoke out publicly about long standing problems at Euston station, many of which I'm sure members in this room will have experienced.
London's main rail gateway to four of the other largest cities in the UK. And as a result of that, Network Rail and the then Secretary of State for transport may be in this room, I'm not sure. Committed to a five point action plan to improve the customer experience at Euston. So a number of modest but welcome improvements have been implemented since then, ahead of, obviously, the long term exciting plans for redevelopment at Euston.
So this was an example of London Travelwatch ability not just to speak out independently, but to do so to the benefit of the public, both within and outside the capital, and really working hand in hand with the other body. So I'm grateful to Lord Moylan for adding his name to my amendments in this group. I move my amendment 40, and I hope the minister will be positive in his response to fix this clear anomaly in the bill as set out before us today.
13:49
13:49
Speaker 3
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Speaker 3
My Lords, when I was deputy chairman of transport for London, I found London Travelwatch a rather annoying body as and and and and I suspect that the noble Lord. The minister, when he was Commissioner of Transport. Good job and even more annoying than I did, because of course it was there to complain as well as to make suggestions for improvements, so I can understand that there may well be a level of resistance to the suggestion from the noble Baroness, lady Pidgeon.
However, I have added my name to her amendments because, objectively speaking, she is absolutely right. This is a very important statutory body. It requires it should be treated on a level footing with other transport users committees. I can see no possible grounds for objection that the Minister may have. I suspect this will be one of the concessions he makes on report, and if he doesn't, it will be inserted in the bill whether he likes it or not.
So I look forward to him hearing to hearing him say that the noble Baroness is spot on about this, and that he'll be willing to accept, if not her amendments as drafted today, at least amendments in lieu to the same effect that he might produce in the near future.
However, I have added my name to her amendments because, objectively speaking, she is absolutely right. This is a very important statutory body. It requires it should be treated on a level footing with other transport users committees. I can see no possible grounds for objection that the Minister may have. I suspect this will be one of the concessions he makes on report, and if he doesn't, it will be inserted in the bill whether he likes it or not.
So I look forward to him hearing to hearing him say that the noble Baroness is spot on about this, and that he'll be willing to accept, if not her amendments as drafted today, at least amendments in lieu to the same effect that he might produce in the near future.
13:51
13:51
13:51
13:51
13:51
13:51
13:51
13:51
Speaker 4
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Speaker 4
Some of the board. As the noble Baroness says London Travelwatch plays a vital role as. the London. Championing the interests of people who travel across all modes of the city's integrated transport network. That's precisely why the Railways Bill will strengthen its rail powers to ensure there is consistent passenger advocacy across Great Britain. However, the passenger watchdog will have a new role in the Reform railways, which will be different to the role of London Travelwatch and will go beyond being solely a watchdog and passenger champion.
It will have a central role in holding rail operators, including GBR, to account by setting consumer standards for the industry and monitoring operator compliance with them. It wouldn't be appropriate to have two different bodies setting standards, which is why the watchdog will work closely with London Travelwatch to ensure that standards applied across all operators reflect their expertise. That's why London Travelwatch is treated differently in the bill, and why GBR, the Secretary of State and the Office of Rail and Road must consult only the watchdog on certain matters, such as the licence, the long Term rail strategy and GBR business plan.
London Travelwatch is not expected, for example, to have any role at all on the licence. That said, I can reassure the noble Baroness that I absolutely agree that London Travelwatch must continue to have a voice on matters that impact the London transport network and indeed the wider scope of London Travelwatch, as she refers to. I understand that Transport Focus, the future passenger watchdog, and London Travelwatch will update their existing collaboration agreement to reflect changes in roles and I expect this will include additional expectations around consultation and engagement, where matters will affect London and the other services for which London.
Travelwatch oversees these reasons. I urge her now to withdraw her amendments, though I am happy to discuss this with her further after the committee stage.
It will have a central role in holding rail operators, including GBR, to account by setting consumer standards for the industry and monitoring operator compliance with them. It wouldn't be appropriate to have two different bodies setting standards, which is why the watchdog will work closely with London Travelwatch to ensure that standards applied across all operators reflect their expertise. That's why London Travelwatch is treated differently in the bill, and why GBR, the Secretary of State and the Office of Rail and Road must consult only the watchdog on certain matters, such as the licence, the long Term rail strategy and GBR business plan.
London Travelwatch is not expected, for example, to have any role at all on the licence. That said, I can reassure the noble Baroness that I absolutely agree that London Travelwatch must continue to have a voice on matters that impact the London transport network and indeed the wider scope of London Travelwatch, as she refers to. I understand that Transport Focus, the future passenger watchdog, and London Travelwatch will update their existing collaboration agreement to reflect changes in roles and I expect this will include additional expectations around consultation and engagement, where matters will affect London and the other services for which London.
Travelwatch oversees these reasons. I urge her now to withdraw her amendments, though I am happy to discuss this with her further after the committee stage.
13:53
Speaker 2
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Speaker 2
Thank you for this. I would say short debate, but I did speak quite extensively, but maybe comprehensively on this matter. I understand what the noble Lord, the minister is saying, but I do think it would be helpful, even if you have to define it differently, in that to to put London Travelwatch where appropriate, on the same footing as the passenger Council for certain areas of consultation, a collaboration agreement between two organisations. I mean that that's between them, but I think it would be I would like to see something on the statute that makes it clear in the areas where you would expect London Travelwatch to have a role, so I would be happy to meet the minister outside and see whether government can come up with some wording that would deliver that.
That would ensure London's voice is not lost in this. And on that basis, I'm happy at this moment to withdraw my amendment.
That would ensure London's voice is not lost in this. And on that basis, I'm happy at this moment to withdraw my amendment.
13:54
Speaker 9
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Speaker 9
Is it your Lordship's pleasure with this amendment be withdrawn? Amendment is by leveraging amendment 41. Lord Evans of Guisborough, not moved and 42 not moved. 43 Lord Lansley not moved. Amendment 44. Lord Evans not moved. Amendment 45. Lord Lansley not moved. Amendment 46. Lord Moylan not moved 47. Not moved, not moved. Amendment 48. Lord Young of Cookham, not moved.
Already debated 49. Already debated, not moved. Amendment 50. Lord Berkeley debated. Not moved. Amendment 51 already debated. Not moved. Amendment 52. Lord Harding of Wind, Baroness Harding of Winscombe not moved. Amendment 53. Baroness Harding of Winscombe moved. The question is that schedule one should be the first schedule of the bill. As many as are of that opinion will say content, content, content, content for the contents have it.
Question is that clause 12 stand part of the bill? As many as are of that opinion will say content, content or not content for contents have it after clause 12. Amendment 54 Lord Bradshaw.
Already debated 49. Already debated, not moved. Amendment 50. Lord Berkeley debated. Not moved. Amendment 51 already debated. Not moved. Amendment 52. Lord Harding of Wind, Baroness Harding of Winscombe not moved. Amendment 53. Baroness Harding of Winscombe moved. The question is that schedule one should be the first schedule of the bill. As many as are of that opinion will say content, content, content, content for the contents have it.
Question is that clause 12 stand part of the bill? As many as are of that opinion will say content, content or not content for contents have it after clause 12. Amendment 54 Lord Bradshaw.
13:56
13:56
13:56
Speaker 12
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Speaker 12
The amendment I'm moving is almost self-explanatory. I think most people in the room will have witnessed arbitrary cuts in expenditure on the railway. These cuts probably in the rating from the Treasury. But coming through the Department of Transport say that you shall cut 10% of rail services or you will cut staff or maybe have a recruitment ban. What I am seeking to do is to ameliorate that process somewhat so that if a government, not necessarily the one of the noble Minister makes, is proposing to make an arbitrary cut in the money available to the railway, whether we're talking about the money available now or sometime in the future, instead of leaving the railway to make the best of a bad job, shall instead make a proposal to the regulator, and this will give the regulator a real job.
The regulator will have already approved the business plan of the railway sometime previously.
The regulator will have already approved the business plan of the railway sometime previously.
13:58
Speaker 12
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Speaker 12
If. That an arbitrary cut is made in future, that cut should be referred to the rail regulator and, as it were, deferred for three months, during which time the road and rail regulator will have the opportunity . Together with the industry of coming forward with better solutions than have been proposed under the arbitrary cuts . They could, for example, seek to postpone some work or make. It could alter the scope of the work, and they could.
Instead of having a crewed ban on recruitment, ensure that that only applies to the staff who are not absolutely essential to the running of the railway. I'm seeking in this amendment to make a change to the way in which the Treasury and the Department of Transport handles its relations with the industry, and I think that would be a good thing with the rail and road regulator . A chance to propose something. Alternatively, and as he does also include roads in his treatment, he might also consider the terrible waste of money which has been on wasted on smart motorways.
And he might propose that some form of. concession is levied on heavy goods vehicles, which I'm sure most people would agree do enormous damage to our roads. I beg to move.
Instead of having a crewed ban on recruitment, ensure that that only applies to the staff who are not absolutely essential to the running of the railway. I'm seeking in this amendment to make a change to the way in which the Treasury and the Department of Transport handles its relations with the industry, and I think that would be a good thing with the rail and road regulator . A chance to propose something. Alternatively, and as he does also include roads in his treatment, he might also consider the terrible waste of money which has been on wasted on smart motorways.
And he might propose that some form of. concession is levied on heavy goods vehicles, which I'm sure most people would agree do enormous damage to our roads. I beg to move.
14:00
14:00
Speaker 1
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Speaker 1
My Lords, I have two amendments in this group that is 65 and 73, I think. Rather than the broader issues of funding, mine are much more gritty kind of questions of how the transparency of the business plan and the funding processes for Great British Rail's railways are to work. 65 we're in schedule two. We're looking at the amendment 65 looks at schedule two in that part of the bill , where Great British Railways is showing us how, in its business plan, its money is received and allocated towards activities.
And if I remember correctly, we're in that bit where it has to set out various things. So we're at line line 27 on page 71. The plan must set out the activities that it proposes, the cost of carrying on those activities and how to meet those costs. Now, strictly speaking, all the things that what I'm asking for in amendment 65 might be comprised within that. But I think it's an opportunity for us to be very clear that Great British Railways should, in my view, I'll come on to a separate in a separate group to another issue related to this in the relationship with local government bodies.
But in this particular instance, I think there would be important transparency in Great British Railways being required when setting out its business plan , and to show what contributions are received by GBR itself from GBR companies. By way of presumably of profits or revenue remitted to GB for this purpose and vice versa. How much is being paid out through GBR companies? How much is being received? And that's amendment 65 is for that purpose is to say where the activity is carried out by GBR company.
The contributions received from or provided to GBR in relation to those activities. So I hope that's a straightforward kind of transparency issue. When the business plan is being presented, I think a good plan would do that anyway. It's just a case of trying to be clear about that now. It affords me the opportunity to say to my noble friend, Lord Moylan, we discussed on Tuesday the question of GBR companies, and he returned to this issue and chastised me for that.
I was inaccurate. I don't think I was as inaccurate as he might imagine.
And if I remember correctly, we're in that bit where it has to set out various things. So we're at line line 27 on page 71. The plan must set out the activities that it proposes, the cost of carrying on those activities and how to meet those costs. Now, strictly speaking, all the things that what I'm asking for in amendment 65 might be comprised within that. But I think it's an opportunity for us to be very clear that Great British Railways should, in my view, I'll come on to a separate in a separate group to another issue related to this in the relationship with local government bodies.
But in this particular instance, I think there would be important transparency in Great British Railways being required when setting out its business plan , and to show what contributions are received by GBR itself from GBR companies. By way of presumably of profits or revenue remitted to GB for this purpose and vice versa. How much is being paid out through GBR companies? How much is being received? And that's amendment 65 is for that purpose is to say where the activity is carried out by GBR company.
The contributions received from or provided to GBR in relation to those activities. So I hope that's a straightforward kind of transparency issue. When the business plan is being presented, I think a good plan would do that anyway. It's just a case of trying to be clear about that now. It affords me the opportunity to say to my noble friend, Lord Moylan, we discussed on Tuesday the question of GBR companies, and he returned to this issue and chastised me for that.
I was inaccurate. I don't think I was as inaccurate as he might imagine.
14:03
14:03
14:03
14:03
Speaker 3
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Speaker 3
us, I never I would never dream of doing . Inconceivable to do that, I drew to my noble friend's attention an email that I had received which said that he'd made a mistake and that a minister had also also made a mistake. I gave no opinion myself, whether that. Was well argued, and I added both the minister and the noble Lord. And I've explicitly. In writing to the noble Lord, I hope he's received by. Now I've said, I do not know whether this is right or wrong, but I wondered if you wished to make a comment.
And of course the noble Lord, Lord Lancey, may wish to make a comment at any time he chooses, but not a comment. I hope that is intended to be a rebuttal of any chastisement or even mild criticism suggested by me.
And of course the noble Lord, Lord Lancey, may wish to make a comment at any time he chooses, but not a comment. I hope that is intended to be a rebuttal of any chastisement or even mild criticism suggested by me.
14:04
14:04
Speaker 1
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Speaker 1
I thank my noble friend for that correction. He's shared the email with me. I think it is worth just putting on the record in my. There is a point that was made in that email which is. It is important to distinguish between joint venture and and corporate activities on other companies. On the other. However, the point of the debate on Tuesday was. I was seeking to establish under the legislation that GBR companies do not have to be wholly owned.
Baroness Jones of Mülheim Moulsecoomb.
Baroness Jones of Mülheim Moulsecoomb.
14:04
14:04
Speaker 1
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Speaker 1
And such will show. Was seeking to establish that GBR companies are required to be wholly owned. That's. That's the simple debate, and as I understand it, the Bill clause 99 makes it very clear that GBR companies are a subsidiary of GBR and a subsidiary under the Companies Act does not require to be wholly owned. And if the government had wanted GBR companies to be wholly owned subsidiaries, they would have said so.
So as far as I'm concerned, it is a subsidiary and subsidiary, as we know, under the Companies Act, is a control, not a matter of complete ownership. So as far as I'm concerned, I got what I wanted out of that debate, which is my assurance that GBR companies are not required to be wholly owned.
So as far as I'm concerned, it is a subsidiary and subsidiary, as we know, under the Companies Act, is a control, not a matter of complete ownership. So as far as I'm concerned, I got what I wanted out of that debate, which is my assurance that GBR companies are not required to be wholly owned.
14:05
Speaker 3
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Speaker 3
My Lords, I we're now debating what was the other day, but since there was an element of confusion, noble Lord has characterised very accurately the difference in position between himself and the noble Baroness, Lady Jones of Moulsecoomb. But it was in the context of a debate, a very important debate, about whether GBR would be able to carry out partnership. I do use the word very loosely partnership arrangements with private sector developers for the development of land in which GBR had a stake with a view to achieving things like more housing or whatever it might be.
And and there the issue, of course, a subsidiary does not have to be wholly owned. It's a question of control. Of course it comes. There comes. It can easily come a point where a joint venture company might not be controlled by the by by GBR. And the question then is whether those arrangements would still apply. So the fundamental issue in the debate, as I saw it, and I entirely understand what the noble Lord is saying, is whether the structure proposed by the government in the Bill inhibits what we would all agree are desirable developments that could take place using GBR assets, working with the private sector, and that I think I heard the noble Lord give assurance on that, and I accept that, of course, but I was merely advancing this to him because the suggestion was that a confusion arisen about joint ventures, subsidiaries, wholly owned control in the course of debate, and that the minister had fallen into that confusion along with others.
And therefore I was giving him the opportunity to say whether that was in fact the case. I don't expect him to do so today, in fact, because he's only just had the email.
And and there the issue, of course, a subsidiary does not have to be wholly owned. It's a question of control. Of course it comes. There comes. It can easily come a point where a joint venture company might not be controlled by the by by GBR. And the question then is whether those arrangements would still apply. So the fundamental issue in the debate, as I saw it, and I entirely understand what the noble Lord is saying, is whether the structure proposed by the government in the Bill inhibits what we would all agree are desirable developments that could take place using GBR assets, working with the private sector, and that I think I heard the noble Lord give assurance on that, and I accept that, of course, but I was merely advancing this to him because the suggestion was that a confusion arisen about joint ventures, subsidiaries, wholly owned control in the course of debate, and that the minister had fallen into that confusion along with others.
And therefore I was giving him the opportunity to say whether that was in fact the case. I don't expect him to do so today, in fact, because he's only just had the email.
14:07
Speaker 1
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Speaker 1
I think I that was an intervention. I think I can only speak for myself. I don't think I'm now confused. I think the bill does not inhibit this from happening in the future. And that's a satisfactory position for us to have reached. But it's relevant to this debate in the sense that my amendment 65 is about the relationship between GBR and its companies, and I think the financial transactions, as it were, the, the, the, the resources provided to or the resources received from GBR companies ought to be explicit in the business plan.
Turning to amendment 73, now we really are in a happy position. It's many, many years since I was responsible, many years since I was responsible for the public expenditure of a government department. I don't mean as Secretary of State, I mean as actually the official responsible. And knowing what powers one is using in relation to spending money is very important. And what amendment 73 explores, and I literally it is a probing amendment, but I've used the structure of saying that there should not be the same activity funded out of both the.
The powers in this bill. Where there is financial assistance which can be provided by the Secretary of State to Great British Railways and section six of the Railways Act, 2005, which noble Lords who know these things better than I do, will remember, is a very broad ranging power to provide financial assistance to GBR. What I want to establish at this point, and we might return to it at a later stage to see whether it is a satisfactory position.
What is the position in terms of what activities of GBR you will be in receipt of financial assistance from the government under the section six power that exists under 2005 Act now, or the financial assistance which is to be provided under this legislation, I think we need to avoid the confusion of two different powers providing financial assistance to the same activity.
Turning to amendment 73, now we really are in a happy position. It's many, many years since I was responsible, many years since I was responsible for the public expenditure of a government department. I don't mean as Secretary of State, I mean as actually the official responsible. And knowing what powers one is using in relation to spending money is very important. And what amendment 73 explores, and I literally it is a probing amendment, but I've used the structure of saying that there should not be the same activity funded out of both the.
The powers in this bill. Where there is financial assistance which can be provided by the Secretary of State to Great British Railways and section six of the Railways Act, 2005, which noble Lords who know these things better than I do, will remember, is a very broad ranging power to provide financial assistance to GBR. What I want to establish at this point, and we might return to it at a later stage to see whether it is a satisfactory position.
What is the position in terms of what activities of GBR you will be in receipt of financial assistance from the government under the section six power that exists under 2005 Act now, or the financial assistance which is to be provided under this legislation, I think we need to avoid the confusion of two different powers providing financial assistance to the same activity.
14:10
Speaker 5
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Speaker 5
My Lords, I wish to speak to amendment 54, which the noble Lord, Lord Bradshaw, moved in, in opening this group, and also amendment 55, which is in the name of noble friend Lord Moylan. Both of them, I think, and I'm. I'm obviously I haven't heard Lord Moylan's exposition of the purpose of his amendment. I look forward to listening to that shortly. Both of them, I think I sort of understand why they're there.
They both of them, I think, are intended to make it more difficult to change funding for railways as opposed to other areas of public expenditure. And I'm not sure that's entirely a good thing. I completely understand why that would be a good thing if you were looking at it from the through the railway end of the telescope. But I think if you're looking at it from the point of view of a taxpayer or a citizen, I'm not sure tying the hands of ministers in that way is entirely helpful.
So let me just take those two amendments in turn. So it's worth saying, just in terms of background, the structure for setting the budgets in the first place. I think if I've understood the bill correctly in schedule two, part one, the funding by the Secretary of State broadly is the position now, which is that the government sets out a sets out a plan for funding, which is over a multiple year period, notifies various people of that funding, and the funding is set out, as are the things that are expected to be delivered by the funding.
So it's all very transparent for us to see what's going on. And then currently in the bill, what is required if the Secretary of State proposes to vary the financial assistance is, as far as I understand it, purely notification of the Orer where the Secretary of State has to tell the IRR in various circumstances. But it's very clear from the bill as drafted that only notification, only notification is required. There's no requirement for the Minister to await the Or doing anything before the Minister is able to proceed with the funding change.
That is, I think, a set of circumstances which, if I've correctly understood that I am content with Lord Moylan's amendment which he has tabled, which I, I, I understand is a probing amendment to test . This would make. It would make it very difficult for the Secretary of State to change that funding settlement, except in two cases. One would be if the things that it required GBR to do had changed and therefore funding was different, or there was an emergency in the country at the level of of what is set out in the Civil Contingencies Act, which, given we don't have those very often, I think there are lots of circumstances where the government has to make changes to public expenditure for all sorts of reasons, without the country being in a situation at a level of an emergency, as defined in the Civil Contingencies Act.
And I think it's the it's the proper role of ministers to have that level of flexibility and the ability to set budgets and make funding decisions, and also to choose even within the departmental. allocation they've got, even if the Treasury isn't changing anything in terms of the money the department's got, it is the job of ministers to decide how that money is allocated between
They both of them, I think, are intended to make it more difficult to change funding for railways as opposed to other areas of public expenditure. And I'm not sure that's entirely a good thing. I completely understand why that would be a good thing if you were looking at it from the through the railway end of the telescope. But I think if you're looking at it from the point of view of a taxpayer or a citizen, I'm not sure tying the hands of ministers in that way is entirely helpful.
So let me just take those two amendments in turn. So it's worth saying, just in terms of background, the structure for setting the budgets in the first place. I think if I've understood the bill correctly in schedule two, part one, the funding by the Secretary of State broadly is the position now, which is that the government sets out a sets out a plan for funding, which is over a multiple year period, notifies various people of that funding, and the funding is set out, as are the things that are expected to be delivered by the funding.
So it's all very transparent for us to see what's going on. And then currently in the bill, what is required if the Secretary of State proposes to vary the financial assistance is, as far as I understand it, purely notification of the Orer where the Secretary of State has to tell the IRR in various circumstances. But it's very clear from the bill as drafted that only notification, only notification is required. There's no requirement for the Minister to await the Or doing anything before the Minister is able to proceed with the funding change.
That is, I think, a set of circumstances which, if I've correctly understood that I am content with Lord Moylan's amendment which he has tabled, which I, I, I understand is a probing amendment to test . This would make. It would make it very difficult for the Secretary of State to change that funding settlement, except in two cases. One would be if the things that it required GBR to do had changed and therefore funding was different, or there was an emergency in the country at the level of of what is set out in the Civil Contingencies Act, which, given we don't have those very often, I think there are lots of circumstances where the government has to make changes to public expenditure for all sorts of reasons, without the country being in a situation at a level of an emergency, as defined in the Civil Contingencies Act.
And I think it's the it's the proper role of ministers to have that level of flexibility and the ability to set budgets and make funding decisions, and also to choose even within the departmental. allocation they've got, even if the Treasury isn't changing anything in terms of the money the department's got, it is the job of ministers to decide how that money is allocated between
14:14
14:14
Speaker 4
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Speaker 4
Could I just say that three months notice is not a long time, and any arbitrary cut cannot possibly take place in three months because timetables have to be altered, veins have to be altered, rosters have to be altered. So three months is a very short time. It gives the rail regulator to make some decisions. I'm not talking about giving the rail regulator lots of extra powers to alter the timetable.
I'm quite satisfied with where we have got to on that. But what I'm talking about, if any future government, which is to reduce the money, it should have the grace to have the matter properly considered by people who are professionally competent. Not always include ministers.
I'm quite satisfied with where we have got to on that. But what I'm talking about, if any future government, which is to reduce the money, it should have the grace to have the matter properly considered by people who are professionally competent. Not always include ministers.
14:15
Speaker 8
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Speaker 8
I'm grateful for the Noble Lords intervention. I hadn't yet got to to dealing with his amendment in detail. I was dealing with Lord Moylan, so I've listened carefully to what he said and I'll I'll deal with that when I when I get on to his amendment. So I'm not sure I agree with my noble friend Lord Maldon, and said, I understand his amendments are probing one, I wouldn't want to tie the hands of ministers in the way that he's set out.
I understand, of course. It is, of course, desirable not to change funding for any public service once it has been set. I mean, one doesn't do that if one can avoid it. But there are there are occasions when that is necessary. And I think if you're looking at who are the appropriate people to make those decisions, it should be ministers. And the problem with with ring fencing, certain parts of expenditure and making it more difficult to make changes, there is you are effectively making a decision that that any changes to public expenditure have to fall in other areas.
And those are decisions that should properly be taken by ministers at the time those changes are made, because they have to balance the consequences of making those expenditure changes, the changes that will necessitate to public services, and making the case to the about why they're doing them. And I just think that those are those are properly for ministers, rather than being ring fenced arbitrarily in legislation. Let me come to amendment 54, which the noble Lord Bradshaw has tabled.
The reason why I'm. I'm concerned about this amendment, and I'm very happy.
I understand, of course. It is, of course, desirable not to change funding for any public service once it has been set. I mean, one doesn't do that if one can avoid it. But there are there are occasions when that is necessary. And I think if you're looking at who are the appropriate people to make those decisions, it should be ministers. And the problem with with ring fencing, certain parts of expenditure and making it more difficult to make changes, there is you are effectively making a decision that that any changes to public expenditure have to fall in other areas.
And those are decisions that should properly be taken by ministers at the time those changes are made, because they have to balance the consequences of making those expenditure changes, the changes that will necessitate to public services, and making the case to the about why they're doing them. And I just think that those are those are properly for ministers, rather than being ring fenced arbitrarily in legislation. Let me come to amendment 54, which the noble Lord Bradshaw has tabled.
The reason why I'm. I'm concerned about this amendment, and I'm very happy.
14:16
14:16
Speaker 8
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Speaker 8
When I've finished my remarks, he wishes to. To come back and say I've misunderstood it. First of all, he referred to arbitrary changes. Arbitrary usually is a word used by people when they just don't agree with the changes proposed by somebody else. Ministers may well bring forward changes. It may be because the overall amount of money available to the government has had to be changed for some reason, because of some event. It may be that ministers have decided that expenditure may need to be spent in another area.
It may be that the Transport Secretary has decided that there's another area of transport which has become a higher priority. Those are perfectly reasonable decisions. They will have to be explained to Parliament, and ministers will be subject to questioning by both Members of Parliament and members of this House in making those decisions, but they're properly for ministers. Why have a slight problem with this? Is is it's involving the Office of Road and Rail, and I listened very carefully to the noble Lord, Lord Bradshaw, when he was setting it out.
He was, I think, suggesting that the office for Road and Rail could come back with alternative propositions. It could come back with suggesting funding decisions between rail and road. He was certainly starting from the proposition that rail funding was better than road funding. And I think he also was talking about taxation decisions or decisions about heavy goods vehicles. Now, those are all decisions, I think I humbly suggest, that are properly for ministers.
Now, he wasn't suggesting I accept that those decisions should be taken by the office for Road and Rail. He was suggesting that the office for Road and Rail should take some time, produce a report and then make suggestions to ministers. But I don't think it's the role of a regulator to get involved in making qualitative opinions about where public money should be spent. Those are not decisions for regulators. Those are properly decisions for ministers who are accountable to parliament.
And so unless I've misunderstood his amendment, I don't think getting regulators to come back and second guess the decisions of ministers and make alternative public spending propositions, is, is actually a good one for the conduct of public policy. The way the bill is currently structured, ministers have to notify the or if they're going to make funding decisions so that there's proper levels of transparency, which is absolutely right and proper, so that people know what's going on.
But I think there's a there's quite an important principle, I think, to maintain, which is that there are certain things that regulators.
It may be that the Transport Secretary has decided that there's another area of transport which has become a higher priority. Those are perfectly reasonable decisions. They will have to be explained to Parliament, and ministers will be subject to questioning by both Members of Parliament and members of this House in making those decisions, but they're properly for ministers. Why have a slight problem with this? Is is it's involving the Office of Road and Rail, and I listened very carefully to the noble Lord, Lord Bradshaw, when he was setting it out.
He was, I think, suggesting that the office for Road and Rail could come back with alternative propositions. It could come back with suggesting funding decisions between rail and road. He was certainly starting from the proposition that rail funding was better than road funding. And I think he also was talking about taxation decisions or decisions about heavy goods vehicles. Now, those are all decisions, I think I humbly suggest, that are properly for ministers.
Now, he wasn't suggesting I accept that those decisions should be taken by the office for Road and Rail. He was suggesting that the office for Road and Rail should take some time, produce a report and then make suggestions to ministers. But I don't think it's the role of a regulator to get involved in making qualitative opinions about where public money should be spent. Those are not decisions for regulators. Those are properly decisions for ministers who are accountable to parliament.
And so unless I've misunderstood his amendment, I don't think getting regulators to come back and second guess the decisions of ministers and make alternative public spending propositions, is, is actually a good one for the conduct of public policy. The way the bill is currently structured, ministers have to notify the or if they're going to make funding decisions so that there's proper levels of transparency, which is absolutely right and proper, so that people know what's going on.
But I think there's a there's quite an important principle, I think, to maintain, which is that there are certain things that regulators.
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14:19
Speaker 8
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Speaker 8
But there are also certain decisions that are properly for ministers. And I fear I don't like criticising noble. I know he's a great. Takes a great interest in this area of policy, but I don't think I can support his amendments. I think it has those deleterious effects, which I think would have on public policy making and and just just in the spirit of balance, he'll also have noticed that I was not entirely enthusiastic about the amendments tabled by my noble friend, Lord Moylan, which I know is a probing amendment.
So I think I've been quite evenhanded. My my non-approval of both of those amendments, because I think they both have a similar thought, which is tying the hands of ministers in making public spending prioritisation decisions.
So I think I've been quite evenhanded. My my non-approval of both of those amendments, because I think they both have a similar thought, which is tying the hands of ministers in making public spending prioritisation decisions.
14:20
Speaker 5
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Speaker 5
My Lords, what an absolute pleasure it is to hear today from my noble friend and railway expert, Lord Bradshaw. What's a railway? And it's such a flight. He's been able to join us in person today at this committee and has contributed to our debate, particularly after he had a significant birthday yesterday. Funding certainty is absolutely crucial for the railway going forward and being able to properly plan investment and work and deliver it in a timely manner is essential.
Lord Bradshaw's amendments try to show the seriousness of changing mid programme railway investment and putting in additional steps for any material change to an agreed funding settlement by involving the ORR for independent assessment, which should be published. This would ensure transparency and expert assessment if funding is changed. The railway, particularly mid year. Lord Lansley's amendment 65 requires more transparency, which I think is welcome, and the contribution from Lord Harper. In fact, it's noticeable that he has spoken in every group apart from the one solely with my amendments.
But I won't take that personally on London Travel Watch. But I have to say, once the Secretary of State, always a Secretary of State, I look forward to the minister's response.
Lord Bradshaw's amendments try to show the seriousness of changing mid programme railway investment and putting in additional steps for any material change to an agreed funding settlement by involving the ORR for independent assessment, which should be published. This would ensure transparency and expert assessment if funding is changed. The railway, particularly mid year. Lord Lansley's amendment 65 requires more transparency, which I think is welcome, and the contribution from Lord Harper. In fact, it's noticeable that he has spoken in every group apart from the one solely with my amendments.
But I won't take that personally on London Travel Watch. But I have to say, once the Secretary of State, always a Secretary of State, I look forward to the minister's response.
14:21
Speaker 6
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Speaker 6
My Lords, I have a number of amendments in this group 55, 56, 70, 78 and 86. I'm going to start with amendment 78. Paragraph 15 of schedule two provides that financial assistance given to GBR or GBR company, primarily to enable it to carry out its infrastructure functions under clause three one A of the bill, which is one of the general functions we discussed yesterday, is not to be treated as a substantive. For the purposes of the Subsidy Control Act 2022.
Now, this is a probing amendment to find out the justification for that. I suspect the justification is that it's not treated as a subsidy currently, and therefore the bill simply carries forward the existing situation. Wonder if that's appropriate. The Subsidy Control Act consists for a purpose, and it requires 2022 act, and it requires that public authorities should consider whether subsidies are proportionate and necessary, whether they distort competition or investment, and whether their benefits outweigh their adverse effects.
And I wonder why it is that the management and renewal and operation of infrastructure on the railways should be exempt specifically from those requirements. It doesn't apply. This exemption does not apply to other general functions listed in clause three, but it applies to this one, particularly as I don't want to be hypercritical because I know these things are are very difficult, and they're often excuses. There are often excuses, but particularly when I think there is a sort of a general lack of confidence that these functions are carried out with great efficiency at the moment, they always seem to be very expensive, so why shouldn't this condition apply to them? Is there a reason other than simply inertia? I don't think that inertia is enough.
The act also requires has safeguards about transparency, scrutiny of particularly significant subsidies by the Competition and Markets Authority, and ultimately the ability to challenge subsidy decisions by the Competition Appeal Tribunal. Now, noble Lords may say, oh, well, all this is going to happen. It'll be a GBR doing stuff, GBR rail, which therefore, how does competition come into this? But actually, as noble lords know, a great deal of maintenance activity on the track is carried out by private companies contracted for that purpose.
As far as I know, there is no. That may upset the noble Baroness, Lady Jones, but there we are. As far as I know, there's no intention. There's no indication in the Bill that that is going to change. And so the provision of subsidies, I think, does. I understand why it might raise competition concerns. And there's an appropriate authority here that can address them. That's my first question. It is a probing amendment, but I would like to know why these potentially very substantial sums should be outside the regular framework regarding amendment 70.
I'm simply asking for you publish the business plan. I think it's important that people should be able to see it possible. The minister should say that he has every intention of publishing the business plan. TfL publishes its business plan. Most other similar organisations publish its business plan. But as far as I could see, there isn't a statutory obligation in the bill. I may have missed it to publish the business plan each year or each period for which to which a new business plan would apply.
Amendments 55, 56 and 86 are about building financial discipline, both on the government and elsewhere. And here, perhaps I could address the comments made by my noble friend Lord Harper, and say something about the amendments tabled by the noble Lord, Lord Bradshaw. There's a serious issue here. I don't think Lord Bradshaw, the noble Lord, Lord Bradshaw, has got it right. And I don't actually think that my amendments have got it right.
But this is the right place for us to talk about this general question of how government treats the railways in terms of funding and the provision of funds, not how much it gives, but how it does it, what the process is. And the reason for that is that I used to be in a local authority. Very often we had we had to set a budget in March. Very often we didn't know until Christmas, even after Christmas , what the subsidy from government was going to be.
It's extremely difficult to put budgets together. at short notice. With the railways, it's even more difficult. The noble Lord, Lord Bradshaw, has said already that significant changes require a great lead time and planning in order for them to be delivered, and just as long for them to be reversed. And one of the things my amendments is most of my amendments are trying to do is actually not to fetter ministers.
And I accept the comments of my noble friend, Lord Harper, that ministers have to be accountable for public expenditure, and they have to make difficult decisions sometimes, but to try to build in a notice period. So that and I've suggested two years so that if changes are to be made, they would be lagged by that period so that the railways, New Great British Railways knew when they were going to be. Now, when the noble Lord, Lord Bradshaw, talked about timetables and so forth, he was discussing the operational side of the railway.
But there's also the infrastructure investment side of the railway, which may extend to building a completely new railway. I mean, one of the problems we all have, and we all acknowledge this, is that it's impossible to build new infrastructure on a one year settlement. That's why we give long term settlements to railway developers. They know that they will have the money to carry the project through to the end. Should that change in funding, not also be subject, if it is necessary, should also be subject to at least some sort of notice period.
And then further down the line from that, we have the supply chain. So a colleague of mine recently visited, I think it was well, I won't say which rail, which train manufacturer were British train manufacturer because I can't actually remember, but I, or I can, but I, let me, let me because what I'm going to say might be adverse, not about them, but about their situation, is that they're down to using one line of in manufacturing, because the orders have effectively dried up.
Now, we all know that the ideal situation is that British train manufacturers can have access to a steady supply of a steady stream of demand that they maintain jobs, not go from famine to feast. Where is the discipline going to come as a result of all these changes? To address that, what sort of lags and notice are necessary? As I say, I don't think I have all I have these amendments between them, although they they all point to this debate.
I don't think they necessarily have the answer. And we may not get further on this, but I think the government is going to have to be very talk very seriously about this when it creates a wholly new structure. Great British Rail to operate the railways. Funding has to be mentioned and an understanding of the approach to funding, not just for the operations but also for the infrastructure has to be maintained, has to be addressed.
There's also amendment 86, which addresses the other side of the equation an accountability for money once it has been spent. And amendment 86 requires GBR to publish an annual statement of its financial performance. Well, it may be said that they're going to have to do this as a company's law company. They'll have to produce an annual report. But I think one of the issues we should be considering is whether, given the scale of the public money going into Great British likely to be going into Great British Railways, whether that a simply an annual report produced on a company's laws basis is going to be enough.
And again, here probing to hear what the minister has to say about whether he intends to be more open with publishing figures on performance at the end of a financial period, rather than simply confining himself to the the loopholes and dodges that are often available for those producing simply producing company accounts.
Now, this is a probing amendment to find out the justification for that. I suspect the justification is that it's not treated as a subsidy currently, and therefore the bill simply carries forward the existing situation. Wonder if that's appropriate. The Subsidy Control Act consists for a purpose, and it requires 2022 act, and it requires that public authorities should consider whether subsidies are proportionate and necessary, whether they distort competition or investment, and whether their benefits outweigh their adverse effects.
And I wonder why it is that the management and renewal and operation of infrastructure on the railways should be exempt specifically from those requirements. It doesn't apply. This exemption does not apply to other general functions listed in clause three, but it applies to this one, particularly as I don't want to be hypercritical because I know these things are are very difficult, and they're often excuses. There are often excuses, but particularly when I think there is a sort of a general lack of confidence that these functions are carried out with great efficiency at the moment, they always seem to be very expensive, so why shouldn't this condition apply to them? Is there a reason other than simply inertia? I don't think that inertia is enough.
The act also requires has safeguards about transparency, scrutiny of particularly significant subsidies by the Competition and Markets Authority, and ultimately the ability to challenge subsidy decisions by the Competition Appeal Tribunal. Now, noble Lords may say, oh, well, all this is going to happen. It'll be a GBR doing stuff, GBR rail, which therefore, how does competition come into this? But actually, as noble lords know, a great deal of maintenance activity on the track is carried out by private companies contracted for that purpose.
As far as I know, there is no. That may upset the noble Baroness, Lady Jones, but there we are. As far as I know, there's no intention. There's no indication in the Bill that that is going to change. And so the provision of subsidies, I think, does. I understand why it might raise competition concerns. And there's an appropriate authority here that can address them. That's my first question. It is a probing amendment, but I would like to know why these potentially very substantial sums should be outside the regular framework regarding amendment 70.
I'm simply asking for you publish the business plan. I think it's important that people should be able to see it possible. The minister should say that he has every intention of publishing the business plan. TfL publishes its business plan. Most other similar organisations publish its business plan. But as far as I could see, there isn't a statutory obligation in the bill. I may have missed it to publish the business plan each year or each period for which to which a new business plan would apply.
Amendments 55, 56 and 86 are about building financial discipline, both on the government and elsewhere. And here, perhaps I could address the comments made by my noble friend Lord Harper, and say something about the amendments tabled by the noble Lord, Lord Bradshaw. There's a serious issue here. I don't think Lord Bradshaw, the noble Lord, Lord Bradshaw, has got it right. And I don't actually think that my amendments have got it right.
But this is the right place for us to talk about this general question of how government treats the railways in terms of funding and the provision of funds, not how much it gives, but how it does it, what the process is. And the reason for that is that I used to be in a local authority. Very often we had we had to set a budget in March. Very often we didn't know until Christmas, even after Christmas , what the subsidy from government was going to be.
It's extremely difficult to put budgets together. at short notice. With the railways, it's even more difficult. The noble Lord, Lord Bradshaw, has said already that significant changes require a great lead time and planning in order for them to be delivered, and just as long for them to be reversed. And one of the things my amendments is most of my amendments are trying to do is actually not to fetter ministers.
And I accept the comments of my noble friend, Lord Harper, that ministers have to be accountable for public expenditure, and they have to make difficult decisions sometimes, but to try to build in a notice period. So that and I've suggested two years so that if changes are to be made, they would be lagged by that period so that the railways, New Great British Railways knew when they were going to be. Now, when the noble Lord, Lord Bradshaw, talked about timetables and so forth, he was discussing the operational side of the railway.
But there's also the infrastructure investment side of the railway, which may extend to building a completely new railway. I mean, one of the problems we all have, and we all acknowledge this, is that it's impossible to build new infrastructure on a one year settlement. That's why we give long term settlements to railway developers. They know that they will have the money to carry the project through to the end. Should that change in funding, not also be subject, if it is necessary, should also be subject to at least some sort of notice period.
And then further down the line from that, we have the supply chain. So a colleague of mine recently visited, I think it was well, I won't say which rail, which train manufacturer were British train manufacturer because I can't actually remember, but I, or I can, but I, let me, let me because what I'm going to say might be adverse, not about them, but about their situation, is that they're down to using one line of in manufacturing, because the orders have effectively dried up.
Now, we all know that the ideal situation is that British train manufacturers can have access to a steady supply of a steady stream of demand that they maintain jobs, not go from famine to feast. Where is the discipline going to come as a result of all these changes? To address that, what sort of lags and notice are necessary? As I say, I don't think I have all I have these amendments between them, although they they all point to this debate.
I don't think they necessarily have the answer. And we may not get further on this, but I think the government is going to have to be very talk very seriously about this when it creates a wholly new structure. Great British Rail to operate the railways. Funding has to be mentioned and an understanding of the approach to funding, not just for the operations but also for the infrastructure has to be maintained, has to be addressed.
There's also amendment 86, which addresses the other side of the equation an accountability for money once it has been spent. And amendment 86 requires GBR to publish an annual statement of its financial performance. Well, it may be said that they're going to have to do this as a company's law company. They'll have to produce an annual report. But I think one of the issues we should be considering is whether, given the scale of the public money going into Great British likely to be going into Great British Railways, whether that a simply an annual report produced on a company's laws basis is going to be enough.
And again, here probing to hear what the minister has to say about whether he intends to be more open with publishing figures on performance at the end of a financial period, rather than simply confining himself to the the loopholes and dodges that are often available for those producing simply producing company accounts.
14:31
Speaker 9
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Speaker 9
For . My Lord, very briefly, I think noble Lord, Lord Moylan's amendments on producing a business plan is absolutely essential because, as he has noted, the. The railways are a long need, long term investment. And. It's not just trains which are need to somehow be ordered 10 or 20 years before they're needed, but it's things like HS2 where we have no budget for. At the moment we have no real knowledge of how much is going to be spent each year and when it's going to open.
So I think there needs to be a much greater discipline for this, and I fully support these probing amendments to see, to see what my noble friend is able to tell us.
So I think there needs to be a much greater discipline for this, and I fully support these probing amendments to see, to see what my noble friend is able to tell us.
14:32
Speaker 7
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Speaker 7
My Lords, I thank the noble Lords, all noble lords, for this this debate in this group. Five and I will echo the noble Baroness pigeon. It's a delight to see the noble Lord Bradshaw in his place this afternoon, and I'm sure that the rest of the Grand Committee, as I do wish him a very happy, significant birthday for yesterday.
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14:32
Speaker 7
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Speaker 7
I've heard, I've also read and heard what he's argued carefully. And as a as a man of huge experience in the railway, I will reflect on, on, on what he said. The committee will be relieved to know I'm not going to redebate the status of GBR companies and subsidiaries. I thought I would leave that to the noble Lords, Lansley and Moylan to to fight that out, but I, I, I think I had the same clarity as the noble Lord Lansley at the end of it.
At the end of that debate, I think noble Lords amendments are collectively seeking that. Firstly, the Secretary of State considers GBS duties, her long term rail strategy and the wider planning consideration when determining GBR funding settlement, that that funding settlement is transparent, that thirdly, that it's protected. And finally, Lord Moylan seeks to ensure that it's in place two years before the next financial period. I should start, I think, by providing some explanation of the provisions.
The bill already establishes a comprehensive funding framework. Schedule two sets out the Secretary of State must publish a statement of objectives for the railway. In doing so, she is absolutely bound to consider her duties, her own strategy, and she will, of course, consider wider planning and the impact of the network. Following the statement of objectives, the Secretary of State must then publish a statement of funds available so that GBR can understand its funding parameters and produce a high quality business plan.
Then, schedule two provides that GBR must produce, publish and keep up to date the five year integrated business plan across both infrastructure and passenger services. The Office of Rail and Road will advise the Secretary of State on the effectiveness of the business plan, including whether it represents good value for money. If it does, the Secretary of State will then approve the plan and issue a five year settlement under paragraph seven of schedule two. As in the Noble Lords proposal, the Secretary of State is required to publish details of the five year funding settlement she gives to GBR, including the funds agreed.
She will absolutely ensure that these published details are clear enough to allow stakeholders to understand the settlement meeting. The Noble Lords request for transparency whilst protecting key commercially sensitive information. GBS business plan will also contain all of its planned activities, its costs and how it plans to meet those costs. This plan will be updated and published annually after the initial settlement. A clear summary of our advice through the funding process will also be published, as set out in paragraph 4.6, which means that the noble Lords desires for an annual report on GBR financial performance will be delivered.
Other further reporting requirements are duplicative and unnecessary, and all this amendment does is to increase the time GBR spends on bureaucracy instead of getting on with its job of delivering on protecting the funding settlement which the noble Lord Bradshaw, noble Lord Moylan both spoke about. I agree with both noble Lords that when maintaining and renewing long term railway assets, certainty of funding is critical. It provides a stable basis of planning, supports efficient delivery and helps build investor confidence throughout the supply chain.
I will repeat that the intention behind setting a five year settlement is that it should endure for the full five year period. On the noble Lord Moorlands amendment. I can assure him that the Secretary of State must publish any updates to that settlement that are likely to have a material impact if she wishes to make a material change, a material change to the settlement, she will. She must also notify the IRR, who will advise on the likely impact of the railway, and that is one of its important and critical roles.
This will ensure that there is transparency around any funding changes and that there will be scrutiny. Material changes are proposed that will not support an effective railway on the noble Lord Moorlands amendment 55. I don't agree that the Secretary of State should be restricted to only changing the funding settlement in emergencies, as the noble Lord Harper says, the government has a lot of priorities to deliver across health care, housing, transport and public safety which all require funding.
Whilst of course, in my mind, the railway is absolutely the most important of those priorities, I recognise that the government and ministers need to be able to move money in response to changing circumstances, because choices about funding priorities are ultimately for the government of the day. On the details of amendments 74 to 77 from the noble Lord Bradshaw, the first key point is the question of which funding changes the IRR should get involved in. The bill already requires that the Ori is notified when changes to the funding settlement are material enough to affect delivery, but not in every circumstance.
I think that this approach is proportionate. There may well be some smaller accounting type changes to the funding needed, which will not affect delivery and do not require a true statutory formal change process. This could, for example, include GBR offering to return small underspends back to government where efficiencies have been found. But of course, if material changes, as I've said, should be notified to the IRR, this process ensures that they will be. The bill currently requires that the Secretary of State notify RR before a material funding reduction is made to the five year infrastructure settlement.
This allows RR to exercise its independent and expert judgment when it receives notice of a potential change. I can reassure noble Lords that the RR would absolutely act if significant funding were taking out. The railways were taken out of the railways, including by advising the Secretary of State and publishing that advice. I believe that this approach is most practical, rather than requiring author to respond to each change in funding in a set way.
To summarise this point, certainty is crucial for the railways, government and the wider supply chain, but it must be proportionate and it has to be balanced against the ability of ministers to allocate public resources. Noble Lord Moylan also raised a question of rolling stock manufacturers, and the government's answer to this is to is to construct and publish in due course a rolling stock and infrastructure strategy, the first for more than 30 years. In order to give that part of this market the long term certainty for which it craves, which will keep the.
Keep the production facilities and jobs as going. Finally, I agree, I agree that given the amount of investment on the line, it's important funding is in place for good times, in good time to allow GBR and industry to prepare for the next settlement. Although I don't think this should be in primary legislation because requiring funding levels to be confirmed two years before the start of a funding period would reduce flexibility and risk settlements becoming outdated before they can even take effect.
I can reassure the noble Lord that the details of the timing will be managed by the author, as they have been in successive control periods, to ensure that the financial settlement is never at risk. Schedules two sets out that the statement of funds available must be published early in the process, and created to timelines determined by the IRR. I can confirm that in practice, as seen under the periodic review process, this information will be published significantly in advance and has to be more than a year ahead of the final settlement to work.
I understand that the author will ensure the process concludes fully with a time with time for industry to prepare. I hope this is a reassurance. I'll also reassure the noble Lord Bradshaw that the bill leaves flexibility to fund more of GBR activity through the five year settlement. Once this becomes practical and ministers are more comfortable funding an integrated entity. If ministers do fund passenger services through the five year settlement using the route in the bill, all of the protections we just discussed would already apply.
Turning now to a related issue on amendment 65, I reassure the noble Lord Lansley that we are in agreement, and the outcome of amendment 65 is already achieved by the provisions in the bill under paragraph four, brackets three of schedule two GBR will be required through its business plan to set out its activities, the cost of those activities and how it proposes those costs are met. In practice, this means that the business plan must cover everything GBR does subsidiaries as well as.
power company and must cover its revenue sources across all its subsidiaries. Turning to amendment 70 once again, I should confirm that I confirmed to the committee that the bill already requires the full business plan to be published and kept up to date. Paragraph four, bracket seven and the commitment to update it in schedule two, paragraph five, brackets three. However, the bill contains slightly more discretion for GBR to redact sections of the business plan than this amendment proposes.
This is because it's important that all types of sensitive data, not just commercially sensitive or able to be protected. Personal data security, sensitive information about stations and public places, or anything legally privileged, or all examples of content that may need to be redacted from the final plan and a flexible requirement can be better used to navigate these nuances. That flexibility is important, but I should be clear that GBR cannot withhold information simply to avoid scrutiny, or will assess and advise the Secretary of State on the unredacted version of the business plan and GBR.
Public law duties and wider accountability framework will ensure that GBR will not be able to hide important information relevant to public scrutiny. Turning to amendment 73, I understand the intention of the amendment is to prevent the Secretary of State from circumventing the process, as set out through the Bill, by restricting access to the broader funding powers in the Railways Act 2005. The purpose of paragraph six, bracket seven, is to make clear that the second.
To Parliament, the Secretary of State, that the Secretary of State can use her other funding power in the 2005 act. This will be necessary when funding activity outside the five year settlement, such as individual enhancement process projects or once off funding packages, which are needed following, for example, a natural disaster. I can assure him that this does not reduce transparency over GBR funded activities. GBR business plan covering all GBR activity will be costed, updated and published as GBR outputs change.
The business plan will include enhancement projects and will show clearly where the funding for them has come from. Therefore, transparently identifying the use of the 2005 power for Parliament and others to scrutinise. I therefore hope the noble Lord can see that the inclusion of paragraph six, bracket seven, to allow the Secretary of State to use to also use other funding powers is purely practical. Finally, I thank the noble Lord, Lord Moylan, for amendment 78 for clarity.
Relevant subsidy control law does not apply to infrastructure funding. However, relevant subsidy control law does apply in full to passenger services funding. As we discussed in the ticket retailing debate on Tuesday, railway infrastructure being exempted from subsidy control rules is something that happens on the current railway. Railway infrastructure funding provided to Network Rail today is not subject to subsidy control law. The bill does not change its principle.
It simply enshrines it in the bill for clarity and transparency. For many years, funding provided for the operation and management of the main national railway infrastructure has not been treated as subsidy, as this market has been effectively closed for competition because, of course, there are not multiple infrastructure managers operating on the same infrastructure. That position has underpinned the funding arrangements for Network Rail and continues to be appropriate for GBR as its success as its successor.
Removing this provision would not change the way that the railways subsidise. It would just mean continuing to rely on previous legal interpretations, rather than the additional transparency provided by this clause in the Bill. Schedule two part three therefore provides clarity and legal certainty, and it makes sense for this stance to continue, as there is no competitive market for the railway infrastructure that GBR will be responsible for, so there is no need to waste resources administering this funding as if there is.
I therefore, would urge the noble Lord to withdraw their amendments.
At the end of that debate, I think noble Lords amendments are collectively seeking that. Firstly, the Secretary of State considers GBS duties, her long term rail strategy and the wider planning consideration when determining GBR funding settlement, that that funding settlement is transparent, that thirdly, that it's protected. And finally, Lord Moylan seeks to ensure that it's in place two years before the next financial period. I should start, I think, by providing some explanation of the provisions.
The bill already establishes a comprehensive funding framework. Schedule two sets out the Secretary of State must publish a statement of objectives for the railway. In doing so, she is absolutely bound to consider her duties, her own strategy, and she will, of course, consider wider planning and the impact of the network. Following the statement of objectives, the Secretary of State must then publish a statement of funds available so that GBR can understand its funding parameters and produce a high quality business plan.
Then, schedule two provides that GBR must produce, publish and keep up to date the five year integrated business plan across both infrastructure and passenger services. The Office of Rail and Road will advise the Secretary of State on the effectiveness of the business plan, including whether it represents good value for money. If it does, the Secretary of State will then approve the plan and issue a five year settlement under paragraph seven of schedule two. As in the Noble Lords proposal, the Secretary of State is required to publish details of the five year funding settlement she gives to GBR, including the funds agreed.
She will absolutely ensure that these published details are clear enough to allow stakeholders to understand the settlement meeting. The Noble Lords request for transparency whilst protecting key commercially sensitive information. GBS business plan will also contain all of its planned activities, its costs and how it plans to meet those costs. This plan will be updated and published annually after the initial settlement. A clear summary of our advice through the funding process will also be published, as set out in paragraph 4.6, which means that the noble Lords desires for an annual report on GBR financial performance will be delivered.
Other further reporting requirements are duplicative and unnecessary, and all this amendment does is to increase the time GBR spends on bureaucracy instead of getting on with its job of delivering on protecting the funding settlement which the noble Lord Bradshaw, noble Lord Moylan both spoke about. I agree with both noble Lords that when maintaining and renewing long term railway assets, certainty of funding is critical. It provides a stable basis of planning, supports efficient delivery and helps build investor confidence throughout the supply chain.
I will repeat that the intention behind setting a five year settlement is that it should endure for the full five year period. On the noble Lord Moorlands amendment. I can assure him that the Secretary of State must publish any updates to that settlement that are likely to have a material impact if she wishes to make a material change, a material change to the settlement, she will. She must also notify the IRR, who will advise on the likely impact of the railway, and that is one of its important and critical roles.
This will ensure that there is transparency around any funding changes and that there will be scrutiny. Material changes are proposed that will not support an effective railway on the noble Lord Moorlands amendment 55. I don't agree that the Secretary of State should be restricted to only changing the funding settlement in emergencies, as the noble Lord Harper says, the government has a lot of priorities to deliver across health care, housing, transport and public safety which all require funding.
Whilst of course, in my mind, the railway is absolutely the most important of those priorities, I recognise that the government and ministers need to be able to move money in response to changing circumstances, because choices about funding priorities are ultimately for the government of the day. On the details of amendments 74 to 77 from the noble Lord Bradshaw, the first key point is the question of which funding changes the IRR should get involved in. The bill already requires that the Ori is notified when changes to the funding settlement are material enough to affect delivery, but not in every circumstance.
I think that this approach is proportionate. There may well be some smaller accounting type changes to the funding needed, which will not affect delivery and do not require a true statutory formal change process. This could, for example, include GBR offering to return small underspends back to government where efficiencies have been found. But of course, if material changes, as I've said, should be notified to the IRR, this process ensures that they will be. The bill currently requires that the Secretary of State notify RR before a material funding reduction is made to the five year infrastructure settlement.
This allows RR to exercise its independent and expert judgment when it receives notice of a potential change. I can reassure noble Lords that the RR would absolutely act if significant funding were taking out. The railways were taken out of the railways, including by advising the Secretary of State and publishing that advice. I believe that this approach is most practical, rather than requiring author to respond to each change in funding in a set way.
To summarise this point, certainty is crucial for the railways, government and the wider supply chain, but it must be proportionate and it has to be balanced against the ability of ministers to allocate public resources. Noble Lord Moylan also raised a question of rolling stock manufacturers, and the government's answer to this is to is to construct and publish in due course a rolling stock and infrastructure strategy, the first for more than 30 years. In order to give that part of this market the long term certainty for which it craves, which will keep the.
Keep the production facilities and jobs as going. Finally, I agree, I agree that given the amount of investment on the line, it's important funding is in place for good times, in good time to allow GBR and industry to prepare for the next settlement. Although I don't think this should be in primary legislation because requiring funding levels to be confirmed two years before the start of a funding period would reduce flexibility and risk settlements becoming outdated before they can even take effect.
I can reassure the noble Lord that the details of the timing will be managed by the author, as they have been in successive control periods, to ensure that the financial settlement is never at risk. Schedules two sets out that the statement of funds available must be published early in the process, and created to timelines determined by the IRR. I can confirm that in practice, as seen under the periodic review process, this information will be published significantly in advance and has to be more than a year ahead of the final settlement to work.
I understand that the author will ensure the process concludes fully with a time with time for industry to prepare. I hope this is a reassurance. I'll also reassure the noble Lord Bradshaw that the bill leaves flexibility to fund more of GBR activity through the five year settlement. Once this becomes practical and ministers are more comfortable funding an integrated entity. If ministers do fund passenger services through the five year settlement using the route in the bill, all of the protections we just discussed would already apply.
Turning now to a related issue on amendment 65, I reassure the noble Lord Lansley that we are in agreement, and the outcome of amendment 65 is already achieved by the provisions in the bill under paragraph four, brackets three of schedule two GBR will be required through its business plan to set out its activities, the cost of those activities and how it proposes those costs are met. In practice, this means that the business plan must cover everything GBR does subsidiaries as well as.
power company and must cover its revenue sources across all its subsidiaries. Turning to amendment 70 once again, I should confirm that I confirmed to the committee that the bill already requires the full business plan to be published and kept up to date. Paragraph four, bracket seven and the commitment to update it in schedule two, paragraph five, brackets three. However, the bill contains slightly more discretion for GBR to redact sections of the business plan than this amendment proposes.
This is because it's important that all types of sensitive data, not just commercially sensitive or able to be protected. Personal data security, sensitive information about stations and public places, or anything legally privileged, or all examples of content that may need to be redacted from the final plan and a flexible requirement can be better used to navigate these nuances. That flexibility is important, but I should be clear that GBR cannot withhold information simply to avoid scrutiny, or will assess and advise the Secretary of State on the unredacted version of the business plan and GBR.
Public law duties and wider accountability framework will ensure that GBR will not be able to hide important information relevant to public scrutiny. Turning to amendment 73, I understand the intention of the amendment is to prevent the Secretary of State from circumventing the process, as set out through the Bill, by restricting access to the broader funding powers in the Railways Act 2005. The purpose of paragraph six, bracket seven, is to make clear that the second.
To Parliament, the Secretary of State, that the Secretary of State can use her other funding power in the 2005 act. This will be necessary when funding activity outside the five year settlement, such as individual enhancement process projects or once off funding packages, which are needed following, for example, a natural disaster. I can assure him that this does not reduce transparency over GBR funded activities. GBR business plan covering all GBR activity will be costed, updated and published as GBR outputs change.
The business plan will include enhancement projects and will show clearly where the funding for them has come from. Therefore, transparently identifying the use of the 2005 power for Parliament and others to scrutinise. I therefore hope the noble Lord can see that the inclusion of paragraph six, bracket seven, to allow the Secretary of State to use to also use other funding powers is purely practical. Finally, I thank the noble Lord, Lord Moylan, for amendment 78 for clarity.
Relevant subsidy control law does not apply to infrastructure funding. However, relevant subsidy control law does apply in full to passenger services funding. As we discussed in the ticket retailing debate on Tuesday, railway infrastructure being exempted from subsidy control rules is something that happens on the current railway. Railway infrastructure funding provided to Network Rail today is not subject to subsidy control law. The bill does not change its principle.
It simply enshrines it in the bill for clarity and transparency. For many years, funding provided for the operation and management of the main national railway infrastructure has not been treated as subsidy, as this market has been effectively closed for competition because, of course, there are not multiple infrastructure managers operating on the same infrastructure. That position has underpinned the funding arrangements for Network Rail and continues to be appropriate for GBR as its success as its successor.
Removing this provision would not change the way that the railways subsidise. It would just mean continuing to rely on previous legal interpretations, rather than the additional transparency provided by this clause in the Bill. Schedule two part three therefore provides clarity and legal certainty, and it makes sense for this stance to continue, as there is no competitive market for the railway infrastructure that GBR will be responsible for, so there is no need to waste resources administering this funding as if there is.
I therefore, would urge the noble Lord to withdraw their amendments.
14:45
Speaker 4
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Speaker 4
Three thank you. I would like to start by saying how much I disagree with Lord Harper's remarks. His idea. But proper parliamentary scrutiny is carried out properly in the House of Commons is absolutely false, because the whipping system there does not permit a full and frank discussion such as we're having now, and I think that he is really yesterday's man in respect of the remarks he made, I am quite content to leave my amendment in the hands of the noble Lord.
The Minister, I think, and I reiterate that I'm not asking for much. I know the RR will be consulted about a lot of things, but in the event of what I call an arbitrary cut, I believe that three months notice will not affect the eventual savings , and better savings will result from a further scrutiny together by the LRR, together with the players in the industry. So with that, I'm prepared to withdraw my medal and I will look forward to it.
Appearing at the report stage. Thank you.
The Minister, I think, and I reiterate that I'm not asking for much. I know the RR will be consulted about a lot of things, but in the event of what I call an arbitrary cut, I believe that three months notice will not affect the eventual savings , and better savings will result from a further scrutiny together by the LRR, together with the players in the industry. So with that, I'm prepared to withdraw my medal and I will look forward to it.
Appearing at the report stage. Thank you.
14:47
14:47
14:47
Speaker 5
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Speaker 5
Thank you very much. My amendment is 57, 58 and 61 are about aligning funding of designated passenger train services with the five year funding cycle for infrastructure. I think there's absolutely no point bringing track and train together if their funding cycles are on a different period of time for this new organisation to succeed and run the joined up railway. that funding, that's both capital and revenue. The investment side and passenger services must be provided for in a five year funding cycle.
Now, critical elements of the running of the railway are included in passenger services funding, for example, staffing at stations in rolling stock maintenance depots and of course train crew such as drivers, guards and conductors, and indeed driver and staff training, which as we know, is a huge issue. And if you don't get this bit right alongside the infrastructure, then you won't benefit from what Great British Railways is supposed to deliver. So I hope the minister can explain to us how this can be addressed and look forward to his response to my amendments and other amendments in this group are probing aspects of the business plan.
But most strikingly from this is Lord Moylan's, a number of amendments about ending or reducing taxpayer funding for the railway. As I said on day one of committee, the railway is going to continue to need investment and subsidy, and I just don't think it's right for such clauses to be on the face of the bill. As we've heard earlier, it's about political direction of the government of the day to deal with the budget as they see fit.
But I hope we can look forward to having a joined up funding in five year periods in order that we can make sure that Great British Railways is a success. I look forward to the Minister's response.
Now, critical elements of the running of the railway are included in passenger services funding, for example, staffing at stations in rolling stock maintenance depots and of course train crew such as drivers, guards and conductors, and indeed driver and staff training, which as we know, is a huge issue. And if you don't get this bit right alongside the infrastructure, then you won't benefit from what Great British Railways is supposed to deliver. So I hope the minister can explain to us how this can be addressed and look forward to his response to my amendments and other amendments in this group are probing aspects of the business plan.
But most strikingly from this is Lord Moylan's, a number of amendments about ending or reducing taxpayer funding for the railway. As I said on day one of committee, the railway is going to continue to need investment and subsidy, and I just don't think it's right for such clauses to be on the face of the bill. As we've heard earlier, it's about political direction of the government of the day to deal with the budget as they see fit.
But I hope we can look forward to having a joined up funding in five year periods in order that we can make sure that Great British Railways is a success. I look forward to the Minister's response.
14:49
14:49
Speaker 1
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Speaker 1
My Lords, I think it might fall to me to just speak to two amendments of mine in this group, that is, amendments 67 and 72. 67, in a way, is simply another opportunity, like in the last group, to explore. And I hope again to extract assurance from the minister that the business plan and the statements by GBR in its business plan will be sufficiently transparent, not only, as we said in the last group, that we can see the financial relationship between GBR and its GBR companies.
But in this amendment, to see the financial relationship between GBR and any arrangement that it enters into with any local government body. So what money is being paid to GBR for these purposes and how it's attributed to to those activities? So I hope that's just I hope the minister can say yes. That will definitely form part of the business plan. If he does, I think I would accept it doesn't all need to be specified.
I think my my noble friend Lord Harper, on a debate on an earlier day, quite correctly referred to the dangers of specificity. When everyone gets any kind of list, if there's no list at all, we all agitate about the fact that we don't know what's going to be in the business plan. If we try to specify too much, we start to create a statutory prohibition or a statutory inhibition. Perhaps is the more correct word on what is put into the business plan.
Okay, so I've explained that 172 is, I think, a more interesting amendment in the sense that. I might say in parentheses that the minister said, I think he slightly missed the point of my amendment in the last group, which wasn't to say that there shouldn't be the flexibility to provide for activities to be funded from different powers, i.e., section six of the 2005 act. The point, however, is that the. I personally don't think that the same activity should be funded from two different statutory powers, and I think there's a particular problem if that occurs in section six of the 2005 act is very broad.
The Secretary of State may provide or agree to provide financial assistance to any person for the purpose of securing the provision, improvement or development of railway services or railway assets, or for any other purpose relating to a railway or to railway services and the government, while removing part of section six has left in this section, railway has its wider meaning, so it is pretty broad based power. Now what is interesting is you contrast that power in the 2005 act, with the power to provide financial assistance in this act, which, when we look at paragraph six, power to provide financial assistance as it stands, is for the purpose of activities carried on in exercise of Gbr's function under section 31A31A, we recall, is the provision of infrastructure.
So let's look at three one B is the provision of railway passenger services. C is in determining fares, but I think we can probably ignore that one since the financial assistance isn't to provide the fares, it's in determining the fares. So let's ignore that one. But I was quite interested that it also excluded three one F. That is research and development and innovation. So I suppose the purpose is a probing amendment.
But I want to I want to be quite clear. Is it the government's intention that financial assistance under this act should only be provided for infrastructure, that there will be no financial assistance for the provision of passenger railway services, there will be no money for research and development and innovation. All of that will be funded out of the fare structure. They've given themselves a power of a power in the bill to add additional. Through regulation, to add additional purposes for which financial assistance could be provided.
But at the moment, it's just infrastructure. So if at the moment money is required to be provided to GBR to for the for the provision of railway passenger services, that money would come from the 2005 act. I'm just trying to follow the money. Where is the money going to be coming from? And if the minister can tell us that it is only for infrastructure, then I will stand down. But I do think at the very least, giving a power specifically for the Secretary, for the government to support GBR in respect of research and development and innovation, is a power that we ought to retain.
But in this amendment, to see the financial relationship between GBR and any arrangement that it enters into with any local government body. So what money is being paid to GBR for these purposes and how it's attributed to to those activities? So I hope that's just I hope the minister can say yes. That will definitely form part of the business plan. If he does, I think I would accept it doesn't all need to be specified.
I think my my noble friend Lord Harper, on a debate on an earlier day, quite correctly referred to the dangers of specificity. When everyone gets any kind of list, if there's no list at all, we all agitate about the fact that we don't know what's going to be in the business plan. If we try to specify too much, we start to create a statutory prohibition or a statutory inhibition. Perhaps is the more correct word on what is put into the business plan.
Okay, so I've explained that 172 is, I think, a more interesting amendment in the sense that. I might say in parentheses that the minister said, I think he slightly missed the point of my amendment in the last group, which wasn't to say that there shouldn't be the flexibility to provide for activities to be funded from different powers, i.e., section six of the 2005 act. The point, however, is that the. I personally don't think that the same activity should be funded from two different statutory powers, and I think there's a particular problem if that occurs in section six of the 2005 act is very broad.
The Secretary of State may provide or agree to provide financial assistance to any person for the purpose of securing the provision, improvement or development of railway services or railway assets, or for any other purpose relating to a railway or to railway services and the government, while removing part of section six has left in this section, railway has its wider meaning, so it is pretty broad based power. Now what is interesting is you contrast that power in the 2005 act, with the power to provide financial assistance in this act, which, when we look at paragraph six, power to provide financial assistance as it stands, is for the purpose of activities carried on in exercise of Gbr's function under section 31A31A, we recall, is the provision of infrastructure.
So let's look at three one B is the provision of railway passenger services. C is in determining fares, but I think we can probably ignore that one since the financial assistance isn't to provide the fares, it's in determining the fares. So let's ignore that one. But I was quite interested that it also excluded three one F. That is research and development and innovation. So I suppose the purpose is a probing amendment.
But I want to I want to be quite clear. Is it the government's intention that financial assistance under this act should only be provided for infrastructure, that there will be no financial assistance for the provision of passenger railway services, there will be no money for research and development and innovation. All of that will be funded out of the fare structure. They've given themselves a power of a power in the bill to add additional. Through regulation, to add additional purposes for which financial assistance could be provided.
But at the moment, it's just infrastructure. So if at the moment money is required to be provided to GBR to for the for the provision of railway passenger services, that money would come from the 2005 act. I'm just trying to follow the money. Where is the money going to be coming from? And if the minister can tell us that it is only for infrastructure, then I will stand down. But I do think at the very least, giving a power specifically for the Secretary, for the government to support GBR in respect of research and development and innovation, is a power that we ought to retain.
14:54
Speaker 9
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Speaker 9
Just in response to noble Lord, Lord Lansley's point about the subsidy, the consequence of what he's suggesting could happen is that a GBR could subsidise a passenger service, which is on the same route and the same competition as a private sector operator. And that, to me would be would be quite difficult.
14:55
Speaker 1
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Speaker 1
I'm not sure if that's a question to me, but let's assume it is. I'm not sure that I'm saying that. What I'm saying is that Secretary of State, as things stand, is under this act is not providing money to GBR for the purpose of providing passenger , railway, railway, passenger services. The state has the power to do it under the 2005 act. Nothing I'm saying is determining that money is to be used.
14:55
Speaker 6
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Speaker 6
My Lords amendment. 314 in my name and supported by my noble friend Lord Moylan, enters the arcane world of Treasury theology. What is and what is not public expenditure, and it requires the Secretary of State to report on the impact of the Bill on public finances. Now, this is important because the government constantly emphasises, and rightly so, its commitment to the fiscal rules in order to contain borrowing, in order to build market confidence, in order to reduce upward pressure on interest rates and taxes.
Now, one of the fiscal rules is the investment rule. Public sector net financial liabilities . Snuffle, which is a broad measure of national debt, must be falling as a share of the total economy by 20 2930. Another is the stability rule. Government must forecast a surplus on day to day spending by 20 2930, meaning regular public services are funded entirely through tax revenues rather than borrowing. Now, clearly what GBR spends is public expenditure, but expenditure by private companies or borrowing by private companies can be classified as public expenditure.
If certain qualifications are met and decisions on this are not taken by the government, but by the Office of National Statistics, and they operate according to international definitions. They're not allowed for consideration of political or commercial significance when making their classification decisions. They are essentially a statistician's. Now, the minister may not have read UK economic statistics sector and transaction classifications the classification process.
Now, one of the fiscal rules is the investment rule. Public sector net financial liabilities . Snuffle, which is a broad measure of national debt, must be falling as a share of the total economy by 20 2930. Another is the stability rule. Government must forecast a surplus on day to day spending by 20 2930, meaning regular public services are funded entirely through tax revenues rather than borrowing. Now, clearly what GBR spends is public expenditure, but expenditure by private companies or borrowing by private companies can be classified as public expenditure.
If certain qualifications are met and decisions on this are not taken by the government, but by the Office of National Statistics, and they operate according to international definitions. They're not allowed for consideration of political or commercial significance when making their classification decisions. They are essentially a statistician's. Now, the minister may not have read UK economic statistics sector and transaction classifications the classification process.
14:57
14:57
14:57
14:57
Speaker 6
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Speaker 6
But it is actually relevant to amendment 314 . And if I can summarize, the difference between the public and private sectors is determined by where control over the organisation lies, rather than by ownership or whether or not the entity is financed from public funds and control is the ability to determine general corporate policy. Now, I'll come on in a moment to the relevance of this to the rolling stock companies, where under the new scenario, the GBR will be the principal customer, and I'll come to that in a moment.
But there are two relevant instances where attempts by government to circumvent these rules have come unstuck, with consequences for the balance sheet. Now, one familiar to the noble Lord, the minister was Network Rail. Network rail was set up in 2002 as a private company limited by guarantee, primarily to keep its massive debt off the government's balance sheet and by structuring Network Rail as a private company limited by guarantee. Without shareholders, the government could then borrow large sums of money for infrastructure upgrades without adding to those billions, adding those billions to the official national public debt.
However, in 2015, ONS reclassified Network Rail as a central government body in the public sector, and this resulted in roughly £30 billion of debt moving on to the government's balance sheet. And the noble Lord will have direct experience of the consequences of that Network Rail. And we have that because we actually have the Hendy report. And that sets out the consequences for Network Rail of this reclassification. Debt was controlled, capital was rationed, assets were sold off and upgrades were postponed.
Now, I think the last thing the noble Lord wants to do is to write another Hendy report, Mark two when stocks are so classified as Network Rail is. The other example is housing associations. Previously in the. In the private sector, the ability to borrow . Without it affecting the Psbr. In 2016, the ONS reclassified housing associations from private non-financial corporations to public non-financial corporations, and this change was decided following legislative and regulatory changes brought about by the Housing and Regeneration Act 2008.
The government then had to legislate to the regulation of social housing influence of Local authorities in England Regulations 2017 to get them reclassified. And if you look at that explanatory memorandum for that, see, it explicitly stated that the regulations were, I quote, aimed at reducing public sector control over private registered providers to enable the ONS to reconsider the classification of private registered providers, which they did . Now coming to the railways in 2020, the ONS reclassified train operating companies that entered into EMA emergency measure agreements, and the UK and Scottish governments, both during the Covid 19 epidemic.
They were reclassified as public sector organisations. And that's because nearly all the risk and revenue under those arrangements rested with the government. As a result of this bill, all passenger services operated under contracts with DFT are expected to be transferred to public ownership by the end of 2027. But what about the rolling stock companies? Investment there is running at an average of 800 million a year, and between now and 2050, it's estimated that some 26 billion will be invested.
Now the main customer will be GBR. The industry will be dependent on what economists call a monopsony. A monopsony is when there is only one buyer. A monopoly is when there's only one seller, and GBR will specify exactly what the what the rolling stock company should build, when they should build it, and of course, undertake to pay for it, probably through a lease. And the question raised by this amendment, will this bring the industry in the eyes of the ONS into the warm embrace of the public sector, with a hit on government borrowing? Now, my Lords, the ONS has stated that it expects to conduct an assessment of the railway industry if the railway Bill receives Royal Assent.
In particular, it intends to review the classification of rolling stock leases and it summarises their view as follows. And I had to read this several times before I understood it. This is what they said. A statistically important question relates to the rolling stock leases. The statistical framework maintains a distinction between operating and finance leases. Rolling stock leases have been historically considered operating leases for statistical purposes. This means that the rolling stock assets and the associated imputed loan liability were not reported on the public sector balance sheet.
In fiscal statistics, we expect to review the treatment of rolling stock leases as part of the wider review of the rail sector. So my amendment says that within six months, the Secretary of State should consult with the ONS on this and then publish a report setting out the fiscal impact of the bill on the public finances. Now, my Lords, this may sound like an abstruse matter, but the consequences could have a severe impact on the department's budget if there is a reclassification.
So I will listen carefully to the Minister's reply, which I expect will follow very closely the script prepared by his officials.
But there are two relevant instances where attempts by government to circumvent these rules have come unstuck, with consequences for the balance sheet. Now, one familiar to the noble Lord, the minister was Network Rail. Network rail was set up in 2002 as a private company limited by guarantee, primarily to keep its massive debt off the government's balance sheet and by structuring Network Rail as a private company limited by guarantee. Without shareholders, the government could then borrow large sums of money for infrastructure upgrades without adding to those billions, adding those billions to the official national public debt.
However, in 2015, ONS reclassified Network Rail as a central government body in the public sector, and this resulted in roughly £30 billion of debt moving on to the government's balance sheet. And the noble Lord will have direct experience of the consequences of that Network Rail. And we have that because we actually have the Hendy report. And that sets out the consequences for Network Rail of this reclassification. Debt was controlled, capital was rationed, assets were sold off and upgrades were postponed.
Now, I think the last thing the noble Lord wants to do is to write another Hendy report, Mark two when stocks are so classified as Network Rail is. The other example is housing associations. Previously in the. In the private sector, the ability to borrow . Without it affecting the Psbr. In 2016, the ONS reclassified housing associations from private non-financial corporations to public non-financial corporations, and this change was decided following legislative and regulatory changes brought about by the Housing and Regeneration Act 2008.
The government then had to legislate to the regulation of social housing influence of Local authorities in England Regulations 2017 to get them reclassified. And if you look at that explanatory memorandum for that, see, it explicitly stated that the regulations were, I quote, aimed at reducing public sector control over private registered providers to enable the ONS to reconsider the classification of private registered providers, which they did . Now coming to the railways in 2020, the ONS reclassified train operating companies that entered into EMA emergency measure agreements, and the UK and Scottish governments, both during the Covid 19 epidemic.
They were reclassified as public sector organisations. And that's because nearly all the risk and revenue under those arrangements rested with the government. As a result of this bill, all passenger services operated under contracts with DFT are expected to be transferred to public ownership by the end of 2027. But what about the rolling stock companies? Investment there is running at an average of 800 million a year, and between now and 2050, it's estimated that some 26 billion will be invested.
Now the main customer will be GBR. The industry will be dependent on what economists call a monopsony. A monopsony is when there is only one buyer. A monopoly is when there's only one seller, and GBR will specify exactly what the what the rolling stock company should build, when they should build it, and of course, undertake to pay for it, probably through a lease. And the question raised by this amendment, will this bring the industry in the eyes of the ONS into the warm embrace of the public sector, with a hit on government borrowing? Now, my Lords, the ONS has stated that it expects to conduct an assessment of the railway industry if the railway Bill receives Royal Assent.
In particular, it intends to review the classification of rolling stock leases and it summarises their view as follows. And I had to read this several times before I understood it. This is what they said. A statistically important question relates to the rolling stock leases. The statistical framework maintains a distinction between operating and finance leases. Rolling stock leases have been historically considered operating leases for statistical purposes. This means that the rolling stock assets and the associated imputed loan liability were not reported on the public sector balance sheet.
In fiscal statistics, we expect to review the treatment of rolling stock leases as part of the wider review of the rail sector. So my amendment says that within six months, the Secretary of State should consult with the ONS on this and then publish a report setting out the fiscal impact of the bill on the public finances. Now, my Lords, this may sound like an abstruse matter, but the consequences could have a severe impact on the department's budget if there is a reclassification.
So I will listen carefully to the Minister's reply, which I expect will follow very closely the script prepared by his officials.
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15:04
Speaker 4
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Speaker 4
Expositions of difficult issues are always so clear and so compelling. There is a movement, of course, on the left wing of the Labour Party. And of course the left wing is well represented in your lordships House to nationalise the Roscos so that we can have a full sweep of national nationalisation of the railways today has cost the government nothing, because, of course it already owned nearly everything, and all it's done is allow certain franchises to expire at no cost to the taxpayer.
But the cost of the taxpayer of nationalising the roscos would be absolutely enormous. And that's one of the reasons the government has resisted pressure from the more corbynite wing of its party to proceed on that basis. But the noble Lord, my noble friend Lord Young of Cookham, is suggesting that through the stroke of some scribal pen in the Office of National Statistics, the financial consequences, at least, if not the legal consequences, the financial consequences of nationalising the Rosco would be landed on the government's plate as a result of this bill.
As a result, in other words, of eliminating the multiplicity, the multiplicity of buyers of rolling stock that exists at the moment and replacing it with a single buyer, a state owned entity. That's, as I understand, is the gravamen of what the noble Lord is saying. And his amendment, I think, is too gentle almost for the circumstances, because I think this is something we would need to know in advance of the passage of the bill, and I think it's dilatory of the Office of National Statistics to say they would review it only after the Bill is passed, because matter is of such consequence that I think legislators should know before they pass the bill whether it is going to ensue as a consequence of their doing so.
So I think this is a matter of very considerable importance. I don't know if the officials advising the noble Lord have perceived the full complexity of the noble Lords amendment and advance. They may not have given him that. They may, of course, have done so, but they may not have given him a full response to the points raised by my noble friend. So it may be something that he wishes to follow up in writing.
I don't know that might be acceptable to my noble friend, but I think it is a matter that really we need to know about. It's extremely important. Turning to my own amendments, I don't propose to comment on other amendments in the group, but turning to my own amendments, which were slightly mocked by the noble Baroness, Lady Pigeon, I just want to say that we have been told, and I accept this is probably the case, that should this bill pass into law, it's likely to set a framework which which is going to last for many years.
People say 20 or 30 years before you come round to restructuring the railways. That's roughly the cycle on which it happens. And I therefore think it's very disappointing. The government is restricting debate, seeking to restrict debate to very narrow issues about about structure of the railway. It is the main basis of the Bill when noble Lords want to debate other matters. So, for example, the noble Lord, Lord Bradshaw and the previous group were sadly not in his place any more, wanted to discuss the whole structure of funding the railways.
Not the amounts, not the amounts of funding, but the mechanism by which it's done to make to avoid crashing from one decision to another, and to make it possible for the railway to plan and the suppliers to plan what they're doing. For with some knowledge that funding is going to continue, at least for a period into the future. Essentially, the government wants to escape from having that debate and say everything's fine as it is, and we'll carry on as before in in my amendments here, I want to have what I think is a very important political discussion about what is what is the government's vision for the level of subsidy that should go to the railway and for the balance between subsidy and tax, between fares and taxpayer funding that support it? We have a particular balance in this country, which is different from that that exists in many European countries.
And we've sort of held to that. But where do we want to go with it now? The noble Baroness says that the railway will always require funding. Well, of course they didn't. For the first 100 years. They didn't require any public subsidy at all. And they they provided the most comprehensive and intense and innovative transport system that you could imagine reaching to nearly all parts of the country.
And they did so at a time when there were practically no roads and certainly no air travel. There was certainly no air travel. And yet they did this without subsidy. And we only talk of subsidies. The railways really, when you get to the sort of 20s and 30s when money started leaking into the out of government, into the railways, before you had a full subsidy regime that came in really with the Second World War.
And what followed. So it is possible to think about it now. I'm not saying it's realistic to think about it, particularly because I accept what the noble lady says, that there is likely to be an element of subsidy all the way through. But what is the government's plan? What is the direction of travel? Would the government not like to set out its policy and its vision? If it doesn't want to do so today, then where in this process is this going to appear? Are we going to be is this all going to be in the long term rail strategy? Is that what the noble Lord is going to tell us so that we can have a debate then about what is the appropriate level between subsidy and taxpayer, between taxpayer and fare payer.
Remember, only 10% of the population makes regular use of the railways. The rest of the population is expected to subsidise it through their taxes, but only 10% is actually using it. Is that a fair and sensible balance and an allocation of subsidies? These are very important issues. Amendment 112 is closely related to it. It isn't quite the same. Amendment 112 asks for the railways to publish annual savings targets.
Why shouldn't they have annual savings targets? There are great inefficiencies in every organisation. I don't say in every public sector organisation, though that's true because there are inefficiencies in private sector organisations as well. And when I was deputy chairman of transport for London, we had a process for trying to reduce. We had
But the cost of the taxpayer of nationalising the roscos would be absolutely enormous. And that's one of the reasons the government has resisted pressure from the more corbynite wing of its party to proceed on that basis. But the noble Lord, my noble friend Lord Young of Cookham, is suggesting that through the stroke of some scribal pen in the Office of National Statistics, the financial consequences, at least, if not the legal consequences, the financial consequences of nationalising the Rosco would be landed on the government's plate as a result of this bill.
As a result, in other words, of eliminating the multiplicity, the multiplicity of buyers of rolling stock that exists at the moment and replacing it with a single buyer, a state owned entity. That's, as I understand, is the gravamen of what the noble Lord is saying. And his amendment, I think, is too gentle almost for the circumstances, because I think this is something we would need to know in advance of the passage of the bill, and I think it's dilatory of the Office of National Statistics to say they would review it only after the Bill is passed, because matter is of such consequence that I think legislators should know before they pass the bill whether it is going to ensue as a consequence of their doing so.
So I think this is a matter of very considerable importance. I don't know if the officials advising the noble Lord have perceived the full complexity of the noble Lords amendment and advance. They may not have given him that. They may, of course, have done so, but they may not have given him a full response to the points raised by my noble friend. So it may be something that he wishes to follow up in writing.
I don't know that might be acceptable to my noble friend, but I think it is a matter that really we need to know about. It's extremely important. Turning to my own amendments, I don't propose to comment on other amendments in the group, but turning to my own amendments, which were slightly mocked by the noble Baroness, Lady Pigeon, I just want to say that we have been told, and I accept this is probably the case, that should this bill pass into law, it's likely to set a framework which which is going to last for many years.
People say 20 or 30 years before you come round to restructuring the railways. That's roughly the cycle on which it happens. And I therefore think it's very disappointing. The government is restricting debate, seeking to restrict debate to very narrow issues about about structure of the railway. It is the main basis of the Bill when noble Lords want to debate other matters. So, for example, the noble Lord, Lord Bradshaw and the previous group were sadly not in his place any more, wanted to discuss the whole structure of funding the railways.
Not the amounts, not the amounts of funding, but the mechanism by which it's done to make to avoid crashing from one decision to another, and to make it possible for the railway to plan and the suppliers to plan what they're doing. For with some knowledge that funding is going to continue, at least for a period into the future. Essentially, the government wants to escape from having that debate and say everything's fine as it is, and we'll carry on as before in in my amendments here, I want to have what I think is a very important political discussion about what is what is the government's vision for the level of subsidy that should go to the railway and for the balance between subsidy and tax, between fares and taxpayer funding that support it? We have a particular balance in this country, which is different from that that exists in many European countries.
And we've sort of held to that. But where do we want to go with it now? The noble Baroness says that the railway will always require funding. Well, of course they didn't. For the first 100 years. They didn't require any public subsidy at all. And they they provided the most comprehensive and intense and innovative transport system that you could imagine reaching to nearly all parts of the country.
And they did so at a time when there were practically no roads and certainly no air travel. There was certainly no air travel. And yet they did this without subsidy. And we only talk of subsidies. The railways really, when you get to the sort of 20s and 30s when money started leaking into the out of government, into the railways, before you had a full subsidy regime that came in really with the Second World War.
And what followed. So it is possible to think about it now. I'm not saying it's realistic to think about it, particularly because I accept what the noble lady says, that there is likely to be an element of subsidy all the way through. But what is the government's plan? What is the direction of travel? Would the government not like to set out its policy and its vision? If it doesn't want to do so today, then where in this process is this going to appear? Are we going to be is this all going to be in the long term rail strategy? Is that what the noble Lord is going to tell us so that we can have a debate then about what is the appropriate level between subsidy and taxpayer, between taxpayer and fare payer.
Remember, only 10% of the population makes regular use of the railways. The rest of the population is expected to subsidise it through their taxes, but only 10% is actually using it. Is that a fair and sensible balance and an allocation of subsidies? These are very important issues. Amendment 112 is closely related to it. It isn't quite the same. Amendment 112 asks for the railways to publish annual savings targets.
Why shouldn't they have annual savings targets? There are great inefficiencies in every organisation. I don't say in every public sector organisation, though that's true because there are inefficiencies in private sector organisations as well. And when I was deputy chairman of transport for London, we had a process for trying to reduce. We had
15:11
Speaker 14
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Speaker 14
Trying to reduce. We had an annual savings target of 3% per annum where we took out that amount of cost year after year, bringing it down because we could find those efficiencies. I. I had learnt from local government offices where that you could do that because they knew where the inefficiencies were. In fact, they they'd built them in a little bit to give themselves some fat. But if under pressure they were required to produce them, then why shouldn't Great British Railways have a similar discipline imposed on it? Where is the sense of financial discipline that we're looking for? These are times when the government has very little money.
I think we know that the tax burden is higher than ever, and yet public expenditure is under huge pressure, and choices about defence and so forth can't be made sensibly because of commitments elsewhere. It's all very well. I'm not disagreeing or criticising the noble Baroness. It's all very well to say the railways will always require subsidies, but the fact of the matter is, and I believe this very firmly, and I'm a believer in the railways.
The fact of the matter is that a railway that relies consistently and heavily on subsidy in current and foreseeable fiscal circumstances of this country is a railway is going to come under huge pressure and will be cut. It is not sustainable unless it can show that it is contributing from its own efficiencies and from general to generating higher fare income, which doesn't necessarily mean through higher fares, but can be a combination of fare in passenger numbers generating income.
It needs a plan to show that it's doing that. These amendments ask the government to set out that plan, tell us when they're going to set out that plan in the interests of Great British Railways itself.
I think we know that the tax burden is higher than ever, and yet public expenditure is under huge pressure, and choices about defence and so forth can't be made sensibly because of commitments elsewhere. It's all very well. I'm not disagreeing or criticising the noble Baroness. It's all very well to say the railways will always require subsidies, but the fact of the matter is, and I believe this very firmly, and I'm a believer in the railways.
The fact of the matter is that a railway that relies consistently and heavily on subsidy in current and foreseeable fiscal circumstances of this country is a railway is going to come under huge pressure and will be cut. It is not sustainable unless it can show that it is contributing from its own efficiencies and from general to generating higher fare income, which doesn't necessarily mean through higher fares, but can be a combination of fare in passenger numbers generating income.
It needs a plan to show that it's doing that. These amendments ask the government to set out that plan, tell us when they're going to set out that plan in the interests of Great British Railways itself.
15:13
Speaker 11
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Speaker 11
Amendments 57, 58 and 61 are, are, are about the funding of passenger services. And in principle, I support the intentions of these amendments and acknowledge the benefits to business that aligning the funding cycles could bring. However, the reality of passenger services funding is that it's inextricably tied to passenger revenue, which changes in response to a number of factors that are difficult to predict, particularly over longer time spans. Certain factors, such as wider economic conditions and the weather, for example, are outside both GBR and government's control, so it is quite difficult for any government to commit passenger services funding in fixed five year periods, given the revenue forecasting challenges, and it will it.
It will, however, be a goal to work towards and in particular can't be achieved before Gbr's funding settlement processes have bedded in and ministers have confidence in how settlements operate. I do, however, recognize how important it is that GBR has the confidence to plan across track and train to make the most of integration. That's why GBR will be required to produce and publish a business plan covering all its activity, including on passenger services, and this plan will span the duration of the five year funding period, regardless of changes to passenger funding.
In addition, once ministers have got more experienced funding and integrated body and GBR has demonstrated its fiscally responsible. The bill provides a route, including passenger services, in the five year funding settlement in the future via statutory instrument that allows passenger services funding to join the five year settlement in future. I hope the noble Baroness sees that we're as aligned as we can be on this amendment, and I hope, therefore she can support the bill as drafted on amendment 72.
Noble Lord Lansley, where research relates to infrastructure funding, this will continue to be allocated to five year infrastructure budget budget similar to Network Rail today. However, for research and development isn't related to infrastructure activities. Those schemes tend to be funded by government on a shorter term basis, according to need. One example of this is the first of a kind competition, which aims to address persistent issues on the railway, such as safety concerns, service reliability or anti-social behaviour.
This year, applicants will put forward ideas to help deliver major projects on time and in budget, improve the passenger service performance and reduce the industry's impact on the environment. With previous winners applauded for creating tech led solutions. This kind of scheme is suited to one off timescales, which can move quickly to secure outside investment and ensure innovation, and to avoid funds like this being allocated in the same way as essential operational funding, which is clearly different.
It wouldn't work well to force this type of research and development into funding periods. Amendment 63, 6869 112. I should start with a point of agreement with these amendments. GBR needs to run a more efficient railway than the one we have today, and I absolutely agree that the taxpayer has not always received value for money from the railways. This is precisely why we're creating GBR through this bill. After all, the main obstacle to an efficient, financially sustainable railway, a lack of integrated decision making delivery is being handled by this bill because I agree that we must get the most out of the railway for the taxpayer.
The Secretary of State is already under a duty in clause 18 to consider the efficient use of funds when taking all decisions on the railway, including her decision to issue the statement of objectives. This duty is imperative, as it's one of the main ways that the Bill incentivise incentivizes GBR to maximise the value of the I'm sorry, maximise the value available to for passengers whilst reducing, where possible, the overall taxpayer subsidy. In my view, however, the Bill's current duties are well balanced and the need to consider the efficient use of public funds achieves the same intention better than the straight direction to minimise costs.
Minimising costs could push push the duties out of balance such that pure cost cutting rather than working is preferred, which could lead to the wrong outcomes. For example, one of the simplest ways that GBR could reduce costs is to cut services to the lesser used, but equally relied on parts of the network. If that sounds familiar, it's because it's that kind of thinking that led to the Beeching cuts. But I know that noble lords will agree with me that that wouldn't be the right answer.
Further, GBR business plan is where GBR will set out how much it will be able to deliver for the country with the funding government can provide, and we absolutely expect those plans to demonstrate how it is meeting its duty to use public money efficiently. To meet that duty, I would expect to see GBR planning to make rail services more attractive to passengers, planning to attract outside investment, planning to make good use of devolved authority funding, achievable cost savings and other measures which will reduce subsidy taxpayer subsidy.
Following that, the author will review the plan and advise the Secretary of State on whether it represents good value for money, whilst also being bound by a duty to make efficient use of public funds. And finally, the Secretary of State will approve the plan with their own duty to consider the efficient use. I therefore think that the intent is delivered by the Bill as drafted on the statement of objectives. Specifically, I'd reassure that the Secretary of State could absolutely improve, include improvements in efficiency and productivity within her objectives, and I am sure that she will.
That's because paragraph 22 of schedule two is indicative and not limiting. Provision allows the Secretary of State to include objectives about the standards she wants GBR to achieve with its funding, and she can include topics such as efficiency and productivity, as well as other standards she. She may wish to set on amendments 85 and 88. I've already said I recognise the need to get the most out of the railway for this plan.
That said, it would be unrealistic to set up GBR with a statutory goal to eliminate all subsidy. The reality is that taxpayer funding will always be needed for some issues, and we can see this through comparative railway networks worldwide. Railways are a long term, capital intensive endeavor that deliver economic growth, jobs and housing and deliver social benefits greater than the sum of their parts. It's essential for the functioning of our largest cities and country, and taxpayer funding is necessary to ensure investment in infrastructure, maintenance and service delivery over the long run.
It is, of course, about striking the right balance. GBR needs to be efficient and incentivised to chase revenue growth through its financial framework, but there will always be some routes and regions in which rail travel is extensively relied on, but won't make an operating profit. I'm sure noble Lords would agree that we should not be shutting off access to the railway for these communities. Therefore, although GBR will always be incentivised and encouraged to make a profit, there will be social and economic conditions where it may be unavoidable for GBR to run at a loss.
They could, for example, be the need to maintain a high standard of services during a temporary economic downturn and setting up GBR to break the law in those circumstances would create an inflexible system, which does not drive the right behaviors as a whole. Turning to noble Lord Landers amendment 67 about transparency, I can confirm to the noble Lord that the bill already requires that GBR business plan covers all of GB's activities, its costs, and how those costs will be met.
Therefore, we're. A cost is being met by devolved by devolved funding that will already be clear through the business plan. I hope this reassures him that the bill already provides for this intent, but how much I agree with both the noble Lord Lansley and the noble Lord Harper on the dangers of two greater specificity specificity amendment 89, tabled by the noble Lord Lord Barclay, is also about financial transparency. I'm pleased to be able to offer my noble friend reassurances that this information is already available, or that there are proportionate arrangements in place to ensure that it will become available.
The bill's impact assessment sets out the estimated cost savings from establishing GBR, and estimates that rail reform will generate more than £1 billion worth of savings and efficiencies. By the end of this debate on costs incurred, I can assure my noble friend that GBR has forecast cost of operation will be contained within its published business plan. The bill ensures this, and requires that the GB plan covers all its planned activities. The five year funding period revenue will also be included in the business plan, as it's part of the requirement in the bill for GBR to set out how it proposes to meet its costs.
Naturally, some commercially sensitive information is likely to be redacted, as any business would do, but otherwise, the bill achieves what this amendment proposes. Similarly, on amendment 314, I can assure the noble Lord young that there are already processes to account for, scrutinise and publish the kinds of information the amendment seeks a report on. For example, the impacts on the government's balance sheet will be considered as part of the Office of National Statistics Classification Assessment and GBR.
Income expenditure and liabilities will be included within their annual accounts required under the Companies Act. Information related to passenger revenue and government subsidy will be made available through the regular publication, such as annual release on rail financing as they are today. The noble Lord recounted some other examples, including, of course, the bringing onto the public balance sheet of Network Rail in 2015. He quotes 30 billion, but my recollection is 54 billion, actually.
And of course, there were some consequences of that. One of the consequences he didn't mention is that Network Rail were there were henceforth required to consider efficiency much more carefully afterwards than they had done for many years previously. And the consequence of that has been a significant reduction in the costs of some of the things that it does, as I can attest, since I chaired it for for the for nine years until 20 , 2024, in response to him, of course, the Secretary of State will work with with both the Office of National Statistics and Her Majesty's His Majesty's Treasury in their work, and will no doubt contrast in the recent past, where government has in effect for considerable time specified rolling stock for individual train operators, some of which, of course have been in public ownership for nearly ten years.
I. Given everything I set out, I hope that noble Lords feel able to withdraw their amendment.
It will, however, be a goal to work towards and in particular can't be achieved before Gbr's funding settlement processes have bedded in and ministers have confidence in how settlements operate. I do, however, recognize how important it is that GBR has the confidence to plan across track and train to make the most of integration. That's why GBR will be required to produce and publish a business plan covering all its activity, including on passenger services, and this plan will span the duration of the five year funding period, regardless of changes to passenger funding.
In addition, once ministers have got more experienced funding and integrated body and GBR has demonstrated its fiscally responsible. The bill provides a route, including passenger services, in the five year funding settlement in the future via statutory instrument that allows passenger services funding to join the five year settlement in future. I hope the noble Baroness sees that we're as aligned as we can be on this amendment, and I hope, therefore she can support the bill as drafted on amendment 72.
Noble Lord Lansley, where research relates to infrastructure funding, this will continue to be allocated to five year infrastructure budget budget similar to Network Rail today. However, for research and development isn't related to infrastructure activities. Those schemes tend to be funded by government on a shorter term basis, according to need. One example of this is the first of a kind competition, which aims to address persistent issues on the railway, such as safety concerns, service reliability or anti-social behaviour.
This year, applicants will put forward ideas to help deliver major projects on time and in budget, improve the passenger service performance and reduce the industry's impact on the environment. With previous winners applauded for creating tech led solutions. This kind of scheme is suited to one off timescales, which can move quickly to secure outside investment and ensure innovation, and to avoid funds like this being allocated in the same way as essential operational funding, which is clearly different.
It wouldn't work well to force this type of research and development into funding periods. Amendment 63, 6869 112. I should start with a point of agreement with these amendments. GBR needs to run a more efficient railway than the one we have today, and I absolutely agree that the taxpayer has not always received value for money from the railways. This is precisely why we're creating GBR through this bill. After all, the main obstacle to an efficient, financially sustainable railway, a lack of integrated decision making delivery is being handled by this bill because I agree that we must get the most out of the railway for the taxpayer.
The Secretary of State is already under a duty in clause 18 to consider the efficient use of funds when taking all decisions on the railway, including her decision to issue the statement of objectives. This duty is imperative, as it's one of the main ways that the Bill incentivise incentivizes GBR to maximise the value of the I'm sorry, maximise the value available to for passengers whilst reducing, where possible, the overall taxpayer subsidy. In my view, however, the Bill's current duties are well balanced and the need to consider the efficient use of public funds achieves the same intention better than the straight direction to minimise costs.
Minimising costs could push push the duties out of balance such that pure cost cutting rather than working is preferred, which could lead to the wrong outcomes. For example, one of the simplest ways that GBR could reduce costs is to cut services to the lesser used, but equally relied on parts of the network. If that sounds familiar, it's because it's that kind of thinking that led to the Beeching cuts. But I know that noble lords will agree with me that that wouldn't be the right answer.
Further, GBR business plan is where GBR will set out how much it will be able to deliver for the country with the funding government can provide, and we absolutely expect those plans to demonstrate how it is meeting its duty to use public money efficiently. To meet that duty, I would expect to see GBR planning to make rail services more attractive to passengers, planning to attract outside investment, planning to make good use of devolved authority funding, achievable cost savings and other measures which will reduce subsidy taxpayer subsidy.
Following that, the author will review the plan and advise the Secretary of State on whether it represents good value for money, whilst also being bound by a duty to make efficient use of public funds. And finally, the Secretary of State will approve the plan with their own duty to consider the efficient use. I therefore think that the intent is delivered by the Bill as drafted on the statement of objectives. Specifically, I'd reassure that the Secretary of State could absolutely improve, include improvements in efficiency and productivity within her objectives, and I am sure that she will.
That's because paragraph 22 of schedule two is indicative and not limiting. Provision allows the Secretary of State to include objectives about the standards she wants GBR to achieve with its funding, and she can include topics such as efficiency and productivity, as well as other standards she. She may wish to set on amendments 85 and 88. I've already said I recognise the need to get the most out of the railway for this plan.
That said, it would be unrealistic to set up GBR with a statutory goal to eliminate all subsidy. The reality is that taxpayer funding will always be needed for some issues, and we can see this through comparative railway networks worldwide. Railways are a long term, capital intensive endeavor that deliver economic growth, jobs and housing and deliver social benefits greater than the sum of their parts. It's essential for the functioning of our largest cities and country, and taxpayer funding is necessary to ensure investment in infrastructure, maintenance and service delivery over the long run.
It is, of course, about striking the right balance. GBR needs to be efficient and incentivised to chase revenue growth through its financial framework, but there will always be some routes and regions in which rail travel is extensively relied on, but won't make an operating profit. I'm sure noble Lords would agree that we should not be shutting off access to the railway for these communities. Therefore, although GBR will always be incentivised and encouraged to make a profit, there will be social and economic conditions where it may be unavoidable for GBR to run at a loss.
They could, for example, be the need to maintain a high standard of services during a temporary economic downturn and setting up GBR to break the law in those circumstances would create an inflexible system, which does not drive the right behaviors as a whole. Turning to noble Lord Landers amendment 67 about transparency, I can confirm to the noble Lord that the bill already requires that GBR business plan covers all of GB's activities, its costs, and how those costs will be met.
Therefore, we're. A cost is being met by devolved by devolved funding that will already be clear through the business plan. I hope this reassures him that the bill already provides for this intent, but how much I agree with both the noble Lord Lansley and the noble Lord Harper on the dangers of two greater specificity specificity amendment 89, tabled by the noble Lord Lord Barclay, is also about financial transparency. I'm pleased to be able to offer my noble friend reassurances that this information is already available, or that there are proportionate arrangements in place to ensure that it will become available.
The bill's impact assessment sets out the estimated cost savings from establishing GBR, and estimates that rail reform will generate more than £1 billion worth of savings and efficiencies. By the end of this debate on costs incurred, I can assure my noble friend that GBR has forecast cost of operation will be contained within its published business plan. The bill ensures this, and requires that the GB plan covers all its planned activities. The five year funding period revenue will also be included in the business plan, as it's part of the requirement in the bill for GBR to set out how it proposes to meet its costs.
Naturally, some commercially sensitive information is likely to be redacted, as any business would do, but otherwise, the bill achieves what this amendment proposes. Similarly, on amendment 314, I can assure the noble Lord young that there are already processes to account for, scrutinise and publish the kinds of information the amendment seeks a report on. For example, the impacts on the government's balance sheet will be considered as part of the Office of National Statistics Classification Assessment and GBR.
Income expenditure and liabilities will be included within their annual accounts required under the Companies Act. Information related to passenger revenue and government subsidy will be made available through the regular publication, such as annual release on rail financing as they are today. The noble Lord recounted some other examples, including, of course, the bringing onto the public balance sheet of Network Rail in 2015. He quotes 30 billion, but my recollection is 54 billion, actually.
And of course, there were some consequences of that. One of the consequences he didn't mention is that Network Rail were there were henceforth required to consider efficiency much more carefully afterwards than they had done for many years previously. And the consequence of that has been a significant reduction in the costs of some of the things that it does, as I can attest, since I chaired it for for the for nine years until 20 , 2024, in response to him, of course, the Secretary of State will work with with both the Office of National Statistics and Her Majesty's His Majesty's Treasury in their work, and will no doubt contrast in the recent past, where government has in effect for considerable time specified rolling stock for individual train operators, some of which, of course have been in public ownership for nearly ten years.
I. Given everything I set out, I hope that noble Lords feel able to withdraw their amendment.
15:25
Speaker 14
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Speaker 14
May I just ask the noble Lord before he sits down? Is his position that one of the consequences of this bill, if enacted, and we will not know for some months until after it's enacted, is that roughly £25 billion worth of rolling stock? And I know I don't argue about the figure, but I believe it's roughly worth £25 billion , could be added to government debt and that we are going into this in the dark, not knowing whether that is going to be the case and what soundings he's taken with Treasury colleagues about this interesting possibility.
15:25
Speaker 11
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Speaker 11
Well, of course nobody can. But since our independent, nobody can predict the the consequences of an Office of National Statistics Examination until they until they conclude one. Why , I said the Secretary of State will work with them is because they will need to also consider the recent past. As I said, the bill is in Parliament because it has got cross-government agreement from all the departments of government. So. But we can't contemplate what the future might hold in respect of the decisions of the ONS.
15:26
Speaker 14
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Speaker 14
I'm sorry to press the noble Lord. No, I agree. If the ONS is independent, you can't say what their decision is going to be. But you could secure that decision before the passage of the legislation. That cannot be too difficult. I mean, given the consequence, it must be possible to secure the decision first. Nobody, I think, is suggesting that what the Prime manipulate the decision.
That's not my objective. Could the government not take that approach? Because these are very significant sums, and to sort of hold one's nose and just jump into the dark seems to me to be reckless.
That's not my objective. Could the government not take that approach? Because these are very significant sums, and to sort of hold one's nose and just jump into the dark seems to me to be reckless.
15:26
Speaker 11
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Speaker 11
Well, let me respond to the noble Lord and say this, which is that I already said that actually, one of the things that the Secretary of State will do is to help the ONS with its understanding of both the recent past and what's happened, what will happen as a consequence of the bill. And in the recent past, the government has specified to the most extraordinary detailed degree all the rolling stock used in all franchises for the past, probably the past 10 or 12 years.
It's also determined how long it runs for and how long it lasts. So in in those circumstances, I think, I think we're very content to wait for the ONS to do its work when it chooses to do it.
It's also determined how long it runs for and how long it lasts. So in in those circumstances, I think, I think we're very content to wait for the ONS to do its work when it chooses to do it.
15:27
Speaker 1
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Speaker 1
May I just ask the minister a question ? Pursuant to the debate about the powers to fund the GBR business plan? It does seem to me from the minister's reply, and I understand it, and I think it's a reasonable proposition that. That the Secretary of State, the Secretary of State should provide financial assistance in relation to activities that are set out by GBR in its business plan. And indeed, paragraph three says the Secretary of State should do exactly that.
Say what financial assistance is expected to be provided, but would it not be logical, therefore, for the powers in the. That are specified in the subsequent paragraph to provide financial assistance should extend to those activities that are within the business plan, rather than having only infrastructure being capable of being funded by the Secretary of State using the powers. So let's. So we end up with something which is much more visible.
Specific powers to provide financial assistance in relation to the business plan over this funding period.
Say what financial assistance is expected to be provided, but would it not be logical, therefore, for the powers in the. That are specified in the subsequent paragraph to provide financial assistance should extend to those activities that are within the business plan, rather than having only infrastructure being capable of being funded by the Secretary of State using the powers. So let's. So we end up with something which is much more visible.
Specific powers to provide financial assistance in relation to the business plan over this funding period.
15:28
Speaker 11
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Speaker 11
I thank the noble Lord for that. Since since I managed in the end to have to correct myself when I in the last. not session on Tuesday, I think I'd rather take some advice and write to him about about this. I understand his point, but I'm not sure I'm capable of expressing an answer in language that. That will be clear enough for him, so I'll I'll I'll drop him a line, if I may.
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Speaker 9
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Speaker 9
I'd like to thank the noble Lord, the Minister, for his response and the fact that in principle, he supports the amendments that I tabled in in this group and that it's a goal to work towards. I think it's reassuring that he's pointed out that there is, within this legislation the potential for statutory instrument. If I understood what he was saying, to include passenger services in the future within the five year sort of settlement going forward, and on that basis, I welcome that and I withdraw my amendment.
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Speaker 1
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Speaker 1
Thank you very much, my Lords. This from my point of view, this I have two amendments in this group. Amendment 59 is looks at the statement of objectives that the Secretary of State. It sets out for GBR and what is intended to be achieved over the funding period and the the objectives, as you can see in paragraph two two, may include objectives as to standards to be achieved when carrying on the activities that are going to be set out in the business plan.
It's a very simple proposition, and it's one of those happy subjects that we always discuss in committee is should the word be may or should the word be must? Because the implication of may is that it may not. And I think what we're considering is whether it would be acceptable for the statement of objectives, not to include reference to the standards that are to be achieved in relation to these activities. Now, we do have one of these lists about which we're not supposed to be too specific.
That follows, but of course, standards to be achieved are not set out as such. In that subsequent list. They tend to be things objectives relating to other things. But there is. My other amendment is intended to see how these things interact because . Because Great British Railways have a. Separately in clause 65, the responsibility to consider whether they should have a performance scheme which, as I understand it, is essentially about minimising disruption to the network and to passengers.
Question is where are the objectives in relation to minimising disruption to passengers? Because I don't see it in paragraph two three, those objectives you could you could argue that it arises from the carriage of passengers goods, but it's not sufficiently explicit, I think, and I'm not sure whether it's included in objectives, as the standards are those same standards that. were in a performance scheme. So I see these two amendments being linked, and one of the things we're looking for is to ensure that the objectives do set out standards, and that the objectives also are very clear about what is required in terms of avoiding disruption and enabling passengers to be confident about the availability of services according to the timetable.
So I beg to move. Amendment 59.
It's a very simple proposition, and it's one of those happy subjects that we always discuss in committee is should the word be may or should the word be must? Because the implication of may is that it may not. And I think what we're considering is whether it would be acceptable for the statement of objectives, not to include reference to the standards that are to be achieved in relation to these activities. Now, we do have one of these lists about which we're not supposed to be too specific.
That follows, but of course, standards to be achieved are not set out as such. In that subsequent list. They tend to be things objectives relating to other things. But there is. My other amendment is intended to see how these things interact because . Because Great British Railways have a. Separately in clause 65, the responsibility to consider whether they should have a performance scheme which, as I understand it, is essentially about minimising disruption to the network and to passengers.
Question is where are the objectives in relation to minimising disruption to passengers? Because I don't see it in paragraph two three, those objectives you could you could argue that it arises from the carriage of passengers goods, but it's not sufficiently explicit, I think, and I'm not sure whether it's included in objectives, as the standards are those same standards that. were in a performance scheme. So I see these two amendments being linked, and one of the things we're looking for is to ensure that the objectives do set out standards, and that the objectives also are very clear about what is required in terms of avoiding disruption and enabling passengers to be confident about the availability of services according to the timetable.
So I beg to move. Amendment 59.
15:32
15:32
Speaker 14
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Speaker 14
My Lords, it may be helpful to the Committee since I have such a large number of amendments in the group and nobody else has. Who is present has any amendments. If I spoke now and then it would be easier for . Amendment noble Baroness to comment on the amendments. I've moved. My Lord. May I start with amendment 63? A I put this in because I've been contemplating artificial intelligence in the last 24 hours.
I've been contemplating the wipeout of 10% of the global population by artificial intelligence, which whistleblower at anthropic has said is a very likely prospect. Sometime in the next ten years. It's possible that these claims are somewhat overblown. I don't know, but it's astonishing. It seems to me that we're having a bill. I say this is a 30 year mark, a 30 year measure. In all likelihood, this will stay in place that length.
And we're not having any debate about the future. The the, the digital, the artificial intelligence, the innovative future of the railway.
I've been contemplating the wipeout of 10% of the global population by artificial intelligence, which whistleblower at anthropic has said is a very likely prospect. Sometime in the next ten years. It's possible that these claims are somewhat overblown. I don't know, but it's astonishing. It seems to me that we're having a bill. I say this is a 30 year mark, a 30 year measure. In all likelihood, this will stay in place that length.
And we're not having any debate about the future. The the, the digital, the artificial intelligence, the innovative future of the railway.
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15:34
Speaker 9
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Speaker 9
You okay? I wish to speak to my amendment 82 in this group, to which Lord Moylan has also added his name. This amendment creates a new board of Great British Railways and provides detail the composition of this board. The board would increase the transparency and accountability of the Secretary of State's decisions, as it would create a vehicle for these to be properly discussed and ensure a wide range of expertise is available.
And if the Secretary of State decided to make a decision which was against the advice of that board, the reasons for that would need to be set out clearly and publicly. The membership of the board would represent Great British Railways, but also other key stakeholders in the running of the railway, such as open access operators, freight operators, the Office of Rail and Road, the Passengers Council and organisations that represent passengers with accessibility requirements. The board would comprise at least six members and to make sure that there is a voice for the other stakeholders.
No more than half of the board's membership would be employed or otherwise represent Great British Railways, so this amendment would allow for any decision or direction from the Secretary of State concerning Great British Railways to be notified to the board prior to being made, and then the board would need to publish any decision or direction it considered and whether it had approved any such decision or direction. And if the board did not agree with the Secretary of State, they would still be free to go ahead with the decision, but they would need to publish a statement setting out their reasons for that.
This really, for us, is a way to ensure that the Secretary of State uses the powers in this bill wisely, with a proper sounding board for feedback from experts and different viewpoints in the field. And I hope the minister will seriously consider this proposal. The other amendments in this group are around the clear objectives to Great British Railways. So Lord Moylan's amendment 64, a requiring consultation with the supply chain and railway service providers when preparing objectives for a funding period, would appear a sensible way to ensure industry buy in and prioritisation others a different ways to try to measure and assess the performance of Great British Railways.
I hope the noble Lord, the Minister, will be able to provide details of how the Secretary of State and Parliament will be able to assess this going forward.
And if the Secretary of State decided to make a decision which was against the advice of that board, the reasons for that would need to be set out clearly and publicly. The membership of the board would represent Great British Railways, but also other key stakeholders in the running of the railway, such as open access operators, freight operators, the Office of Rail and Road, the Passengers Council and organisations that represent passengers with accessibility requirements. The board would comprise at least six members and to make sure that there is a voice for the other stakeholders.
No more than half of the board's membership would be employed or otherwise represent Great British Railways, so this amendment would allow for any decision or direction from the Secretary of State concerning Great British Railways to be notified to the board prior to being made, and then the board would need to publish any decision or direction it considered and whether it had approved any such decision or direction. And if the board did not agree with the Secretary of State, they would still be free to go ahead with the decision, but they would need to publish a statement setting out their reasons for that.
This really, for us, is a way to ensure that the Secretary of State uses the powers in this bill wisely, with a proper sounding board for feedback from experts and different viewpoints in the field. And I hope the minister will seriously consider this proposal. The other amendments in this group are around the clear objectives to Great British Railways. So Lord Moylan's amendment 64, a requiring consultation with the supply chain and railway service providers when preparing objectives for a funding period, would appear a sensible way to ensure industry buy in and prioritisation others a different ways to try to measure and assess the performance of Great British Railways.
I hope the noble Lord, the Minister, will be able to provide details of how the Secretary of State and Parliament will be able to assess this going forward.
15:37
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15:37
Speaker 14
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Speaker 14
And I do beg his pardon. I got slightly muddled because of changes in the groups. Could I come to my amendment starting with 60 to 64, a 83, 84, 87, 94, 124, 125 and 291. The central issue running through these amendments is accountability. We're creating an enormous new publicly owned organisation which receive, in all likelihood, billions of pounds of taxpayers money and exercise extraordinary control over the railway.
It therefore needs clear, objective objectives, measurable performance indicators and consequences for when it fails to deliver. Amendment 60 addresses the funding objectives as drafted. The bill says the Secretary of State may include the specified objectives. My amendment changes that to must. Amendment 64 requires consultation with railway service providers and the rail supply chain. When those funding objectives are prepared, GBR will continue to rely enormously on the private rail supply chain.
Those businesses invest in skills, equipment and capacity on the basis of decisions taken by government and GBR, so it's sensible that those decisions are informed by the expertise, the knowledge of their own business and the consequences for employment and profits in the private sector that would arise from those decisions being made. They should be consulted. The remainder of my amendments addressed what might be called the problem of the missing key performance indicators.
We have repeatedly been told that GBR will be held to robust performance measures, but what does robust actually mean? Amendment 124 answers that question by establishing a proper statutory KPI framework covering the things passengers and taxpayers actually care about reliability, safety, passenger experience, affordability and value for money, passenger growth, financial sustainability, productivity and efficiency, and freight performance. Of course, one can argue about what should be in the list, and I'd be willing to enter discussions with the noble Lord, the minister, about about putting something else in or maybe adjusting something I've proposed.
But we need to know what the performance indicators are in the bill, because otherwise we're allowing GBR far too much latitude, power and latitude unconstrained with little accountability. Amendment 94 then ensures that the long term rail strategy is geared towards enabling GBR to meet these KPIs. The government may say that a long term rail strategy should not be dictated by short term measures, but we have to get from short term to the long term.
A 30 year aspiration is of very little value. If there is no way of measuring whether GBR is moving towards it year by year. Amendment 125 therefore requires annual reporting and quarterly updates against those key KPIs. Even I might admit that quarterly updates might be a little bit onerous. So I'll meet the minister halfway if he objects, and let's have semi-annual updates. I'm a reasonable person and I'm open to suggestions, but something is needed if we are going to.
It's no good saying. And we had the other day on the freight target. And the freight target is to achieve 75% growth by 2050. And only yesterday or the day before, the government produced a statement saying that it set an interim target. So they appreciate what I'm saying, that there should be interim targets, but the interim target is that it should achieve a 40% growth by 2040. None of us will be here.
Nobody is going what is there, 2030 target. There is no 2030 target. There's merely a 2040 target. This is not this is not good enough. This is playing with achieving targets. This is not a seriously in the private sector this would be simply laughable. So we do need these. And as I say, quarterly updates may be too onerous. But an update every decade or 15 years is just not good enough.
Amendment 291 gives the OBR the important independent job of assessing whether GBR is actually achieving them. GBR can't be allowed, surely, just to mark its own homework. And amendment 84 applies the same principle during the transition. This is a generational restructuring of the railways involving employees, operators, freight, open access, local authorities, the supply chain and millions of passengers, a quarterly ministerial statement, or even once every six months on progress towards GBR becoming fully operational would increase transparency, maintain focus and importantly, prevent drift.
Finally, amendment 87 concerns consequences. When I've talked about when I've asked the minister privately, but I think I have heard him say this in a meeting for all peers when I've asked him privately how the Secretary of State will exercise control over GBR, he has said, and he did say this in a meeting with all the other day, so I think I can repeat it. He said, well, of course she can always sack the chairman.
Well, I suppose she can. She's the sole shareholder in the business. She can sack the chairman. But there was nothing about sacking the chief executive. Of course it isn't the Secretary of State's job, as I understand. We're not vouchsafed these arrangements to appoint or to sack the chief executive. That would be a decision for the board. So what I'm trying to introduce here is some accountability for the chief executive, and we're giving the Secretary of State the power, not, obviously, a duty, to dismiss the executive head of GBR, where the organisation is failing against the KPIs and has also failed to act on guidance issued by the Secretary of State.
It's not enough just to sack the chairman. He won't get anybody applying for the job of any quality if they're if they're the only person whose head can roll. So the chief executive needs to have their neck on the block as well. My Lords, amendment 59 in my noble friend Lord Lansley's name is obviously sound. The Secretary of State may include objectives for the standards to be achieved in relation to rail services.
She. It ought to be a must. Amendment 66 and enable my noble friend Lord Grayling, to which I've also added my. To which I've added my name requires GBR business plan to contain measurable performance indicators for its statutory duties. This is simply basic accountability. If Parliament gives GBR duties, its business plan should explain how performance against them will actually be measured.
It therefore needs clear, objective objectives, measurable performance indicators and consequences for when it fails to deliver. Amendment 60 addresses the funding objectives as drafted. The bill says the Secretary of State may include the specified objectives. My amendment changes that to must. Amendment 64 requires consultation with railway service providers and the rail supply chain. When those funding objectives are prepared, GBR will continue to rely enormously on the private rail supply chain.
Those businesses invest in skills, equipment and capacity on the basis of decisions taken by government and GBR, so it's sensible that those decisions are informed by the expertise, the knowledge of their own business and the consequences for employment and profits in the private sector that would arise from those decisions being made. They should be consulted. The remainder of my amendments addressed what might be called the problem of the missing key performance indicators.
We have repeatedly been told that GBR will be held to robust performance measures, but what does robust actually mean? Amendment 124 answers that question by establishing a proper statutory KPI framework covering the things passengers and taxpayers actually care about reliability, safety, passenger experience, affordability and value for money, passenger growth, financial sustainability, productivity and efficiency, and freight performance. Of course, one can argue about what should be in the list, and I'd be willing to enter discussions with the noble Lord, the minister, about about putting something else in or maybe adjusting something I've proposed.
But we need to know what the performance indicators are in the bill, because otherwise we're allowing GBR far too much latitude, power and latitude unconstrained with little accountability. Amendment 94 then ensures that the long term rail strategy is geared towards enabling GBR to meet these KPIs. The government may say that a long term rail strategy should not be dictated by short term measures, but we have to get from short term to the long term.
A 30 year aspiration is of very little value. If there is no way of measuring whether GBR is moving towards it year by year. Amendment 125 therefore requires annual reporting and quarterly updates against those key KPIs. Even I might admit that quarterly updates might be a little bit onerous. So I'll meet the minister halfway if he objects, and let's have semi-annual updates. I'm a reasonable person and I'm open to suggestions, but something is needed if we are going to.
It's no good saying. And we had the other day on the freight target. And the freight target is to achieve 75% growth by 2050. And only yesterday or the day before, the government produced a statement saying that it set an interim target. So they appreciate what I'm saying, that there should be interim targets, but the interim target is that it should achieve a 40% growth by 2040. None of us will be here.
Nobody is going what is there, 2030 target. There is no 2030 target. There's merely a 2040 target. This is not this is not good enough. This is playing with achieving targets. This is not a seriously in the private sector this would be simply laughable. So we do need these. And as I say, quarterly updates may be too onerous. But an update every decade or 15 years is just not good enough.
Amendment 291 gives the OBR the important independent job of assessing whether GBR is actually achieving them. GBR can't be allowed, surely, just to mark its own homework. And amendment 84 applies the same principle during the transition. This is a generational restructuring of the railways involving employees, operators, freight, open access, local authorities, the supply chain and millions of passengers, a quarterly ministerial statement, or even once every six months on progress towards GBR becoming fully operational would increase transparency, maintain focus and importantly, prevent drift.
Finally, amendment 87 concerns consequences. When I've talked about when I've asked the minister privately, but I think I have heard him say this in a meeting for all peers when I've asked him privately how the Secretary of State will exercise control over GBR, he has said, and he did say this in a meeting with all the other day, so I think I can repeat it. He said, well, of course she can always sack the chairman.
Well, I suppose she can. She's the sole shareholder in the business. She can sack the chairman. But there was nothing about sacking the chief executive. Of course it isn't the Secretary of State's job, as I understand. We're not vouchsafed these arrangements to appoint or to sack the chief executive. That would be a decision for the board. So what I'm trying to introduce here is some accountability for the chief executive, and we're giving the Secretary of State the power, not, obviously, a duty, to dismiss the executive head of GBR, where the organisation is failing against the KPIs and has also failed to act on guidance issued by the Secretary of State.
It's not enough just to sack the chairman. He won't get anybody applying for the job of any quality if they're if they're the only person whose head can roll. So the chief executive needs to have their neck on the block as well. My Lords, amendment 59 in my noble friend Lord Lansley's name is obviously sound. The Secretary of State may include objectives for the standards to be achieved in relation to rail services.
She. It ought to be a must. Amendment 66 and enable my noble friend Lord Grayling, to which I've also added my. To which I've added my name requires GBR business plan to contain measurable performance indicators for its statutory duties. This is simply basic accountability. If Parliament gives GBR duties, its business plan should explain how performance against them will actually be measured.
15:44
Speaker 11
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Speaker 11
Let me turn to amendment 941, two, four, one, two five and 291. I'm pleased to say that I agree with many of the performance indicators set out in Noble Lords amendments, which will be important in GBR delivering the service the public expects. I also agree with the concept of an annual report. I can reassure the Committee that on both counts such a thing already exists. The Bill requires GBR to produce an annual business plan, and we have already confirmed that this will include meaningful KPIs around performance.
For example, the business plan will clearly have to include GBR progress towards reaching its statutory freight growth target, and I'll happily confirm today that it will. The 2050 target is a long way out, but progress against it should be measured in. 2014 in the business plan 2040 and 2050. By keeping these key KPIs in the business plan, we ensure that a reflection of gbr's activities, the cost of those activities and its performance against those activities and costs are always transparent and available for scrutiny.
GBR will publish annual updates to this plan, which can, of course, and should be scrutinised by Parliament in the usual way. GBR will need to consult with the Or on the passenger watchdog when creating these updates, ensuring expert and independent advice. And exactly as the noble Lord, Lord Moylan proposes, the author will monitor GBR performance against the KPIs in its business plan as part of its monitoring function. An important distinction, however, is that the author's role under the bill as drafted is not confined to looking backwards at whether a target has been met.
The IRR can also recommend to the Secretary of State whether Gbr's commitment and performance measures are realistic and measurable, something not factored into the amendment linking KPIs to the long term rail strategy, rather than the business plan, would undermine the purpose of the strategy. The rail strategy is designed to provide ministerial direction on the long term trends that will affect the railways and, at a high level, what they expect GBR to do about them. But GBR must be independent enough to respond to the rail strategy with a self-developed, proactive and detailed activity plan covering the next 5th May order.
For example, the business plan will clearly have to include GBR progress towards reaching its statutory freight growth target, and I'll happily confirm today that it will. The 2050 target is a long way out, but progress against it should be measured in. 2014 in the business plan 2040 and 2050. By keeping these key KPIs in the business plan, we ensure that a reflection of gbr's activities, the cost of those activities and its performance against those activities and costs are always transparent and available for scrutiny.
GBR will publish annual updates to this plan, which can, of course, and should be scrutinised by Parliament in the usual way. GBR will need to consult with the Or on the passenger watchdog when creating these updates, ensuring expert and independent advice. And exactly as the noble Lord, Lord Moylan proposes, the author will monitor GBR performance against the KPIs in its business plan as part of its monitoring function. An important distinction, however, is that the author's role under the bill as drafted is not confined to looking backwards at whether a target has been met.
The IRR can also recommend to the Secretary of State whether Gbr's commitment and performance measures are realistic and measurable, something not factored into the amendment linking KPIs to the long term rail strategy, rather than the business plan, would undermine the purpose of the strategy. The rail strategy is designed to provide ministerial direction on the long term trends that will affect the railways and, at a high level, what they expect GBR to do about them. But GBR must be independent enough to respond to the rail strategy with a self-developed, proactive and detailed activity plan covering the next 5th May order.
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15:47
Speaker 11
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Speaker 11
Let me come, if I may. Let me let me come to that point. I, I believe I believe that there is. But before I say so, let let let let let me check. The rail strategy. The long term rail strategy is designed to provide ministerial direction on the long term trends that will affect the railways and at a high level, what they expect GBR to do about them. The business plan is clearly the right place for short and medium term targets to be included, which GBR should set for itself and which the IRR should review and comment on.
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15:48
Speaker 11
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Speaker 11
So? In response to noble Lord, the long term rail strategy will set out the Secretary of State's expectations. The business plan will set out what GBR believes it can be. It can achieve to to move towards the long term rail strategy. But the business plan, of course, has to be agreed with the Secretary of State, who might well disagree with some of its own targets and for which there would be. In the end, the GBR has to satisfy the Secretary of State about the progress that it proposes to make.
I don't think that's much different, actually, as the noble Lord will recall, actually from the transport for London Business Plan, which translated the mayor's transport strategy into targets related to the budget of the organization and which were agreed by the mayor.
I don't think that's much different, actually, as the noble Lord will recall, actually from the transport for London Business Plan, which translated the mayor's transport strategy into targets related to the budget of the organization and which were agreed by the mayor.
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15:49
Speaker 1
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Speaker 1
Minister, surely there is a. Between the long term rail strategy and the business plan, there is the thing the statement of objectives. And surely the question is which I think my noble friend, through his amendments has kind of explored quite positively, is that the statement of objectives needs to be quite specific, and some of them need to be performance indicators in themselves because the business plan is, is GBR explaining how it is proposing, through its activities and funding, to meet and contribute to meeting the competitive set out.
In the statement of objectives.
In the statement of objectives.
15:49
Speaker 11
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Speaker 11
I have to say, the noble Lord, I don't I don't see the difference in the sense that the long term rail strategy must express the Secretary of State's desire, for example, for a reliable railway in terms that enable the business plan to set out the. The. The measures that would be used to you to decide whether or not it was reliable. And indeed, in the recent past, one of the things that had to be done since this government took office is to agree for the first time what the what the measurements are and what the targets should be about expressing the performance of the railway.
So I don't see I don't I don't see that conflict in a way that the noble the noble Lord does.
So I don't see I don't I don't see that conflict in a way that the noble the noble Lord does.
15:50
Speaker 1
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Speaker 1
Forgive me. I don't see it as a conflict at all. I mean, I think I'm expressing which I think the minister has done on a previous occasion. There is a difference between what is in the term and what needs to happen this year and next year, and indeed, for the purpose of the funding period in the next five years. The statement of objectives is specifically in the next five years. The long term rail strategy is on a different time frame.
15:51
Speaker 11
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Speaker 11
The noble Lord is right. Actually, I'm I'm beginning to confuse myself about this. There is a danger of, of getting into to greater specificity. You're right. You're right that the statement of objectives will include specific standards and therefore that. But that translates into the business plan.
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Speaker 13
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Speaker 13
My Lord, before the noble Lord sits down. Referring to the discussion we've had on KPIs, it occurs to me that there needs to be some differentiation between the list, whether it's the list produced by the noble Lord, Lord Moylan, or the list in the bill, or another one of issues which are in basically in the total control of Great British Railways and the ones which are not. And I think noble Lord, Lord Moylan mentioned the freight one.
The freight is not in control of GBR in respect of how many trains run and how much money GBR makes from them directly. But of course it can. It can fiddle around with the access and the signalling and everything else, but it is dependent upon many other people delivering the KPI, which I think is supposed to be the KPI of British Railways. And I think the the. So it would be interesting to see, to hear from my noble friend how the two different criteria are.
Set when coming up, when coming up with the calculations of who does the KPI and what's it cover.
The freight is not in control of GBR in respect of how many trains run and how much money GBR makes from them directly. But of course it can. It can fiddle around with the access and the signalling and everything else, but it is dependent upon many other people delivering the KPI, which I think is supposed to be the KPI of British Railways. And I think the the. So it would be interesting to see, to hear from my noble friend how the two different criteria are.
Set when coming up, when coming up with the calculations of who does the KPI and what's it cover.
15:53
Speaker 11
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Speaker 11
So my noble friend is right that some of these KPIs relate to wider economic circumstances than the railway currently has, but we did already discuss on the first day of the committee the fact that the need for a freight KPI, the need for a freight target, a long term freight target is. So that GBR does focus on its own part in in in, in growing freight. Now, clearly. Clearly, it's much subject to what, what, what shippers want to send, how they want to send it, where they want to send it, and so forth.
But I don't see any conflict between GBR having a long term freight target. It may have to take different action if if the economy or the or things which are transported by rail change over time. And there's been no greater case of that than the case of coal and steel, which were once a significant part of railway freight, which but which today are virtually nothing. On the other hand, intermodal, intermodal traffic and and construction materials have vastly increased.
And there's no doubt in my mind that the railway could contribute more than perhaps it's done in the recent past to growing those , growing those particular categories, if it were minded to do so. And that freight target is designed to make it think about how it could do it. So I don't see any any contradiction in that. And indeed it will be like running any other business. I mean, the the noble Lord Moylan referred to his experience at transport for London.
And of course it's exactly the same. It's a large organisation which is contributing to, but to some extent dependent on the economy of London. And that will be true of the railways as a whole. The reason we're discussing these now is because there is no doubt, and I'm agreeing with noble Lord, that there should be KPI KPIs for GBR, and it should be held to account for meeting them, and that in the end it should be in their business plan, which sets them next to the costs that they incur and the revenue that they're going to derive from them in order to in order to achieve them.
I should just go back to the noble Lord Lansley and say that. The paragraph 5.5 brackets three in schedule two says that GBR must keep the business plan up to date. We we we're pretty clear that that means annually it could be more. If circumstances change, it's not unknown for businesses of this scale to have to change their business plan if the economic circumstances dictate. But I think annual is is is reasonable.
I would not expect either the Secretary of State nor indeed the board of GBR to tolerate any circumstances where it didn't propose an annual business plan. If I may, I'll try and find my place on amendment 66. I'm glad that noble Lord agrees with me that GBR business plan is where KPI should sit. However, they need to evolve over time, whilst. By contrast, contrast GBR duties are unchanging and a core list of ambitions guiding GBR over the next decades.
While business GBR business plan is where it will both show how it will discharge its duties and set out its KPIs, there is an important distinction between them. Duties and KPIs are not the same thing. KPIs need to be driven by the specific, often numerical outcomes sought by government, whereas duties of behavioral expectations. Some of the duties would be impractical to even turn into measurable KPIs. How would GBR measure if it's provided businesses with certainty or if it's acted in the public interest? So I believe it's right that the two should not be statutorily linked.
Amendment 87 proposes action about about the about the chief Chief Executive I, I, I would hope that the noble Lord understands that primarily the powers of the Secretary of State rest with the right in the end to dismiss the chair of the chair. failed to do the job that the. That the Secretary of State expects of the chair and the board. And that might well be the case if the Secretary of State believed in the end that the chair failed to challenge the executive and the chief executive effectively, the Secretary of State will also have.
As we've also discussed this afternoon, the right to issue legally binding directions to GBR. And those could be where immediate remedial action is required and the Secretary of State could remove accounting officer status from the CEO, effectively taking financial management, the company, into the department. But what I would say.
But I don't see any conflict between GBR having a long term freight target. It may have to take different action if if the economy or the or things which are transported by rail change over time. And there's been no greater case of that than the case of coal and steel, which were once a significant part of railway freight, which but which today are virtually nothing. On the other hand, intermodal, intermodal traffic and and construction materials have vastly increased.
And there's no doubt in my mind that the railway could contribute more than perhaps it's done in the recent past to growing those , growing those particular categories, if it were minded to do so. And that freight target is designed to make it think about how it could do it. So I don't see any any contradiction in that. And indeed it will be like running any other business. I mean, the the noble Lord Moylan referred to his experience at transport for London.
And of course it's exactly the same. It's a large organisation which is contributing to, but to some extent dependent on the economy of London. And that will be true of the railways as a whole. The reason we're discussing these now is because there is no doubt, and I'm agreeing with noble Lord, that there should be KPI KPIs for GBR, and it should be held to account for meeting them, and that in the end it should be in their business plan, which sets them next to the costs that they incur and the revenue that they're going to derive from them in order to in order to achieve them.
I should just go back to the noble Lord Lansley and say that. The paragraph 5.5 brackets three in schedule two says that GBR must keep the business plan up to date. We we we're pretty clear that that means annually it could be more. If circumstances change, it's not unknown for businesses of this scale to have to change their business plan if the economic circumstances dictate. But I think annual is is is reasonable.
I would not expect either the Secretary of State nor indeed the board of GBR to tolerate any circumstances where it didn't propose an annual business plan. If I may, I'll try and find my place on amendment 66. I'm glad that noble Lord agrees with me that GBR business plan is where KPI should sit. However, they need to evolve over time, whilst. By contrast, contrast GBR duties are unchanging and a core list of ambitions guiding GBR over the next decades.
While business GBR business plan is where it will both show how it will discharge its duties and set out its KPIs, there is an important distinction between them. Duties and KPIs are not the same thing. KPIs need to be driven by the specific, often numerical outcomes sought by government, whereas duties of behavioral expectations. Some of the duties would be impractical to even turn into measurable KPIs. How would GBR measure if it's provided businesses with certainty or if it's acted in the public interest? So I believe it's right that the two should not be statutorily linked.
Amendment 87 proposes action about about the about the chief Chief Executive I, I, I would hope that the noble Lord understands that primarily the powers of the Secretary of State rest with the right in the end to dismiss the chair of the chair. failed to do the job that the. That the Secretary of State expects of the chair and the board. And that might well be the case if the Secretary of State believed in the end that the chair failed to challenge the executive and the chief executive effectively, the Secretary of State will also have.
As we've also discussed this afternoon, the right to issue legally binding directions to GBR. And those could be where immediate remedial action is required and the Secretary of State could remove accounting officer status from the CEO, effectively taking financial management, the company, into the department. But what I would say.
15:58
15:58
Speaker 11
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Speaker 11
What what I would say to him about all those things is that actually we're setting the, the, this organisation up. And conventionally, it's the chair and the board that both support, hire and fire the chief executive. And I don't believe that his amendment is the right way of doing this. It should be done through the chair and the board and the expectations of the Secretary of State made through them, and action or whatever action might be necessary.
The chief executive should be taken as a consequence of that relationship on amendment 83. I think the bill already does what I what the noble Lord is trying to achieve. Much of the substance of this amendment is already enabled by the process created by schedule two. GBR is already required to produce a business plan containing all its activity and how it's got to be met, which will be reviewed as we've discussed annually to ensure it's up to date.
Plan will be published, which allows Parliament and the public to hold GBR to account. The oral will monitor GBR delivery of its business plan, and I agree with the noble Lord that transparency is important, but we don't need to hardwire in excessive bureaucracy as this amendment would do. On the Statement of Objectives amendments 59, 60, 62, 64AI can understand the desire to codify the contents of the statement of objectives, but this legislation needs to be drafted to last well as long as the as as long as the last Railways Act has.
And it therefore needs to be open to future governments to suggest their own objectives for the funding period. The Bill, as drafted, provides a suggested list of what could be included, setting a strong precedent for future government but leaving options open for secretaries of state. This is a tried and tested method being the same approach which underpins the periodic review of funding today. The periodic review is widely considered one of the most successful parts of the current regime, which is why the bill replicates the five year length of it.
Similarly, the statement has to be capable of accommodating different approaches based on wider environmental and socio economic circumstances. That's why the current list of potential topics to be covered by, the statement says, serves as a guide for future drafters but does not constrain the government. Amendment 62, I'm afraid I think confuses the funding settlement with the access framework in the reality. In reality, the the expertise about what specific incentives should be set for different operators on different routes is within the rail railway industry.
GBR, in collaboration with industry, should create the performance scheme, not the Secretary of State on Consulting Industry on the Statement of Objectives amendment 64 a. The Bill proposes, and I agree with it, that the better place for industry engagement is on GBR business plan. I absolutely expect both GBR and the Office of Rail and Road to engage with industry on the development of the business plan. This allows industry's view to be fed into the product that's produced in response to the Secretary of State's objectives.
The chief executive should be taken as a consequence of that relationship on amendment 83. I think the bill already does what I what the noble Lord is trying to achieve. Much of the substance of this amendment is already enabled by the process created by schedule two. GBR is already required to produce a business plan containing all its activity and how it's got to be met, which will be reviewed as we've discussed annually to ensure it's up to date.
Plan will be published, which allows Parliament and the public to hold GBR to account. The oral will monitor GBR delivery of its business plan, and I agree with the noble Lord that transparency is important, but we don't need to hardwire in excessive bureaucracy as this amendment would do. On the Statement of Objectives amendments 59, 60, 62, 64AI can understand the desire to codify the contents of the statement of objectives, but this legislation needs to be drafted to last well as long as the as as long as the last Railways Act has.
And it therefore needs to be open to future governments to suggest their own objectives for the funding period. The Bill, as drafted, provides a suggested list of what could be included, setting a strong precedent for future government but leaving options open for secretaries of state. This is a tried and tested method being the same approach which underpins the periodic review of funding today. The periodic review is widely considered one of the most successful parts of the current regime, which is why the bill replicates the five year length of it.
Similarly, the statement has to be capable of accommodating different approaches based on wider environmental and socio economic circumstances. That's why the current list of potential topics to be covered by, the statement says, serves as a guide for future drafters but does not constrain the government. Amendment 62, I'm afraid I think confuses the funding settlement with the access framework in the reality. In reality, the the expertise about what specific incentives should be set for different operators on different routes is within the rail railway industry.
GBR, in collaboration with industry, should create the performance scheme, not the Secretary of State on Consulting Industry on the Statement of Objectives amendment 64 a. The Bill proposes, and I agree with it, that the better place for industry engagement is on GBR business plan. I absolutely expect both GBR and the Office of Rail and Road to engage with industry on the development of the business plan. This allows industry's view to be fed into the product that's produced in response to the Secretary of State's objectives.
16:01
Speaker 14
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Speaker 14
My Lord, may I just say that the minister has said I think the Bill should be amended to say that the business plan is annual, especially as that's the government's clear intention. But the minister has just said the business plan is going to be annual, and it's precisely try to get stakeholder engagement with business away from the annual cycle. The amendment was tabled. So. Could they could the could the minister take account of that? It's not good enough to turn up once a year and have a word with the industry about what your plans are? That's what we're trying to get away from.
16:01
Speaker 11
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Speaker 11
I think I understand what the noble Lord is saying. I'm expecting an organisation of the like, as GBR will be, to be constantly in discussion with the railway industry, the wider railway industry and the supply industry and indeed its customers, simply because actually, as we've discussed, the market will change over time. And I don't I don't see that there's any confusion between an annual exercise of, of, of producing a business plan and the sort of engagement over a, over a prolonged period, which will, which will confirm and vary industry's advice over time about what should be in it.
And I think that's a perfectly natural way of doing business. And if I refer to often, probably to transport for London, that's precisely the way that transport for London did it. The business planning cycle was an annual cycle, but the engagement with those parties who had an interest in both the inputs and the results was an activity throughout throughout the year.
And I think that's a perfectly natural way of doing business. And if I refer to often, probably to transport for London, that's precisely the way that transport for London did it. The business planning cycle was an annual cycle, but the engagement with those parties who had an interest in both the inputs and the results was an activity throughout throughout the year.
16:02
Speaker 14
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Speaker 14
The minister has just changed the story. A moment ago he was saying that engagement with the stakeholders, business stakeholders would be through the business plan. Now he's saying it's not actually through the business plan once a year, because anyway, we don't know it's going to be once a year, but it might be once a year. It's not that it's going to be a continuous process. Well, of course it can be. It can be both.
But and it can be other things, but it's not giving us the level of assurance that and precision that I think noble lords are looking for. And this is I think it's one of our big opportunities to speak up in committee for the interests of the supply chain. There may be other opportunities coming later in other groups. So this is this is the chance for the government to to nail down our interests.
We have we're interested in passengers and we're interested in freight, but we're also interested in the supply chain and trying to secure for them a degree of visibility about the future is, is, is important. And it's what we're getting is not very clear, I'm afraid.
But and it can be other things, but it's not giving us the level of assurance that and precision that I think noble lords are looking for. And this is I think it's one of our big opportunities to speak up in committee for the interests of the supply chain. There may be other opportunities coming later in other groups. So this is this is the chance for the government to to nail down our interests.
We have we're interested in passengers and we're interested in freight, but we're also interested in the supply chain and trying to secure for them a degree of visibility about the future is, is, is important. And it's what we're getting is not very clear, I'm afraid.
16:04
Speaker 11
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Speaker 11
Well, I agree with the noble Lord in as much as the supply chain is crucially important, actually, for much of the supply chain, the thing that really makes a difference with them is the five year periodic settlement. But that highlights actually the need for this engagement to go on both at at the time at which that five year plan is formed and the rest of the time as well. And I don't see any contradiction in those two things happening.
I think I think the, the, the, the, the five year settlement for infrastructure couldn't possibly be properly done without the involvement of the supply chain. But they don't come go away for the next four years until the next one, the the, the dialogue with them is constant. And so it should be. I better make progress, if I may, on. On the noble Baroness Pigeon's amendment 82. I don't often completely disagree with the noble Baroness, but I'm afraid I do here, and I think the reason is because the amendment was fundamentally blur accountability with the railway system and undermine the clear responsibilities in the bill.
I don't think interposing another board between the Secretary of State and and the board of GBR would be the right thing. But I also think that the bill contains a number of provisions such that the Office of Rail and Road and the passenger watchdog would both have many opportunities to provide the Secretary of State with advice before she takes decisions. The reality is this is most likely to have taken advice from either or both of them before any performance matters should escalate to the point of requiring a direction.
Finally, turning to amendment 84. As we've discussed in earlier groups, the government is dedicated to providing a steady drumbeat of publications which will inform the House and indeed this Committee on Progress to establish GBR. I'd encourage the noble Lord to look at the government's policy publication timetable on gov UK, and indeed, I've just written to Noble Lords about the publication of the draft Access and Use policy by Network Rail. Given the ambitious time timeline that we're working to on this, it would not seem to make much sense to divert resources away from the business of establishing GBR to write progress reports, which would largely duplicate existing promotion of government's already making available.
Given what I've said, I would encourage noble Lords and noble Baroness to withdraw their amendments.
I think I think the, the, the, the, the five year settlement for infrastructure couldn't possibly be properly done without the involvement of the supply chain. But they don't come go away for the next four years until the next one, the the, the dialogue with them is constant. And so it should be. I better make progress, if I may, on. On the noble Baroness Pigeon's amendment 82. I don't often completely disagree with the noble Baroness, but I'm afraid I do here, and I think the reason is because the amendment was fundamentally blur accountability with the railway system and undermine the clear responsibilities in the bill.
I don't think interposing another board between the Secretary of State and and the board of GBR would be the right thing. But I also think that the bill contains a number of provisions such that the Office of Rail and Road and the passenger watchdog would both have many opportunities to provide the Secretary of State with advice before she takes decisions. The reality is this is most likely to have taken advice from either or both of them before any performance matters should escalate to the point of requiring a direction.
Finally, turning to amendment 84. As we've discussed in earlier groups, the government is dedicated to providing a steady drumbeat of publications which will inform the House and indeed this Committee on Progress to establish GBR. I'd encourage the noble Lord to look at the government's policy publication timetable on gov UK, and indeed, I've just written to Noble Lords about the publication of the draft Access and Use policy by Network Rail. Given the ambitious time timeline that we're working to on this, it would not seem to make much sense to divert resources away from the business of establishing GBR to write progress reports, which would largely duplicate existing promotion of government's already making available.
Given what I've said, I would encourage noble Lords and noble Baroness to withdraw their amendments.
16:06
Speaker 1
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Speaker 1
My Lord, thank you very much. Thank all of those noble lords who took part in this. I thought, really interesting debate. I think we in my mind, we established, I think, a rather an important 1 or 2 important propositions. The first is that when the government is setting out its statement of objectives in relation to which GBR writes its business plan, it would be helpful if it was as specific as possible about the performance indicators that are to be included in that, and I think my noble friend made a lot of good points where that's concerned.
I made in effect, only one point, which was in amendment 62. I accept that relating it directly to the performance scheme may not be the way to do it. But I do think, like with the question of, you know, how many how many trains arrive within 15 minutes of the timetabled, there are standards that need to be included and that we have those standards in the statement of objectives, I think is really important. The other thing I think we've we've established is the an interesting reflection on the relationship between the business plan and the funding arrangements.
Can I just draw Noble Lords attention? A final point to look at paragraph one of schedule two about funding, because the ORR is setting a timetable, and we've got four components to this. And I have to say, I don't envy the Office of Rail and Road, the process of trying to establish in precisely what relationship these four dates are, because they have to say to the Secretary of State, you've got to tell us what your statement of objectives is.
Then the Secretary of State, you've got to tell us what funding is available, which is a bit of an interesting question, but the answer might be not much, maybe.
I made in effect, only one point, which was in amendment 62. I accept that relating it directly to the performance scheme may not be the way to do it. But I do think, like with the question of, you know, how many how many trains arrive within 15 minutes of the timetabled, there are standards that need to be included and that we have those standards in the statement of objectives, I think is really important. The other thing I think we've we've established is the an interesting reflection on the relationship between the business plan and the funding arrangements.
Can I just draw Noble Lords attention? A final point to look at paragraph one of schedule two about funding, because the ORR is setting a timetable, and we've got four components to this. And I have to say, I don't envy the Office of Rail and Road, the process of trying to establish in precisely what relationship these four dates are, because they have to say to the Secretary of State, you've got to tell us what your statement of objectives is.
Then the Secretary of State, you've got to tell us what funding is available, which is a bit of an interesting question, but the answer might be not much, maybe.
16:08
16:08
Speaker 1
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Speaker 1
And thirdly, the ORR the Great British Railways has to go off on a third element. It has to actually give us the business plan. And then finally, the secretary of State tells tells British Rail and GBR and ORR how much financial assistance is going to be provided. Just make two points. I'm not at all sure why the fourth of those is there in that form, because there's nothing in the schedule which says there is a requirement on the Researchers state.
To provide such a notice. There's no notification requirement. It's simply the power to provide financial assistance . Is there? So I would have thought the Secretary of State might give notification of how much financial assistance, but looking across the whole funding period and having to notify them of what financial assistance is available, seems to me to be a curious requirement. The only other thing.
To provide such a notice. There's no notification requirement. It's simply the power to provide financial assistance . Is there? So I would have thought the Secretary of State might give notification of how much financial assistance, but looking across the whole funding period and having to notify them of what financial assistance is available, seems to me to be a curious requirement. The only other thing.
16:09
Speaker 3
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Speaker 3
If the noble Lord would be willing to give way, I for once will intervene on him. I welcome to the five year funding period which, which, which of which we're now in in control period seven, I think. And actually the process that was described is complex but works remarkably well, which is why the industry and indeed government are wholly aligned with wanting to carry on with it. We, we, I could discuss with him in more detail how it works, but it has actually been generally very effective.
And, and it and it relies on a lot of collaboration between the parties, which is the reason why it's been successful.
And, and it and it relies on a lot of collaboration between the parties, which is the reason why it's been successful.
16:10
Speaker 1
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Speaker 1
I take that point. But of course, that's that's if the financial assistance under this is restricted to infrastructure, which I think we debated earlier just a short while ago. But I do think I do think if there is a requirement to notify the financial assistance. I don't see it at the moment and the minister and might have a have a look at whether such a notification is required. That being the case, I've made my points.
Can I just say one other thing? I won't be here next Wednesday for the for the committee. I do apologize in advance. Endeavour to leave notes with colleagues about any of the amendments that are my responsibility, but we will have the benefit. I will have the benefit of reading back, and no doubt we might have the benefit of Lord Grayling's presence on those amendments in the course of next week, but with that, I will withdraw, if I may beg leave, to withdraw.
Amendment 59.
Can I just say one other thing? I won't be here next Wednesday for the for the committee. I do apologize in advance. Endeavour to leave notes with colleagues about any of the amendments that are my responsibility, but we will have the benefit. I will have the benefit of reading back, and no doubt we might have the benefit of Lord Grayling's presence on those amendments in the course of next week, but with that, I will withdraw, if I may beg leave, to withdraw.
Amendment 59.
16:11
Speaker 9
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Speaker 9
Is it your pleasure for amendment 59 be withdrawn. Amendment is by leave withdrawn. Amendment 60. Lord Moylan not moved 61. Baroness Pidgeon not moved 62. Lord Lansley not moved. Amendment 63. Lord Moylan not not move. That concludes the work before this committee this afternoon. The committee is adjourned.