Passenger Railway Services (Public Ownership) Bill

Baroness Randerson Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Grayling (Con)]

My Lords, I rise along with the noble Lord, Lord Gascoigne, as someone who has worked closely with the new Minister. I congratulate him on his appointment. He knows more than almost anyone about our railway network—the problems, issues and challenges—and, while he may find himself on the other side of the political fence to me, he will be a great asset in trying to sort the challenges of our rail network.

He will know, very much more than anybody else, what the challenges are. He will also know, therefore, that sorting out our railways is not simply about changing the ownership structure. He knows full well, for example, that many of the issues that passengers have experienced in recent years have been laid at the foot of Network Rail—the company he chaired, although it was not his fault, of course—and rightly so. However, all of us involved bear the scars from the difficult times in 2018 with the timetable change. The noble Baroness, Lady Blake, knew well the challenges then, particularly in her role in the north. In the north, they were caused most immediately by Network Rail’s failure to deliver an electrification programme in the timetable that had been committed to, which had a dramatic knock-on effect on the rest of the railway.

Therefore, I am not clear, and it is why I have a lot of sympathy with the amendment from the noble Lord, Lord Gascoigne, why a move of ownership is going to deliver a transformation for the passenger. I hope that the Minister, with his experience, will be able to talk a bit about that as he responds to the debate. Fundamentally, on both sides of the House, we are all about improvement for the passenger, and simply transferring ownership from public to private and private to public does not solve the challenges. Ironically, I was reading at the weekend—and I am sure it is true—that the Government are looking at bringing the private sector in to run Euston station, at the same time it is planning to take the private sector out of the railway to run the trains that go into it.

So I would be grateful if the Minister could set out why he thinks this change will deliver improvement for passengers and why, therefore, the amendment being proposed by my noble friend is wrong.

[Baroness Randerson (LD)]

My Lords, I am in the slightly unusual position of speaking to Conservative amendments that have not been spoken to already. However, I am sure the noble Lord, Lord Moylan, will correct me if I interpret them wrongly.

The noble Lord, Lord Gascoigne, set out the failures of the current system. Prior to the laying of the noble Lord’s amendment, I had taken the theme of this group of Conservative amendments as displaying a welcome, if overdue, conversion on the road to Damascus. After more than a decade of increasing confusion on railway services, declining levels of passenger satisfaction and rocketing fare prices, the Conservatives are actually looking at improving public train services.

Amendment 2 touches upon something with which I definitely agree: the inevitable winding-down effect of a four to five-year transition period. As I said at Second Reading, there is bound to be an impact on staff morale and the inevitable likelihood is that the best staff will move to other industries when faced with an uncertain future. There will also, of course, be cost pressures. For example, there is bound to be a tendency to level up across very different terms and conditions from one employer to another within the train operating companies. Last week, I was speaking to some train operating companies, all of which recognised the problems that will be faced as the Government try to bring together and harmonise terms and conditions without exposing the taxpayer and the passenger to higher costs. Of course, the most obvious problem is how to deal with rest day working. I know the Minister is fully aware of the problems to which I am referring, so I will be interested in his response.

Amendment 26 refers to costs. At Second Reading, I asked questions about several issues, such as station ownership and operation, which were not really answered. I also asked about British Transport Police, which is encompassed in Amendment 40, put down by the Liberal Democrats. The Labour manifesto contained a supposedly cunning plan for low-cost nationalisation, but there are still bound to be significant costs for such obvious things as new livery and uniforms. We all look forward to an integrated fare structure; that, of course, will come with upfront costs.

Amendment 22 refers to the establishment of an independent public body to assess performance, while Amendment 21 refers to an annual report from the Secretary of State. I hope that the noble Lord, Lord Moylan, will explain exactly what he is aiming at in these amendments. One of them asks for the sort of close supervision by the Department for Transport that we have had since Covid, which clearly has not worked terribly well; the other refers to a more arms-length approach. Which of those approaches does the Conservative Party in this House believe will be better?

Liberal Democrats would establish a railway agency —a nationwide public body to act as a guiding mind for the railways, putting commuters first, implementing wholesale reform of the fares system and holding train companies to account. We do not believe that the renationalisation of passenger rail will automatically deliver cheaper fares or better services. From speaking to members of the public, we have concluded that they really do not care who runs the railways; they just want cheap, efficient and reliable services.

I do not doubt the Government’s good will or their wish to make this huge change, which we all want to happen. However, as a signal of their intent and an upfront signal to the public, I hope the Minister will speak with the Chancellor of the Exchequer to ensure that in next week’s Budget, we have a fare freeze and the public see from the start that there will be a difference under this Government.

[Lord Berkeley (Lab)]

My Lords, the amendments in this group are all designed to try to get some information from the Government about the effect of the changes in this Bill. Will it help the passenger—as well as, I hope, the rail freight customer—and will it help with the costs? Several noble Lords have referred to the issue of costs on the railway, which is very serious; I shall probably come back to that later.

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[Baroness Randerson (LD)]

My Lords, as a Great Western passenger, I wish I could speak as glowingly as my noble friend Lady Scott has done about Greater Anglia. GWR is known fondly to its passengers as “Great Western Roulette”. Will it or will it not turn up? How late will it be? Will it have five, eight, nine or 10 carriages? I can see people for whom that rings a bell.

The Liberal Democrat Amendment 1 turns on its head the Government’s proposed time-served system, which noble Lords have been discussing. In some ways, Amendment 48, in the name of the noble Lord, Lord Liddle, addresses the same issues. This is really about natural justice. Why should a poorly performing franchise be allowed to continue while an excellent one is terminated? Bear in mind that we are not bothered about the franchise owners; we are bothered about the passengers who have to suffer the service it provides. Why should passengers be denied reliable services?

There are two serious problems with the Government’s scheme. By chance, as has been said by several noble Lords, Greater Anglia, a profitable and very good operator, will have its contract terminated at the start of the process, while Avanti, whose performance is poor, will outlast almost all other train operators. That is topsy-turvy logic. The rail industry will lose the example set by Greater Anglia at a time when it, as a company, could be setting the new standards we all hope will be achieved by the new integrated public sector railway.

By imposing this rigorous approach to nationalisation at all costs, and nationalising even those train operators that are performing very well, the Government’s attitude is really inconsistent. They are not applying the same logic to roscos or freight services, or even to open-access operators. It is simply illogical to insist on the upheaval and dismantling of Greater Anglia, for instance, while regarding an open-access operator such as Grand Central as quite acceptable.

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[Lord Hendy of Richmond Hill (Lab)]

On my noble friend Lord Liddle’s comment, I am sure the Secretary of State would like to make her own decision, but I am pretty confident that the work done in the department to assess whether Avanti is meeting its performance standards has taken into account what latitude there is. I suspect there is very little because of the contract terms.

I will write to my noble friend Lord Berkeley, and make the letter available, about the causes of delay on the west coast main line and to Avanti’s services. It is, of course, as he knows, undoubtedly true that every set of delays on the railway is due to a combination of the train operator and the infrastructure, and the way in which those parties manage their interaction with each other. When the Secretary of State and I have seen train companies about their performance, we have insisted that they are always accompanied by the relevant route directors of Network Rail. One of the issues is the root cause of the delays; another is how well those parties interact to resolve them. One of the issues on the west coast main line is that Network Rail’s control point, not unreasonably, is at Rugby where the signalling system is, Avanti’s control is in Birmingham and its train crews are managed from Preston. I would not run a railway like that myself.

[Baroness Randerson (LD)]

Going back to the contracts that are performing well, what is the Minister’s view on emergency situations, such as the recurrence of Covid and lockdowns? Would an existing contract, as currently written, enable an extension if the Government felt they needed it, or would they have to come to an end, so that we have to go through a fresh bidding process, come what may?

[Lord Hendy of Richmond Hill (Lab)]

It varies in accordance with the particular train company. Some of them are coming to a natural conclusion, others have break clauses that enable termination and, in a limited number of cases, there are some choices that could be made. To that extent, we will have to make them.

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[Lord Berkeley (Lab)]

My Lords, I will follow on from the interesting contributions from the noble Lords, Lord Lansley and Lord Young. I understood that Ministers had accepted that open access operators will be able to continue, or new ones may be able to come. So I have two questions. As the noble Baroness, Lady Scott, said in her introduction to her amendment, Greater Anglia is contributing quite a lot of money each year to the Treasury. Presumably it could ask to convert that service into an open access service and keep the money, and that would presumably be all right and the Treasury would lose out. I would be interested to hear my noble friend’s view on that.

If there is a new service, as one of the noble Lords said, that an operator of some description thought would be a useful one to introduce but which the new GBR thought was not appropriate, presumably there would be no reason why the new operator could not submit an application for open access, as happens at the moment. It does not have to be a long distance one from London to Blackpool; it could be a short distance one. How would that be seen by the Government. Would they welcome it?

[Baroness Randerson (LD)]

My Lords, this has been a very interesting group of amendments to debate so far, and I am very taken by the latest thoughts from the noble Lord, Lord Berkeley, on playing around with the definition of open access operators and what will be accepted. I was interested, too, in Amendments 28 and 29 and the thoughts of the noble Lord, Lord Young, who is always very thought-provoking. His amendment, as he said, is very much the obverse of the ones put down from these Benches. I urge the Government to look at this and allow themselves the flexibility to change the order of nationalisation in order to allow good franchises to flourish and to give themselves time to unravel privatisation more slowly and more logically. It has to be more than just, “This was in the manifesto and therefore it will happen whether or not it is logical”.

I am really sorry that the noble Lord, Lord Liddle, is not in his place, because Amendment 35 is fascinating. It refers to a broader definition of what a public sector company should be, so that it includes public/private partnerships and co-operative ventures. I do not need to remind noble Lords opposite that some of them have been, or may still be, members of the Co-operative Party. As Liberal Democrats, we share an enthusiasm for co-operatives as a form of company and operation. I can envisage that a smaller rail line, perhaps in a rural area, would work very well on a co-operative or a public/private partnership basis. After all, it would bring in fresh investment without, in any way, undermining the Government’s commitment to a nationalised structure overall for the railways.

Finally, I urge the Government to look again at their plans and the precise terms of the Bill through a post-Covid lens. Covid caused the collapse of the railway system, necessitating a whole new approach to franchising for the train operators. It could happen again, either for similar reasons or as a result of a financial crisis, and I urge the Government to look again at the terms of the Bill. Have they allowed themselves sufficient flexibility to cope with the unexpected, to allow rail services to continue to operate even if there is a series of unlikely events that have upset the market for those services?

[Lord Moylan (Con)]

My Lords, my noble friend Lord Young of Cookham said that he thought that the Government’s determination to trammel itself in the way that Clause 2 does was ideologically driven—a commitment to a certain vision of the railways based essentially on a political ideology. I would not be so bold as to disagree—he may well be right—but there is another way of looking at this, which I referred to at Second Reading. What is really driving the Government’s approach to this is that they have absolutely convinced themselves that the only way in which the railways can operate is if there is a single controlling brain, so that every train run in this country for passenger service purposes is run by Great British Railways, and that this body will be the sole provider of railway services.

This is a truly ideological obsession. It is almost a psychological fixation that appears to have gripped the Government, and it needs to be tested. Questions are being asked from every side of the House about its practical effects, and we are getting no answer except, “It’s in the manifesto”, which really is no answer to a passenger standing on a platform waiting for a train that was operating perfectly satisfactorily under private ownership and is now simply not arriving.

I turn first to Amendments 4, 10, 14 and 15 in this group standing in my name. If I had written the explanatory statements rather better, Members would understand—perhaps they do—that these four operate as one. They are consequential on each other and have a single effect, which is to say that the Secretary of State in awarding new services must put them out to tender but on a “concession” basis. Amendment 14 defines a “concession” as

“a contract under which the franchising authority specifies rail services to be provided by a private sector entity and retains the risk of fluctuations in the receipt of fares”.

In other words, this amendment does something that Transport for London has done with great success in relation to buses, London Overground rail services, the Wimbledon tram and the Docklands Light Railway. They are all operated on this basis and although there might be complaints from customers about this, that or the other, there are no complaints about the basis on which the services are operated contractually. Of course, TfL has chosen to brand them all under its own branding, so members of the public and passengers are often not even aware that they are operated on this basis. We have a system that works and that we should consider very seriously by contrast to the determination of the Government that all these services are to be taken in-house and run by a single employer with a great, single, controlling brain.

Amendment 14 does something else: it is in conformity with the Williams review, which I thought was the plan that there was, generally speaking, consensus that we should operate to. There is no other plan or document of any weight or substance that has been produced as a result of an independent review for the future of the railways. When I drew attention in our last debate to what is said on page 55 of the Williams review about the concession model being the pattern taken from TfL that should be used nationally, there was a slightly astonishing intervention from the Minister in which he said that Mr Williams no longer thought that, because he had rung him up and said that we need to have it nationalised. How much else in the Williams review has been vitiated by random phone calls made by the Minister to its author? How much is left of the Williams review, if it is capable of being rewritten by the Minister on the basis of claimed phone calls with Mr Williams?

It happens that Mr Williams and I served together on the board of Transport for London when the Minister was its commissioner. I have to tell him that if I were to look into the contacts in my telephone I think I would find that Mr Williams’s telephone number was in my telephone as well. It is perfectly possible that we could pursue this debate on the basis of various individual and private phone calls that we had had with Mr Williams about what he actually meant, what he thinks now, and whether his view has changed —and then what will be left of this report? Without this report, there is no plan. The Government are, it turns out, now inviting us to take a step completely into the dark. It is not just an act of faith, as I said on an earlier group, that they can run the trains better. It is a belief that they are going to give us a better plan for the future, but that they cannot tell us what the plan is, whereas at least previously they had some basis for saying what it would be. The whole thing really is turning into the most dreadful shambles.

I would like to know why concessions do not work, why something so successful in London will not be allowed, and why what was recommended by Williams is not allowed. I do not, I am sad to say, expect to hear the detailed explanation from the Minister that those questions deserve. The other amendments in this group have similar effect.

My noble friend Lord Lansley would like the Government to have the power, where they choose to, to go out to tender and allow some of these wicked private entities to submit tenders. I may myself be wicked when I say that many of these private entities are not very private—some are the subsidiaries of our great European railway friends. They are state-owned bodies from Europe. Who knows whether the Prime Minister, as he creeps towards a great reset and love-in with the European Union, would not find it quite useful to be able to say that the Italian railways, Deutsche Bahn and Renfe could bid for services running on our railways—just as they can at the moment—and that they are not going to be kicked out of Britain? “Mrs von der Leyen, we are going to let them back in.” Would not that little bit of flexibility that my noble friend Lord Lansley would like to be able to give to the Government possibly be rather welcome in the future?

My noble friend Lord Young of Cookham made a good case for his amendments. I echo the comments of the noble Baroness, Lady Randerson, who said that it is a great pity that the noble Lord, Lord Liddle, is not here to speak to his very intriguing amendment. To a large extent, the argument for it was made very well by my noble friend Lord Young of Cookham.

The possibilities of collaboration with the private sector—indeed, with community groups and, when we come to later amendments relating to devolution, local authorities and local government—are all worth exploring if we are going to reform our railway. All of these are being shut off and closed down now by the word “only”, which the noble Lord, Lord Lansley, and others are effectively suggesting be deleted.

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[Lord Young of Cookham (Con)]

My Lords, I support the point made by the noble Lord, Lord Berkeley, about the potential conflict of interest under the new scenario: we will have Great British Railways, with a single operating mind, carrying all the revenue risk for passenger train operations, while at the same time there will be open-access operators and freight operators bidding for a limited path on the railways.

The former Secretary of State said:

“I shouldn’t need to approve whether a passenger train ought to be removed from the timetable to allow a freight train to run instead, as I was doing earlier today”.


The question is: who is going to make that decision in the future? If it is going to be GBR, as the noble Lord, Lord Berkeley, said, there is a clear conflict of interest; the company would have an interest in the passenger train operator having precedence in order to secure the revenue. That may be in conflict with government policy, which is to promote the transfer of freight from road to rail. Surely it is important that at the moment, the train operator cannot insist that he has a particular path for his train: he has to bid either to Network Rail or to the ORR. Who is going to make that decision in the future? Will it be a domestic one within GBR? In which case, how will the conflict of interest raised by the noble Lord, Lord Berkeley, be resolved in a way that is satisfactory for both the open-access operator and the freight train operator, which may find that they do not have the paths they wanted?

[Baroness Randerson (LD)]

My Lords, this small group of amendments addresses a number of issues that inevitably raise questions, because this very tightly drawn Bill provides no hint of how they are to be dealt with. I participate in this debate with some temerity following contributions by the noble Lord, Lord Berkeley, and my noble friend Lord Bradshaw, who know so much detail about the freight industry.

Liberal Democrat Amendments 40 and 41, to which I have added my name, are therefore probing amendments looking for details of government plans, which I hope the Minister can supply today. There are thousands of jobs and potentially billions of pounds of investment riding on the Government’s answers to these questions.

Amendment 40 is about a very specific issue but, as my noble friend Lady Pidgeon has emphasised, the role of the British Transport Police is vital, providing the rule of law on our trains. It is important to remember that the rule of law provides consumer and passenger confidence. Those of us who are older, younger or weaker are particularly dependent on the good offices of the BTP because they provide the assurance that people need before they are prepared to travel on our trains.

I emphasise that, as my noble friend said, British Transport Police funding has been provided virtually unseen from within the industry for a very long time. The total amount of money, at nearly £500 million a year, is not inconsiderable. It is therefore important that we have a clear answer now from the Government about they intend to deal with BTP in the future. In particular, how will it be overseen? Will that be with independence and at arm’s length from the Government? Which body will do that supervision?

Amendment 41, on freight, deals with a much more substantial and complex issue, because the freight industry is so complex. As the noble Lord, Lord Berkeley, said, it is essential that the new system be set up to encourage rail freight to improve its efficiency. That will be difficult, as he emphasised, because a centralised, nationalised Great British Railways will be bound to feel pressure to prioritise passenger services. We have crowded tracks running at capacity. We have vocal passengers who want trains at a time and a frequency convenient to them. We have a Government who have sponsored a nationalisation project, and their reputation will be damaged if passengers’ interests suffer. We also have a Government who emphasise that they are facing a financial black hole. Will they be willing to invest in track and signal modernisation of the sort outlined by my noble friend Lord Bradshaw, to benefit freight rather than passengers?

I fear that freight could rapidly become a poor relation, so I am keen to hear details and reassurance from the Minister. I thank him for his letter, but I point out that it says that next year’s railways Bill will “enable” the growth of freight. I emphasise that I would much prefer a duty to promote the growth of freight, rather than simply enabling it.

[Lord Moylan (Con)]

My Lords, I shall speak first to Amendment 40, concerning the British Transport Police, in the name of the noble Baroness, Lady Pidgeon. I associate myself with everything she has said about the importance of the British Transport Police in maintaining safety and law on the railway network and indeed in promoting a sense of safety, which is almost as important. That is particularly true, if I may say this, for women travelling on the railways, perhaps on their own. If they do not feel safe, they will not travel on the railways, it is as simple as that, and the British Transport Police have an important role to play in that regard. Fortunately, there is generally a good record of personal safety on the railways, but we want to see how the Bill will enhance that.

My figures may be terribly out of date, but when I was last involved, half the funding that the British Transport Police received came from Transport for London for services in London, and the rest was spread throughout the rest of the country. I will not say that the railway companies were not procuring enough British Transport Police to do the job—the test of that, of course, is whether there is criminality on the system—but they were not procuring at the same rate of coverage that Transport for London was procuring at. This is an opportunity for the Government to say, as they take control of the companies, how they are going to ramp that up and what investment they are going to make in it. I hope to hear from the Minister on that point.

A very interesting constitutional point was raised by the noble Baroness, Lady Pidgeon, which I had not heard expressed in any way before: how is the British Transport Police Authority to be constituted? At the moment it is constituted in large measure through representatives of the train operating companies. If there is effectively only one train operating company, which is the Government, how is it going to be constituted? As the noble Baroness says, it operates out of the Department for Transport. Is it going to become the first government department in this country—I think this is correct—to have its own police force? Even the Home Office, out of which ordinary policing operates, does not have its own police force; they are all accountable to police authorities or, now, to elected police and crime commissioners in appropriate areas, or to the Mayor of London in his capacity in London, and so forth. Could we end up in a constitutional nightmare here, a car crash that the Government have not properly thought through, as a result of this proposal to nationalise all these railways? Again, I would be interested to hear what the Minister has to say.

Turning to freight, I share the concern of the noble Baroness, Lady Randerson, about expressing too definite opinions on this topic, especially in the presence of the noble Lords, Lord Berkeley and Lord Bradshaw, who have such considerable and long-term prior knowledge of it. I have some slight sympathy with the Government on the point because, while I may be wrong about this, I understand that there are freight companies that have rights to paths which they do not use but will not relinquish because they may be useful in the future—and why should they relinquish them?—while, at the same time, they might want to have access to other paths which they cannot get hold of. This is slightly a mess, so perhaps there is some work for the Government to do here to sort it out.

The previous Government also had, as I understand it, a rail freight growth target: to increase rail freight by 75% by 2050. So far, that has not been mentioned and we have not heard yet whether the new Government wish to commit themselves to that target. Again, there is an opportunity for the Minister to say that that is his target when he gets to his feet. We would like to hear more about that.

The Minister may want to say that some of those points can be addressed in the future Bill—the Bill we are promised that is further down the road—but he cannot say that of the points raised by my noble friend Lord Young of Cookham and the noble Lord, Lord Berkeley, both of whom made the point that the way in which this is now proceeding, by contrast with the Williams report, creates a fundamental and ineradicable conflict of interest in the role of Great British Railways. When it was the body—the great controlling brain, as I referred to it—that was going to establish who could run what railway services where and, where appropriate, award franchises or concessions for passenger railway services, while also allowing open access and allowing freight services to take place, it could do that from a disinterested position. It would be allocating resource presumably according to some sort of rational principle that could be explained and interrogated by interested members of the public and other parties with a stake in the matter.

Now, of course, it is always going to be the case that Great British Railways will also be the operator of the passenger services—so what about the other services? What about open access and, most particularly as far as this group of amendments is concerned, where does freight get a look in? How does it make its case and to whom does it appeal if it feels it is unjustly done by? Is it to be allowed to appeal only to the courts or could there be a truly independent body outside Great British Railways—perhaps the Office of Rail and Road; I do not know—to which appeals could be made and which would decide and allocate these paths, where they are constrained, on a rational basis?

We have no idea about this because the Bill, as I said earlier, is being rushed through for manifesto and publicity reasons—for headline reasons, fundamentally—without these crucial questions that it throws up being answered. They are not my questions; I did not table these amendments. They come from Benches on all sides of the House. These questions are being thrown up and the Government have no answer, except the tune we are getting accustomed to, which has as its first verse, “It’s in the manifesto” and as its second verse, “We’ll tell you when we get to it some time next year”. I hope we can do better than that when the Minister gets to his feet.