Shadow Great British Railways: Chair Appointment

Baroness Randerson Excerpts

Tuesday 12th November 2024 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

Yes, it is a reasonable thing to do. This is not the chair of Great British Railways, which will be established after the substantive railway Bill in due course; this is an arrangement to bring some benefits to the railway to counter the now 31 years of fragmentation and balkanisation, and, in particular, to bring together the three parts of the already publicly owned railway: the rail services division of the Department for Transport, Network Rail and directly operated holdings. It is a very reasonable thing to do and it will deliver results.

[Baroness Randerson (LD)]

My Lords, Laura Shoaf has been chief executive of West Midlands Combined Authority, and we on these Benches are pleased that she brings deep experience of devolution, which we hold dear as one of the solutions for the future of our railways. Passengers are impatient to see signs of improvement, so can the Minister assure us that the promise to establish a passenger standards authority will be kept? Will the Government also consider establishing that in shadow form, so that it can get on with the job of improving standards for passengers as soon as possible?

Passenger Railway Services (Public Ownership) Bill

Baroness Randerson Excerpts

Report stage
Wednesday 6th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, Amendment 1 is impossible to disagree with. It is fundamental to the survival of our railways that things improve. They have reached crisis point because of decades of under- investment, poor management and poor political decision- making. However, the presence of this reminder might be useful for the Secretary of State. It might be a statement of the obvious in some ways but useful for her because the big problem with nationalisation is that Governments in the UK have consistently failed to invest long-term. We can improve buses by investing within a couple of years, but when you invest in the railways it takes a couple of decades for it to make a big difference. That is the Government’s challenge in renationalising the railways and the buck now stops with them.

On Amendment 16, I understand and strongly support the wish for thorough and transparent public consultation on the contents of the forthcoming rail Bill. I remind noble Lords of the example of the public consultation undertaken by the previous Government on their plan to close ticket offices. It led to a massive national outcry, forcing them to drop the plan, so I am a great believer in the impact of public consultations. The Bill that we are expecting in the near future is considerably more complex, but the problem with this amendment as written is that it extends the timescale that it all will take. It will take far too long before we get the legislation that we all hope will make the big difference. I will listen very carefully to the Minister. We hope that there will be some legislation by the end of next year at the very latest.

One way or another, the Minister has been associated with plans for the future of the railways and the creation of Great British Railways for some years now. There is surely nothing raised in our debates that he has not thought of, he has not worked on, or that would come as a surprise to him. He has been exceptionally generous with his time in cross-party discussions in the last couple of weeks. I urge him to explain when he replies what the timescale is likely to be and to assure us that there will be full consultation and that there is a grand plan.

[Lord Moylan (Con)]

My Lords, we have had lengthy discussion on this Bill in Committee, and it is not my intention today to repeat unnecessarily the arguments and the evidence adduced during those debates. The longer that we went on in Committee, the clearer it became that this is a very bad Bill that has been accompanied by a degree of arrogance. I do not say this as a personal comment on the Minister; it is on the part of the Government in general. There has been a tone, sometimes said quite explicitly, of “We won so we can do what we want”. That is an argument. It has some merit, but the merit that you would expect to find in an argument made in a playground.

Another type of arrogance has also been underlying our debates: “We want a better railway, but we are not going to tell you what it will look like. That’s all going to come in the future—don’t ask your pesky questions now. That will all be dealt with, and you have to trust us”. That is not a basis on which the House should be passing this type of legislation. The amendment in the name of the noble Lord, Lord Berkeley, goes some way to address that latter point. We all have a common desire for a better railway, but we will no doubt disagree on the details of how it is to be achieved. My noble friend Lord Grayling said that these are very complex issues. I do not think that anyone would disagree.

Therefore, on the prospect of having the Bill published in draft for pre-legislative scrutiny, I disagree with the noble Baroness, Lady Randerson. I do not think that will add materially to the time taken before legislation is enacted because it is likely to produce a better Bill when it eventually arrives in your Lordships’ House, one that can go through faster and be implemented better with better outcomes. It is the outcomes that we are interested in, not a particular timescale, although like her I will hold the Government to their undertaking that a Bill will come forward within 12 to 18 months.

It is more important to get the outcome right than to worry about a few weeks here or there, which is as much as we would be discussing in relation to the amendment tabled by the noble Lord, Lord Berkeley. I am deeply disappointed that he is not going to press it to a Division as I would be very tempted to support it if he did. However, I expect and hope that the Minister, when he stands up, can satisfy the noble Lord, Lord Berkeley, by saying that there will be some sort of pre-legislative scrutiny of the very large and complex Bill that he is expecting to bring before your Lordships’ House in the next 12 or 18 months, to use his phrase.

The amendment in the name of my noble friend Lord Lansley is very good and commends itself. Like him, I would like to hear what the Minister says in response. I note that my noble friend does not intend to press it to a Division.

Amendment 1, tabled by my noble friend Lord Gascoigne, is indispensable. A number of things are missing from this Bill. A number of important parties have been wholly excluded. One of them, for example, which we will come to later in debate, is the staff. There is no reference to the staff in this Bill. We take for granted that they will be TUPE-ed. That basic legislative cover is there and does not need to be stated. They will not lose their jobs as a result of this but will be TUPE-ed over. However, has any consultation been carried out with the staff? You would expect that normally, would you not? Do they want to change their employer? Do they want to be working for the Government? They may all say yes, but one would have thought that in an undertaking such as this the Government would have bothered to ask them. There has been no consultation with the staff.

The other glaring omission from the Bill is, of course, the passenger. It is a passenger railway services Bill, yet it says nothing at all about the passenger. My noble friend Lord Gascoigne is attempting to put this lacuna right and to put the passenger back at the head of the Bill, as the driving force of what the Government are trying to do and to require Ministers to test their actions under this Bill against the standard of whether it will improve matters for the passenger. That is why, if my noble friend intends to divide the House and seek its opinion on this matter, I recommend that we support him.

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[Lord Moylan (Con)]

My Lords, in the course of debate at Second Reading and in Committee, numerous noble Lords drew attention to the fact that the manner in which the Government are approaching the termination of franchises is going to result in some very perverse outcomes. Admittedly, most of the franchises still in existence are relatively short, but the Government—with a view to saving money, as far as I can make out—are determined to terminate them in the order in which the contract falls in.

That has the bizarre consequence that some of the most popular, effective and highly rated franchises are going to be terminated early at the head of the list, while those that are most reviled by the public—I am not going to mention any names in the course of this brief speech—and regarded as being hopeless at what they do will have the longest continuation in existence. It is of course the case that if they fell into default, the Government could terminate them early without expense, but we heard from the Minister earlier that none of them is as bad as that. None the less, some of them are very bad indeed.

This case was made most compellingly at Second Reading by the noble Lord, Lord Browne of Ladyton, but it has been made by other noble Lords as well. I think there is strong demand among noble Lords for the worst franchises to be brought to the head of the queue. My Amendment 2 would have the effect of bringing that about: the worst-performing operators would be terminated first, while services that are currently working well would be enabled to continue. Amendment 10 in the name of the noble Baroness, Lady Randerson, has a similar intent and effect. It is drafted differently—it is expressed as providing flexibility to the Government, whereas mine is perhaps a little more mandatory in its tone—but they are similar in various ways.

With the time the Government have had for reflection on the strength of feeling in the House about this issue, they should be able to come forward and say something now that would alleviate noble Lords’ concerns. Otherwise, I will be interested in testing the opinion of the House on my Amendment 2.

[Baroness Randerson (LD)]

My Lords, I will speak to Amendment 2, and to Amendment 10 in my name and that of my noble friend Lady Scott. Amendment 2 was the Liberal Democrats’ Amendment 1 in Committee, requiring the Secretary of State to terminate franchises for default and to nationalise the worst-performing operators first, while allowing train operating companies that are currently working well to continue.

The Minister explained to us, both in this Chamber in response to our amendment and in private discussions, that this cannot be done without major costs to the taxpayer. The existing contracts have been written and signed by the previous Government so as to make it difficult to penalise defaulters. We accept what the Minister says and we are not prepared to cause the taxpayer greater costs than necessary in this process. So, having listened and learned, we turned our amendment around and wrote Amendment 10, which simply proposes giving the Secretary of State the freedom to enable services that are working well to have an extension to their franchise and to continue for a period of time suitable to the Government. Can the Minister explain to us the Government’s approach to this and whether existing contracts could be extended, as our amendment suggests?

Our view is that the Government are going to be hard pressed in dealing with the numerous parts of the rail systems that are failing, and they need to allow themselves a bit of space by letting the bits that are working well continue until they get around to the overall process of nationalisation. The Government’s whole approach has been nationalisation gradually rather than one big effort, and I hope this amendment works with the grain of their intentions.

[Lord Liddle (Lab)]

My Lords, from listening to the noble Baroness, Lady Randerson, I think there is a misunderstanding about what the Government are trying to do. As I understand it as a humble Back-Bencher, we are trying to get rid of the franchising system because, as it is, it does not help us to run a railway in the way we want to. In his opening remarks the noble Lord, Lord Hendy, said that one of the points is to have a simplified fare system that will greatly raise the prospects of increasing passenger revenue and passenger use of the railway, because the fare system is an obstacle to that. We cannot do that while we have the franchise system, so we have to get rid of the franchise system.

If there is any fault in what is happening at the moment, it lies on the opposite side of the Chamber and with the Transport Ministers who gave operators such as Avanti the very loose targets that they have to meet. I advocate that we should be tougher with Avanti, have it in every month, and if things have not improved, we should take the risk of taking the franchise off it and saying, “See you in court”. That would be my approach, but the problem is what the Conservatives have left us with, and that is very difficult to solve. I do not support this amendment, which would result just in extending the existing system.

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[Lord Snape (Lab)]

My Lords, I rise to say a few words on Amendment 13 and the future of rail freight once this legislation becomes law.

Traditionally, on nationalised rail in the past, freight was often seen as the poor relation. Trying to attract people to the freight side of the former British Rail, particularly getting management involved, was much more difficult than the passenger side. There was a bit of glamour about fast passenger trains that the freight network never shared. My noble friend the Minister spoke in Committee about the Government’s intention to increase rail freight by 75% by 2050. I would be grateful if he could provide some clarification as to how that will be done.

I look at railway operations from time to time on the website OpenTrainTimes—I am a devotee, and this is a terrible confession to make. I note how close to the timetable rail freight adheres these days, which was not necessarily true in the past. There was a welcome introduction of relief from access charges for new business, as far as rail freight was concerned. Can my noble friend tell us whether there is any intention to extend that? Indeed, we should go further. In Committee I pointed out the imbalance in taxation in this country that makes it cheaper and more attractive to buy a fleet of lorries and put them on our road network—where, of course, the infrastructure is paid for out of general taxation—than it is to run rail freight, as Royal Mail has, deplorably, just demonstrated.

While I would not seek to pin down my noble friend the Minister as far as future taxation policy is concerned, I certainly hope he can press Treasury Ministers to see whether something can be done in future to rectify that imbalance between rail and road. In speaking to Amendment 13, I hope that my noble friend can give me some reassurance as to how this envisaged increase in rail freight—welcome though it is—will be implemented.

[Baroness Randerson (LD)]

My Lords, these three amendments deal with crucial aspects of the running of the railways and they are issues that we on these Benches probed in Committee. I certainly anticipate that, when we get the full Bill next year, there will be long and vigorous debate and discussion about them and I have serious reservations about the possible plans. However, we on these Benches accept that, however concerned we are about freight or open access or competition, the Government have chosen to write a very tightly drafted Bill and to separate ownership from operational organisation in that Bill and it is not appropriate to try to write, in a rather haphazard way, the big, final Bill on Report in this House at this time.

[Lord Hendy of Richmond Hill (Lab)]

I thank noble Lords for their amendments in this group. In response to Amendment 3, from the noble Lord, Lord Lansley—and I thank him for our discussion a few days ago— I will highlight two important ways in which this Bill promotes competition.

First, there will continue to be huge opportunities for competition between businesses in the supply chain which publicly owned operators and Network Rail will continue to depend on. I was speaking this morning at the Railway Industry Association’s conference and it welcomed clarity about the Government’s intentions with enthusiasm, because it knows as well as we do that the railway, after six years of being promised reform, needs to understand what reform might look like in order for its businesses to prosper. Public ownership and our plans for GBR to provide long-term strategic direction for the whole railway will give greater clarity and certainty to businesses in the supply chain and so will support healthy competition.

Secondly, in relation to competition between train operators, the Bill preserves the existing arrangements for open-access operators. Open-access services are the only source of meaningful competition between operators on today’s railway, and this Bill makes no changes to the way in which open-access applications are treated by either Network Rail or the independent regulator, the Office of Rail and Road.

Having set out how the Government’s approach is consistent with a duty to promote competition, I also note for completeness, referring to the propositions of the noble Lord, Lord Lansley, that the Section 4 duty applies to the Secretary of State only when she is exercising certain functions under the 1993 Act. It does not apply to the exercise of her functions under Sections 23 to 31, which are the franchising functions that are amended by the Bill. As such, there can be no question of this Bill impairing the Secretary of State’s ability to comply with the Section 4 competition duty.

Turning to Amendment 17, tabled by the noble Lord, Lord Moylan, open-access operators are a valuable part of the system and will remain so following this short Bill. Looking ahead to the wider railways Bill, we see a continuing role for open-access services where they add value and capacity to the network. I will say more in a moment about how their interests will be protected. In the meantime, I reiterate that the current short Bill has no impact on open-access operators, the services they provide or the process by which they can secure rights to operate on the rail network. For this reason, the report required by this amendment would serve absolutely no purpose; the Bill plainly has no impact.

Requiring this report—not just once but every single year in perpetuity—would simply place an additional reporting burden on Network Rail and the Office of Rail and Road, and potentially also on open-access operators themselves if they were each required to provide information about their services to inform each report.

Finally in this group, Amendment 13 deals with freight. My noble friend Lord Berkeley is a staunch advocate of the rail freight sector and I hope that I can reassure him and the noble Lord, Lord Moylan, about the Government’s intentions. The Government hugely value the rail freight sector and recognise the importance of its contribution in reducing congestion on our roads and in helping our transport system move towards net zero.

I entirely agree that the Government’s plans for reform under the railways Bill must ensure that Great British Railways promotes growth in the freight sector and must provide suitable protections for freight operators. We will set out our detailed plans in the consultation I have already referred to as soon as we are able to.

In the meantime, I am very happy to reassure noble Lords on three fronts. First, our proposals for the railways Bill will include a statutory duty on Great British Railways. I have reflected carefully on the remarks of the noble Baroness, Lady Randerson, in Committee, and the remarks just made by my noble friend Lord Snape, and as a result I now confirm that this duty will be not merely to enable the growth of rail freight but to promote it. My noble friend Lord Snape referred to variable access charges. I very much agree that we would seek more of that in the future to encourage more freight traffic.

Secondly, the Secretary of State will set a specific freight growth target for Great British Railways. I cannot confirm today the specific detail of what that target will be, but we will set out our plans for that in due course.

Thirdly, I thank my noble friend Lord Berkeley in particular for his comments on the importance of a fair system for the allocation of access. As discussed with my noble friend last week, I have confirmed today that there will be consultation on the Government’s reform proposals, and that the consultation will set out the proposed role for the Office of Rail and Road in the access decision-making process. Any changes will then be set out in the railways Bill itself, so noble Lords will have ample chance to debate these matters before changes are implemented.

I also reassure noble Lords that our proposals for allocating capacity and granting access to the network will include safeguards to ensure that both freight and open-access operators continue to be treated fairly. As I have already said, I would be delighted to meet with my noble friend and other noble Lords with an interest once the consultation has been published, so that we can discuss the details and continue the very helpful conversations we have started here.

Turning to the specifics of the noble Lords’ Amendment 13, the statement required by this amendment would be very short and sweet. There is no need to wait six months after Royal Assent for me to provide this statement; I can give it to the noble Lords now. The Bill is narrow in scope. Its purpose is simply to allow the Government to transfer the operation of franchised passenger services to the public sector. It does not make any changes to the arrangements under which freight services operate. This means that the Bill will not, and cannot, have any adverse impacts on the freight sector or on freight growth.

I have clarified the impacts of the Bill on competition, open access and freight, I have confirmed that we will soon publish a consultation document setting out our proposals for the railways Bill, and I have reaffirmed that these proposals will consider appropriate protections for freight and open-access operators. In light of what I have said, I hope that noble Lords will agree that there is no need to pursue their amendments further today.

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[Baroness Randerson (LD)]

My Lords, this group raises some interesting questions about the various shapes that the ownership of rail services can take. Our interest on these Benches, which we raised in Committee, is specifically the interface between the Government’s picture for national rail services run by the Government and those run by devolved authorities. We are interested in seeing that nothing in this Bill attacks devolution as it currently exists or stops the further development of devolution when it is properly and fully thought through. We are interested in ensuring that nothing in this Bill would prevent current devolution models continuing and new ones from being established. Those devolution models include aspects of private sector involvement.

In addition, in Committee, the noble Lord, Lord Liddle, raised some interesting questions about alternative public/private models and not-for-profit models. I hope that he will speak about those again in this debate.

I will be listening very carefully to the Minister’s response. If I understood him earlier in our discussions about this, he has reassured us about devolution, but I need an additional public response on that issue. With that, I take note of a very interesting aspect of this debate.

[Lord Liddle (Lab)]

My Lords, I will speak briefly, as the noble Baroness, Lady Randerson, mentioned what I said in Committee.

It is right to raise these questions here, but they are questions for the future and for the big Bill that we will get next year. Personally, I do not want to see the re-creation of British Rail. My dad used to work for it, and to my mind it did not have great success as a monopoly nationalised industry. Therefore, it is right that, in the debate about the Bill setting up GBR when it comes around, we should explore the models of ownership that might work on these concessions. I would not rule out co-operative models, or heritage railways, running part of the national network.

My main concern is that we do not get stuck on the idea that this has to be a public sector monopoly. After all, the main thrust of Labour policy, the manifesto on which we won the election and the Budget put forward by Rachel Reeves is that we should use public investment to generate private investment, which will multiply the effects on economic growth. I do not see why the railways should somehow be different from that general principle. I discussed this with the Minister, and he explained how one thing being looked at is using the private development of Network Rail-owned land to improve investment in services. That strikes me as a very good idea and something that we should look at. Noble Lords are right to raise this question, but I hope we are going to have an open-minded debate about it in the coming year.

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[Lord Moylan (Con)]

My Lords, I will speak to the amendments in this group, particularly Amendment 12 standing in my name. I have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Pidgeon. Both amendments are aiming at the same thing.

I said earlier today that there are a number of crucial things missing from this Bill: one is staff, and we will come to that, and another is the passenger, and we have dealt with that. The third is the local authorities, the regions, the metropolitan authorities and devolution as a whole. On this side of the House we have always had great aspirations for the powers of combined metropolitan authorities and regional government, and for their expansion. We are largely responsible for promoting and establishing mayoralties in Manchester and the West Midlands, and in other places as well, such as Teesside and so forth. We have done that with a view to expanding their powers, and part of that was to take on a greater role in transport. We are seeing the beginning of that in Manchester with the buses, and Merseyrail is operated by the combined authority.

In doing that, we are coming from a successful metropolitan model, London, which already has many of these powers. As far as we can make out, these powers, where rail is concerned—not buses—are effectively to be closed down where they do not already exist. They will not be expanded further—the Minister has been quite clear about that—and we will not see the growth of rail on a metropolitan basis.

My Amendment 12 is simpler than that advanced by the noble Baroness, Lady Pidgeon. It would require a preliminary report that outlines the proposed framework in which Great British Railways is going to communicate with local authorities and regional authorities about passenger railway services. That it is going to communicate is something that the Government have committed to, as the Labour Party document Getting Britain Moving said so. There is going to be a great deal of consultation and involvement on every possible front, but, again, we are told that we have to take all of this on trust—that none of this will become manifest until we see the great rail Bill that will come in the future, with a bit of consultation but without seeing a proper text in advance for pre-legislative scrutiny.

We are trying to get it established now, as a principle at least, that the Government can initiate these communications before that Bill comes into effect. They can set up structures that allow those communications to take place; this amendment requires the Government effectively to do that.

If the Minister cannot agree to the precise amendment tabled by the noble Baroness, Lady Pidgeon, I very much hope that he will at least be able to agree to my amendment, which asks him to get those structures—which he envisages happening—in place as soon as possible, so that local authorities and the relevant regional authorities can be involved.

[Baroness Randerson (LD)]

My Lords, in response to the previous group, the Minister emphasised— I think it was in reply to the noble Lord, Lord Moylan—that the concession model would not comfortably fit national rail services. I accept that, and he made my point for me in making his response. The Government must not be allowed to create a national monolith, because one size will not fit all. Part of the variability that we should celebrate in this House is that which comes with devolution, because it fits local areas comfortably.

The Government have made a great deal of the £22 billion or £40 billion black hole and the shortage of public money. Money is undoubtedly in short supply. The Government have also made a lot of their support for devolution, but if devolution on rail transport services is to flourish then there has to be an alternative source of funding and of investment. Local authorities, even on the big scale of metro mayors, will not have the resources to invest in a pure public sector model.

Our concern in our Amendment 7 is that the Government leave themselves the scope to access or call upon alternative models of funding. That would be very much along the lines of what the noble Lord, Lord Liddle, suggested: some form of local partnership or an alternative structure, other than a pure public sector company. As my noble friend Lady Pidgeon says, we will be listening carefully to the Minister’s reply.

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[Baroness Randerson (LD)]

My Lords, I am very pleased to speak in support of my noble friend Lady Brinton and the significant group of signatories to this amendment. This eye-catching group of people campaign on disability-related issues and have made important points in this debate and others aligned with it. In addition to that amendment, which speaks for itself, there is Amendment 11 in my name and that of my noble friend Lady Scott.

Although the experiences of people using wheelchairs and those who do not have perfect sight and so on are very much at the sharp end of passengers’ experiences, the passenger body generally does not have a good experience in Britain these days. There are huge problems for passengers of every age group and every level of physical ability, so there is a massive job to be done in improving that experience. People would put up with a second-rate experience, perhaps, if they were paying second-level fares, but they are paying premium fares for a very rough deal, and those two just do not sit together.

Amendment 11 seeks to establish a body that will work on behalf of passengers: a body dedicated to passengers’ needs and to creating the kind of experience that those of us who are lucky enough to travel abroad on trains know can be achieved with a perfectly normal, non-premium rail service in other countries. If they can do it, I do not see why we cannot.

I am very pleased to see Amendment 15 in the name of the Minister, and I look forward with great interest to what he is going to say about it, because I hope it will reassure us that the Government’s plans include the creation of a passenger standards authority —or something similarly named—that will look out for passengers. I also hope that the Government will produce a commitment that suits the needs of the signatories of Amendment 8.

[Lord Moylan (Con)]

My Lords, I rise with some humility to make a few comments on Amendment 8, which, of course, is one where the noble Baronesses, Lady Brinton and Lady Grey-Thompson, bring an experience that cannot be gainsaid in your Lordships’ House. I said in Committee that I fully acknowledge—from my own personal knowledge—that the Minister is personally committed to seeing improvements in regard to accessibility. I know that it is a matter of importance to him, but none the less, fine words and parsnips come to mind. Action is needed and we need to see real progress. If Great British Railways offers something in that regard that has not been offered before, that would be greatly to its credit.

In relation to Amendment 11, from the noble Baroness, Lady Randerson, this is another example of what the Government could be doing now. It is already the Government’s policy to have a passenger standards authority; they have set that out in the document Getting Britain Moving. Like so many other things, it is wrapped up in a Bill that we are told we might see in 12 or 18 months. I have expressed in Committee a degree of doubt and scepticism as to whether the Government will meet that target. I hope they will, but these are very complex issues, and it could take even longer than that before we see the Bill. Then, of course, it has to be passed and enacted, and then, as I keep pointing out, it has to be implemented. Change on that scale does not happen overnight; it will take several years for it to be implemented. Where in that timeframe is the passenger standards authority going to stand? Will we see it coming to life at the beginning of the process or at the end? Could it be four or five years away before it comes into existence? We have no idea.

The amendment from the noble Baroness, Lady Randerson, would at least say, “This is one thing you can get started on now. You can get it up and running very quickly and it could be something that passengers could benefit from at a really early stage”. I really do not understand why the Government cannot accept, if it turns out that is the case, what the noble Baroness is proposing.

I have no comment on Amendment 15 in the name of the Government except to say that it is, of course, entirely unobjectionable from our point of view.

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[Lord Young of Cookham (Con)]

My Lords, Amendment 9 in my name would require an annual report on public operator liabilities. This might sound rather a dry subject with which to lead the last group on Report, but it is an important one, as it has the potential to totally disrupt the Government’s ambitions for Great British Railways. I begin by thanking the Minister for the meeting that we had last week with the noble Baroness, Lady Blake. He listened patiently to my concerns and was able to allay some of them—though not, I am afraid, this one.

This amendment has grown in prominence since last week’s Budget with its clear fiscal rules, and these were needed to give confidence to the markets that the Government could borrow the substantial sums needed to fund their expenditure; we will debate all that on Monday. In a nutshell, my concern is that, if liabilities which are currently off the Government’s books cease to be off balance sheet, we will revert to the position when I was Transport Secretary, with transport bidding for investment against schools, hospitals and defence and always missing out because of political priorities.

I believe the noble Lord has conceded the risk of this happening, because he has said repeatedly that it will be for the Office for National Statistics to decide in the future how GBR liabilities impact the public sector balance sheet and, specifically, public sector net debt. However, it simply cannot be prudent for the Government to embark on a programme of nationalisation without fully understanding the financial consequences of the ONS classifying GBR as “central government” and without taking the necessary precautions.

We can have a shot at what the ONS will do, because it has stated that in circumstances such as GBR it would run what is called the market body test, and we know that GBR, as the Government envisage it being structured, would fail that test. The integration of track and train within a single entity, as set out clearly in Labour’s Getting Britain Moving document, will mean that GBR will fail the ONS market body test, meaning that its liabilities will be consolidated into the department’s accounts. The Minister has argued previously that the position will not be different from where we are now, but it will be. The creation of GBR as a permanent public monopoly will create a completely different system, which will change the way in which the ONS categorises expenditure.

The Labour document is clear that GBR will be a “single employer”. If so, it will simply fail the market test and its accounts will be classified as “central government”, rather than a public corporation, as LNER is currently. The accounts will then be required to be consolidated into DfT’s accounts, like other bodies that fail the market test, and then classified as “central government”. Crucially, these different accounting treatments will make investment, for example, in rolling stock harder, as it will be in competition with other demands for public investment. The Minister has made it clear that GBR will use its purchasing power to commission new rolling stock through the roscos: rolling stock that will then be leased to GBR. He stated:

“GBR will enable a longer-term view of the rolling stock market, and it will reduce the margins it needs to make”.—[Official Report, 23/10/24; col. 736.]


Those long-term liabilities, totalling potentially some £15 billion, will score immediately on the Government’s balance sheet, increasing national debt, even if the money to manufacture the trains comes from the roscos and is raised on the capital markets.

What I hope the Minister has done—and if he has done it, no one would be happier than me—is get an undertaking from the Treasury that, if the ONS so classifies GBR debt, the Treasury will ensure that the DfT is insulated from that decision. He may have such a letter in his breast pocket. If he has not, we know what is likely to happen because it happened to Network Rail, which was reclassified by the ONS in 2014. The Minister said at our meeting that there was scope for economies at Network Rail when it was reclassified, and I am sure he was right. But those measures were never going to compensate for all the consequences. Network Rail had to divest £1.8 billion by selling property assets; it had to defer renewal works; it had to postpone completion dates; and it had to renegotiate a lot of contracts. Do we honestly want that to happen to GBR?

So, in a nutshell, I am concerned at the gamble the Government are taking with the future of the railways by going back to the pre-privatisation system, where Ministers will have to compete against other spending departments for what the railways need. I beg to move.

[Baroness Randerson (LD)]

My Lords, I have one very brief question for the Minister, following the warnings by the noble Lord, Lord Young. Have the Government looked at this from the point of view not just of what I would call the finished product of the nationalised railway system but of how the categorisation of a mixed economy would work? We, the nation, will be in a situation of a mixed, some-and-some economy for a significant number of years to come.

[Lord Moylan (Con)]

My Lords, my noble friend Lord Young sought throughout Committee, with great forensic precision and courtesy, to get answers to the sort of questions he has been raising today, and I have sought, with rather blundering efforts, to get answers to very similar questions. Here we are on Report, still asking questions that the Government have consistently failed to answer throughout. The reason is that, as I said earlier today, this is a rushed Bill that has not been thought through properly as to its broader consequences. These are consequences not to be dealt with in a future Bill coming down the road but that flow directly from the measures in this Bill. I very much hope the Minister can give some account of them today and explain how the Bill and this nationalisation will affect the public finances in what I call, in my blundering way, balance sheet terms.

There are other items. Since we discussed this Bill in Committee, we and the country have had the body blow of the employers’ national insurance increase delivered by the Chancellor of the Exchequer. Amendment 19 in my name is there to probe what the consequences of that will be for Great British Railways. Will there be a very significant increase in staff costs on the railways as a result, and what impact is that likely to have on the revenue expenditure that the railways can undertake?

In Amendment 18, I ask for clarity on something that also flows directly from the Bill—it is a direct consequence of it, and not something to be dealt with in a future Bill—to do with the harmonisation of staff wages, terms and conditions as they transfer from diverse employers in the private sector to a single employer owned by the state. Drivers and other staff are employed by the railway companies on terms agreed with trade unions but not necessarily the same terms as between one company and another, so drivers’ pay, terms and conditions will vary somewhat between one company and another. The Government have resisted saying, at any point, what they will do about this if they are a single employer. Of course, theoretically, each franchise as it falls due will be placed in a separate company from the others, so it is perfectly possible, legally, for it to have a separate agreement with its staff, different from that which another nationalised company has with its staff, replicating the current arrangements, if it chooses to do so. Is that the Government’s intention, or is there an intention that wages, terms and conditions should be harmonised? If the latter, do the Government imagine that they will be harmonised on the basis of the lowest common denominator, the highest common denominator, or some denominator that might be found in the middle as a sort of average? This is a direct consequence of the Bill, but nothing has been said by the Minister about it.

I come back to the question of staff consultation. There has been no staff consultation about the change of employer. The idea that the Minister might wander around Waterloo station randomly consulting drivers as he accosts them, which he held out when he spoke earlier, is an attractive and enticing one. That is to be encouraged—there are not enough Ministers going around randomly accosting staff whom they employ in the public sector—but it hardly constitutes what might be called formal consultation in industrial relations terms.

I hope I am forgiven for saying this, but earlier I saw the Minister having a quiet chat in a break for a Division with his brother, the noble Lord, Lord Hendy, with his great industrial relations experience. Who knows? Perhaps he was pointing out to the Minister that normal industrial relations consultation requires a little more than simply wandering around and chatting to the staff on the station as you meet them, welcome though that is.

I very much hope that by now, with all the warning that the Minister had about these issues in Committee, he will be able to give an account of himself that will satisfy the legitimate questions of my noble friend Lord Young, and will be able to explain to us what his employment and industrial relations strategy is as a direct consequence of the nationalisations that will take place under the Bill.

Flight Cancellations

Baroness Randerson Excerpts

Wednesday 6th November 2024 Lords Chamber

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

Regulation 261/2004 sets out the rights of passengers in the event of flight disruptions, such as cancellations and long delays. On the noble Lord’s question, I have no current information about changing the arrangements, but I will certainly go away to see what can be done.

[Baroness Randerson (LD)]

My Lords, I am interested in the noble Lord’s question, because one of his predecessors was keen on simplifying and downgrading the compensation in recent months. A key factor in this week’s problems and delays was staff shortages in air traffic control. Can the Minister confirm that the CAA is working to deal with this problem—a repeated problem—to ensure that sufficient staff cover is always available? Can he tell us what conversations the Government have had with our European partners at Eurocontrol, who have emphasised the need for better co-operation across countries to make sure that air passengers fly safely?

[Lord Hendy of Richmond Hill (Lab)]

I can assure the noble Baroness that the Civil Aviation Authority is working on this and that the Department for Transport has had discussions with it. I cannot answer the question about more European co-operation, but I shall write to the noble Baroness to give her some information.

Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024

Baroness Randerson Excerpts

Tuesday 5th November 2024 Grand Committee

[Lord Hendy of Richmond Hill (Lab)]

My Lords, with permission, I shall start the concluding paragraph again.

To conclude, we must act now to address the global challenge of climate change. Historically, the aviation industry has faced difficulty in achieving carbon reductions. However, SAF represents an immediate opportunity to change this. The technology has been proven to achieve significant greenhouse gas savings and it can be used in aircraft today. The proposed instrument will facilitate the adoption of this technology on a large scale, which is essential for achieving net zero and delivering on the manifesto commitment to secure the future of aviation.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for his explanation. There is no doubt about the need for action in relation to aviation. UK aviation fuel use more than doubled between 1990 and 2020, despite efficiency improvements in aeroplane design. By 2050, aviation will be one of our largest emitters. The technological advances are not looking optimistic in relation to battery and hydrogen-powered aircraft. Such flights are a long way off becoming long-distance or even medium-distance in terms of practicality. Combine this with the fact that the lifespan of an aircraft is 30-plus years and this is a huge challenge for us. SAF is far from a perfect answer, but it is all we have and it is welcome to see this draft SI here.

I have obediently read this complex and lengthy document and I have some fairly basic questions for the Minister. First, the consultation took place in 2022, I think. Why has it taken so long to get from the consultation process to this SI? I am aware, when I ask that question, that it is deeply unfair, because this was the previous Government’s problem, but I notice that, at the top of the front page, it says that this draft SI replaces one produced on 20 May this year. Is it substantially different in terms of its impact, or is the difference simply that a couple of mistakes have been ironed out? The length of time it has taken is disappointing, because the previous Government announced “jet zero” with a great fanfare several years ago, and therefore the slowdown is a problem.

Secondly, have the new Government changed the plans for the operation of the new system? They might have changed the SI, but have they changed their plans to any practical extent? Thirdly, the aviation industry has been pressing us for government action to stimulate production of SAF for many months or even years. It has been telling us that, if the Government did not take action rapidly, SAF production would take off, if I can use that term, in our competitor countries, we would fall behind and we would not therefore be a leader in SAF production. I am referring here to the manufacture rather than the use of SAF.

Although this SI seems to encourage the use of SAF, it does not seem to directly provide a mechanism to encourage and support the manufacture of SAF, along the lines of the mechanism that we have been pressed by the aviation industry to adopt. Can the Minister explain whether anything in the Budget will help encourage the production of SAF? I noted that money was available for the aerospace industry and was unsure whether that would cover this sort of thing.

Finally, there is good SAF and not so good SAF, which is referred to in this Explanatory Memorandum. Can the Minister explain how industry checks, and government process checks, will ensure that the SAF manufactured and used in the UK is up to the highest environmental standards?

[Lord Trefgarne (Con)]

I apologise to your Lordships for not being in my place when we resumed following the Division.

I have a simple question for the Minister. Can he say whether all this applies to general aviation, in particular aviation involving smaller aircraft which very often run on aviation gasoline and not the fuel that forms part of this agreement? This is important because the price of fuel is a critical part of operators’ costing, they need to know where and when they can get it and that it will be available when required. In essence, the question is, does this apply to general aviation and to smaller aircraft running on gasoline, as well as to larger ones running on turbine fuel?

Franchising Schemes (Franchising Authorities) (England) Regulations 2024

Baroness Randerson Excerpts

Tuesday 5th November 2024 Grand Committee

[Lord Grayling (Con)]

My Lords, I stand to speak briefly about these regulations, as I was the Secretary of State when the original legislation was passed. While I understand what the Minister is trying to do—he comes at this, of course, from the perspective of somebody who has led the franchising operation in London—I have two big misgivings about this change.

We very consciously extended the franchising powers to the other metropolitan areas and mayoral combined authorities, believing that what was being done in London and the volume of passengers there made that a sensible and realistic option. Despite that, areas such as Manchester took several years before deciding to go down this road. Promises were made about franchising happening quickly, but it never actually did at that time. Of course, the mayoral combined authority areas have the critical mass to do this, whereas the reality is that, on the ground in other parts of the country, the idea that an alternative to what happens now is available through franchising is something of an illusion.

The reality is that local authorities in counties such as Surrey, where I was a Member of Parliament for 23 years, already plan their services because they pay for them where a gap cannot be filled commercially. It is not as if they can somehow suddenly dictate that this route happens and that route happens. Given the low level of ridership, getting any buses at all to run is a challenge and something they have to fund and develop themselves. So I do not really see how expanding franchising to counties such as Surrey will make any difference whatever. That in itself seems to make this change anything but what the Minister has just described it as. Of course, franchising is a realistic option in metropolitan areas and mayoral combined authority areas. That is why we gave that power in the first place, but I just do not see it going to other parts of the country.

I have a reservation that goes beyond simply not understanding why this is necessary. There is a danger that this will hold back the development of bus services for the future. The reason I say that is that it was clear to me during my time as Secretary of State that the future of bus travel in rural areas, in particular, is about demand-responsive buses. It is not about traditional routes going all day long from A to B and B to A. It is about buses that do different things at different times of the day, follow different routes and respond to passenger demand. Effectively, it is about Uber-type operations on a large scale, with routes changing all the time based on who wants to use them.

I do not see how demand-responsive buses fit within a franchise system. I would very much like to hear the Minister explain that to me. By definition, if you are dealing with a private operator that adapts the routes it follows all the time to reflect individual demand on individual days, which has to be the future of buses in some parts of the country, how on earth does franchising fit with that? Yet a local authority may decide on this for political reasons, for example—on the Labour side, there were great debates at the time about wanting to see local authorities have greater control over bus systems—and I fear a conflict between its desire to structure things in some areas, trying hard to do so even when it has to pay for a lot of the routes itself, and not unleashing the potential of demand-responsive buses. They will be the future of public transport in areas of the country that remain ill-served by buses, and where it is difficult to make them operate simply because the sheer demand that exists in our cities is not there.

So I would particularly probe the Minister about how he sees demand-responsive buses working within the system that these regulations create. I still think that they are not necessary. Franchising in big cities and major conurbations is fine. This feels like a set of regulations that will not achieve very much. As the notes say, there is no actual demand from non-metropolitan combined authority areas and this instrument may hold back the private sector from the kind of innovation that will be needed for the future.

[Baroness Randerson (LD)]

My Lords, I welcome the progress on franchising represented by this SI. I always felt it was a great pity that the 2017 Act made franchising so complex, so I am pleased about the removal of the first stage of the franchising process. However, I draw the attention of noble Lords to the report of the Secondary Legislation Scrutiny Committee, of which I am a member. That report criticised the Explanatory Memorandum because it had little information on what franchising is and how it differs from the current situation. Also—I think this is crucial—how many local authorities are expected to adopt franchising?

I do not agree with the points made by the noble Lord, Lord Grayling, in full, but he raises an issue which relates basically to capacity. I will come back to that in a moment, but if franchising is not suitable for Surrey, why was it regarded in that 2017 legislation as acceptable for Cornwall? It is my recollection that Cornwall was allowed to franchise buses. An element of doubt is sewn in this SI in the Explanatory Note, which says that no impact assessment has been produced because the SI is not expected to have any, or any

“significant, impact on the private, voluntary or public sector”.

I find that judgment worrying, because bus franchising is a very big undertaking, a multimillion pound undertaking, and it takes a long time. I have watched Manchester, for example, struggle with franchising in producing the Bee Network over many years.

Nevertheless, despite the deficiencies in the way the SI is cast, it is welcome because it removes the first stage, as I pointed out earlier, and also because it extends bus franchising powers beyond mayoral authorities. At the time that this legislation went through this House, I questioned why, having voted, as a local authority, for an elected mayor, that made you intrinsically more capable of running the buses. It struck me as totally illogical. Not all bigger local authorities have elected mayors: I think of Bournemouth, Christchurch and Poole, which is a fairly densely urban area that does not have an elected mayor.

So I am pleased that the complexity of the process is being reduced and I am pleased that it is being extended, but, in reality, the key barrier remains the capacity and expertise in our local authorities. I was pleased to read that the department is looking to build up its capacity to offer advice and assistance to local authorities, because on the ground that is what they desperately need.

When the Secondary Legislation Scrutiny Committee asked the Department for Transport why there was no proper explanation in the Explanatory Memorandum, the department provided a very clear paragraph, which was included in our report. I recommend that noble Lords read it if they are in any doubt about the importance of this legislation.

Finally, the same legislation in the 1990s that allowed London to franchise and fatally divided the country between the bus haves and the bus have-nots also encouraged local authorities to sell their bus services and their buses and forced them to run them on a strictly commercial basis. It has interested me ever since that the few local authorities that still have bus companies and run their own buses at arm’s length are largely successful and some of the best examples of bus services in the country.

MV “Ruby”: Ammonium Nitrate

Baroness Randerson Excerpts

Thursday 31st October 2024 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I echo what the noble Lord says about the port of Great Yarmouth. The department has engaged with HMRC and the Department for Business and Trade, which have separately considered whether the goods on board the “Ruby” are subject to import sanctions. They have confirmed that ammonium nitrate, the substance on board the motor vessel “Ruby”, is not subject to import sanctions under the Russia (Sanctions) (EU Exit) Regulations 2019.

[Baroness Randerson (LD)]

My Lords, as the previous question has illustrated, there is a complex background to this situation. A couple of years ago, it was discovered by the Secondary Legislation Scrutiny Committee that the Department for Transport had fallen badly behind in transposing international maritime law into British legislation, a situation exacerbated by Brexit as we no longer had to follow EU law. Can the Minister assure us that the UK is now fully signed up to our international maritime obligations and therefore fully protected in a sensitive and complex situation?

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness is obviously right that this is an important issue. I will write to her about the current position in this respect, but I have to say that the position of the motor vessel “Ruby” is not affected by the situation in the past that she talked about.

Railway 200

Baroness Randerson Excerpts

Thursday 31st October 2024 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

It is as with so many other projects; this Government found when they took office a very large list of projects with a much smaller funding envelope to deliver them. The Secretary of State for Transport has commissioned a full review of all transport infrastructure projects. This needs to be done properly. As I have said before here, everything you do with the railway lasts 150 years. When we have finished reviewing all those projects we will have a plan to go forward to invest in the best possible way.

[Baroness Randerson (LD)]

My Lords, one of the commercial supporters of the celebration the noble Lord referred to is Alstom, a train manufacturer based in Derby. Some months ago, there were serious concerns about jobs in and the viability of Britain’s train manufacturing companies, caused by intermittent orders. Given that there is a lack of information from the Government so far about how the system will work in the future under nationalisation, and given that they have not committed to touching the roscos and the system of ordering trains, can the Minister reassure us that those threats to well-paid, skilled jobs have now receded?

Passenger Railway Services (Public Ownership) Bill

Baroness Randerson Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, I suspect that this will be one of the shorter debates in our consideration of this Bill in Committee, but it is one of the most important. It will be short, I suspect, because this group is rather technical, but it has very great significance, not only for the operation of the railways but for the passenger experience.

There are four amendments in this group, all of them in my name. The first two, Amendments 19 and 20, are closely related. They relate to the very peculiar situation in which we are now going to see the railways operated in this country: that is, that they are going to be practically unmonitored independently as far as their finance is concerned. Compare the railway sector to the water sector or to electricity. These sectors have economic monitoring to ensure that best value is being delivered to the customer. Nothing of the sort is envisaged in relation to our new nationalised railway. There is to be no economic monitoring and no supervision of the setting of fares, and that is what these amendments relate to. One is to do with charges to customers—that is Amendment 19—and the other is to do with the costs incurred by the utility. The railways are a utility, and that is how they are going to be run.

Of course, if they were run by the private sector—as they would be if they were water or electricity—that economic monitoring would cover both the costs charged to the customer and the costs incurred by the operator, because their efficiency would be monitored. As I say, none of that is envisaged here. We are asked to assume that, in public ownership—I am not now talking about a Bill that is going to come to us in 18 months; I am talking about the direct consequences of this Bill as soon as it starts to come into effect and as these franchises move over—the Government are going to set fares in a reasonable way that is not exploitative of customers.

It could be said that that can be assumed because it is not going to be run by the private sector—that the Government are not going to gouge our eyes out, because Governments do not do things like that. But they do. Tell somebody who is applying for an urgent passport at a cost of £1,000 that they are not having their eyes gouged out. Tell someone applying for a statement of their nationality that recognises an existing British nationality who is charged well over £1,000, including each time for their children on top, that they are not having their eyes gouged out—that is several thousand pounds for a family that are already British and simply want to have it recognised, as they are allowed to do, and register as British because they are already British.

We know from experience that Governments are perfectly willing to charge very high fees for their services in order to make a profit. Sometimes, this profit has been complained about—for example, in relation to nationality, not least by the noble Baroness, Lady Lister of Burtersett, and others on the Labour Benches when we have debated matters such as that.

Who will decide how fares are set, what the logic is, and what the railways’ aim is in setting those fares? This is particularly true in the case of railways, because they inevitably have variable fares. It is part of the nature of a railway that they aim for the highest return they can get from particular passengers; they are then willing, because of the nature of the structure of the business, to take marginal fares to cover marginal costs from other passengers who might pay very little for the same journey because they are willing to go at a certain time or book a certain distance in advance, and things of that sort. Those who do not have that advantage may find themselves being gouged because they need to travel at the last minute or because they are captive customers. Do not forget how many captive customers the railways have. There are not necessarily a lot of captive customers on the long-distance railways, but on the commuter network, especially around London, they are, in effect, captive customers. How attractive to the Treasury to turn the railways into a mill for generating money for the Government, if that is what it wants to do.

I am not saying what the fares policy should be. What I am saying is that there should be some independent monitoring of how it is done so that customers—or passengers, as I must remember to call them, remembering what I said to the noble Lord, Lord Snape, the other day—do not find themselves trapped in a system and exploited. No independent monitor is proposed, so we have to trust either the Department for Transport or Great British Railways. I am not sure which it will be in the long term, but in the short term, over the next few years, we have to trust the Department for Transport to set fares in a way that is not designed to maximise revenues from those who cannot resist paying them.

Similarly, if this were in the private sector, through the setting of charges there would be economic regulation—as there is in the water industry, at Heathrow Airport and so forth—of the efficiency of the costs with which the railways conduct themselves. There is no sign of that either in the Bill. Again, we are asked to trust the Department for Transport to ensure efficiency. Considering how many staff the Department for Transport employed to monitor and shadow the staff employed by HS2 Ltd, I do not regard it as a great guarantor of the efficiency of delivery and the control of costs. There ought to be an independent body to do that.

That deals, as far as I am concerned, with Amendments 19 and 20. We then come to Amendment 23, which is rather different but again relates to something the public should be entitled to know about: the great transfer of pension liabilities that will occur as a result of moving pension responsibilities from the train operating companies to the Department for Transport. I want to be clear about this: I completely understand that the staff are largely currently members of the national rail pension fund and that they will remain members of the same pension fund. The contributions and so forth should not in themselves change simply because of the Bill—I perfectly follow that. The costs will not increase as a result, but the purpose of this amendment is to probe where they will lie in balance sheet terms. Will they be a liability fully on the Government’s balance sheet? What consequence will that have for the national debt? This is something that we should know, because the railway pension scheme is, obviously, one of the largest pension schemes in the country. These are not trivial sums; they are very significant sums in terms of pension funds.

Finally, I have Amendment 25 on lease payments. I will not trespass into this very deeply because a similar amendment in the name of my noble friend Lord Young of Cookham is due to be debated later, and I know that he is much more knowledgeable about these matters than I am, but it is certainly the case that the lease arrangements that exist for the rolling stock are between the train operating companies and the roscos, the rolling stock finance companies. That is where the lease liability exists. Are these to be transferred to the Government? If they are, where will they sit in balance sheet terms? What balance sheet effect would that have? Therefore, there is the question of public debt.

There are two separate strands to these four amendments. One strand relates to balance sheet liabilities and the effect on the Government’s balance sheet of the measures proposed. We are told that this Bill has no cost implications, but is that true? The other relates to how we ensure that the railways are properly and independently monitored to make sure that the fares they charge are not exploitative in circumstances where exploitation is open to them, that their costs are efficient and that they are efficiently delivered. Simply saying that we should trust the Government or the Department for Transport on this is, I suggest, not a satisfactory answer.

[Baroness Randerson (LD)]

My Lords, one of the clear attractions of the new system should be increased transparency. There should be no chance that the new authority would be able to hide behind commercial confidentiality. One public body would make life very much easier in terms of national answerability. I do not agree with the mechanism suggested by the noble Lord, Lord Moylan, but he is making a valid point. Can the Minister confirm that the passenger standards authority, the passenger body that is going to be the champion of passenger standards, will have the power to investigate fares and report on problems? I gently point out that the Government will no longer be able to blame the train operators. All the blame will now fall on the Government, and passengers will make judgments based on that. It is therefore important that there is a public way for the Government to explain their decisions in relation to train fares and the fare structure overall.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

First, I briefly note my intention to write to the noble Lord, Lord Teverson, on his points about public investment that I did not manage to address on Monday. I also intend to address later the question asked by the noble Lord, Lord Young of Cookham, on Monday.

On fares, there is nothing new here. The regulation of fares has always been by government through its contracts with operators, whether public or private, and as far as this Bill is concerned, that will continue.

[Baroness Randerson (LD)]

I want just to make the point that, as the Minister well knows, the fare system is so complicated that, in practice, people have not been able to understand it adequately in order to make those judgments, and one of the Government’s aims, quite laudably, is to make it simpler. I also point out that the Minister is talking about regulated fares, and I think about half the fares in the market are not regulated.

--- Later in debate ---

The purpose of these amendments, as I say, is not simply to sing the praises of open access—I think we did that in the debate on the previous amendment. It is to ask, very seriously, how this assessment will be made, and what warmth and encouragement will be extended to operators that wish to offer competing and supplementary services, or whether the offer of open access will in effect be made a nullity by an excessively tight application of the principles of abstraction.

[Baroness Randerson (LD)]

My Lords, there are of course some excellent examples of open access operators and some very successful ones, but I am a bit sceptical. We have a Government who are so opposed to competition on the railways that even very good train operators, such as Greater Anglia, have to be removed as a priority. I am sceptical that the Government would be keen to encourage further open access operators. I think I drew attention to this in our debates on Monday. I feel it is illogical that the Government are putting an end to the train operators that have fully rounded franchises but will tolerate open access. Open access is, in reality, capitalism red in tooth and claw, in comparison with the role of train operating companies managing the franchises they have.

The Government here are set up as a judge and a jury over open access operators and whether more will be allowed. Can the Minister tell us how the judgment will be made on future open access operators, or tell us with total frankness that we have what we have and are unlikely to get any more?

[Lord Hendy of Richmond Hill (Lab)]

The Bill before the House is specifically about the ownership of services currently operated under contract to the Secretary of State, Scottish Ministers or Welsh Ministers. Transferring and retaining these services in public ownership will not affect open access operators or prevent them running as they do now. It is therefore not necessary, as in Amendment 24, to require the Government to lay a report on the impact of public ownership on open access operators, given that this Bill will not affect the rights of those operators to access the network and run services. I emphasise that as part of the wider railways Bill, any proposed changes to access arrangements and the body that decides them will, of course, be subject to consideration and debate by your Lordships’ House before they are implemented. I beg for some patience in this debate.

Turning to Amendment 27, which requires the ORR to produce an independent report on access, I again reassure the House that under the present public ownership Bill, the ORR will continue its role in relation to access decisions. There is therefore no need for this amendment; an independent function is already in place that will decide on access to ensure there is no disadvantage to non-publicly owned operators. We will set out further detail on GBR roles and responsibilities in the coming months. Given those reassurances and that this Bill does not affect the rights of open access operators to run services, I urge the noble Lord to withdraw the amendment.

--- Later in debate ---

[Lord Gascoigne (Con)]

My Lords, I rise briefly to support my noble friends Lord Young of Cookham and Lord Moylan on their Amendment 42, which calls for an annual statement setting out the liabilities to the public purse.

As I said on day one, the whole rail system is duplicated, messy and costly. Given that this Bill is piecemeal and without the other substantive and necessary reforms, it runs the risk of not fixing the problem but making it worse and costing the taxpayer even more. As has already been noted, in the Labour Party’s Getting Britain Moving document, there is a section titled “Failure is increasing costs”, which talks about the savings to be made. The Government’s September press release hails the Secretary of State as having

“fired the starting gun on rail reform”,

and clearly notes that it will be

“saving taxpayers up to an estimated £150 million every year in fees alone in the process”.

So we will bank that—well, the Treasury will, rather than the taxpayer—but the indication from that is that there will be savings of at least £150 million every year. I am not disputing that figure, but what other savings will there be?

I was reading the other day that nationalisation could be costing the taxpayer £1 billion per year by the end of this Parliament. There is an argument that it is only because of privatisation that we can see what the system costs and what is profitable and what is not. There is a legitimate concern that the cost will once again become opaque, with the passing of this Bill and when it starts to take effect. In assessing the virtue of these reforms, not just from an ideological point of view, the country should know what else it is taking on, not least because it will effectively be the owner or shareholder, not just of the railways but now the liabilities of the companies which will be transferred on to the Government’s balance sheet.

[Baroness Randerson (LD)]

My Lords, the amendment and the speech of the noble Lord, Lord Young, indicate the obvious advantages of nationalisation in terms of greater access to information and transparency; it has disadvantages, which the noble Lord set out, but it also has advantages. The speech by the noble Lord, Lord Sikka, was compelling: the evidence and information he gave us illustrated much better than I have heard before the issues that have been referred to—I referred to them on Second Reading and on Monday—regarding the imbalance between the attitude of the Government towards the speed of taking over the train operators and the fact that they are prepared to leave well alone the roscos, which can quite clearly be seen to be exploiting their situation and therefore getting excess profits as a result. I will be very interested to listen to the Minister’s explanation of why that is happening.

[Lord Moylan (Con)]

My Lords, at this hour I would like to expand considerably on my noble friend Lord Young of Cookham’s remarks on his amendment, but I find there is nothing I can add, given how well expressed his argument was technically. I shall say only that I hope the Minister, by contrast to his response to the previous group, will recognise the serious balance sheet issues that arise in relation to lease obligations. I understand that, while the department currently recognises its obligations to the end of the current contracts, most of which are a matter of months or very few years away, when the responsibility transfers to the Government, they will be responsible for the lease payments for the whole of the life of the remaining contracts for the lease of the trains and these will therefore represent a balance sheet liability, not simply an ongoing cost, that may well need to be recognised. I am not, as I say, as proficient in these matters as my noble friend, but I hope very much that the Minister treats that seriously and gives us a proper and robust answer about how this is to be treated.

I shall save the bulk of my remarks for the amendment moved by the noble Lord, Lord Sikka, with which, it may surprise noble Lords, I have a great deal more sympathy than they might expect, certainly as far as his analysis is concerned, though not necessarily with his solution of total nationalisation and so forth.

The fact is that there is a very large amount of capital in the world, and a capital is seeking a return. However, this capital is not buccaneering 19th-century capital of the sort that built the railways in the first place; this is not capital that is looking for investments at risk; and this is not capital that sees that it might win a large prize on one investment in its portfolio but is willing to tolerate the total loss of another investment in its portfolio. This is capital that is looking for risk-free returns—or returns that are close to being risk free—but at a rate of return that is considerably higher than it would achieve if it invested in government bonds.

Such capital is to be found throughout our economy—this is a criticism not of the current Government but of the previous Government and of the Labour Government as managed by Gordon Brown—because it is the basis on which funding is now provided to most of our utilities. That is why they all belong to large, foreign—although they are not necessarily foreign, and I do not object to the fact that they are foreign, so I will drop that word—investors who are looking for super returns and are achieving them because the Government are so accommodating towards them.

The noble Lord, Lord Sikka, asked why the Government do not do something about this and why they do not nationalise the roscos as well. That would be a true nationalisation. As I said at Second Reading, this Bill is not really a nationalisation of the railways; as I said in Committee on Monday, it is more like dismissing your chauffeur at the end of his contract. That is all that is really happening. If you are nationalising something, you normally have to pay for it and you normally acquire assets. That is not what is happening here, because the assets are all left in the private sector. The Bill’s headline claim of nationalising the railways—after all, that is the main purpose of this Bill: to get a headline out there quickly—is largely bogus. The main reason that the Government are not acquiring the roscos is that they cannot afford to do so.

There is a second reason that the Government are not acquiring the roscos or going even further—as I suspect the noble Lord, Lord Sikka, would—by seizing their super profits and acquiring them at a price that would reflect a reasonable rate of return closer to the risk-free rate of return for the rest of the period of their leases. That reason is that this Government, rather like the previous one, are wholly dependent on that source of funding for nearly every infrastructure project that they want to carry out, be it railways, environmental stuff, net zero and so forth.

In fact, there was a great conclave of these investors only a week or so ago, at which the Government told them what wonderful prospects they would have with their super, close-to-risk-free returns if only they would invest in Britain. It is not that we will get less of this sort of finance that is so objectionable to the noble Lord, Lord Sikka, under this Government; we will get a great deal more of it. That is the simple explanation, whatever the Government say, as to why they will not do what the noble Lord would like them to do, and which anybody who values true competitive capitalism would also consider to be moving towards terminating an outrage.

HS2: Purchased Land

Baroness Randerson Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I am aware of the report that the noble Lord refers to. It is an interesting report. We recognise the concerns about connectivity between Birmingham, Manchester and the north of England. We will consider advice and engage with the mayors and the detail of the report and give ourselves time to do that before any precipitate action is taken on the land concerned.

[Baroness Randerson (LD)]

My Lords, does the Minister agree that building a modern railway should surely include level boarding, in order to make disability access available to everyone? Does he therefore share my concern that many of the stations planned on HS2 were not to have level boarding? In particular, can he reassure us that the Government’s review will look at level boarding access at Old Oak Common station, which will be a major point on the route?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Baroness for her question. I am as aware as she is that level boarding is a really important consideration for many people, including those with disabilities. However, even in respect of HS2, it is a complicated subject because there are relatively few HS2 stations and, as it is now configured, those trains will serve many stations on the conventional railway network, at which platforms have been at differing heights for as long as they have been built, in some cases going back to the 1840s. However, the point she raises is really important; the point she raises about Old Oak Common is important, and the point about Old Oak Common is equally complicated, because Old Oak Common will not merely serve the new HS2 trains in their new station—at which level boarding will be relatively simple—but will also serve trains on the conventional railway network on both main and relief lines out of Paddington, which have themselves several different floor heights. We need to crack this problem, and I am very sympathetic to the point raised by the noble Baroness, but it is more complicated than it might sound. I will give her the assurance that she wants that we are actively considering it, because building new railway stations is very expensive and takes a long time and we should try to get it right.

Passenger Railway Services (Public Ownership) Bill

Baroness Randerson Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

[Lord Ranger of Northwood (Con)]

Yes, there was the noble Baroness, Lady Jones, my noble friend Lord Moylan and myself, in the role of adviser to the Mayor of London on transport. Although we have spoken much about how London’s model has improved and can be looked at, I have to highlight that I support my noble friend Lord Moylan’s amendments, and particularly Amendment 34 in the name of my noble friend Lord Young with regard to the Secretary of State’s power to award—and potentially their power only to do so.

I recall that in the almost four years that I was the mayoral adviser for London, between 2008 and 2011, there were at least five and a half Secretaries of State for Transport. Sometimes the rotation of Secretaries of State through that important office can be quite hasty. If we are looking to award such authority, power and control to that office, the speed in the potential change of roles can lead to a certain amount of confusion and hesitation, and not even the progress that we would want to see. For that reason, as many others have probably mentioned, I support Amendment 34.

I also support my noble friend Lord Lansley’s Amendment 36 on planning. This was a point that I wanted to make. One of the major changes that we made when we came into City Hall in 2008 was to look at developing the London Plan and the Mayor’s transport strategy in conjunction, so that we could understand the potential for investment in transport infrastructure and where we would look for housing and the development that would generate jobs and growth. That is obviously critical to where investment in transport is then made, and there can be an issue if we do not align that strategy with planning; therefore, we have the amendment that my noble friend Lord Lansley mentioned.

There are a number of challenges when we start to centralise thinking about transport planning. It worked better when we worked very closely at a city and regional level, and closely with boroughs as well. Local authorities know very well their requirements and demands. That feeds into the overall stitching together of planning for what transport is required. During my career, I was fortunate to work in organisations such as Transport for London, Network Rail, the Rail Safety and Standards Board and even the Department for Transport. That approach, though it felt fragmented, brought together the complex requirements for transport. Yet whenever the Government—not the previous Government but the one before them—tried to centralise through organisations such as Railtrack, the Strategic Rail Authority and Network Rail, as it seems they will do now with Great British Railways, there seemed to be a disconnect between what was required and what the large, centralised bureaucracy was trying to deliver. On that basis, I also support the amendments tabled by my noble friend Lord Moylan around ensuring that there is enough authority and devolution in the Bill.

[Baroness Randerson (LD)]

My Lords, I support the intention of the amendments in this group. There is one amendment in the name of my noble friend Lady Pidgeon, Amendment 16, which the noble Lord, Lord Moylan, has signed, as I have signed his Amendment 12. Unlike him, I want to talk about devolution in Wales and Scotland, because that issue is very important. Railways cross borders; that point is addressed by the noble Lord’s amendment. I agree with his idea that there should be proper formal consultation with the devolved Governments—by the way, I can assure him that the new Council of the Nations and Regions should have a crowded agenda, because many devolved issues have been building up over a long period.

Let us look at the case of Wales. If, for example, you travel from Cardiff to Wrexham, you find yourself crossing between Wales and England; your start and end points are in Wales, but the middle of the journey is in England. That complexity needs to be built in. Devolution of rail powers to Scotland is pretty clear, but in Wales it is—I hope—a work in progress. I will explain to noble Lords why I say, “I hope”. The Welsh Government do not have powers over rail infrastructure. The operation of the railway in Wales is the responsibility of the Welsh Government, but infrastructure planning and funding remain with Network Rail. This is a cause of considerable frustration; the Minister answered a question about it earlier today.

This frustration is largely because Wales gets under 2% of total infrastructure spend in the UK, while having 5% of the population and more than 5% of the land mass. Our rail systems in Wales are in such a poor state, so there is a good argument that we should be getting more than 5%. The failure to allow Wales the Barnett consequentials of HS2 just rubs salt into the wound, and it is a lot of salt—£4 billion of it. I urge the Government to rethink the situation and the tendency set out in the Minister’s letter, because surely there is no hard and fast rule on this. Back in 2007, the Labour Government of the UK made noises which suggested they were willing to offer Wales control of infrastructure. Unfortunately, at that point, the Welsh Government were not keen to take it on, but I think they would be very keen now.

I am keen that this Bill does not in any way prevent further devolution. Transport for Wales, which is owned by the Welsh Government, is investing widely. Despite problems in mid-Wales, services are improving, and passenger numbers were up 27% in the last three months alone. That is a sign of progress. Can the Minister explain why the Welsh Government might not be considered capable of doing the rest of the job?

As my noble friend Lady Pidgeon has said, Transport for Greater Manchester, which I recently met representatives of as well, is enthusiastic about its success and devolution plans. They spoke to me about the Bee Network, which has lower costs than what went before, higher levels of punctuality and higher numbers of passengers. It is a real success story. They have firm plans to devolve eight rail lines within the next four years. I gather that they may be looking at some form of public/private partnership. That is the sort of thing referred to in the amendment tabled by the noble Lord, Lord Liddle, in Monday’s debate.

Can the Minister specifically reassure us that the aims of the declaration of intent that Greater Manchester signed with the previous Government still hold good? Can he specifically reassure us that there is nothing in this Bill that will prevent Greater Manchester’s ambitions being implemented? We on these Benches want to go further. Where Greater Manchester leads, why should not Birmingham, Liverpool or several other places follow? Shutting off the devolution of rail is at odds with the Government’s plans to give local authorities more powers over buses, for instance. It does not sit comfortably together.

I have two pleas for the Government. First, as I said on Monday, I ask them please to leave their options open. Do not close off avenues in the Bill: allow for unexpected events in the future. Secondly, it is illogical to allow open access operators to pick off rail routes, and it is illogical to encourage local authorities to have more control over buses but not to encourage them to fully integrate their local transport services by having control over trains and railways as well.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I remind noble Lords that the Bill is, in my view at least, narrowly focused on allowing the further public operation of existing franchised railway operations currently in the private sector. Many in this House will know that I was the commissioner of Transport for London when the original Overground was proposed and established. Some of the details of its success are extremely familiar to me and give me a glow of pride and satisfaction whenever anybody mentions them. I was also there when the Overground was expanded—in fact, some Members of this House could have allowed it to expand further but chose to oppose it on the grounds that, for a mayor of a different political colour, that might not suit the then-Government’s aims. I say all that because devolution is really important. I have no intention of closing it off, and neither does the Bill—but it has to be subject to the effective operation of the railway network as a whole. I will come back to that in a moment.

I will speak first to Amendments 31 to 33 and 37 of the noble Baroness, Lady Jones of Moulsecoomb, Amendment 34 of the noble Lords, Lord Young of Cookham and Lord Moylan, and Amendment 36 of the noble Lord, Lord Lansley. These amendments would empower the Secretary of State and the Scottish and Welsh Ministers to award contracts to companies owned by various local authorities. Amendment 16 of the noble Baronesses, Lady Pidgeon and Lady Randerson, and the noble Lord, Lord Moylan, aims to provide opportunities for local authorities to take responsibility for services in their areas before contracts are awarded to public sector operators.

Amendment 46 of the noble Lord, Lord Moylan, would require another report, this time on whether public ownership makes it more or less likely that further services will be devolved by means of exemptions granted under Section 24 of the Railways Act 1993.

Amendment 50, also of the noble Lord, Lord Moylan, is another attempt to delay transfers to public ownership, as it makes the establishment of new regional partnership boards the trigger for the provisions of the Bill to come into force. The noble Lord, Lord Moylan, mentioned shadow Great British Railways. This is not a statutory entity but a preparation for Great British Railways; it is not a mechanism to do its job in advance of the creation of the body itself.

In line with the spirit of all these amendments, the Government are absolutely committed to strengthening the role for local communities in shaping the design and delivery of passenger rail services in their areas. Our plans for reform will make this a great deal easier for them, because they will need to engage with only one organisation—Great British Railways—instead of having to deal separately with Network Rail and multiple train operating companies.

The noble Lord, Lord Moylan, reminded us of the manifesto. We have already made it clear that our railways Bill will include a statutory role for the devolved Governments and mayoral combined authorities in governing, managing, planning and developing the rail network, and there is absolutely no intention to enact rail reform without that statutory role. We are committed to a full and open discussion on that role, and how it will work, as we refine our plans for the railways Bill in the coming weeks, and that will be included in the published consultation.

--- Later in debate ---

[Lord Berkeley (Lab)]

My Lords, this has been a very depressing debate—listening to the terrible problems that many noble Lords have had in using the rail network. It is wonderful that they have been able to expose them so widely. We have heard about them before, but it is depressing that we are in 2024 and they have not been solved already. All this could have been done years ago, without legislation and without any change. It just needs somebody to do it and to take responsibility for it. So the list of the noble Baroness, Lady Randerson, is very good—all the lists are good. There are three things that I hope my noble friend will take forward.

There are three different elements to the GBR responsibility. One is the infrastructure—platforms. One is the trains—level boarding. The other is services—what people do or do not get at the stations. Most important is that the passenger standards authority, mentioned by the noble Baroness, Lady Scott, must be not only comprehensive, strong and fast but independent.

We have to think about how you can be independent of the Government and the railways, and still have credibility. I hope everybody can, but the Government will have to accept something that is independent, rather than something which takes backdoor instructions from Ministers who say, “Don’t get too strong on this, because it’s too expensive”.

We will have to watch this for a long time, but I congratulate other noble Lords who have spoken in this debate and exposed this, which should have been exposed a very long time ago.

[Baroness Randerson (LD)]

My Lords, I believe this is the most important group of amendments today because it has passengers at the core. I have added my name to three amendments because I am so convinced that the comment made earlier about the lack of focus on passengers in the current fragmented rail system has done so much damage to the rail industry.

When things go wrong—and things go wrong all the time—the train operators spend their time deciding whether it is their fault or Network Rail’s fault, instead of concentrating on putting it right for the passengers. To my mind, this is the obvious way ahead. I remind noble Lords that we live in an ageing society and the railway has to operate for all.

Not all disabled people are in wheelchairs. When I get on trains, I watch people who are capable of walking being helped by staff, or by other passengers, to get on the train because it is difficult. It must be made easier. Once it is made easier, you give people confidence; once you give them confidence, they become train passengers much more willingly.

I broaden it even further. The noble Lord, Lord Moynihan, referred to people who have a visual impairment—quite rightly. I wish to raise the issue of people with hearing impairment. I have 30% hearing. I wear hearing aids, which improve that considerably, but they do not bring me anything like up to normal standard. Unfortunately, one recent Saturday evening I was at Paddington station for over four hours, while no trains ran. Announcements were constantly given only over the loudspeakers. Every time a loudspeaker announcement was made, I had to go up to someone and say, “Can you just tell me what he said?” Of course, people were basically in a panic and they were not doing it clearly. Eventually they gave up and said that no trains would run to Wales at all that evening. But the point I am making is that, over four hours, that situation took no account at all of people who could not hear clearly.