Open Access Rail Services

Lord Grayling Excerpts

Wednesday 22nd October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

My noble friend is correct. Both the east coast and west coast main lines are now heavily constrained, and under the current arrangements the regulator, the Office of Rail and Road, has recently declined most of the additional applications for train paths simply because there is no room. He is also right to suggest that we need to leave room for increased freight operations. There is a general consensus that more railway freight is good for the economy and the environment, and it would be right to leave paths for freight expansion.

In respect of his question about profitability, it was recently reported that FirstGroup’s open access business achieved a 32% operating profit in the 2024-25 financial year. These profits arise because open access operators do not pay the full cost of accessing the track, and nor do they have to meet public service obligations to operate the services that most people need. This allows them to offer reduced fares and provide journeys only between the most profitable locations. Currently, Lumo is the only open access operator that contributes towards fixed costs via an infrastructure cost charge, which leaves taxpayers to fill the shortfalls. The railways Bill will propose to change the arrangements for access and will consider what needs to be done further in respect of charging.

[Lord Grayling (Con)]

My Lords, the Minister just said that the ability to grow open access is constrained by the lack of capacity on the network, yet he says that the Government intend to increase rail freight by 75%. How are both of those true?

[Lord Hendy of Richmond Hill (Lab)]

I am surprised that the noble Lord does not know the answer to that, as one of the many former Secretaries of State for Transport in the Chamber. The answer is that there are protected freight paths on all the main lines that are likely to carry freight, in order that freight operators can respond to short-term demand measures—which they do frequently, changing trains on a daily and weekly basis—and have room for expansion. It is important that they are left to do that. Otherwise, there is no chance of freight expansion and the commercial freight businesses would be damaged.