Great British Railways

Lord Hendy of Richmond Hill Excerpts

Thursday 13th March 2025 Grand Committee

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

My Lords, first, I congratulate the noble Lord, Lord Young, on securing this timely debate on an important subject. I offer him my wholehearted apologies for the omission of the letter that I sent everybody else; it was an administrative error but I it has, I believe, been rectified. I apologise to him for that.

The context of this debate is the live consultation document, A Railway Fit for Britain’s Future, which was published a few weeks ago and on which the Government welcome contributions. I hope all noble Lords here today will respond to the consultation document. It is not immediately apparent to me that everybody has ready every word of it, from what I have heard—perhaps that is reasonable—but it is important that noble Lords respond to it because it raises some of these subjects absolutely directly.

Having said that, I am not going to repeat large quantities of what is in the consultation document, for the obvious reason that it is in the public domain. People will respond to it; the Government will then consider their responses fully. It would be better if I spent my time looking at elements of the issues in front of us that noble Lords have raised.

I start with the noble Lord, Lord Young, who asked whether I share the RMT’s views. He deftly pointed out, however, that it appears to have two views that are contrary to each other at once. I can therefore say without compunction that I share some of its views but not all of them. It is entitled to its views because it represents the hard-working staff of the railways as their trade union, but they are not the determinants of future government policy.

The noble Lord expressed genuine concern about competition and asked whether I am open to listening to responses to the consultation. I am open to that; I have listened extraordinarily carefully to what noble Lords have said here today, and I believe that aspects of what they have said should influence the way we draft the legislation, following the responses to the consultation. It would be foolish and unnecessary for us to produce a consultation if we did not intend to listen to what people had to say about it.

The other thing I would say about the consultation is that it is over 30 years since a substantive railway Bill was in either House. It behoves us to do a good job this time because it may be a long time before there is another; you never know.

I listened carefully to what the noble Lord, Lord Tunnicliffe, had to say. His descriptions of some of the history were quite correct. I can correct him on only one material fact, which is that Network Rail slid into the public sector with a debt of £54 billion, rather than £34 billion; I remember remarking that it was higher than the national debt of New Zealand at the time I became the body’s chair. The noble Lord was right in describing that, in those days—at the time of the original privatisation of the railway and subsequently—there was some slack. It is true that quite a lot of additional services could be put into the timetable simply because there was plenty of room for them.

I always listen to the noble Lord, Lord Bradshaw, extraordinarily carefully. He was a very senior railway manager when, sadly, I was still at school; he knows perfectly well how to run a busy, complex railway, and his memory is not diminished an inch by the effluxion of time since he did that. I do not think he is entirely correct to suggest that the ORR is concentrated on only one of its objectives—that would be doing it a disservice. But he is certainly entitled to a view about the extent to which it has balanced its objectives. He is indeed right about the east coast main line timetable. I had to answer a Question in the House only two days ago about the level of service at Alnmouth and Berwick. The last Government invested £4 billion to improve the capacity of the east coast main line. It has taken four years to get an agreement on that timetable, and that is because the number of people with rights on the east coast main line is so great that it required a huge meeting of railway operators. In the end, it also required the Secretary of State and I, as Ministers, to make a decision which on any normal railway would be taken by the railway administration. The noble Lord asked whether the ORR’s regulatory assumptions are sound and independently verified. They have been tested twice independently and found satisfactory at least.

The noble Lord, Lord Bradshaw, mentioned freight. The propositions about open access, whatever they are, do not apply to freight where the Government have already stated that they intend to have a target to increase freight. I believe we have also heard here that freight operators are apparently more comfortable with the regime proposed in the consultation paper.

I listened to the noble Lord, Lord Liddle, very carefully. I too want to see more trains on HS1 and through the Channel Tunnel, and the department is working as hard as it can to see that there are more trains and that any obstacles to further competition on the routes through the Channel Tunnel to Europe are removed. There are some things we can do, and we are proposing to do them.

The noble Lord, Lord Lansley, talked about what was in the King’s Speech and what, effectively, the Secretary of State wrote subsequently to the chair of the Office of Rail and Road. Opinions vary on this letter, but I think she and I are clear that what she said in the letter was not that there should be no open access. It did not say that we disagree with it; in fact, the consultation paper says that in the right circumstances, open access has a valuable part to play. But it would be negligent of her, and certainly negligent of me, not to reflect the fact that the railway post-Covid is costing the taxpayer an enormous amount of money. All of us in this Room, whatever political side we are on, cannot celebrate a railway that consumes twice as much public subsidy as before Covid. We need to do something about it. It is proper for the Secretary of State to reflect on the fact that one of the legitimate concerns of both the Secretary of State and, indeed, the ORR ought to be the whole cost of the railway to taxpayers. She talks about a balance: on the one hand, opening up new markets, driving innovation and offering choice to passengers, but also a balance that is mindful of the abstraction of revenue to taxpayers, as well as the charging mechanism. That letter sets out her views, which I do not think are anti-open access; it makes clear the role that the Government believe open access ought to have and the basis on which we are consulting.

The concerns of the noble Lord, Lord Berkeley, were principally about freight, which I have already covered.

The noble Lord, Lord Gascoigne, said that the private sector was under threat. I say to him that, in fact, four-fifths of railway expenditure is in the private sector and, very largely, that will continue. The Government’s proposals to take passenger services into public ownership are not the same as taking the private sector out of the railway. Network Rail spends a huge amount of money with many private sector organisations to maintain and improve the railway and that will continue, as will freight operations and so forth.

The noble Lord also talked about the costs of GBR as a potentially large public body—I prefer that word to “quango”, having chaired two such public bodies. There is a considerable saving to the public purse from managing the railway better. The fact that every meeting on the railway needs 20 people in it to decide anything, because of the proliferation of different contracts, is a huge cost and a huge barrier to effective management of the railway.

As chair of Network Rail, I had a difficulty with the ORR, because we were told at one stage that there was a belief that the law suggested that there were only two dates on which you could change the national railway timetable a year. That is completely inflexible and militates against the public getting a good service from the railways, simply by baking some arthritic processes into what ought to be a dynamic situation to deliver better services to passengers and freight.

The noble Lord, Lord Mann, talked with considerable passion about Hull Trains, and I respect his passion about that because it is clear that Hull Trains has produced a huge benefit for the city of Hull over the years it has been working. His observations about Worksop are probably more difficult, both for him and for me, but one of the issues with some proposals that the department has seen, but which will currently at least be considered by the ORR, is that the department at least considers that they will abstract from other services. The danger, of course, is that you offer a better service to a small number of people and the result of it is a higher cost to taxpayers and/or a reduction in services to others. Those are balances that railway administrations have had on their minds since 1830 or so, and they are considerations that GBR will have to have.

One thing that is obvious to me is that, in the course of further setting out how the new railway will work, you need a really comprehensive access and use policy. The consultation document says that GBR will have to have such a policy, that it will have to behave in accordance with it and, at the end of it, if people believe that it has not behaved in accordance with it, that will be appealable. In certain circumstances, the ORR will continue to be able to direct GBR to do something different.

I completely agree with the noble Baroness, Lady Pidgeon, that it is the passengers in the end—well, it is the passengers to start with—who ought to be the real consideration of the railway. One reason I am passionate about the case for reform is that passengers are not well served by the current circumstances. The railway costs too much to run, it is arthritic and it is slow—as I said, every decision needs huge numbers of people involved. When the east coast main line timetable is put in, it will justify the £4 billion of public investment put into the line because there will be a third train to Newcastle as a consequence. That is good for passengers. It will not affect Lumo, because Lumo will still run and its access rights will continue. Open access can of course add value.

I listened carefully to what the noble Earl, Lord Effingham, said. I must have read most of it before somewhere, in a number of documents principally put out by FirstGroup. The only thing I would say to him is that he is of course right about some of that. There is no doubt that Lumo, which did get open access provision, has made a real difference in the air competition to Edinburgh and it is to be absolutely commended for that. The number of routes on the railway where that is true is very limited, but it behoves us to want open access where it adds to the railway—and to be careful about it where it adds to the total taxpayer subsidy and would otherwise make the railway more congested and less reliable for passengers.

I close by thanking the noble Lord, Lord Young, again for his debate. I apologise once more that everybody else got a letter addressed to him before he did—I am really sorry about that. I thank him for raising the subject and allowing me to respond.