Passenger Railway Services (Public Ownership) Bill
Lord Hendy of Richmond Hill ExcerptsWednesday 6th November 2024
(1 year, 3 months ago)
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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.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
I thank the noble Lords, Lord Gascoigne and Lord Moylan, for Amendment 1. I absolutely support the idea that the Government should be clear about what the railway is for and what we want it to achieve. Far too many conversations in this industry are about tracks, signals and trains and how the railway works—or, in many cases, does not work so well. There needs to be much more focus on what the railway is for, but you can do that only if the organisation fundamentally works.
I am clear that when we establish Great British Railways, we should set out a clear statement of purpose, and we will set out a proposal for this statement of purpose in the consultation we will launch ahead of the substantive railways Bill. I am also very clear about the purpose of the Bill and the Government’s wider plans for the railway. Improving the performance of passenger services is clearly a big part of that purpose, but it is not and cannot be the only purpose. The Secretary of State has set out six key objectives against which she expects the railway to deliver. In summary, the railway should be reliable, affordable for passengers and taxpayers, efficient, of suitable quality, accessible and, of course, safe. She and I are reminding senior railway leaders of these objectives very clearly and very often. I expect that to carry more weight than a statement of purpose in a Bill that, if we are honest, might not be read widely by those on the front line of running the railway. Given the range of objectives that the Government wish to meet, I would not support the idea of singling out one objective, even a vital one, and placing it in this Bill.
Turning to the specific wording of the amendment, which is about performance, the easiest way to improve the performance of passenger railway services would be not to run so many of them, and to try to run fewer freight trains. It would be much easier to make trains run on time if the railway were less congested. Of course, I do not advocate that as a solution, but it illustrates the point that trying to reduce the Government’s objectives for the railway to a single purpose might be counter- productive. I hope that my remarks will have reassured the noble Lord that I am entirely on board with his underlying suggestion that the railway needs a clear statement of purpose, but I am not convinced that it needs to be enshrined in primary legislation right now, nor that it should focus exclusively on the performance of passenger services.
The noble Lord, Lord Grayling, asked me to set aside my ministerial hat and opine about the performance of the London Overground and the type of operator that operates it. I shall not set aside the hat, but I will say that one of the differences with the Overground is that it operates within a consistent and easily understood fares structure, which has enabled a significant increase in patronage over the period it has been operating. We must change the railway fares: there are far too many of them and they are deeply confusing. But one of the reasons for public ownership of the main network is to ensure that we have control of the operation and that there is enough information to be able to do that.
I will not trouble to respond to the point about arrogance and the Government acting, according to the noble Lord, Lord Moylan, as if we won the election, because it is rather self-evident that we did. I will remind him that this measure is very popular with the public, and every recent opinion poll suggests that a very large majority wish to see the railway in public ownership. We will return to the matter of the staff, but he acknowledges that the transfer of undertakings regulations will apply, and they do involve some consultation. But if you went to Waterloo station today and asked the staff there whether they want to change their employer, most of them would tell you that they have changed employer so often that some of them cannot remember who their employer is, and do not much care. The most frequent description of railway employment that I get when I speak to railway men and women—
Lord Moylan (Con)
Are not the staff of Waterloo station already employed by Network Rail?
Lord Hendy of Richmond Hill (Lab)
I was referring to the people who drive and operate the trains. There are more of them on Waterloo station than there are employees of Network Rail.
To finish what I was saying, most people on the railway refer to their employer and their work as “the railway”, which tells you something about the way in which the franchise system has dealt with loyalty to employment.
I thank the noble Lord, Lord Lansley, for Amendment 14 and the discussion we had in the last few days. He is right that Regulation 17 requires the publication of a specified list of information within one year, following the direct award of a contract, where that information has not already been published. However, we expect the majority of the information included in Regulation 17 to have already been published well before one year has expired. That is because Regulation 23, which covers post-award publication, requires a competent authority to publish a similar set of information within two months of contract award. The information which must be published is set out in Schedule 2. Regulation 23 also allows interested parties to request the reasons for a direct award within one month of the post-award publication. I agree that a year would be a very long time to wait before the information is published. However, I do not believe that the noble Lord’s amendment is needed because similar and, in many respects, more detailed publication requirements are already provided for in Regulation 23. I urge him to withdraw the amendment, and I note that he does not intend to press it.
I note that Amendment 16, from my noble friend Lord Berkeley, is somewhat novel constitutionally, as it would constrain parliamentary sovereignty by imposing limitations on when primary legislation relating to the railways could be introduced. I am very happy to confirm to my noble friend, to the noble Baroness, Lady Randerson, and to others who mentioned it that the Government intend to set out their key proposal for the railways Bill in a consultation document that I very much hope will be published before the end of this calendar year. This will give all interested parties, including Members of your Lordships’ House, the chance to review and scrutinise it and to feed in their views before the Bill is introduced later in this parliamentary Session. The Government do not intend to publish a draft of the Bill before it is introduced, as I would expect that to delay progress in implementing the Government’s planned reforms.
It is now more than six years since the previous Government declared that the structure of the railways is
“no longer fit to meet today’s challenges”
and appointed Keith Williams to lead his review. Passengers, freight and everyone on and who uses the railway have waited too far long already to see meaningful change. I have to say that my own experience is that the previous Government went through pre-legislative scrutiny in a desultory manner, and frankly, we all concluded that they did not intend to bring a Bill before either House any time soon.
While the Government are keen to hear the widest possible range of views on their proposals, including the noble Lord’s, I do not on this occasion support the idea of publishing a draft Bill. It also does not seem necessary, given that noble Lords can submit their views during the consultation I have committed to and will be able to debate the Bill once it is before the House. I am of course happy to meet with my noble friend Lord Berkeley and other noble Lords at the time of the consultation launch to seek their views, as we have done during the course of the Bill before us, if that would help persuade him to withdraw his amendment.
Lord Gascoigne (Con)
My Lords, I am grateful to the Minister for his response, to all those who spoke in this relatively short debate, and to those who supported my Amendment 1. I am pleased to see that the Government Chief Whip is on the Front Bench, and I am conscious that many people have sat through days of Committee and we are about to head into recess, so I will not detain noble Lords for long.
As I said in Committee and earlier, I want to make the case for why this amendment is not against the spirit of the Bill. It does not stop it, and I want to ensure that everyone knows that these changes are not being done through ideology and that they are focused on the passengers. Effectively, it forces the department, Ministers, civil servants and everyone to deliver this mission and this mission alone. Otherwise, we will enter into what President Ronald Reagan called “trust me” government.
Without boring on for too long, and to repeat the point I made, Labour has used this language repeatedly, in opposition and in government, so I am still not sure why the amendment cannot be included, especially given that the Minister, who I respect greatly, warmed to the sentiment behind it and understands it. As I said, we risk entering into the world of having to trust the Government that that is the intention. Despite those words of reassurance, the Bill still needs something on the face of it—Ronseal, like I said. With that, I would like to test the opinion of the House.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Moylan, and the noble Baronesses, Lady Randerson and Lady Scott of Needham Market, for their amendments in this group—Amendment 2 and Amendment 10 respectively. The amendments seek to test the Government’s approach of transferring services as existing contracts expire. I also thank my noble friend Lord Liddle for saying that the intention is to get rid of franchises and for explaining why. He is right. I should also say that I and the Government do not believe that we should either pay compensation for termination or keep paying fees to owning groups of train operating companies when we do not need to.
I am happy to begin with a reassurance about the Government’s position. We will not hesitate to take decisive action if Avanti, CrossCountry or any other operator’s poor performance means that the contractual conditions that allow for early termination are met. The contracts we have inherited from the previous Government make it far too hard to get rid of an underperforming operator, but if we have the opportunity to put passengers out of their misery by ending a failing operator’s contract early and bringing their services into public ownership, we will do just that. In those circumstances, we will not wait for those contracts to expire.
The noble Baroness, Lady Randerson, and the noble Lord, Lord Young, asked whether the public sector operator will have the capacity to take in services from a failing operator whose contract has been terminated early, at the same time as other planned transfers. I reassure them that current contracts allow sufficient flexibility to accommodate this. All but two of the current contracts with private operators give the Secretary of State significant discretion to select an expiry date within a range of possible dates specified in each contract. The Secretary of State simply has to give the outgoing operator a minimum of 12 weeks’ notice of expiry. This means that if a contract can be terminated early for poor performance—be it by Avanti, CrossCountry or any other operator—the Secretary of State will be able to adjust the planned expiry dates of other contracts if necessary to ensure that the failing operator’s services can be transferred as quickly as possible without overwhelming the public sector operator. Of course, we also need a programme of return that is reassuringly steady for the good management of the operations as they come back into public ownership. I hope those observations will be sufficient to persuade the noble Baronesses not to press their Amendment 10.
In response to the noble Lord, Lord Moylan, my previous comments address the first part of his Amendment 2. The Government will not hesitate to exercise its contractual rights if an operator’s poor performance means that the conditions for early termination are met. The Secretary of State, my noble friend Lady Blake of Leeds and I have all made the Government’s position on the matter very clear and on the record. There is no need for a statutory obligation to cover this point.
The noble Lord knows very well that I cannot accept the remainder of his amendment because it would substantially delay the programme of transfers to public sector operation. As the noble Baroness, Lady Randerson, said, thanks to decisions taken by the previous Government, the two most poorly performing operators currently have the longest contracts, with terms that make it very difficult to terminate them early for poor performance. I cannot say quite what the cost is, but I will write to my noble friend Lord Snape to tell him the rough quantum. In fact, the amendment from the noble Lord, Lord Moylan, would mean it would be impossible for the Secretary of State to exercise any contractual break clause, as defined in his amendment, until after the worst-performing operator’s contract had ended. That could be as late as October 2027, so it is difficult to see this as anything other than a wrecking amendment. I hope the noble Lord will prove me wrong by withdrawing it.
Lord Young of Cookham (Con)
Before the Minister sits down, can he just clarify something that he said? Is it the case that under new Section 30A inserted by Clause 2(3) he has the flexibility already to renew two of the franchises mentioned by the noble Lord, Lord Snape, by using that particular paragraph in the Bill—namely, that he
“is satisfied that it will not be reasonably practicable to provide”
the services in any other way?
Lord Hendy of Richmond Hill (Lab)
Is that the two worst-performing franchises or two others?
Lord Young of Cookham (Con)
Any franchises. Can he use that section to renew the satisfactory franchises, because it would “not be reasonably practicable” to do so otherwise, and take them in-house?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Young, for his intervention. I think he is right, but he will forgive me if I consider it further and write to him.
Lord Moylan (Con)
My Lords, with the leave of your Lordships’ House, I may speak for slightly longer than would be normal because I would like to address a comment made by the noble Baroness, Lady Randerson, about my Amendment 2. She said that it was the same as Amendment 1 tabled by the Liberal Democrats in Committee. In fact, that is only superficially the case. While proposed new Sections 25B(1) and (4) are the same as in the amendment tabled in Committee— I think, by the noble Baroness, Lady Scott of Needham Market—the meat in the sandwich, so to speak, has changed. There would be no additional cost in early termination fees as a result of this amendment as drafted because the franchises would be terminated not as they fell in but in order of worst first, even though that might take a little longer.
I listened very carefully to what the Minister said. Although the Minister found it helpful, the intervention from the noble Lord, Lord Liddle, was, to this side of the House, slightly infuriating. Throughout the debate in Committee there was a constant jumping between asking us to please focus on this narrow, technical Bill to then, when we wanted to talk about the narrow, technical Bill, being told that we should be talking about the great, big, wonderful Bill that will be coming in 18 months, because that is really what this is all about. But we cannot talk about that Bill because we have not seen it—indeed, we are not even going to get to see it in pre-legislative form. So although the Minister found it helpful, it illustrated the constant problem we have had in dealing with the Government on this measure.
For that reason, I am afraid I am not sufficiently satisfied with the Minister’s comments in respect of my Amendment 2 and I would like to test the opinion of the House.
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.
Lord Lansley (Con)
My Lords, I am very grateful to all noble Lords who have taken part in this short debate. It has raised a number of important issues, and I am grateful to the Minister for the clarity that he brought to the subject—partly from my own point of view, in understanding how the legislative provisions work, which is always helpful. I have to confess that I know much less about railways than the noble Lord, but I try to find out how legislation works, since that is part of our job, and what he said was very helpful.
What he had to say about there being no changes to the legislative provisions and the arrangements in relation to open access was important and I will come back to that in a minute.
I do not think there is any merit in pressing the amendment now, because when we come to look at the role of Great British Railways in the major Bill to follow, we will look at issues such as the one my noble friend raised—the relationship between Great British Railways and the control of train paths. That is exactly the problem that occurred in France, and I think my noble friend Lord Moylan also discussed the abuse of a dominant position. We will need to look at how that kind of scrutiny and competition can be sustained, notwithstanding the monopoly aspects of Great British Railways. However, in light of all those helpful points, I beg leave to withdraw Amendment 3.
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.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lords, Lord Lansley and Lord Moylan, for their amendments in this group. I will speak first to Amendment 4. Following enactment of the Bill, there would be just two routes by which the Secretary of State could secure the operation of passenger services. The first option, and this is the option we plan to use, would be to make a direct award to a public sector company under the amended Section 30 of the Railways Act 1993 and in accordance with the Public Service Obligations in Transport Regulations 2023.
The second option, which is a very limited option, would be to use the power to continue an existing private sector franchise temporarily under new Section 30A. This power is deliberately limited only to circumstances where the Secretary of State is satisfied that a transfer to a public sector company is not reasonably practicable. This means the Government would expect to use it only as a last resort, for a short period, to avoid a transfer causing disruption to passengers or staff. Apart from this very limited power in new Section 30A, the Bill leaves no other route by which the Secretary of State could contract with a private sector operator to run either existing services or new ones. This is entirely consistent with the Government’s very clear policy in favour of public ownership of services that form part of the national railway network.
On the point from the noble Lord, Lord Lansley, about DfT OLR Holdings Ltd, I confirm that award to it is securing the provision. All services currently designated under Section 27 will be provided under Section 30 by a public sector operator as existing contracts expire. The noble Lord also asked about the Secretary of State’s power to secure the provision of new services through a public sector company if those services had never been provided under a franchise agreement. Regulation 21 of the Public Service Obligations in Transport Regulations 2023 allows the Secretary of State to vary the terms of a public service contract to include additional services, and so would provide the necessary statutory basis for her to secure the provision of new services from a public sector operator.
The noble Lord asked whether the Bill will leave an option for the Secretary of State to procure East West Rail services from a new private sector operator, and the simple answer is that it will not. The Government have no plans for long-term private sector operation of the new East West Rail services, which will commence operation next year, nor any other services that the Secretary of State is responsible for procuring.
There are—and, after this Bill, there will remain—two ways in which other parties might operate or secure the provision of services on the rail network. One possibility is that a third party might operate them as an open access operator, as is the case with Hull Trains, for example. Another possibility is that a mayoral or combined authority or other local authority might secure the operation of services either by running them itself or by procuring a third party to do so. As I will explain in relation to the next group of amendments, the Secretary of State can facilitate this by granting an exemption under Section 24 of the 1993 Act, which takes the relevant services out of the scope of the surrounding provisions of that Act.
I noted with interest that my noble friend Lord Liddle remarked about involvement of developers, for example. I echo his sentiment that there will be ways of getting private capital in, particularly through development, that have not really been explored so far.
I hope that my explanation reassures the noble Lord, Lord Lansley, that the Government have carefully considered the implications of the Bill and the options it will and will not leave open, and I hope he will feel able to withdraw this amendment.
Amendments 5 and 6 from the noble Lord, Lord Moylan, deal with competed concession contracts. As I set out to the noble Lord in Committee, these amendments would remove the opportunity to deliver the benefits of public ownership, which a clear majority of the public support and which was a specific commitment in the manifesto on which this Government were elected. For the following reasons, I cannot agree to the amendments.
First, a concession model would mean the taxpayer continuing to fund substantial profits for private sector operators. A concession model along the lines of Transport for London’s contracts would expose operators to more financial risk than today’s contracts, where government bears virtually all the financial risk. Under such a model, train operators would price their bids to generate even more profit than the £110 million to £150 million per annum that they can earn under the current contracts. Our plans for public ownership will eliminate those fees and profits entirely—in the Government’s view, continuing to line the pockets of private shareholders is not a good use of taxpayers’ money.
Secondly, TfL concessions are a relatively inflexible form of contract which is not well suited to the needs of the national railway network. For a concession contract, the procuring authority has to define the service levels and standards at the start of the procurement process, and those levels and standards then endure for the life- time of the contract. Changes to the service specification can be achieved only through costly negotiation and agreement with the operator which already holds the contract.
That is very different from the London bus market, for example, which we discussed in Committee, where the concession model is much more suitable because there is a large number of small individual contracts. For the London Overground, much of which is heavily constrained by the geography of the railway network and the other services that run on it, it might be satisfactory, but the whole of the national railway network requires greater flexibility to adapt to changing patterns of demand. Finally, and most importantly, a concession model would not resolve the fragmentation of the current system, nor would it deliver on the Government’s commitment that rail services should be run by and for the public.
The noble Baroness, Lady Randerson, referred to devolved Administrations and local mayoral authorities. We will come to devolution further in the next amendments.
I urge noble Lords not to press their amendments.
Lord Lansley (Con)
My Lords, I am very grateful to all noble Lords who participated in this shortish debate, particularly to the Minister for the additional clarity sought by my Amendment 4.
My noble friend raised the issue of concessions, which I suspect we will come back to. It is one of those occasions where one looks at the interesting examples of what is happening in the French railway system, which is using concessions to a greater extent and is perhaps not encountering the objections that the Minister cited in relation to TfL’s concessions. That is a comparison that I am not qualified to make, but I know my noble friend on the Front Bench might pursue it.
I thoroughly agree with the point made by the noble Baroness, Lady Randerson, about the desirability of maintaining devolution models or perhaps extending them. The use of the exemptions under Section 24 should be considered. The Minister said that, in addition to the two routes the Secretary of State might use for securing the provision of services, that is the additional route, as it were, alongside open access, which we discussed in the previous group.
Lord Hendy of Richmond Hill (Lab)
My Lords, I would like to clarify a point for the noble Lord, Lord Moylan, on Amendment 13. If I inadvertently implied that the Government would somehow reduce the present freight target of 75% growth by 2050, I did not mean to. We intend that target to remain.
I will speak first to Amendment 7, proposed by the noble Baronesses, Lady Pidgeon and Lady Randerson, and I recognise the passion with which the noble Baroness, Lady Pidgeon, spoke on this. In responding to this group of amendments, let me start by saying very clearly that this Government are absolutely committed to strengthening the role of local leaders and local communities in shaping the provision of rail services in their areas. We are a pro-devolution Government. A stronger local voice is absolutely essential if the railway is to play its full part in this Government’s missions of kick-starting economic growth, breaking down barriers to opportunity and accelerating towards net zero. Our plans for reform in the substantive railways Bill will provide that stronger local voice. I can reaffirm to your Lordships’ House that the railways Bill will include a statutory role for devolved governments and mayoral combined authorities. They will be involved in governing, managing, planning and developing the railways.
Linked to this, we expect GBR to closely collaborate with areas through partnership agreements, which will build on progress made through existing arrangements the department has with the West Midlands Rail Executive and Transport for the North. We are already working with leaders in areas such as Greater Manchester, the West Midlands, the north-east and Liverpool City Region to discuss how these relationships could work, with governance supporting these discussions established. While final agreement of these partnerships will need to wait until GBR is formally established, the Government are committed to working with mayors to explore opportunities for progress ahead of GBR operation.
We are clear that together the statutory role and partnerships must allow genuine and meaningful opportunity to influence service levels and standards, and to drive forward the integration of local rail services with other modes as part of a genuinely joined-up local transport offer to passengers. It must allow for things like common branding, integrated timetabling, integration of fares and ticketing in the manner that Londoners, and people who live and work in London, completely understand. By getting this right in the wider railways Bill, we can offer local leaders the much greater level of influence that they are seeking. Existing options for local authorities to directly procure or operate their own services will remain in place, subject to the Secretary of State’s approval, as is currently the case. Alongside our proposed statutory role, our plans for the design of Great British Railways will make it easier for local leaders to engage with and influence what happens on the railway. I am so pleased that the noble Baroness, Lady Randerson, raised her dislike of a one-size-fits-all approach, and I agree with her.
First, I expect GBR will adopt a route and regional structure, with—importantly—a single leader responsible for train operations, rolling stock, staff and infrastructure within a given geographical area. This is material to the reason for public ownership and will create revenue growth and efficiencies and improve performance. A regional and route approach will ensure that GBR is close enough to local communities to understand and respond to their needs, while also being clear that they are part of a national system that needs to work coherently as a whole. It will also mean that local leaders will need to engage with just one organisation—GBR—rather than an infrastructure owner and, potentially, several different train operators.
Secondly, where local leaders wish to promote service improvements, having track and train under unified leadership will mean GBR can take a whole-system approach to identify the most cost-effective solutions. In the past, Network Rail has been much too quick—because it is an infrastructure provider—to opt for the most expensive solution, which is infrastructure change. A whole-system approach would begin by asking whether a service enhancement can be delivered with additional staff, while making better use of the existing train fleet on the existing railway infrastructure. If the answer is no, the next question should be whether the improvement can be delivered solely through changes to the rolling stock fleet. If, and only if, the answer to that question is also no, it might then be sensible to look at infrastructure change, which is usually the most expensive option and certainly takes the longest time.
The crucial point is that one organisation, GBR, on a route or regional basis, will be able to take a view across all those options with local leaders. I would encourage local leaders who think they might want to take over responsibility for operating or procuring services in their areas to keep an open mind until they have seen our full proposals for wider reform. I also reassure noble Lords that, where local leaders conclude that they wish to take over that responsibility, the current Bill does not stand in the way.
Existing legislation in Section 24 of the Railways Act 1993 allows local authorities and others to apply to the Secretary of State for specific services to be exempted from the franchising regime. Where the Secretary of State grants such an exemption, the exempted services are no longer caught in the surrounding provisions of the 1993 Act. So long as adequate alternatives are being made available, this means that the Secretary of State is no longer obliged to secure the operation of these services and they are not subject to the restriction that says they can be provided only by means of a public sector company. The relevant local authority can then operate or procure the services to its own specification, using its existing powers under other legislation, which, in the case of Transport for London, are conferred by Section 173 of the Greater London Authority Act 1999.
This is the mechanism by which services have been devolved in London and in the Liverpool City Region. The current Bill does not make any changes to the way this mechanism works. Following enactment of this Bill, the railways legislation will still provide the same opportunity as today for the Secretary of State to devolve services where she considers it appropriate and where it supports a well-functioning national service, and if we receive any such requests for the devolution of services, we will consider them openly, fairly and carefully, taking proper account of local, regional and national interests. I hope this reassures the noble Baronesses.
On Amendment 12, from the noble Lord, Lord Moylan, I thank the noble Lord for this amendment, which would require the Secretary of State to publish a report on the proposed communications framework between Great British Railways and local transport authorities across the UK. I can reassure the noble Lord that communicating effectively with local authorities is of critical importance to the Government. I have already explained that the Government are keen to ensure that local communities can influence the design and delivery of passenger rail services in their areas. We expect that GBR will engage with local transport authorities regularly on this and on key strategic matters, such as housing and economic growth.
I have also already mentioned the proposed statutory role, which will enable partnership agreements between mayoral combined authorities and GBR. The Government are already engaging with mayoral authorities to develop a framework for these partnership agreements and the intention is that the framework will enable varying degrees of influence, depending on the ambitions and institutional capability of partners. This will include close collaboration on the delivery of rail elements of local transport plans and greater opportunities for local partners to directly invest in the railway and to influence service provision.
Due to devolved infrastructure funding arrangements, my department currently has a memorandum of understanding with the Scottish Government which outlines interactions regarding the governance of Network Rail. The devolved operator, ScotRail, also has an alliance agreement with Network Rail which sees both organisations working closely together to better integrate the railway. For devolved services in Wales, there are a number of supporting devolution agreements between the department and the Welsh Government which set out the existing relationship. Under GBR, these devolved accountabilities will remain in place. We will therefore work with the devolved Governments to update existing arrangements and ensure that the benefits of establishing GBR are felt across Great Britain.
In conclusion, the report proposed by Amendment 12 is not necessary, given that the Government will be setting out their plans in a consultation which will be published shortly. This will provide not only detail on our proposals but also the opportunity for local authorities, mayoral combined authorities and noble Lords to input their views on these proposals. I hope my explanations in response to these amendments will be sufficient to persuade noble Lords not to press their amendments.
Baroness Pidgeon (LD)
One thing that has united this House in our discussions is support for further devolution and acknowledgment of the success of devolved lines in London and elsewhere in the country. I thank the Minister for his detailed response and serious consideration of the points we raised in Committee. I was really pleased to hear the words, “This is a pro-devolution Government”, because we have not heard that in the debates to date. I was also pleased to hear that the Minister will ensure that in the next legislation, the role of local authorities will be strengthened, and that he will include that statutory role to ensure their involvement in the governance, management and provision of rail services.
Transport for Greater Manchester, which my noble friend Lady Randerson met with recently, will be reassured to hear that, ahead of Great British Railways being established and on the statute book, there are opportunities for it to develop its ambitious plans for the Bee Network. What was said today about branding and being consistent in these metro areas was really reassuring, given that we want to drive a modal shift and get more people using public transport.
I was really pleased to hear the Minister say that the Secretary of State will still be allowed to exempt lines—that if local leaders want to take over a line, their request will be seriously considered and an exemption granted where appropriate to allow lines to be run across the country, as we have seen in London and Liverpool. On the basis of what the Minister has said, I beg leave to withdraw Amendment 7.
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.
Lord Hendy of Richmond Hill (Lab)
My Lords, I will speak first to Amendment 8, which was tabled by the noble Baroness, Lady Brinton, and is supported by the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Holmes, and my noble friend Lord Blunkett, and to Amendment 15 which is tabled in my name. I thank the noble Baronesses for their amendment and for the productive discussion we had last week. As I said in Committee, I feel personally ashamed of the industry that I am so familiar with as so many deficiencies come out of the way that it treats passengers, particularly those in need of some assistance. Many of those deficiencies are a result of the fragmented structure of the privatised railway.
The noble Baroness, Lady Grey-Thompson, has shown me and described to me the plethora of apps that you need to buy tickets, the differences in how they work, what they do and whether they enable you to book a seat, a wheelchair space or a ticket for the whole of your journey. I am shocked by it, and I cannot bear for her to show me much more, because all she would do is show me more apps that work differently from those that she has already shown me. We cannot and should not tolerate that. The lack of consistency in train design has been highlighted today, as has the lack of reliable, accurate information about whether crucial facilities such as lifts and accessible toilets are working, and there are other issues.
Looking ahead to the wider railways Bill, establishing Great British Railways will provide the opportunity, for the first time in three decades, to begin to take a coherent approach to these matters. Some of them can be done quickly, some of them we can start now and some of them will, by virtue of the longevity of rolling stock and structures, take a long time, but if we do not start, we will never achieve them. However, I also agree that the noble Baronesses and the many disabled passengers on whose behalf they speak should not have to wait for Great British Railways to come along before we start to improve things, so, as I discussed with the noble Baronesses last week, the Government have tabled an amendment and we also have a number of verbal commitments that I shall place on record in the House today.
First, the Government will work with the disabled community to develop and publish an accessibility road map that will explain the actions we intend to take to improve things for disabled people or others requiring assistance in advance of GBR being set up. We are not waiting for it to do that. The road map will suggest how the Government can work with the industry to prevent situations like those we have heard about in this House so far. As discussed, it will cover important matters that the noble Baronesses have raised with me. They include measuring and reporting on lift reliability and maintenance, providing confirmation and clarity about the legal obligation of operators to provide every disabled person with assistance when travelling whether or not a pre-booking has been made, and improving consistency in the service provided to disabled people across the board. We will engage with the disabled community on the development of the road map to ensure that when it is finished, it works for them.
Secondly, I commit before the House that this Government will provide the funding to develop phase 5 of the passenger assist app. As the noble Baroness, Lady Grey-Thompson, knows from our previous discussions, I have made it clear and will continue to make it clear to those involved that the development of this next phase of the programme must be done in consultation with the noble Baronesses and representatives of disabled people to ensure that it delivers the assistance that people deserve and addresses their needs.
Finally, we have tabled Amendment 15, which is before the House today. It amends the Equality Act 2010 to make it clear that publicly owned train companies are subject to the public sector equality duty. Although it is the Government’s view that the public sector equality duty already applies to publicly owned train operating companies, we are concerned that that is currently not as clear as it needs to be. By adding them to the list of public authorities in the Act, we will ensure that there can be no mistake. Network Rail and Transport for London are already named in the Act, but train operating companies previously were not, which is something that, if this amendment is agreed, we will remedy.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Young, for tabling Amendment 9 and for our productive meeting the other day. I recognise that there is a question of whether public ownership will lead to certain liabilities moving on to the public sector balance sheet and therefore counting towards the public sector net debt. I cannot speculate about future balance sheet treatments and impacts as those will always depend on classification decisions that are a matter for the independent Office for National Statistics.
What I can say is that four train companies are already owned by DOHL, including LNER for six years and Northern for four, and the position has not changed so far. The Office for National Statistics recently considered the classification of TransPennine and concluded that it should remain classified as a public non-financial corporation. The mixed economy that we already have is relevant to the question asked by the noble Baroness, Lady Randerson, about the categorisation of a mixed economy. We are going to be there over the next several years as the train operations come back one by one.
It has been suggested in debate that, if liabilities move on to the public sector balance sheet, that would affect public sector net debt and unduly constrain future investment. The noble Lord, Lord Young, referred to events at Network Rail after it was reclassified, many of which I witnessed when I went there in 2015. In fact, a large number of the things that happened were really good. The organisation was not on the public balance sheet. It had spent an enormous amount of money: when I turned up in July 2015, it had debt of £54 billion, roughly equivalent to the whole of New Zealand’s national debt. With the last chief executive and the present one, we have put it into great order and reduced its expenditure. It has reduced capital expenditure too, which I think was also wise. The list of enhancements that it was proposing to carry out were beyond its capability then, and beyond the funding of even the unlimited amounts of debt that it could call on.
Nevertheless, the existing publicly owned train operators are the driving force behind the current multibillion-pound pipeline of new rolling stock orders. Network Rail is still investing in the railway infrastructure, and it shows that public ownership need not be a barrier to investment.
Looking more broadly across the public services, noble Lords may have seen that, alongside the Budget, the Chancellor announced changes to the fiscal rules to measure government debt in a way that recognises the need to better support capital investment. This Government recognise the pressing need to rebuild our economy and invest in our public services after years of underinvestment.
It might be helpful to provide the noble Lord, Lord Young, with some specific reassurance, and I can reassure him that we are not seeking to close the door on private investment. Where there are genuine opportunities for private investment—which, for example, might well be, and in the future should be, in relation to property development around stations or car park investment—we would expect Great British Railways to work with relevant local authorities and the private sector to promote these opportunities. I reassure the noble Lord that securing appropriate private investment will be an absolute priority for this Government. I hope that provides him with enough reassurance to withdraw the amendment.
Next, I will address Amendments 18 and 19 in turn. I thank the noble Lord, Lord Moylan, for these amendments. Amendment 18 would require the Secretary of State to lay a Statement before Parliament within three months of the Bill’s enactment. The Statement would need to set out the Government’s intentions concerning the terms, conditions and pay rates of staff of existing train operating companies as they transfer to become employees of public sector companies.
At that stage, it would be a very simple Statement. The Government fully expect that the TUPE regulations will apply, preserving employees’ existing contractual terms and conditions as they transfer from private operators to subsidiaries of directly operated holdings, in the same way as they have done in previous transfers. I can also confirm that the Secretary of State’s contracts with public sector companies would ensure that staff could continue to be members of the railways pension scheme. That being the case, there is no need for a further Statement of the kind mandated by the amendment.
The noble Lord asked what the Government intend should happen to pay, terms and conditions in the period after employees have transferred to a public sector operator. Although this is beyond the scope of the amendment the noble Lord has tabled, I am happy to address the question by saying three things.
First, public ownership under this Bill does not give rise to any imperative to harmonise or otherwise amend staff terms and conditions. Decisions about any such changes are for the future. In contrast to the previous Government’s approach, we would expect to discuss these matters openly and constructively with the workforce and their representatives before settling on any specific proposals. If the noble Lord was serious in his proposal, he would be able to tell me, for example, that the previous Government consulted the staff of LNER when it was transferred into the public sector. I think he will find that they did not. I am not going to speculate about the outcome of any such future discussions.
Secondly, resolving the long-standing disputes with the rail unions, as we have done and are doing, clears the way for vital workforce reform to modernise our railways and do away with outdated working practices. We do not need to wait for Great British Railways to start this essential work—although we have needed to clear up a number of disputes, including one so long-standing that it has been a dispute since 2015—and we will do this by working with the workforce, not against them.
Thirdly, looking further ahead to Great British Railways, the overall structure for GBR and the mechanics of how staff will transfer into it are still to be decided. We will want to make sure that GBR retains and treats fairly the committed and talented staff who are essential to keep the railway running for its customers. We will have more to say about this when we publish our proposals for the railways Bill.
Amendment 19 would require another report, this time on the impact of national insurance employer contributions on the operational costs of public sector companies. I am sure that the noble Lord will recognise that employer national insurance contributions are just one relatively small component of train operators’ overall costs—less than 2.5% of total costs in this financial year. Furthermore, other significant costs, such as diesel and electricity, are volatile. It would therefore take significant resource to routinely report on all these different costs, which are subject to change all the time.
This reporting would add little value, particularly when any national insurance costs incurred by a DfT-contracted operator are simply paid to another part of government. Public ownership will make no difference to the net cost to government of the relevant train operators’ employer national insurance contributions; the Government are already both the funder and the recipient of these.
Having said that, I will be pleased to provide an estimate of any impact as soon as I am able to. At that point, I will happily write to the noble Lord and place a copy of the letter in the House Library. In the light of this, I urge the noble Lord, Lord Moylan, not to press his amendments.
Lord Young of Cookham (Con)
My Lords, as this is the last debate and possibly the last speech on Report, I commend the Minister for the patient way he has dealt with the proceedings on Report, drawing on his unique knowledge of the industry we are debating. It has been a pleasure to watch the contrasting debating styles of him and the more flamboyant style of my noble friend Lord Moylan.
I welcome what the Minister said about private investment, but I have to point out that the Bill specifically precludes the sort of investment we saw with the franchise. For example, Chiltern widened single track into double track and built new railway stations. That sort of investment by a train operating company is specifically precluded by the Bill.
On the substance of my concern, he said right at the beginning that there is a question about how the liabilities will be classified. He then sheltered behind the well-known phrase that he “could not speculate” about what the ONS will do. I think there is a distinction between the present position with LNER within the department, with relatively short-term liabilities for rolling stock, and the position with a 20-year liability and GBR. I remind the Minister that, in order to avoid Network Rail being reclassified as public sector body, Treasury Ministers specifically asked—this is under the Labour Government—other Ministers not to criticise the salaries of Network Rail for fear that the ONS would classify it as a public body.
Having said that, the Minister has gone as far as I could have expected him to. He does not have in his breast pocket a letter from the Treasury giving him a guarantee against the consequences of reclassification, but against the good-natured reply he gave me, I seek leave to withdraw my amendment.
Lord Moylan (Con)
My Lords, this amendment deals with devolution and requires the Government to start work on that in the next few months and explain how they are going to do it. One thing that is new today, as far as I am aware and I have listened fairly carefully to all parts of this debate, is that the Minister has said that he intends to issue his consultation document before the end of this calendar year. Did my ears hear that correctly?
Lord Moylan (Con)
On the basis of that “hope”, which I imagine the Minister will expect to be held to—and which I will be holding him to—I am prepared not to move this amendment, because it will simply be timed out by that consultation document which would replace it, so to speak.
“Application of public sector equality dutyIn Part 1 of Schedule 19 to the Equality Act 2010 (authorities subject to public sector equality duty), at the appropriate place under the heading “Transport”, insert—“A public sector company providing services for the carriage of passengers by railway under a public service contract awarded under section 30 of the Railways Act 1993 (public sector provision of services).””Member’s explanatory statement
This amendment provides for public sector companies providing train services under section 30 to be subject to the public sector equality duty.
Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024
Lord Hendy of Richmond Hill Excerpts(1 year, 3 months ago)
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.
Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the order was laid in draft before this House on 24 July 2024. It will ensure that sustainable aviation fuel, also known as SAF—I hope that your Lordships will tolerate the use of that acronym—makes up an increasing proportion of the jet fuel supplied to the UK each year. As a consequence, the greenhouse gas impact of flying will be significantly reduced. The draft order, referred to as the SAF mandate, will contribute to fulfilling our manifesto commitment to secure the UK aviation industry’s long-term future and it has received significant cross-party parliamentary support to this point. No issues were raised on the draft order at the Secondary Legislation Scrutiny Committee or the Statutory Instruments Joint Committee.
The SAF mandate is a bespoke mechanism for guaranteeing demand for SAF in the UK. It will send a strong signal to industry that SAF will play a pivotal role in the future of UK aviation and will provide an incentive for SAF to be supplied. However, it is just one pillar of a wider approach to capitalise on the environmental and economic opportunities that SAF offers. The UK will also lay legislation to support SAF production in the UK by providing revenue certainty. This will strengthen the UK’s leadership in SAF production, improving its fuel security while fostering industrial development and generating green jobs.
We are pleased to see SAF starting to be brought to the UK market in small but increasing volumes. The SAF mandate will help to address barriers to widespread adoption and realise the full potential of this technology. The United Kingdom has a rich history of being at the forefront of aviation innovation and we will continue to show leadership by introducing one the world’s most ambitious frameworks to drive demand for SAF.
SAF is blended with conventional kerosene to be used in existing aircraft and engines without modification. It is a low-carbon fuel that uses sustainable feedstocks instead of crude oil, which achieves greenhouse gas savings across its lifecycle production and use. It can be derived from a wide range of sources that achieve carbon savings relative to fossil fuel in different ways. They include biomass derived from wastes and residues; fossil wastes that cannot be avoided, reused or recycled; and renewable and nuclear energy. This means that we can draw on resources that would otherwise be discarded, such as agricultural residues and black binbag waste, to make jet fuel. The existing renewable transport fuel obligation, or RTFO, rewards the supply of SAF but does not obligate aviation fuel supply. By introducing a specific obligation on aviation fuel, we will guarantee a minimum supply of SAF.
I turn to the specific content of the statutory instrument. It introduces two obligations on suppliers of fossil jet fuel: a main obligation and a power-to-liquid obligation. The obligations are placed on jet fuel suppliers at the point at which their fuel can be supplied only to UK aviation. Each obligation period is one year in length and runs on a calendar year basis. To fulfil the obligations, suppliers must redeem SAF certificates at the end of the obligation period. Certificates are awarded to suppliers of SAF that meets the sustainability criteria. The number of certificates that a supplier receives is in proportion to the greenhouse gas savings that it achieves.
Power-to-liquid fuel, a type of SAF made from carbon dioxide and renewable or nuclear power and heat, will be rewarded with specific certificates that can be used to meet the power-to-liquid obligation. This will specifically incentivise the supply of these fuels, given their potential for higher greenhouse gas emissions reduction and lower risk of environmental impacts.
SAF made from segregated oil and fats, such as used cooking oil, commonly called HEFA, will also receive separate certificates. Suppliers can use these certificates to meet their main obligation, but the amount will be capped, starting from 2027, to allow market space for novel technologies. All other types of SAF are rewarded with standard certificates, which can be used to meet the main obligation. All certificates can be traded between account holders for a price determined by the market. The value of these certificates therefore provides a revenue stream for producers of renewable fuels and demand for their products in the fuel market.
Where a supplier has a shortfall in certificates to meet the obligations, a supplier must pay the buyout, which is a fixed price per unit of energy. The purpose of a buyout mechanism is to provide a way for suppliers to discharge their mandate obligation in cases where they are unable to secure a supply of SAF, preventing excessive costs from being passed on to consumers. This price is set to be higher than the expected cost of producing and supplying the same unit of SAF under normal market conditions, thus incentivising the supply of SAF.
The instrument also sets out the criteria that SAF must meet in order to be eligible, to ensure that we maintain the highest sustainability credentials. The order makes provision for the administration and management of accounts for suppliers to ensure that a record is kept of obligations and certificates. It also sets out appropriate processes for the revocation of certificates and issuing penalties where certain provisions are contravened.
Renewable fuels already contribute one-third of transport’s emission reductions from the current carbon budget. However, this is almost exclusively in the road fuel sector. Introducing the SAF mandate will broaden the use of low-carbon fuels into aviation and secure the long-term future of this transport mode. It is projected that, between 2025 and 2040, the SAF mandate could deliver up to 25 million tonnes of SAF, securing a saving of up to 54 million tonnes of carbon dioxide.
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.
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 Hendy of Richmond Hill (Lab)
I thank all noble Lords for their contributions to this debate. I will take the questions from the noble Baroness, Lady Randerson, first. Her first questions were about the length of time that it has taken to bring this statutory instrument together.
We have engaged extensively with industry in this area. Two consultations have been completed and, in both cases, industry was generally supportive of our proposals. The most recent consultation, in March 2023, received 104 responses and the government response to this was published in April 2024. We received responses from a range of stakeholders, including fuel suppliers, airlines and NGOs, so it has been extensively consulted on. This statutory instrument replaces the previous one tabled, because there has been a change of Government; the current one was therefore tabled by the new Government.
The noble Baroness asked whether this is good SAF and what good SAF is. The Government have been clear that the mandate must deliver fuels with the highest sustainability credentials. We are therefore putting in place strict sustainability criteria that SAF must meet to be eligible under the mandate. SAF must be made from sustainable waste or residues, such as used cooking oil or forestry residues; recycled carbon fuels, such as unrecyclable plastics; or power-to-liquid fuels made using low-carbon, renewable or nuclear energy. SAF produced from food, feed or energy crops will not be allowed. We will continue to monitor the sustainability of SAF pathways to ensure that high sustainability standards are maintained.
The noble Lord, Lord Trefgarne, asked whether this applies to general aviation. I have been referred to a very complex answer, but I am not sure that I can do full justice to his question. If the noble Lord will indulge me, I will write to him fully on that.
Lastly, the noble Lord, Lord Moylan, raised some questions. He asked about the cost implications for passengers. I am assured that, although SAF will be more expensive than traditional jet fuel, it must be right that the costs of decarbonising the fuel are borne by those that produce the emissions. Providing that sufficient SAF is available, increases in average airfares will fall within the range of their annual variations, seen historically, from which it is not difficult to deduce that the effect on passenger numbers will be quite small.
The noble Lord, Lord Moylan, is correct that the guaranteed return is not in this instrument. That is why the Government have committed to a revenue certainty mechanism.
If there are any questions that I have failed to answer completely, I will write to noble Lords and the noble Baroness about them.
Lord Moylan (Con)
May I briefly ask the Minister something? There seem to be two guarantees going on here. Might the Minister be able to inform your Lordships about how they will interact? One is a guaranteed price mechanism. As I understand it, although I am happy to be corrected, the suppliers will be guaranteed a price for the SAF, the suppliers being the large companies that supply this type of fuel—the BPs and so on of this world. The other is a guaranteed return to the investors. The investors are presumably the people who will pay for the construction of the facilities that will produce this material, source it and so on—that is, the infrastructure required to generate it. Can the Minister say how those two guarantees interact, both legislatively and financially? Is the Minister saying that one is being legislated for in this instrument and one is to come later? Noble Lords would be interested to understand that, I think.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention. He is right that there are two mechanisms. The revenue support mechanism Bill will introduce revenue certainty for SAF producers looking to invest in new plants in the UK. Together with the SAF mandate, those measures will give the investment community confidence to invest in these novel and innovative technologies.
The revenue certainty mechanism aims to boost greener flying and support an industry estimated to add more than £1.8 billion to the economy. This will help secure the supply of SAF for UK airlines. The legislation for a revenue certainty mechanism will be in place by the end of 2026. If the noble Lord would like me to explain further how those two mechanisms interact, I would be absolutely delighted to write to him.
To conclude, greener transport is central to the delivery of the UK’s cross-economy climate targets. It directly supports the Prime Minister’s mission to make Britain a clean energy superpower and accelerate our journey to net zero. SAF is one of the key technologies that will facilitate this change. Introducing the SAF mandate will allow the UK to capitalise on the opportunity that SAF presents for decarbonising the aviation sector and will support the transition to net zero.
Franchising Schemes (Franchising Authorities) (England) Regulations 2024
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Franchising Schemes (Franchising Authorities) (England) Regulations 2024.
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, these draft regulations relate to access to bus franchising powers for all types of local transport authorities in England outside London. The regulations bring into effect paragraphs (b) to (g) of Section 123A(4) of the Transport Act 2000, such that the types of authorities listed in those paragraphs come within the meaning of “franchising authority”.
These powers were previously limited to mayoral combined authorities and mayoral county combined authorities. However, these regulations give all types of local transport authorities access to powers to franchise their bus services. In doing so, they will ensure that decisions are made at the right level. These regulations aim to give the power to local leaders to determine the most appropriate action to deliver an improved bus network, based on the needs and circumstances of their areas. This step does not mandate local transport authorities to franchise; it is about providing them with a suite of tools to support their communities and deliver better bus services.
The department will build on the progress of these draft regulations through the introduction of the buses Bill later in this parliamentary Session. The Bill will deliver further changes to make bus franchising easier to deliver, alongside other measures on areas such as accessible travel. It will also improve bus services for local transport authorities that choose not to franchise, allowing greater flexibility over bus funding and letting local leaders deliver their own local transport priorities. Alongside this, the department is building its capacity to provide practical support to local transport authorities throughout the franchising process, should they wish to pursue it.
I will now provide some background information about these regulations. Bus franchising powers for local transport authorities in England, outside London, were created in the Bus Services Act 2017. Powers were automatically given to mayoral combined authorities and mayoral county combined authorities to allow them to prepare a franchising scheme assessment—essentially a business case—if they chose to do so, without requiring consent from the Secretary of State for Transport.
Currently, all other types of local transport authorities wishing to prepare a franchising scheme assessment face a two-stage pre-assessment process. First, regulations must be made which switch on access to the franchising powers. Secondly, the Secretary of State for Transport must give her consent to any individual authority to prepare an assessment of their proposed franchising scheme. This instrument implements the initial stage of this process for non-mayoral combined authorities, ensuring that they will need to obtain the Secretary of State’s consent only to prepare a franchising scheme assessment. This will reduce the barriers facing these types of local transport authorities in pursuing bus franchising.
I turn to the detail of the regulations. Bus franchising is a model for providing bus services where a local authority determines the details of the service and private operators are contracted to run the services. Alternatively, in a deregulated market, any company, subject to minimum safety and operating standards, can operate and have control over bus services. These regulations seek to empower local leaders to choose the model that works best in their area to manage their bus services. Bus franchising is one of those tools. Alternatively, local transport authorities can pursue high-quality enhanced partnerships with private operators or public ownership.
These regulations are part of the Government’s delivery of their manifesto commitment to give
“new powers for local leaders to franchise local bus services”.
Bus franchising will give communities a greater say in the services they can use, connect people to opportunities and benefit those on lower incomes, who disproportionately use buses.
This instrument implements the first stage of this process for all types of local transport authorities so that they require the Secretary of State’s consent only to proceed with the assessment. The department is also revising the bus franchising guidance to streamline the franchising process. The Government consider that this onerous process has acted as a barrier to local authorities. Removing the first stage of this process will make it easier for local transport authorities to pursue franchising if they wish to do so. The regulations improve the suite of tools on offer for local transport authorities to deliver better buses.
I am pleased to say that the statutory instrument was cleared without comment by the Joint Committee on Statutory Instruments. To address the only request made by the Secondary Legislation Scrutiny Committee, for more information on franchising, the department is also revising its bus franchising guidance, which sets out the franchising process accessibly and in detail.
These regulations represent an important first step towards delivering on the Government’s aim of ensuring that local authorities have the tools they need to plan and deliver services in a way that suits their communities. The forthcoming buses Bill, which will be introduced later in this parliamentary Session, will build on this progress. Through this instrument and the forthcoming Bill, the Government will deliver on their plan for improving the bus network and ending the postcode lottery of bus services. The plan is centred on putting control of local bus services back into the hands of the communities that use them and will give local leaders the freedom to take decisions to deliver their local transport priorities. I beg to move.
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.
Lord Moylan (Con)
My Lords, we recently had a Statement in the other place given by the Secretary of State on bus franchising. My understanding is that this instrument gives effect to that Statement—at least its initial parts. I recall that, when we debated that Statement in your Lordships’ House, I had the temerity to describe it as being essentially a bogus offer.
I gave two reasons for that, but I have now found a third, which is that the instrument does not actually allow local authorities to go in for bus franchising at all. All it does is allow them to apply to the Secretary of State for permission to prepare a plan for doing so, but nothing is said, and nothing has been said by the Minister, about what criteria will be applied when such plans are submitted. In order to understand the implications of this instrument, we need to understand that. The Minister has said nothing about how many applications he or his department expect to receive, or about what proportion of such applications he considers it likely that the department will grant. It is perfectly possible that the answers to all these questions is “zero” under this instrument, and that bus franchising will be no further forward as a result of this very grand announcement, which was made with great hoopla in the other place, and of this instrument than it is today. We really would like to know some of the answers to some of these questions in practical and not simply theoretical and legislative terms.
I return to the two reasons I gave when we debated the Statement in your Lordships’ House. The first is that the policy comes with no money attached to it. At the time, the Chancellor had not made her Budget Statement. She since has, so it should be open to the Minister to say how much money has been allocated to supporting local authorities to undertake franchising, because the whole purpose of franchising is to generate services which the market will not bear. Nobody denies that there is a cost to local authorities in undertaking franchising—a cost that they are most unlikely to be able to support from their own resources—so what money is the department, or are the Government in general, putting behind this greatly trumpeted policy?
My second cause for complaint in that earlier debate has already been referred to by the noble Baroness, Lady Randerson: the complete lack of capacity of local authorities, certainly outside the metropolitan areas, to put together and run a bus service as an integrated operation. There is more to this than simply saying “We’d like the buses to run here”. Route planning involves thinking about demand, the locations of passengers and their relationship to places of work, hospitals and other destinations, and so forth. That is a skill; it does not just come to a committee of local councillors sitting around a table. Even if you have experience of route planning, as we have seen in Manchester, you have to think about branding, fares and ticketing, and what you will accept by way of tender. Are you accepting cash or is it cashless only? You have to know what sorts of discounts, season tickets and so forth you are willing to offer. As the noble Lord knows, and as I have had the privilege of observing in the past, in the various positions that he and I have occupied, real skill is required to do this well.
The answer that we have had from the noble Lord so far is a mildly amusing one: the Department for Transport is going to set itself up as a centre of expertise in how to plan routes, and do branding, fares and ticketing, for bus companies and services throughout the country. Now, I fully acknowledge that there is at least one person in the Department for Transport who has the skill to do that, and that is the noble Lord the Minister. But he is going to be jolly busy doing all these jobs, being both a Minister and planning routes for modest settlements and hamlets in the remoter counties of England.
However, if it is not going to be the Minister, who will be recruited to do this skilled work in the Department for Transport? Will they be recruited on a sort of ad hoc consultancy basis? Is this department waiting speculatively for applications to arrive, which may or may not meet criteria that have not been vouchsafed to us so far, and which may then be rejected or accepted by the Secretary of State? How will this wonderful offer of skill and expertise inside the Department for Transport be achieved in practice? The noble Lord should not be allowed to leave this Grand Committee without explaining those things to us in some detail.
I come finally to a point that is new to me, because it struck me only yesterday evening when I went to a reception given by the Accessible Transport Policy Commission and found myself speaking to the chief executive of a private bus company—a commercial operation in a large provincial city; I will not say which. He described to me all the good work it was doing to make its fleet more accessible to people with disabilities. We even talked about something that was new to me, which I am interested to explore—dementia-friendly flooring.
He described to me the close relationship he had, working with the local authority, then he looked me straight in the eye and said, “You’re going to confiscate my business”. That took me aback, because I had not thought about it in those terms—but in practice that is what franchising will do. It is, in effect, the confiscation of a business. Of course, he may still secure the franchise, but then he would simply be operating services for somebody else, for a fee. He would no longer be running a business; he would simply be somebody else’s agent in doing that.
This is confiscation, like the nationalisation of the train operating companies, which is happening. I have to say to the Minister that there is an increasing whiff of Bolshevism about this Government’s transport policy—and we know that that did not end well.
Lord Hendy of Richmond Hill (Lab)
I thank noble Lords and the noble Baroness for their extensive comments. I turn first to the noble Lord, Lord Grayling, and his remarks about where this might apply and the circumstances in which it would be appropriate.
The primary thing to say about this is that it is a matter of choice. This statutory instrument extends choice to all local transport authorities, which might choose various solutions around the scale of public bus services in their areas.
I did not need to search for examples outside London because the noble Baroness, Lady Randerson, gave me some, including the very rural county of Cornwall, where the public transport network is now a model. It includes demand-responsive transport, to a limited extent, but it has also reintroduced bus services in places where they have not been seen for a very long time.
The noble Baroness’s example of Bournemouth, Christchurch and Poole is one of a combined conurbation where the bus services are, in my judgment, of quite a good standard. It may well be that the local transport authorities concerned decided that that service was sufficient, but there are many other places in England where the bus service is not judged to be of a sufficient standard, where it has fallen to a bare minimum and where the reintroduction of some service standards would not only be a good thing but would create revenue which would expand the total service provision.
Regrettably, I can find some examples of places—although I think it would be better not to name them—where sufficient short-term service cuts have been applied that the revenue generated is so low that the whole bus service is in a continual spiral of decline. There are other places where that has not happened. That is the supply side of the choice we are offering local authorities, so that they can do what they think is best.
The noble Lord, Lord Moylan, referred to demand-responsive transport. It is a solution, obviously, but the department is working hard on some experiments to seek to reduce the per-journey cost of DRT, which is very difficult. It is possible to register demand-responsive services, even in a franchised environment.
The noble Baroness, Lady Randerson, made a number of points; indeed, it was she who gave Cornwall as a very practical example of an extremely rural place that has, by experiment, succeeded in franchising and has a very good network. She referred to the criticism of the Secondary Legislation Scrutiny Committee. As I mentioned in my opening speech, the department is revising its bus franchising guidance in order to set out the process accessibly and in detail. I hope that this will satisfy the committee’s demand.
The noble Baroness, Lady Randerson, questioned the capacity of local transport authorities to do this job in rather more balanced terms than the noble Lord, Lord Moylan, did. The department recognises that active support is needed for local authorities that wish to franchise.
I draw both noble Lords’ attention to the Bus Centre of Excellence, which is funded by the Department for Transport and supported by the Chartered Institution of Highways and Transportation. The noble Lord, Lord Moylan, referred to my knowledge of this process as it applies to London. He will probably be very pleased to learn that the Bus Centre of Excellence is chaired by none other than Leon Daniels, who ran surface transport in Transport for London for seven years, I think, and has an intimate knowledge of how franchising works in London. Moreover, since leaving, he has got a very good knowledge of how it might work in the rest of England.
The noble Baroness referred to the impact of legislation and to the local authorities who have successfully continued to run their own in-house bus companies when many were disposed of. She is absolutely right that places such as Reading, Blackpool and Nottingham are good examples of where arm’s-length local authority companies have delivered very successful bus services. The Government intend for that route to be open to local authorities who wish to use it; it will be part of the scope of the buses Bill. It is right to offer local authorities a real choice about how they deliver their local bus services.
Railway 200
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Lord Faulkner of Worcester (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I refer to my railway interests as listed in the register.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, Railway 200 marks the anniversary in 2025 of the first public passenger railway in the world and will celebrate the railway’s contribution to the nation’s and the world’s development and connectivity. A reformed railway is vital to the Government’s commitments to deliver more growth, jobs and housing. Railway 200 is a celebration not only of the past with heritage railways but of the present and the future, including the UK’s exciting technical and engineering innovations and the career opportunities across Britain that they offer. My department is playing a full role in this.
Lord Faulkner of Worcester (Lab)
My Lords, that is a great Answer. In 1845, 20 years after the first passenger railway, Benjamin Disraeli wrote:
“The railways will do as much for mankind as the monasteries did”.
He was right about that. Can my noble friend the Minister be a bit more specific about the support that the Department for Transport is giving to Railway 200, particularly the financial contribution? Does he agree that the celebration provides a great opportunity to not only showcase what the early railway pioneers did but to look forward to what the railways can achieve in future?
Lord Hendy of Richmond Hill (Lab)
I have to agree with Disraeli after all these years. The railway is currently, and will remain, publicly supported to a great extent but with significant private sector contributions. As my noble friend would imagine, we are appealing to all the people whose businesses support the railway, to make sure that the public sector contribution is as low as possible at a time of financial stringency. We have not finished that process yet. Meanwhile Network Rail, which is supported by the department, has contributed some support to get the project going. I cannot say exactly what the department’s contribution is. I expect it to be as low as possible, and in due course if my noble friend asks we will be able to tell him. At the moment we are still collecting financial contributions from those people whose businesses support the railway and vice versa. As far as the nature of the celebration goes, quite clearly the benefits are not only a good celebration of history but of the fact that the UK’s railways are leading the world with technological innovation. Those are the things that we will be clearly showcasing alongside, as I said, the career opportunities offered.
Lord Parkinson of Whitley Bay (Con)
I too agree with the first Earl of Beaconsfield. As Heritage Minister, conscious that plans for the anniversary might be derailed by an intervening general election, I encouraged people from across the sector to liaise with the now Minister in his capacity as chairman of Network Rail. Little did I know that after the election he would be in such an excellent position to help deliver it. The Minister shares the passion of so many, particularly in that cradle of the railways the north-east of England, to ensure that this anniversary celebrates the past and inspires people for the future. I imagine he shared my dismay to hear the news in the Budget yesterday that the Government are not minded to honour the £15 million of capital funding for the National Railway Museum in York which we announced in March. Will he use his good offices to try to persuade his colleagues across government not to cancel that funding, particularly at such a historic juncture?
Lord Hendy of Richmond Hill (Lab)
It is a great pleasure to see the noble Lord in front of me. He was material in moving this project on at an earlier stage, for which I thank him very much. I had not caught the issue that he raises and my best course of action is to go away, inform myself, and then see what can be done about it.
Lord Ravensdale (CB)
My Lords, I declare my interests as set out in the register. The Midlands Rail Hub project is eagerly awaited by stakeholders right across the region, not least in addressing those east-west links in the region that have been such a problem in the past. I heard no mention of the Midlands Rail Hub in yesterday’s Budget. Can the Minister update the House on progress within the department on this vital project?
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?
Lord Hendy of Richmond Hill (Lab)
The Government are absolutely committed to maintaining jobs in the railway manufacturing sector. The noble Baroness needs to know that the creation of Great British Railways will enable the Government for the first time for a very long time to produce a long-term plan for rolling stock strategy for Britain, which will give much more clarity to the manufacturing industry about what will be replaced when.
Baroness Winterton of Doncaster (Lab)
I know that my noble friend the Minister believes, as I do, that rail freight is as important now as it was 200 years ago. Can he assure me that he will continue discussions with companies such as Freightliner, which has a base in Doncaster, which are eager to see a rail freight strategy to move more freight on to rail and help the Government meet their environmental targets?
Lord Hendy of Richmond Hill (Lab)
Indeed, I recognise that. I met the managing director of Freightliner on Tuesday. I met the managing director of DB Cargo on Monday. I met the managing director of GB Railfreight three weeks ago, and I have met the industry collectively since I took office. The Government recognise the importance of rail freight and the need to grow it. A target for the growth of rail freight with be part of the Great British Railways commitment.
The Lord Bishop of Newcastle
My Lords, the father of the modern railways, George Stephenson, was born in Wylam in my diocese. The noble Lord, Lord Parkinson, has already referred to the pride that the north-east feels in his legacy. Would the Minister consider adding his name to those of colleagues from all sides of this House and the other place in pledging support for the reinstatement of the Leamside line in the north-east, adding a modest 21 miles of connectivity to that region?
Lord Hendy of Richmond Hill (Lab)
The Leamside line is one of many projects—I have already had a question about the Midlands Rail Hub—that are part of the review commissioned by the Secretary of State for Transport. We need to allocate the funding we have for railways in the best possible way. The comprehensive review she has commissioned will seek to do just that.
Lord McLoughlin (Con)
My Lords, I welcome the department’s contribution to the 200-year anniversary. Will the Minister acknowledge that we have seen massive growth on the railways over the past 20 years, with passenger journeys going up from 700 million to 1.8 billion before the Covid pandemic? What is the Government’s plan to see them continue to grow? That growth has been brought about by bringing in the private sector.
Lord Hendy of Richmond Hill (Lab)
We all recognise the growth in passenger traffic on the railways in the past 20 years. There are many reasons for it. Sadly, post Covid, the railway has less patronage than it did and certainly less income than it did, so the Government’s proposals for a reformed railway have to address the issues on the railway as they are now, not what happened in the past.
MV “Ruby”: Ammonium Nitrate
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Lord Berkeley
To ask His Majesty’s Government what discussions they are having with the Great Yarmouth Port Authority about additional safety precautions to be put in place to enable the MV Ruby to dock with a cargo of ammonium nitrate.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
The Government have engaged with Peel Ports, which owns the port of Great Yarmouth, and the ship’s management company. They have provided guidance and advice to ensure the safe transfer of this cargo from the motor vessel “Ruby” on to another vessel for onward travel. Ammonium nitrate is regularly handled at UK ports and standard health and safety procedures have been, and are being, followed.
Lord Berkeley (Lab)
I am grateful to my noble friend for that Answer and declare an interest as an honorary president of the United Kingdom Maritime Pilots’ Association. The cargo of 20,000 tonnes of ammonium nitrate is benign on its own, but I know from construction experience what happens when you mix it with a little bit of diesel and an explosive: in Beirut, about two years ago, it demolished most of the city, as I understand it. Is Great Yarmouth a great place to have a transfer like this, when that ship has been sitting in the North Sea for probably weeks, if not months, trying to get some port somewhere to accept it and unload the cargo? I would be interested in my noble friend’s response.
Lord Hendy of Richmond Hill (Lab)
My Lords, the explosion in Beirut occurred because of the incorrect storage of a large amount of ammonium nitrate over a prolonged period. It was stored in a shed, alongside fireworks that caught fire and caused the explosion. The ammonium nitrate on the motor vessel “Ruby” has been stored correctly and is not believed to be compromised in any way. The port of Great Yarmouth has experience of handling agricultural dry-bulk cargoes including ammonium nitrate, over 200,000 tonnes of which are imported into the United Kingdom through various ports.
Lord Bellingham (Con)
My Lords, I declare an interest as a former MP for a constituency very near Yarmouth. I can endorse what the Minister has just said. He is aware, obviously, that this port, owned by Peel Ports, has state-of-the-art handling facilities for hazardous goods, including ammonium nitrate, and I have every confidence in Peel Ports’ ability to carry out this trans-shipment contract. Is he aware that it is going to be very important for the local economy? The port is doing well, but this is a big contract. Can he just comment on one point? The vessel was originally en route from the northern Russian port of Kandalaksha to, I think, Lagos via the Canary Islands. Is there an issue regarding sanctions here?
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.
Lord Moylan (Con)
My Lords, I agree with the tone of what the Minister has said about not spreading alarm unnecessarily, but can he say what actions the port authority has taken to engage with communities in Great Yarmouth to address their understandable concerns?
Lord Hendy of Richmond Hill (Lab)
I am told that handling ammonium nitrate is a normal operational activity at Great Yarmouth, as we have heard. My understanding is that there has been no special public consultation and, in fact, the transfer of cargo has begun and is regarded by the port as not being an exceptional activity.
Lord Greenway (CB)
My Lords, I welcome the Minister to what I think is his first maritime Question. I agree with him entirely about the transportation of this particular fertiliser, many hundreds of thousands of tonnes of which are transported safely around the world every year. He mentioned the Beirut explosion. This particular commodity can be set off only through shock or heat in a confined space. On that occasion, having been poorly stored for several years, as the Minister said, the fireworks caught fire and exploded, providing the perfect whammy for the major explosion which followed.
Lord Hendy of Richmond Hill (Lab)
The noble Lord is right that it is my first maritime Question. I was not expecting to be so knowledgeable about ammonium nitrate 48 hours ago, but I am now and I welcome his information about the explosion in Beirut.
Lord Kamall (Con)
My Lords, can I just follow up the question from my noble friend Lord Moylan about the information given to local residents? It is a routine operation, as the Minister rightly says. But given the extended publicity around this particular transfer and this particular docking, it may well be that some local people who were not aware that this was routine are now alarmed. Can the Minister have another go at answering the question of whether there are any concerns, given the media coverage of this ship docking there?
Lord Hendy of Richmond Hill (Lab)
Given what the noble Lord has said, I will ask again, but I emphasise that as far as the port is concerned this is a routine activity and accounts for no more than removal of the cargo from one ship by means of lorries on the quayside and putting it in a second one.
Lord Dannatt (CB)
My Lords, I am delighted to be able to come to the assistance of the Minister and can assure him that there has been very responsible coverage of this incident in Great Yarmouth, as I live not terribly far away. The Eastern Daily Press yesterday and this morning showed the ship very safely in the outer harbour, with the ammonium nitrate being handled in the way that it has been handled on many occasions in the past. I congratulate Peel Ports, Great Yarmouth and the borough council for the way in which they have carried out this operation, despite the scare stories that have appeared in the media, which, by and large, have been groundless.
Lord Lancaster of Kimbolton (Con)
My Lords, it is one of those odd occasions when you realise that you have some slightly strange expertise: I declare my interests as a firework maker and a bomb disposal officer. I think the tone of this Question is exactly right. Poor old ammonium nitrate is perfectly safe in its own condition, but when it is mixed 16:1 with diesel it becomes a high explosive. I simply suggest that the best approach the Minister could take to reassure local residents is to reassure them that there is no diesel seepage and therefore no threat.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for that. I hope he goes nowhere near Great Yarmouth for the foreseeable future. It is a serious point, and the Health and Safety Executive has been fully engaged. It has been helpful and supportive in providing advice and guidance to the ship’s management company and Peel Ports to ensure that the handling of this cargo is in line with UK regulations and, of course, safe.
Lord Blunkett (Lab)
Given the intervention of the noble Lord opposite, can we have a reassurance that he will be checked very carefully next Tuesday?
Baroness Altmann (Non-Afl)
My Lords, I also wish everyone celebrating a happy Diwali. What was the rush to get the ship docked when it was? It had already been in the North Sea for quite some weeks and had been turned away by Norway and Lithuania. Might it not have been more reassuring for the public had it waited until after 5 November?
Lord Hendy of Richmond Hill (Lab)
Indeed, happy Diwali. The ship was on its way to its home base of Malta and, given the likely conditions in the Bay of Biscay and the weather at the time of year, the ship’s management company took the commercial decision to make repairs to the ship instead of risking the safety of the 19 crew members on board. The Government therefore supported them in convening conversations with UK ports and authorities to identify an appropriate port for the offloading of this cargo type, and I think that is a very responsible thing to do for mariners who were otherwise at sea for a prolonged period in a vessel that was clearly not fit to finish its journey.
Passenger Railway Services (Public Ownership) Bill
Lord Hendy of Richmond Hill ExcerptsTuesday 29th October 2024
(1 year, 3 months ago)
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Lord Grayling (Con)
My Lords, I rise briefly to support my noble friend’s amendment but perhaps from a slightly different perspective to his, given his—and indeed the Minister’s—track record, which had a strong focus on London. I believe it is very important to ensure that there is a clear explanation and, frankly, that there are detailed rules about how the interaction takes place around the London boundary, simply because there is a democratic issue here as well.
The noble Lord, Lord Berkeley, made reference to the attempt by the mayor to take control of the Southeastern franchise some years ago. I blocked that, for two reasons. First, there was a significant level of opposition outside London to that transition taking place—the sense that the mayor should not be running services that cross into Kent, Surrey and so forth—including strong opposition from local MPs. Secondly, there is the issue of fragmentation: who operates which depot, how do you divide the franchise in half and so forth? It is important to maintain a system that is simple and as easy to run as possible.
None the less, there is and will always be an issue around how the mayoral responsibility for services that cross the boundary interacts with services operating under the control of shadow Great British Railways and subsequently Great British Railways, how they interact and work together, and how the whole system is managed. While I do not support my noble friend’s level of enthusiasm for devolution because I worry about fragmentation, it is none the less important in this new world to have very clear guidance, rules and methodology about how the system in London will operate with the system that crosses paths with it around the London boundary and, indeed, into the termini in London.
I think my noble friend has put forward an important point here. Although we have a slightly different perspective on this, I very much hope that the Government will adopt this proposal, because I think it is the right one.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, I start by reminding the Committee that this is a short Bill, simply to bring back the national railway operations into public ownership. This is a popular policy with the public, absolutely necessary to making the railway run properly, and a necessary precursor to a more major Bill next year.
I thank the noble Lord, Lord Moylan, for this amendment, which would require not a report this time—although he has sought to require many—but Statements to Parliament about the relationship between services in Greater London provided under contract to TfL and those for which the Secretary of State is responsible.
There is no reason to expect the Bill, which allows train operations to transfer from private operators into public ownership, to have any adverse effect whatever on the existing collaboration between operators and TfL. The Bill makes no change to the existing duties on the Secretary of State for Transport and on Transport for London under Section 175 of the Greater London Authority Act 1999 to co-operate and co-ordinate passenger rail services in London. Like many noble Lords in the Committee, I know from my own experience how that works. I think we can all conclude that it has worked very satisfactorily so far and there is no reason why it should not continue.
The Bill will not have any adverse effect on those services: substantially the same staff will be running those trains under public ownership on the national railway network, as they do now, so there should be no concern about a sudden deterioration of service. In fact, I expect it to improve: publicly owned operators will prioritise the interests of passengers, rather than exploiting contractual conditions in pursuit of short-term profit.
The Bill says nothing about the devolution of further passenger rail service to the Mayor of London. It would not prevent further devolution, and nothing I have said would prevent that. If they were devolved, they could be operated in the same way as the current London Overground services are operated, under a concession from Transport for London.
When I said, as the noble Lord, Lord Moylan, quoted, that there is no current plan for further devolution, that was an accurate statement. Of course, it may not be an accurate statement in the future, but when I wrote the letter to him and other noble Lords and Baronesses, it was true. We will see what happens. It is only a few weeks since what the mayor said in July and, if he does have aspirations to operate further services, I am sure there will be a cordial discussion under the auspices of Section 175 to discuss whether and how that is carried out and the costs of doing it.
The noble Lord is also mistaken on Manchester. Certainly, the evolving situation I described with the Mayor of Manchester and Transport for Greater Manchester is that services would be operated not by Network Rail, because that is currently an infrastructure provider, but by a train company. In fact, it is most likely to be Northern Trains, which is already owned by the public sector and has been for four years.
As I have already said, I give a commitment that the future, wider Bill will give a statutory role for combined authority mayors that is better than any they have now. I have just repeated it for the avoidance of doubt. In that case, it is under Section 24 of the 1993 Act. If they were to want to operate train services, this Bill does not alter Section 24 and that would be a discussion that could be had. I described the situation as I understand it currently unfolding; in fact, they do not wish to do that, but the Secretary of State could devolve more under Section 24 if she chose to.
At the moment, if I have counted correctly, the operation of rail services in London is currently the responsibility of eight different franchised operators, plus two more under contract to Transport for London. That is without the long-distance operators whose services start and finish in London but do not otherwise serve the London market directly and, indeed, Network Rail, which is responsible for the physical railway infra- structure. Public ownership and subsequent integration into Great British Railways will simplify all this by bringing the currently franchised services together in ownership in one place. If TfL wishes to discuss or influence the provision of other rail services across Greater London in the future, it will have an easier job of engaging with Great British Railways. It will be assured that the train operators that are performing will be interested in acting in the interests of passengers.
The noble Lord, Lord Berkeley, asked where I think it is all going. I will come back and answer that on Report.
It was a pleasure to hear the noble Baroness, Lady O’Neill, talking about the particular circumstances of Bexley, and it is nice to see her in her place. I do not envisage any immediate change to the railway geography of south-east London. I cannot answer for much of the rest of what she said in the way that I once could, as the commissioner of Transport for London, but I am sure that she knows where to go to make the points about the Superloop, ULEZ and the other things she referred to for the benefit of her borough of Bexley.
The noble Lord, Lord Gascoigne, referred to Crossrail 2. It should be evident—I hope it is from what I have now said about Section 175—that, were Crossrail 2 to be promoted and come into effect, it would, like Crossrail 1, be complex, but the outcome would be a significant transfer of services to the mayor, because it would, and hopefully will, eventually take over some national railway services. The ease with which Crossrail has taken over former national railway services in London and transformed them into a coherent service for the benefit not only of London but the national economy would be replicated in Crossrail 2. Nothing in the Bill would change that; nor would it change the way that Crossrail was funded had it been proposed now, or the way Crossrail 2 would be funded if it were proposed in the future.
The answer to a lot of what has been said about the Overground is that the Bill primarily seeks to remedy those parts of the railway network that patently do not work well. I would contend—I have always contended in all my roles and in this one too—that the railway service in London works. It works because it is coherent, and there is no reason for the Bill to interfere with it.
I was very interested to hear from the noble Lord, Lord Grayling. I remember well his position on the devolution of Southeastern services, and he is right that many of them go well beyond the London boundary. There is a democratic issue about how well they serve the areas outside the boundary, and his recollection is correct that at the stage at which it was proposed— I recall it well because I proposed it, even if it was politically advocated by the mayor—it cost more to operate those services separately than it did together. That would be quite a good reason to think carefully about whether a proposition could now be made to do it differently. In a sense, he is making my case because one of the things that we need to have some regard to in a post-Covid railway, with less revenue but similar costs, is the cost of the whole thing. One of the reasons for the proposition in the Bill is to start to sort out the costs of the railway, increase its revenue and improve its performance.
I listened carefully to the remarks made by the noble Baroness, Lady Pidgeon, on devolution and I intend to come back to them on Report.
The Government’s plans will improve co-operation, not hinder it, so I see no need for the statement envisaged in the amendment of the noble Lord, Lord Moylan. I am sure that all involved will work together to ensure that publicly owned and TfL services can co-exist effectively side by side. On that basis, I urge the noble Lord to withdraw his amendment.
Lord Moylan (Con)
My Lords, I will briefly deal with two points. In answer to the very reasonable question from the noble Baroness, Lady Pidgeon, the reason for a separate London debate is the three different cases that currently exist for the devolution of rail services. One is London, where services are in large measure devolved—not all of them but there is a large measure of devolution that exists. The second is the other large conurbations where devolution of rail services does not exist—Birmingham, Manchester and so forth, with the exception of Liverpool, which we agreed earlier in Committee was a slightly separate case. The third is the local authorities that are too small to have much credibility as operating services on the national rail network, although there might be specific cases. It seemed to me that, even though it was mentioned at the time, London deserved a distinct debate because it is different from the other cases that we debated.
Turning to the Minister’s response, I think we have had some instances of documents that have rewritten themselves during the course of Committee. The latest is the letter which it turns out we had all misinterpreted because the weasel word “current” had not been given sufficient prominence, but which in fact means that there may well be devolution of the operation of rail services to London and elsewhere. That is not quite what it meant when everyone first read it, but there we are. I suppose the Minister will feel he has got away with that.
But what has he got away with when he offers a statutory role? We have a notion of what is meant by statutory role when we turn to the Labour Party document Getting Britain Moving, which says:
“there must also be a statutory role for devolved leaders in governing, managing, planning and developing the rail network”.
Eloquent by its silence is the word “operating”—it is not on offer. Whatever the Minister says may or may currently be the case, and whatever provisions of existing legislation he refers to, it is not going to happen. It is inconsistent with his argument for a single brain, it is not mentioned in the Labour Party policy document as it could have been, and there is not going to be meaningful devolution unless there is a change to the legislation. This may be a very short Bill, as the Minister says, but it is heavily pregnant with possibilities for the future.
With that, I beg leave to withdraw my amendment.
Vehicle Emissions Trading Schemes (Amendment) Order 2024
Lord Hendy of Richmond Hill Excerpts(1 year, 3 months ago)
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Lord Hendy of Richmond Hill
That the draft Order laid before the House on 9 September be approved.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, this Order in Council amends the Vehicle Emissions Trading Schemes Order 2023, which implements the zero-emission vehicle mandate and carbon dioxide emissions targets for new cars and vans with the purpose of facilitating the Northern Ireland Assembly’s decision that Northern Ireland should join the scheme and also makes technical updates. In doing so, the amendment brings Northern Ireland into alignment with the rest of the United Kingdom and represents an important milestone on the pathway for the United Kingdom to achieve 100% zero-emission new cars and vans by 2035 and net zero by 2050.
Domestic transport is the largest contributor of greenhouse gas emissions, accounting for nearly 28% of all emissions in the UK. Analysis of the vehicle emissions trading schemes projects emissions reductions of approximately 411 million tonnes of carbon dioxide equivalents out to 2050, with a further 9 million should Northern Ireland join. This is the single largest carbon-saving measure in government and is of singular importance if we are to meet our climate commitments.
These measures are also critical for kick-starting economic growth not just in Northern Ireland but across the UK by giving businesses the certainty they need to invest in the transition to zero-emission vehicles. Some £6 billion of private investment has already been committed by the charging infrastructure industry, and the Government are working closely with the entire vehicle industry to deliver a green future for one of the UK’s most important manufacturing sectors.
As noble Lords may recall from the debate in your Lordships’ House on the original instrument last year, the ZEV mandate sets headline targets for the registration of zero-emission cars and vans. This includes battery electric or hydrogen-powered cars and vans. It also sets carbon dioxide emissions targets requiring that vehicle manufacturers’ emissions get no worse on average than they were in 2021.
A variety of flexibilities is included in the legislation to ensure that every vehicle manufacturer has a viable pathway to meeting the targets during the first few years. For example, overcompliance against the carbon dioxide targets may be used against the ZEV targets, meaning that manufacturers that deliver carbon dioxide efficiencies can deliver fewer zero-emission vehicles than the headline ZEV target.
When this policy was originally consulted on, a remarkable 96% of respondents preferred UK-wide implementation. However, at the time that this legislation was laid in autumn 2023, it was possible for it to apply in Wales, England and Scotland only. This is because of a specific requirement in the power used to create the original legislation—paragraph 11 of Schedule 3 to the Climate Change Act 2008—which means that the order cannot apply unless the statutory instrument creating the schemes has been laid before and approved by affirmative resolution of the relevant devolved legislatures.
As the Northern Ireland Assembly was not sitting at the time the original order was laid in autumn 2023, it was unable to approve the legislation. Therefore, Northern Ireland could not join the schemes alongside Wales, Scotland and England. As an interim measure, Northern Ireland remained subject to the emissions regulations for new cars and vans that the rest of the UK was leaving behind. These regulations were themselves assimilated from European Union law following the UK’s withdrawal and functioned as average carbon dioxide emissions targets that tighten every five years.
Following the restoration of the Assembly in February 2024, John O’Dowd, the Minister for Infrastructure in the Northern Ireland Executive, wrote to the UK Government, the Scottish Government and the Welsh Government expressing his intention, subject to the approval of the Northern Irish Assembly, that Northern Ireland should join the schemes. This amendment was therefore drafted in close consultation with the devolved Governments. I am pleased to confirm that the Assembly approved this amendment and therefore Northern Ireland joined the schemes on 14 October this year. Senedd Cymru approved the amendment on 22 October, and the Scottish Parliament will be taking a vote in the next few days following the amendment’s successful passage through committee.
This legislation is an excellent example of all the Governments in the United Kingdom coming together to tackle a common challenge. I take this opportunity to thank Ministers and officials in the Department for Infrastructure in Northern Ireland, the Scottish Government and the Welsh Government for the exemplary fashion in which this process has been conducted.
The amendment has two purposes: first, to effect the inclusion of Northern Ireland in the schemes and, secondly, to make technical updates to the legislation. Part 1 of this amendment contains preliminary provisions establishing the territorial scope and that the instrument amends the Vehicle Emissions Trading Schemes Order 2023.
Part 2 contains a series of technical updates to correct minor errors and clarify drafting. The most salient of these are the update in Article 3 that clarifies that hydrogen fuel cell vehicles should be treated as zero-emission vehicles for the purpose of the scheme, the correction in Articles 5 and 7 of an error in the formula for determining the cap on the maximum amount of compliance that may be converted from the carbon dioxide target schemes to the zero-emission vehicles target schemes and the addition in Article 11 of additional measures to address a gap in enforcement provisions.
Part 3 amends the schemes to allow Northern Ireland to join. The changes themselves are relatively minimal as the original legislation was drafted to allow for the possibility of Northern Ireland joining, should the Assembly choose to do so.
Finally, Part 4 makes consequential amendments to assimilated EU law to sunset—“sunset” is a verb, apparently—the emissions regulations that currently apply in Northern Ireland and make consequential amendments to revoke now redundant law, preserve certain parts for legacy administration and amend certain regulations that still have utility. I am sorry about that verb.
I am pleased to say that the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments reported no concerns in respect of this instrument, and I thank members of both committees for their hard work.
It is important to note that the zero-emission vehicle targets and the carbon dioxide targets will be applied as a UK-wide average when Northern Ireland joins from January 2025. This means that Northern Ireland alone will not be required to meet the headline zero-emission vehicle target in 2025, which is 28%. The Northern Irish new car and van market is approximately 50,000 vehicles per year, compared with the UK car and van market of around 2.3 million, so it is approximately 2%. As such, while manufacturers will want to maximise their zero-emission vehicle sales in Northern Ireland, joining the schemes will not force vehicles into the market beyond the naturally growing demand.
While this is a technical amendment in nature, it represents a significant step forward in the journey to net zero for Northern Ireland and the whole of the United Kingdom. I beg to move.
Baroness Scott of Needham Market (LD)
My Lords, my noble friend Lady Randerson cannot be in her place this evening, so it has fallen to me to comment on this order. It is, as we have heard, an uncontroversial statutory instrument that very sensibly brings Northern Irish regulation into line. Therefore, from these Benches, we entirely support it.
As a former member of the Joint Committee on Statutory Instruments, it troubles me that a significant part of the instrument is the correction of errors. Although I shall in future refer to all my errors as technical adjustments, there is a serious point about quality control. I will say no more to spare somebody’s blushes, but it is concerning.
I have a couple of questions on the wider point. Sales of electric vehicles are much slower than was anticipated. The industry is saying that this is because of deferring the end of sales of new internal combustion engine vehicles to 2035. Have the current Government given any thought to reverting back to 2030? When can we expect the Government to complete the review of EV charging infrastructure? As the report from the environment committee pointed out, it is a major hindrance to people having confidence to buy EVs.
Lord Moylan (Con)
If I were to take that question, this could be a very long intervention, so perhaps the noble Lord will forgive me if I move more directly to the instrument itself. As the Minister has explained, it essentially does two things: first, it corrects some errors and technical problems that exist in the legislation—the statutory instrument—that was passed last year; it is good to see errors corrected. Secondly, it extends the vehicle emissions trading scheme to Northern Ireland, which, as I understand it, is being done with the support, and at the wish, of the Northern Ireland Assembly. As such, these Benches have no objection to raise to the approval of this instrument.
Lord Hendy of Richmond Hill (Lab)
My Lords, I thank all noble Lords for their consideration of this draft Order in Council.
I will respond to the specific points raised. The points about technical adjustments are noted. I beg the forgiveness of the House that some of this stuff about zero-emission vehicles and alternative technologies is very technically complex, and I would forgive technical people for not getting all of it right.
On the general point about 2030 and 2035, the Government are committed to phasing out new cars that rely solely on internal combustion engines by 2030. That means that pure petrol/diesel cars will be phased out and, by 2035, all new cars and vans sold will need to be 100% zero emission. We will be setting out further detail on the requirements for cars and vans sold between 2030 and 2035 in due course. I hope that continued progress on zero-emission vehicles will give people confidence to purchase these vehicles. It is very important that we deal with carbon and achieve consequential good effects on air quality.
My noble friend Lord Berkeley asked: does it matter? He gave his own answer by saying that the sooner the UK was consistent across its nations, the better. This statutory instrument is the means of doing so—so that is really the answer to that. Apart from debating the doubtful use of verbs on the London Underground— I could find several others worse than “non-stopping”; “to platform” is quite bad as well—it is nice to hear that there is no objection. It is nice that there is a considerable degree of agreement, because this rights something that clearly could not be righted at the time.
There is now consensus across the UK that the zero-emission vehicle mandate is the right tool to move our car and van market towards being fully zero-emission in 2035. The UK Government, Scottish Government, Welsh Government and Northern Ireland Executive are in agreement that net zero is a priority for our economies and for our future. This consistency of approach is to the benefit of business, with barriers removed to accessing the Northern Ireland market, and to Northern Irish consumers, who will reap the rewards of zero-emission vehicles, including lower costs of ownership, cleaner air and reduced noise pollution, as the UK continues on its path to being a clean energy superpower.
Vehicle Drivers (Certificates of Professional Competence) (Amendment) Regulations 2024
Lord Hendy of Richmond Hill Excerpts(1 year, 3 months ago)
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Lord Hendy of Richmond Hill
That the draft Regulations laid before the House on 16 May be approved.
Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, I first declare that I am the holder of a valid certificate of professional competence, as I hold a valid passenger-carrying vehicle licence. But I do not believe there is any conflict of interest in my promoting these regulations.
The purpose of this statutory instrument is to introduce an alternative route for renewal of the driver certificate of professional competence. This alternative will be recognised across all four nations of the United Kingdom and will offer more flexible courses than the current system, with an accelerated pathway for drivers to return to the profession. The existing process for demonstrating competence, which is recognised across Europe, will remain for those drivers who operate within the European Union and will remain valid when driving in the United Kingdom.
We are amending the existing Vehicle Drivers (Certificates of Professional Competence) Regulations 2007 under powers conferred by the Retained EU Law (Revocation and Reform) Act 2023 and the European Union (Future Relationship) Act 2020.
The background to this is that the Vehicle Drivers (Certificates of Professional Competence) Regulations 2007 transposed EU directive 2003/59/EC, and were last amended in 2020. We are proposing to amend the regulations to increase the choice and flexibility available to drivers when they renew and, as a holder of a driver certificate of professional competence myself, I think these are sensible and proportionate reforms that will help the sector.
Noble Lords may remember that, back in 2021, there was an acute shortage of lorry, bus and coach drivers, which caused significant disruption to critical supply chains and passenger services. As part of its response, the department launched a review of the driver certificate of professional competence in 2021, involving industry, seeking views on ways to improve processes to increase recruitment and retention. Many felt that the current renewal process was inflexible and unnecessarily burdensome, in particular the time and cost burdens of the periodic training requirements for the renewal of qualifications.
Currently, drivers must do 35 hours of training through a rigid structure, with courses being a minimum of seven hours and most courses being trainer-led. This was identified as contributing to drivers leaving the profession. Drivers and former drivers stated in the 2021 review that the burden of gaining the certificate of professional competence was acting as a barrier to those considering joining or looking to renew their qualification, leading people to leave the sector.
A public consultation was launched in early 2023, suggesting options for possible changes to the ways to demonstrate professional competence. That consultation, along with regular industry engagement, has informed the reforms that we are proposing, to give drivers more options and greater flexibility during the renewal process and to assist the industry in retaining and recruiting drivers.
Currently, drivers renew their certificates of professional competence every five years to drive in the UK or the EU, by doing 35 hours of training through a rigid system of courses, with little e-learning as an option. We are introducing a national qualification to sit alongside the existing international qualification. The national qualification, which will be valid across the United Kingdom, will still require 35 hours of training every five years, but courses can be shorter, with a minimum of three and a half hours, and there will be more e-learning available, with new stand-alone e-learning courses being introduced—something that is not currently available. This flexibility was something that many in the industry, particularly drivers, have requested.
We are also introducing an accelerated pathway to allow drivers to return to the workforce. If a driver’s certificate of professional competence has lapsed by more than 60 days but less than two years, the driver can take a seven-hour bespoke return-to-driving course to a gain a one-year national CPC. This window of time was chosen to avoid drivers deliberately allowing their CPC to lapse in order to take the accelerated return pathway and to prevent drivers who have been out of the profession for a prolonged time rejoining without adequate training. Within the 12-month validity period of their national CPC, the driver can then do the remaining 28 hours of training to regain a full five-year national or international CPC.
I am aware that some in the industry would have liked to abolish the CPC entirely. While I sympathise with drivers who see it as a burden, based on time and cost to renew, I believe that it is absolutely necessary, for reasons of road safety and driver professionalism. Additionally, due to the requirements of the trade and co-operation agreement with the EU and other international obligations, the CPC must be kept for most commercial international road freight and passenger transport.
These reforms will make renewing or regaining a CPC much easier and more flexible for operators, but particularly for drivers, easing the impact on work/life balance, while not reducing the quality of the education drivers receive, to maintain a safe and highly professional workforce in the road freight and passenger transport sectors.
These changes to the Vehicle Drivers (Certificates of Professional Competence) Regulations will make the renewal process more flexible for drivers operating solely in the UK and help to reduce the chances of future driver shortages. We listened to stakeholders in all four nations while developing the amendments, and we expect the amendments to support the industry while ensuring a professional and safe workforce throughout the UK and beyond.
To help the industry to understand the more flexible training route, the Driver and Vehicle Standards Agency in Britain and the Driver and Vehicle Agency in Northern Ireland will issue guidance to the industry on these changes. I therefore beg to move that the House approve these regulations.
Earl Attlee (Con)
My Lords, I am grateful to the Minister for introducing the regulations so skilfully. I welcome them, including all the detail.
Before saying anything substantive, I should declare my interest: I hold a C+E HGV licence and am a qualified HGV driving instructor, albeit somewhat out of date. I do not need a CPC because I do not drive HGVs commercially and have no intention of doing so. It is sometimes argued that Members of the House of Lords claim to have experience but are actually has-beens. I operate a tank transporter for the REME Museum, so I still keep my hand in.
As part of my research this morning I used the mock HGV theory test to be found at the GOV.UK website. I am pleased to tell the House that I passed, with 43 correct answers out of 50, without any preparation. I was surprised to see some quite technical questions about internal engine design; 4% were concerned with abnormal load operations. I presume that the test is, correctly, designed to make it hard to get 100%. If all the questions were easy, a 100% pass rate would be required, but that would mean that even the simplest error resulted in unnecessary failure. That experience gives me confidence in the testing system, although much if not all the CPC training system is attendance only.
A recent Answer by the Minister to my Written Question indicates that there are about 688,000 HGV drivers with a CPC and a further 287,000 without. Research carried out by your Lordships’ Library appears to indicate that only one person in this Parliament has any practical experience of heavy goods vehicle operation. When the House of Lords (Hereditary Peers) Bill comes into effect, there will be none.
The Minister is aware that I am currently vigorously engaged in supporting the road transport industry in respect of abnormal load movements. However, he will understand that support in the industry for compulsory training, including CPC, is mixed, and he referred to that. For instance, I have been surprised how reluctant the industry has been to recognise the need for training and record-keeping on each piece of equipment to be operated. One problem is that operators who undertake extensive training keep finding that their drivers are being poached by other operators offering slightly higher remuneration but little training. That is a good argument in favour of the CPC regime the Minister has articulated.
The CPC is personal to the driver, not the operator. That is a long-standing problem, and it is not clear to me that the Minister can do anything about it. He has claimed that these regulations and the CPC are all about raising standards and professionalising the HGV driving trade, and I am at one with him on that. However, we are still not treating HGV drivers as well as we should, given their importance to sustaining our way of life. We saw this when we literally ran out of HGV drivers a few years ago, as the Minister observed.
Lord Moylan (Con)
My Lords, I am grateful to the Minister for arranging a briefing with officials for me on this instrument, and indeed on the previous instrument, about which I should have made a similar remark.
This is a Brexit benefit; there is no doubt at all about that. It gives us the chance to set standards and a training regime for our own HGV drivers to match the needs of our economy and our workforce. That brings me—if I may anticipate the Minister—to the question asked by the noble Baroness, Lady Scott of Needham Market. My understanding is that this is a domestic certificate that will operate in the whole of the UK, including Northern Ireland, but it will not of itself give any right for the driver to operate on the continent of Europe. For that there will remain the international certificate and the training regime, which will be compliant with European standards. This is wholly to be welcomed as allowing us to be more flexible and responsive.
Nobody has yet mentioned the question of safety. If the Minister says to the House that he believes this regime will result in a level of competence that will not compromise safety in itself, I am perfectly happy to accept that, but the point needs to be raised because safety in the driving of HGVs is a very important factor.
I feel very inadequate in following the speech of my noble friend Lord Attlee. It made me wonder how easy it is for an HGV driver to gain a life peerage. What a pity it is that the vandalism of the House of Lords (Hereditary Peers) Bill would remove the only one we actually have. However, we have no objections to the instrument.
Lord Hendy of Richmond Hill (Lab)
My Lords, I very much welcome the contribution of the noble Earl, Lord Attlee, and I recognise his professional competence, as he has said to me privately that he recognises mine. I agree with many of his remarks, in particular his support of this training regime. He is right that this instrument makes a difference. I will come on specifically to answer the noble Lord, Lord Moylan, about safety in a moment, but I think the noble Earl is right: this adds to the professionalism in these professions, and it is a good thing to do.
The noble Earl referred to the conditions for HGV drivers. He is right, of course, that historically there has been very poor provision. My department is making some progress on improved roadside facilities and safer rest areas. The department recently announced more than £14 million in joint government and industry funding to improve lorry parking infrastructure, boost working conditions for drivers and drive innovation and decarbonisation.
The HGV parking match-funded grant scheme was launched in 2022 to fund investment in driver welfare, lorry parking provisions, site security and so forth. The department announced the latest grant allocations as recently as 10 October. There are 23 provisionally successful bids, amounting to approximately £4.5 million of government funding and leveraging about £8 million from industry. I am sure the noble Earl will contend that that is not enough. I will therefore write to him on his question as to whether we can find out exactly how many people sleep in their cabs, when maybe they should not need to. I do not know, but I understand the question and will endeavour to answer it in writing.
I am grateful to the noble Baroness, Lady Scott, for her support. We will of course keep these plans under review—especially, as she said, the one that enables people to rejoin the industry. Having left doing my five days of training until after a point at which I realised that I might be the Minister of State for Rail, it was then a bit of a struggle to get the five days in. I was wondering what would happen if I ran out of them. This is a good thing, because there are people who leave these industries and regret that they do so and who then find it difficult to get the qualifications. However, I also agree with the proposition in the instrument before us: they cannot use it to get round the requirement for the five days of training. They should not be able to do that.
The noble Lord, Lord Moylan, had it exactly right that, if you drive in the EU, you will need the EU certificate of professional competence. The EU, as I understand it, is considering introducing reforms, but it is not as fast as we are, so it is unlikely to recognise this national CPC in the near future. These reforms are necessary, however, and good things to do anyway.
Lastly, the noble Lord, Lord Moylan, referred to safety. Driving a heavy vehicle of any sort is a professional job and it needs to be safe. There has been a lot of consideration about the nature of this training. I agree with the noble Earl, Lord Attlee, that it is a good thing, despite the opposition to it from some people—a few operators and some drivers. Apart from anything else, as I can testify, you can hold one of these licences for a long time. I passed my PCV test in July 1974 and, until these regulations first came into effect about 10 years ago, I did not need to do a single day’s further training. If you think about the possibilities of driving either a vehicle like the noble Earl, Lord Attlee, does, or the modest public passenger-carrying vehicles that I drive, that is extraordinary. It is absolutely right that people who follow these professions should get periodic training. They should be reminded of the serious consequences of breaking regulations on drivers’ hours, of not complying with the Highway Code and of a number of other things—including, if I put my railway hat on, the possibility of tall vehicles striking railway bridges—all of which are covered in this training. In addition, in the case of passenger-carrying vehicles, dealing with passengers is covered properly.
It is very good to hear that all sides of your Lordships’ House support this. We are not going to abolish the qualification. I can attest, as I said, to the focus on road safety, that the CPC brings, and I beg to move that these regulations are adopted.
HS2: Purchased Land
Lord Hendy of Richmond Hill Excerpts(1 year, 3 months ago)
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Lord Grocott
To ask His Majesty’s Government what plans they have in respect of land already purchased for HS2 north of Birmingham.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the Government are thoroughly reviewing the position they have inherited before setting out more detailed plans in due course. This includes our position on HS2 phase 2 safeguarding and on the land that was previously acquired for HS2’s cancelled phases. Any land acquired for phase 2 that is no longer required will be sold in line with Treasury rules through a disposal programme.
Lord Grocott (Lab)
My Lords, as my noble friend the Minister knows, when Rishi Sunak cancelled the northern leg of HS2, he did so in the full knowledge that substantial sums of money had already been spent. Can my noble friend tell me his estimate of precisely how much had been spent before the cancellation? Further, so that money is not entirely wasted, can he give the House a clear assurance, which I am not sure he gave in his Answer, that the Government will at least protect the route of the line to Manchester, including retaining land that has already been purchased? I am sure he would agree that, in so doing, he will make it much easier for any future Government—this one, I hope—to complete the project, which should never have been cancelled in the first place.
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his supplementary question. As reported by the National Audit Office, by March 2024 £2.3 billion had been spent on phase 2 which, as he says, was cancelled by the previous Government. No property on the hastily cancelled phase 2a has yet been disposed of. The Government are carefully considering what to do. He will know as I do that railway infrastructure lasts 150 or more years, so the right thing is to have a considered long-term plan for the benefit of the economic growth, jobs and housing in this country.
Lord McLoughlin (Con)
My Lords, nobody knows better than the Minister the importance of capacity as far as that rail line is concerned—particularly the capacity from Handsacre to Crewe, the legislation for which has already gone through this House. Is there a time limit on that legislation, as there sometimes is on planning permissions, or does that legislation stand good for a Government who wish to concern themselves seriously with a capacity that is so vital on our railways, if we are to shift freight from road to rail?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his question, and I recognise, as he does, the capacity limitations of the west coast main line north of Handsacre. There is a time limit; I cannot offhand say what it is, but I can certainly write to the noble Lord. The Government intend to work out what to do and to say what they will do before any expiry of those powers.
Lord Cromwell (CB)
Can the Minister tell the House whether land acquired in this way, where it is to be disposed of, will be offered back to its original owners? Can he comment on interviews that I have heard, where people have been offered the opportunity to buy back the land but at prices considerably higher than they were given when the land was compulsorily acquired from them?
Lord Hendy of Richmond Hill (Lab)
My Lords, I know there is a process to be followed. I will have to write to the noble Lord to explain that process in detail and on the allegation that people have been asked to pay more for their land when it has been offered back than they were offered in the first place. I will do so.
Lord Moylan (Con)
My Lords, the Minister will know that since the cancellation of HS2, the mayors of Greater Manchester and the West Midlands have collaborated in commissioning and producing a report for the construction on a similar alignment of what is referred to as the “Midlands-North West Rail Link” at considerably lower cost than HS2 would be. Can the Minister give the House an absolute assurance that no land will be sold that would be necessary for the construction of that proposed rail link until the Government have had the time to assess it and give it full consideration?
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.
Lord Framlingham (Con)
My Lords, on 31 January 2017 I put an amendment down in this House to the HS2 Bill which, if passed, would have stopped it there and then and saved us all an awful lot of trouble. Some 25 of your Lordships understood and supported me; unfortunately, the Bill that went through resulted in the chaos that we have known, confirming that the project was never a good idea. It is hugely expensive at the expense of the NHS among other things—
Lord Framlingham (Con)
This issue warrants quite a little bit of talking; it is the biggest one and everybody in the country thinks it is nonsense. Here is my question for the Minister: can he please do his best with an impossible task, keep us fully updated and make sure that everybody who has been affected by this travesty gets the fairest possible treatment?
Baroness Smith of Llanfaes (PC)
My Lords, will the Minister confirm that the Government will correct a long-standing injustice that this has starved the Welsh public purse for far too long? Does he acknowledge that HS2 is an England-only project, and will His Majesty’s Government ensure that Wales receives the £4 billion of consequentials owed to the Welsh Government, as Welsh Government Ministers and the Secretary of State for Wales support?
Lord Hendy of Richmond Hill (Lab)
I doubt the noble Baroness’s allegation about support. It is a serious issue, but it is about the allocation of funding. I have answered these questions before, and the position remains the same.
Passenger Railway Services (Public Ownership) Bill
Lord Hendy of Richmond Hill ExcerptsWednesday 23rd October 2024
(1 year, 3 months ago)
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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.
Lord Berkeley (Lab)
I would be grateful if the Minister answered a couple of questions arising from the statement he has made, for which I am very grateful. He said that passengers do not want to be confused by different types of services and operators, but from talking to people who have been involved in TfL and Merseyrail, I get the impression that they think they are rather good. I am not sure they would agree that they would be better if they were run from London by some centralised organisation telling the people of Liverpool or Manchester how many trains they can run.
It all comes back to who actually gets the revenue from the train fares and who pays for the trains, which will probably affect what the local mayors can ask for. They might want to see more trains, but if they are going to have to ask central government for an extra train, that will get quite difficult. I do not think the Minister has answered the question of the money that will be saved through this amendment and the new structure. We have not seen how much money it is going to save or how much extra revenue it might generate. I look forward to his comments.
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his intervention. I do not disagree with him at all: those railway services are rather good. I did say that I was rather proud of the Overground, and from a distance I still am; it is a rather good service. However, there is a difference. Those services operate very largely within the Mayor of London’s geographical area, and the fares at the extremes do not differ. In Liverpool, I believe, they are wholly within the Liverpool City Region, but if not, the same applies. Consideration has to be given to consistency when the services stretch beyond those boundaries. That has been, and is capable of being, managed well.
The points my noble friend makes about who pays for enhancements—both the revenue costs of enhancements, and of extra trains if they are needed—and who gets the revenue from that are all subjects on which we are in harmonious discussion with the Mayor of Greater Manchester and Transport for Greater Manchester. It is possible to enhance railway passenger services in conurbations and elsewhere without having ownership of them, in circumstances where the proliferation of ownership may well create other costs. In the previous debate in Committee, I referred to the number of train crew depots in Newcastle. My recollection is that there are currently four, all of which have managers, supervisors and clerical staff. That is not the sort of proliferation of basic on-costs that we want to see in the rest of the system.
We are having a very practical discussion in Manchester about the eight lines that the mayor wants to specify. I suspect that, at the end of the day, when we reach an agreement, as I believe we will, the services the mayor wants will be presented as part of the Bee Network. I expect them to look consistent across Manchester, in the different modes that Transport for Greater Manchester controls. That is exactly the same effect as we had with London Overground and Merseyrail. We will have to bridge those gaps without creating further cost and confusing passengers.
Amendment 43, in the name of my noble friends Lords Snape, Liddle and Berkeley, requires the Secretary of State to produce an assessment of whether passenger services could be run by devolved authorities before any contract is awarded to a public sector company or any private sector franchise is extended temporarily by the Secretary of State. As I have said already, it is not our intention to devolve the operation of further services to local government as part of this process. Our intention is to end the failing franchise system and move to a public ownership model, which will then allow us more easily to reduce fragmentation and create a culture focused on delivering for passengers and taxpayers, not private shareholders.
It is deeply important that local leaders have greater influence over what services are run in their areas. That is why we are engaging with them to develop a statutory role for mayoral combined authorities in the rail network, which will become part of the wider Bill. As I have said, further devolution of services risks including fragmentation, but as I have also said, it is not ruled out by the Bill.
I turn to Amendments 12 and 13 from the noble Lord, Lord Moylan, which require the Government to consult with the Council of the Nations and Regions and the Prime Minister’s newly appointed envoy before transferring cross-border services to the public sector. This amendment is not necessary. The Government regularly engage devolved Governments on cross-border services. Both the Scottish and Welsh Governments are in favour of transferring rail services into the public sector, and we have worked collaboratively with Scottish and Welsh Ministers on the proposals in the Bill. Consultation will continue to take place as further services are transferred into public sector operation.
In addition, the Council of the Nations and Regions has been set up by the Prime Minister to foster positive collaboration with the devolved Governments. Clearly, we do not require a legislative amendment to encourage collaboration when the council exists to do just that, and I am sure that the newly appointed envoy will further facilitate that.
The noble Baroness, Lady Jones, referred to South Western Railway and in particular to the line between Salisbury and Exeter. I am confident that it will get better when South Western Railway comes into public ownership and we can get much closer liaison between infrastructure and operations and their management.
The noble Baroness, Lady Randerson, referred to Welsh ownership of infrastructure. I am not sure that she is right, bearing in mind our experience with the valley lines, in saying that they aspire to own the infra- structure, but the Bill would not prevent that.
Finally, the noble Lord, Lord Moylan, might want to note that Keith Williams, who he mentioned and who I mentioned on Monday, publicly endorsed the rail manifesto published by the Labour Party before the election. I will say no more about that.
With thanks to all noble Lords for this debate, I urge them not to press their amendments to this relatively narrow Bill, but I will reflect further on everything I have heard about devolution today.
Lord Hendy of Richmond Hill (Lab)
My Lords, I thank the noble Lord, Lord Hamilton of Epsom, for this amendment, which would require the Secretary of State and the Scottish and Welsh Ministers to consider each public sector operator’s progress in preparing for driverless trains before awarding a contract to that operator. The amendment appears to be of limited practical impact, as it would not require the franchising authority to do anything in light of the outcome of the assessment. That said, I understand from the noble Lord’s explanation that it was intended as a probing amendment, and I take it in that spirit.
I thank the noble Lord, Lord Moylan, for his acknowledgement of my small amount of knowledge of railway operation, and that part of it that I appear to have transferred seamlessly to him. I have tried to educate him in that manner and, clearly, he has been a good pupil. I did not try to extend that to his political beliefs because at the time, when I was educating him in the operation of transport, I had no reason to do so. I will have a go at that some other time.
I also know about the operation of the Docklands Light Railway, referred to by the noble Lord, Lord Hamilton of Epsom, because I was responsible for its operation for nearly 10 years. As the noble Lord, Lord Moylan, said, every train has an attendant on it. They do not sit at the front. People who enjoy sitting at the front—including me—do so instead. More seriously, the attendant closes the doors, to ensure that they are safely closed, and can drive the train if they need to.
The Government have no plans for the rollout of driverless trains on the national railway network. Considerable technological development work would need to be undertaken to make this a viable proposition. There is some practical experience of automatic train operation in the United Kingdom—on several Tube lines and some on the national railway network too, such as on the core Thameslink route running through central London, where this system is vital in enabling the high frequency of service. There is also some limited semi-automatic operation on the Elizabeth line. However, in both cases, it is not truly a driverless system as the operation of these trains still requires a driver to be present while the train is in passenger service, to operate doors and initiate dispatch.
As a practical operator, and a passenger, I am very sympathetic to the view of the noble Baroness, Lady Brinton, concerning staff on trains. From my experience at Transport for London, I can say that Tube trains which are automatically driven have a driver because somebody has to close the doors, somebody has to be able to stop the train in an emergency and somebody has to at least attempt to fix it if it goes wrong. On a train with up to 1,000 people on it, it makes sense for that person to have some space to work in and even more sense for them to sit at the front of the train, where they can see where it is going. That is the philosophy which we adopted.
The noble Lord, Lord Moylan, is correct. The real reason for that signalling system is to enable more trains to run more closely. My erstwhile colleagues on the national railway network still look disconcerted at the thought of one Victoria line train leaving a platform and before the last carriage has departed into the tunnel, the cab of the next one arrives, and the slower that they do it, the closer they get together. That is why you want signalling systems of this sort. That is the reason for the application—not the proposed application but the actual application—of the European train control system on the east coast main line that is currently being implemented. It has been funded by government. It involves several contractors and many UK jobs, and it is done precisely for the purpose of increasing the capacity of the line, enabling the trains to run closer together, and is a very effective business model. As locomotives and trains are fitted with that equipment in the UK, it will become progressively cheaper to equip new lines and it will improve train capacity on all of them.
I suggest that, realistically, the deployment of genuinely driverless trains on the national railway network is a long-term proposition for which passenger safety, practical feasibility and a business case are far from proven. However, there is a range of on-train systems short of driverless operation that can be deployed to improve train service performance and the overall efficiency of the system. These include relatively tried and tested systems such as forward-facing CCTV, which can be used to monitor trackside risks such as excessive vegetation growth; systems to monitor the condition of track and overhead wires; driver advisory systems, which help improve fuel efficiency and punctuality; and more cutting-edge technologies such as the automatic train operation that I mentioned.
Sadly, as a result of the fragmented system that we have, even relatively tried and tested systems have not been deployed systematically across the network. Instead, they have been implemented piecemeal according to the whim of individual operators as they have procured and specified their requirements for new or upgraded train fleets. A clear benefit of public ownership and the future consolidation of track and train within Great British Railways will be the chance to take a consistent approach to the deployment of existing technologies and the development and testing of new innovations right across the system. GBR can set a clear long-term direction for future rolling-stock innovation across the system, with consequential beneficial effects on reliability and the costs of the entire railway.
I will not make specific statements in favour of particular innovations or technologies as part of the debate on this Bill. However, I acknowledge the usefulness of technological development that the noble Lord, Lord Hamilton of Epsom, referred to, and agree with the noble Lord, Lord Ranger, that innovation and technological development have a significant part to play in delivering the best possible services for passengers at the least possible cost to taxpayers and farepayers. I emphasise that our future plans for the railway are aimed at creating the conditions in which innovation can flourish, within both GBR and the much wider private sector supply chain upon which GBR will depend. On that basis, I urge the noble Lord to withdraw his amendment.
Lord Hamilton of Epsom (Con)
My Lords, I am most grateful to everybody who has contributed to this debate. I point out that my amendment asks for driverless trains, not “staffless” trains. I was not necessarily suggesting that there should be nobody on the train at all. As was pointed out, on the Docklands Light Railway there is always someone on the train.
My noble friend Lord Snape—he is not really my noble friend, but I regard him as a good chum—seems to be a bit reactionary about all this. I would not describe him as a Luddite because that would be rather tasteless, but the technology is coming down the road. It is doubling every two years and will overtake all of us. We might as well prepare for it. I beg leave to withdraw my amendment.
Lord Moylan (Con)
My Lords, we have heard some very powerful and moving speeches, based on their own personal experience, from the noble Baronesses, Lady Brinton and Lady Grey-Thompson. I feel it would almost be impertinent of me to try to add to what they are saying, given how rich and deep their experience is of travelling on the railways as passengers who are confined to wheelchairs. They also spoke, as did the noble Baroness, Lady Randerson, and others, of those with other forms of disability, including those affected in their sight and their hearing.
However, if I were to add anything of any great substance, it would probably be along the lines of the excellent speech made by my noble friend Lord Moynihan, who clearly set out a programme—a challenging and demanding programme, admittedly, but one that should be embraced by the Government and by Great British Railways—for improving the experience of disabled passengers on the railway. It is very important for us to hear what the Minister will have to say in response to that. I know that he personally is very sympathetic to the experience of disabled passengers and the difficulties they have. However, although I do not make this as a personal remark, Network Rail as an organisation has been making similar noises for a long time, yet the difficulties continue—perhaps not always the same difficulties, and there are some improvements from time to time, but none the less the difficulties continue, and here we are today, hearing these speeches. I look forward to what the Minister has to say.
I was interested in the amendment proposed by the noble Baroness, Lady Scott of Needham Market, in relation to the passenger standards authority. We have heard too little in our Committee debates so far about the role and purpose of that authority. It is promised in the document Getting Britain Moving, but what scope it will have as a strong voice for passengers—that is how it is described—and how it will be much in advance of the existing passenger representative bodies, we have yet to learn. It would be helpful if the Minister could explain his vision for the passenger standards authority. I hope we do not have to have that deferred until we hear about the next Bill coming down the line at us, because I think it is what people want to hear.
I have an amendment of my own in this group. It will not take me a great time to speak to it. It relates to something else that we all want to know about: discount fares. Perhaps I should declare that I am the holder of a senior railcard—I hear a certain hum around the Chamber that suggests, to my surprise, that I may not be alone in that—but there is a multiplicity of other railcards too. If you click the button on the website that says, “Apply a railcard discount to this fare”, you will find a drop-down box containing a whole list of the various railcards that are available. I think passengers want to know that those railcards are going to continue to be available to them in the new system.
One of the difficulties that the Government have—indeed, that we all have—is that we are told, “We’ll pass this Bill and then everything is, so to speak, frozen until we get the next Bill”. As I have said repeatedly, and perhaps I have bored the House by saying it, simply getting the next Bill does not change anything. Change has to follow the Bill, and change is itself very time-consuming to implement. So, even on a good timetable for the Government, we are talking about four or five years before we see change, yet we are getting the impression of life being frozen in the meantime. Hence, we get pleas from the noble Baroness, Lady Randerson, for something to be done about ticketing in the meantime. We all want to know, not just on ticketing but on other matters, what is going to happen in the meantime when, in a sense, no one is in charge because shadow Great British Railways will have been set up but it will have no powers. We will be awaiting Great British Railways and things will not actually be happening.
To come back to my own amendment, that situation applies also to discounted fares. Are they to continue as they are? If they are to be changed—and there may be an argument for change; it may be that a new one has to be added or some have to be deleted, merged or changed in some other way—what would be the mechanism for doing that? I do not mean simply the legal mechanism, because that exists already and it is not being abolished, but who is the driving force behind that? What is the machine that is going to run that sort of thing and make the decisions? We would like to know about all those things. We want some assurance about their continuation but, more importantly, we would like an understanding about the change and the directing mind in this transition period, which could go on for several years.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Moylan, for the remarks that he has just made. He talks of delay and nothing happening. One of the reasons why I personally am here is that I have been waiting six years for rail reform and, in the end, when I was asked, I volunteered to see whether I could move it forward, because it has taken a very long time. Not much has happened since the timetable crisis of 2018 and the report that Keith Williams wrote.
I thank the noble Baronesses, Lady Brinton, Lady Grey-Thompson and Lady Randerson, for Amendment 17, which is supported also by the noble Lord, Lord Moylan. I absolutely recognise the need to address the passenger experience, and I know that my noble friend Lady Blake, who took the Second Reading, recognises it too. Improving accessibility on the railways is a key priority for the Government and something that the Secretary of State and I are personally committed to. We know that the assistance that passengers receive too often falls short of what they deserve and what they have every right to expect.
I was going to list a range of areas where things need to change, but I am embarrassed to do so because so many speakers in this debate have listed them themselves. All I can do is acknowledge that I have heard the list quite clearly. We know that we need to do better, and it hurts me that the public service that I care about fails so regularly to look after people in the way that it ought to. I personally—and the Secretary of State is in the same position—will do my best to do differently in future.
Many of these issues are, frankly, best solved under public ownership, as the problems that have arisen are a direct result of the current fragmented system. For example, on the specification of new trains, which the noble Baroness, Lady Brinton, and others referred to, a guiding mind will take an approach to a greater consistency of design and improve the outcomes for disabled passengers.
In addition, it has been explained, more eloquently than I can do, how many apps there are, how weak they are and how they fail to work. The noble Baroness, Lady Grey-Thompson, took me through, and showed me a huge litany of things that are wrong with, a variety of apps, all of which she needs to make quite simple journeys. I am terribly embarrassed by that. Why should we need so many different electronic devices to deliver such a relatively poor service and outcome in such circumstances? That is an obvious case where consistency is desirable. I referred earlier today to not having a proliferation of train operators, and this is one of the reasons not to do so. We do not want everyone inventing their own process; we want one consistent process, designed with the people who use it, not done for them and not delivered to them after it is done. I have heard the experiences of the noble Baroness, Lady Grey-Thompson, and others of getting something that they wanted but then discovering it did not do what they wanted.
I contend that one of the clearest reasons for the Bill, which seeks to take train operations back into public ownership progressively, is to make those sorts of improvements a great deal easier to deliver in future. Public ownership and control give us the best platform possible to do that. I appreciate the engagement that I have had to date, especially with the noble Baronesses, Lady Brinton and Lady Grey-Thompson. I believe I have offered a meeting to both of them— I hope I have, but that is done for me—and we will have that before Report. That is not an explanation; it is more of an apology, but I hope that for now it will allow them to withdraw their amendment.