Passenger Railway Services (Public Ownership) Bill

Lord Hendy of Richmond Hill Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

[Baroness Randerson (LD)]

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

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

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

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

[Baroness Randerson (LD)]

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

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Baroness for her intervention. Of course, she is absolutely right. The fare system is far too complex, whether it is regulated fares or unregulated fares. One of the primary purposes of bringing train operations into public ownership is to provide the basis of rationalising that fare system without the associated complications of either compensation to private sector operators or, indeed, their saying that some of the information needed to do that is commercially confidential and hence cannot be used to rationalise the system that nobody understands.

On Amendment 19, the department already holds its public train operating companies to account for their financial management through regular review of their management accounts and business plans, as part of its routine contract management activities. That is equally true in relation to privately owned operators whose costs are funded by taxpayers. This scrutiny supports the monitoring of performance against the Secretary of State’s priority to deliver an affordable and sustainable railway. The amendment refers specifically to the auditing of publicly owned train companies’ accounts. It is already the case that those companies must publish their audited accounts annually, which are available in Companies House, so there is already full transparency of their financial performance and management. The proposed amendment would add little value to the existing scrutiny of their financial performance by DOHL ass shareholder, the Department for Transport’s contracting authority, and their own financial auditors, as well as the public via the public audited accounts. That would be an unnecessary additional cost to be borne by the taxpayer which I cannot support.

Regarding Amendment 20, the department already publishes information on its website about payments made to operators under its rail contracts. The department’s published annual report and accounts also detail the department’s expenditure on each contract, as well as any associated year-end balances in respect of payments made in advance or still due to be paid. The Bill does not change that, so there is no need for the taxpayer to pay for an independent body to report on the same data. As I have said previously, the most significant financial impact of the Bill will be that taxpayers will no longer have to foot the bill for tens of millions of pounds in fees paid to private operators each year for the benefit of their shareholders.

Amendment 23 raises the specific question of whether public ownership will expose the Government to pension liabilities that previously sat with private operators. Under the current national rail contracts, DfT funds the legitimate actual costs of the train operating companies. For example, this includes the net operational costs of running services and the cost of leasing rolling stock and pension contributions.

The noble Lord, Lord Young, asked a specific question on Monday about how the Office for National Statistics might classify publicly owned operators in future. I cannot, of course, answer that question, as future classification decisions are a matter for the independent ONS, not for me or my department. What I can do is to confirm the current classification of the DfT contracted operators, which are all currently classified as public non-financial corporations, including the four DOHL-owned operators. I can also confirm what has happened previously when a service is transferred from private to public ownership. For example, following the transfer of services into DOHL, the ONS recently considered the classification of TransPennine trains, and concluded that they should remain classified as a public non-financial corporation. That fact that these publicly owned operators are classified in this way, along with the privately owned operators, means that their costs already impact the public finances. For example—and this is particularly relevant to Amendment 25—both private and publicly owned operators’ rolling stock lease payments already come out of the department’s resource budget.

Turning to pensions, I cannot agree with those who assert that the franchising model left responsibility for funding pension liabilities entirely with the private sector. Even under the form of franchising that was in place before the pandemic, pension costs were to a substantial extent a long-term liability for the public sector. First, this is because the franchising system meant the bidder simply priced any changes in costs into their bids at reletting, changing the amount of subsidy payable to the operator or the premium receivable by Government. This meant that the burden of any increases in pension costs arising during the term of the contract would, at the point of retendering, be passed to the taxpayer. Secondly, in the more recent franchise competitions the department was required to share the risk of any adverse movements in pension deficit recovery payments, as that had become a risk that the private operators stated they were unable to bear. The Bill therefore does not materially change the Government’s level of exposure to liabilities.

On the noble Lord’s second amendment regarding pension liabilities, in previous transfers to DOHL the transferring staff have remained within their existing section of the Railways Pension Scheme at the point of transfer. Railways Pension Scheme contribution rates will not change when services transfer from private to public sector operation and, as mentioned a moment ago, the cost of employer pension contributions is already borne by the Government under the terms of the existing contracts.

The noble Lord may also find it helpful to know that the department already reports in its annual report and accounts the employer’s share of the net pension scheme surplus or deficit, the employer’s share of pension scheme assets and the employer’s share of pension scheme liabilities.

In response to the noble Baroness, Lady Randerson, transparency will be enhanced by public ownership. In respect of the question about the passenger standards authority, I am afraid it is too early to say what it will and will not do. That is why we are going to consult about its duties in order to make sure that it represents passengers’ interests in the best way possible.

In view of these observations, noting in particular that the costs of public sector operations are already in the public domain, I urge the noble Lord not to press these amendments.

[Lord Moylan (Con)]

My Lords, I may have expressed myself very poorly when I presented these amendments, but I think it is fair to say—I do not mean to sound overcritical—that the Minister has misconceived all of them, or at least the three that I spent some time on. So perhaps the House will indulge me if I simply run through once again the points that I was hoping to make but obviously have not done so very successfully.

I shall start with the remark about pensions. I was not asking the question, “Who funds the pension contributions?” That is an interesting question but one to which I already had the answer, so I did not feel that I needed to ask it. I was asking a specific question about where the balance sheet liability lies, which is a very different question. Are the accumulated liabilities, including unfunded liabilities, now going to score effectively as government debt—the whole package, not the payment year by year? It is the difference, if you like, between the balance sheet and the profit and loss. I have asked a question about balance sheet and the Minister has answered a question about profit and loss. I do not expect to get anything further out of him today but, once he has had a chance to reflect on my comments, he may want to write to me because it is a point that needs to be properly explored and indeed, I suspect, will be returned to in relation to leases when my noble friend Lord Young of Cookham takes the matter up later.

On the question of fares being charged, I take the Minister back to the pre-Covid period when the system under which we operate at the moment was functioning in the way that was expected—Covid of course destroyed and damaged the operation of that system. It is true that not all the fares but a large number of them were set by the Government, but the Government in that case had no interest whatsoever in allowing the train operating companies to make super profits or to exploit passengers who were effectively captive. It will be a different matter when the company operating the trains is a subsidiary of the Department for Transport, and any surplus—we must bear in mind that there are railway lines in this country that generate surpluses—will accrue to the department and therefore presumably to HM Treasury. I put it as a counterfactual question to the Minister: does he believe that, if passport issuance or visa issuance were in the hands of the private sector, the Home Office would allow the private sector to set such outrageously high fees and keep the profits? Of course it would not. The only reason why the Home Office can set such very high fees for a captive audience is that it can keep the profits, or at least they score against the expenditure of the Home Office. It has a financial interest in super returns, which is not true if the super returns are to be retained by the private sector, as was the case under the system that we are currently operating under when it was effectively running. So I do not think the Minister has quite grasped my point.

A similar question arises in relation to costs. He has explained—and I do not deny for a moment—that the department publishes information on what it pays to the train operating companies under its contracts. I am not asking: what do they pay? I am asking: is it efficiently spent? Once it becomes part of the department, there is no interest in demonstrating that efficiency has been achieved if political interests overwrite that. There will be no way of knowing with confidence whether efficiency is being achieved unless there is some sort of independent monitor.

It is possible that having reflected on my closing remarks the Minister wants to take these matters up in correspondence, or we can come back to them on Report. But I think his responses—and I blame myself for this—have failed to understand the points I was getting at. I thought they were reasonably clear but obviously I did not do a very good job. With that, and with the leave of the Committee, I would like to withdraw my amendment.

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[Baroness Randerson (LD)]

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

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

[Lord Hendy of Richmond Hill (Lab)]

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

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

[Lord Moylan (Con)]

My Lords, once again I am being deflected more than answered. I did not suggest that existing open access operators were going to be closed down. In fact, it says quite explicitly in the biblical document Getting Britain Moving that current

“independent operators (such as Hull Trains and Lumo) … will remain”.

I take it that the existing operators are guaranteed to remain, at least as far as the current terms of their arrangements are concerned.

I find it very worrying that the Minister cannot say whether his long-term vision includes allowing the ORR to make these decisions, or taking it, which I understood is very much the logic of his Bill, into Great British Railways. It simply is not enough to say that this can be deferred. Open access operators that might want to bid for new services—not the existing ones, I grant you—are now going to be entering a period with a very chilling effect, because they will not know whether open access is going to be welcomed in the future. They will not know, when the new Bill comes forward in 18 months’ time, whether they are going to be welcomed or turned away. That is a direct consequence of this Bill and not something that can simply be deferred on the grounds that it will all be wrapped up in 18 months or so.

I find it very unfortunate that the Minister cannot give a franker and more candid answer on the Government’s intentions at this stage. I fear that the effects for passengers of the measure in front of us are therefore going to be detrimental, even in the short term. With that, I beg leave to withdraw my amendment.

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[Lord Sikka (Lab)]

My Lords, I do not want to reply to the noble Lord, Lord Moylan, because I would be here all night picking holes in every point he made in reference to me.

Perhaps I may help the Minister out. The noble Lord, Lord Young of Cookham, talked about the liabilities of Network Rail. The composition of government debt published by the ONS includes the liabilities of Network Rail, but the assets acquired with that debt are excluded. That means that the government debt is overstated. In a balance sheet, you will have assets and liabilities. In the ONS approach, only Network Rail’s liabilities are included in the debt. I understand that, for quite a long while, the Treasury has been looking at reconfiguring the composition of public debt, and I very much hope that, soon, it will do the proper thing by either taking off the debt altogether from the ONS numbers or including Network Rail’s assets as well.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I am grateful to all noble Lords who contributed to this discussion. First, I should say that the objective of this limited Bill before the Committee remains to unify track and train, to provide better services to passengers, to reduce the cost of the railway and to increase the railway’s income. The phrase I would use to start with is, “We are where we are”.

The noble Lord, Lord Young of Cookham, referred to Network Rail. I am very familiar with its arrangements post being put back on the Government’s balance sheet. All I can say to the noble Lord is that managing it is and has been a difficult job. However, it has still managed to make significant investment in the railway infrastructure of Great Britain. In some ways, its exposure to being in the public sector did it a great deal of good. I was paid significantly less to chair it than my predecessor was; its chief executive is paid significantly less than any of his predecessors and to my mind, he does a very good job. The organisation is a good deal more frugal than it used to be, yet it still does some very good things in operating the railway infrastructure.

The noble Lord, Lord Young of Cookham, knows that Chiltern was always an outlier. There was no other plausible large-scale investment in railway infrastructure by a train operating company; certainly, there has been no recent interest in it. If you looked at the owners of the train operating companies now, you would see that their balance sheets simply would not support it.

Of course, the noble Lord knows that I cannot predict what the Office for National Statistics will or will not say. Although the suggestion is that, after six years, LNER was still capable of being put back in the private sector, there was absolutely no evidence that it or Northern, which was in public ownership for four years, was being prepared at all. There was also no move in the previous Government’s department to do so. Nevertheless, there was no change in the status of the public accounts of those companies. The noble Lord may speculate that there might be in future, with these arrangements, but I could equally assert that experience suggests that there will not be.

My noble friend Lord Sikka made a further point about the treatment of the assets and liabilities of Network Rail. I will write to both him and the noble Lord, Lord Young of Cookham, about that.

On the other hand, I recognise completely the passion with which my noble friends Lord Sikka and Lord Hanworth spoke about the rolling stock companies. Again, we are where we are. I heard my noble friends’ arguments with interest, but the Government will not buy back the rolling stock companies. Great British Railways will enable a longer-term view of the rolling stock market and it will reduce the margins it needs to make. Everybody is right to say that rolling stock lasts for 30 to 35 years, but a railway that is more accurately able to predict how long that rolling stock should last and where it should be used will reduce the uncertainty of relatively short-term leases. It will also significantly reduce the cost of those leases and will actually enhance competition in the market. We will see how that market evolves over time.

Having said all that, I urge the noble Lord to withdraw his amendment.

[Lord Young of Cookham (Con)]

I am grateful to all noble Lords who have spoken in this debate. The noble Lord, Lord Sikka, said that the Treasury would like to redefine what is public expenditure and what is not. I am sure that is the case—it would like to get some liabilities off the balance sheet. The whole point of having an independent ONS is so that the Treasury, led by politicians, cannot adjust the figures and the liabilities to suit its convenience.

What has not come out in this debate is that there is competition between the roscos to supply the wants of the train operating companies. Originally, there were three, now there are four, and there have been two recent entrants. The competition between them has driven down the costs. The Government, who on Monday spent time trying to persuade foreign investors to invest in infrastructure, will have been a little disappointed to hear the noble Lord, Lord Sikka, being less than complimentary about the investments that they have made in some important parts of the infrastructure.

Passenger Railway Services (Public Ownership) Bill

Lord Hendy of Richmond Hill Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

[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.

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[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.

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[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.

--- Later in debate ---

[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.

HS2: Purchased Land

Lord Hendy of Richmond Hill Excerpts

Wednesday 23rd October 2024 Lords Chamber

[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?

[Lord Hendy of Richmond Hill (Lab)]

Yes.

[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 Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, I will speak to Amendments 7 and 9, which together constitute this group. Both are concerned with what the Government say they intend to be the effect of the Bill: the improvement of passenger services. Again, they are largely probing amendments, although we would expect the Bill to be amended, if not with a purpose clause, as proposed earlier by my noble friend Lord Gascoigne, then at least with measures of the character contained in these two amendments, which seek to set a safety net, in effect, in different ways, for the services being provided.

Amendment 7 would have the effect that the relevant franchising authority must give to the Office of Rail and Road—it could be to some other trustworthy and credible body, such as the Department for Transport, if it is not the franchising authority—an assessment that the company that will take over the franchise is capable of doing so. People might ask: what company? The company that will take over the franchise as proposed by this Bill will be a shell company—an off-the-shelf company purchased by the Department for Transport; a perfectly ordinary company under companies law such as anyone might buy off the shelf. That already starts to raise questions around why we would think that it had any competence to run a railway. People will say, “Don’t be silly, that is just a form”. The form is an empty-shell company constituted under companies law, but the sole shareholder of that company will be the Department for Transport. In effect, the Department for Transport will be running this service through the shell company that it has bought off the shelf in order for it to be the recipient of the public service contract, which is the only type of contract that the Secretary of State will be able to award.

But the Minister said a little earlier in the debate— I cannot pin it down exactly without looking at Hansard, but I do not think that he will deny that he said it—that one of the main purposes of the Bill was to take out of the Department for Transport a whole load of stuff that it was no good at doing and give it to Great British Railways, because it would be better at doing it than the Department for Transport. Here we have a system proposed by the Bill in which the responsibility for operating a service will be taken from a train operating company with decades of experience of providing the service—perhaps, in some cases, hundreds of years of experience if it is a foreign railway company putting its foot into the British market and providing services to us—given to a company bought off the shelf, which is owned and controlled by a department that the Minister himself said should have functions taken away from it and transferred to Great British Railways. What sort of a mess is this?

That is why, very simply, this amendment asks for an assessment in advance as to whether that company —the operator—is fit for purpose. We are looking not simply at the shell company but at its shareholders and controllers—the people making the decisions. Why should not the public have that level of assurance before a franchise is terminated and transferred to such an entity? That is what the amendment is calling for, and there is a very strong case that it should be done.

The second amendment, Amendment 9, is not the same, but it points in a similar direction. Nothing is said in this Bill about what level of service the new operator will offer compared to the old operator. It is presumably for the Department for Transport or shadow Great British Railways—we do not know—to decide the terms and conditions of the public service contract that it will award. If it is the Department for Transport, it will award the contract to itself or to its shell company; if it is shadow Great British Railways, it will award it to the Department for Transport. Somebody will have to sit down and decide what those terms and conditions are. All we are asking in this amendment is that the services offered to the public should not be of a lower standard than they are under the existing franchise.

That is not to say that there is not the possibility of some sort of public consultation. That is what we have inserted. We have said that you can lower the services but that you have to consult publicly in advance. At the moment, that would be true on a transfer of a franchise. We have had no assurance from the Government that there will be a public consultation on the termination of a franchise and the award of a public service contract directly to one of the Department for Transport shell companies.

This is one of those issues about which the Government may want to say, ah ha, this will all be dealt with by the great big Bill coming down the rails towards us. That would be a grave mistake, because these issues relate specifically to this Bill and to what will happen the moment it starts to be implemented. As we discussed earlier, this Bill could be the governing statute of the operation of the railways for as much as four or five years, even if the Government have a good headwind behind their new measures and they come forward in time and are implemented reasonably. The public will want to know that our service levels are protected. Will they be consulted? Will the people who run these trains be fit for it, given that we know from the Minister that he does not think that they are fit for much else on the railways? I beg to move.

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

My Lords, I thank the noble Lord, Lord Moylan, for his amendments.

Amendment 7 considers the capability of public sector companies to take over services and operate them to an appropriate standard. It is clearly a key priority for the Government that services should transfer to public ownership smoothly, without detriment to the quality of service during the transition. For this reason, the transfer of services will take place using established arrangements and processes which have previously fulfilled the Secretary of State’s operator of last resort duties. I remind the noble Lord, Lord Moylan, that this has taken place under the previous Government and their predecessors four times with no obvious risk to the delivery of service.

DOHL is the publicly owned company that already oversees four existing publicly owned operators. It has had significant experience of managing the transition of services from private to public operation in recent years. These transfers have been completed successfully and smoothly despite challenging timescales and circumstances, which have included franchise financial failure and poor operator performance. DOHL is therefore well-placed to manage future transitions and is building its capacity to do so as we speak.

The Government have made it clear that we will transfer services on a phased basis as existing contracts expire. This measured, responsible approach will further de-risk the transfer process. As an additional safety net, the Bill includes provision at Clause 2 to allow for temporary continuation of an existing franchise where the Secretary of State is satisfied that it is not reasonably practicable to complete a transfer in the timescales originally planned. We do not plan to use this power other than in genuinely exceptional circumstances, but it is prudent that it should be available if necessary as a last resort, given that everybody would agree that disruption to passengers should be avoided.

Amendment 7 also seeks to provide a new role for the independent regulator, the Office of Rail and Road. The ORR is the regulatory authority responsible for granting operator licences and for assessing, approving and issuing operators’ safety certificates. This Bill does not change this. In its existing role, the ORR will assess carefully the suitability and readiness of any operator—public or private, passenger or freight—to take over services and to operate them safely, and is experienced in doing so. Considering DOHL’s previous experience and track record, the further safeguards I have described and the existing regulatory role of the ORR, the Government do not see any need to commission further analysis from the ORR as this amendment proposes.

Amendment 9 would require the Secretary of State, Scottish Ministers or Welsh Ministers to undertake a public consultation before specifying or allowing any reduction in service levels at all within a contract with a public sector operator.

I start by saying that the Government want to grow rail passenger demand and revenues; we are not starting out with an objective to cut services. When services transfer to public ownership, as now, we will expect operators to clearly communicate all changes to services. I agree that, if there were to be a plan for material reductions in service levels, this should be the subject of public consultation. However, I cannot support a statutory obligation to hold a public consultation in relation to every change to the timetable or to any other aspect of the service specification that somebody might consider to be to their disadvantage.

If a service is so poorly used that it is clearly unnecessary to carry on running it, and there is an alternative train available at a similar time of day, is it really sensible to expend time and public money on a consultation process? If there is a high-frequency service and a slight reduction at a quieter time of day would enable train and/or infrastructure maintenance to be carried out more efficiently and effectively, does this really merit a public consultation? If, God forbid, there were another global pandemic, or other immediate and extraordinary event that caused a serious reduction in passenger demand, I submit that it would be absurd to suppose that a public consultation would be necessary before reducing service levels.

There should of course be consultation on material reductions in services, but to require it regardless of the scale or impact of a proposed change would impose a disproportionate burden. I therefore urge the noble Lord not to press this amendment and to withdraw the amendment I spoke to first.

[Lord Moylan (Con)]

My Lords, will the Minister state at the Dispatch Box not that there should be a public consultation in the event of a material reduction of services on transfer of a contract but that there will be? If so, I would be very happy to leave the matter there. I would like to give him the opportunity to say that it is the Government’s policy that there will be a consultation if there is a material reduction in services on transfer.

[Lord Hendy of Richmond Hill (Lab)]

In response to the noble Lord, I do not see those circumstances arising. However, I will take the point away and consider it during the progress of the Bill.

[Lord Moylan (Con)]

I note that the Minister has not been able to give that commitment. With that, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Teverson (LD)]

My Lords, I did not speak at Second Reading, but I often speak on issues around public investment. One of the things that concerns me greatly about this move, although generally I might be in favour of it, is that, internationally, public investment in this country tends to be extremely low. In fact, over the last 25 years, the average public sector investment is 1.8% of GDP, which most of the time is well below our equivalent G7 nations. However, if you look on it year to year, the graph is a rollercoaster that Alton Towers would probably be favourable to, because it goes up and down, up and down.

I was privileged—it was a great company—to work in the public sector for a short period of time in the transport sector, not on the railways but in another area. Certainly, one of the concerns we heard very regularly from organisations equivalent to us within the public sector—I was in the freight sector, which was so small that the Treasury did not worry about it—was that investment in the public sector operating companies tended to vary year by year depending on what the Treasury felt was possible in terms of public investment, which completely disrupted a regular, predictable and sensible investment programme in what were effectively commercial public enterprises. I would like to hear from the Minister how there will be effectively that barrier between what the Treasury wants to do year to year and the genuine needs of public sector railway companies to offer a consistent and improving service to the travelling public.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord, Lord Moylan, for his Amendment 8, which would require public sector operators to publish plans for investment and innovation. I would dispute the proposition that a move to public ownership will produce a decrease in investment. As I have previously said, currently no meaningful private sector investment is being funded by franchising.

[Lord Moylan (Con)]

I have not said that a move to public operation would reduce investment, nor have I argued it either here or anywhere else. The question put by the amendment is quite different to that.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention. I did not say that he had made the assertion; I was disputing the proposition that a move in that way would produce a decrease in investment.

As I said, no meaningful private sector investment is being funded by franchised operators at present, so we are losing nothing by moving to a public ownership model. The Government are already reimbursing the legitimate operating costs of private sector operators and receiving the revenue. Even before the Covid pandemic, the main private investment in our railways was in rolling stock, generally funded by the rolling stock market, not by train operators or their owning groups. Given that the rolling stock market is not impacted by the Bill, there is no reason to see that change.

The Government, of course, wish to see innovation and investment in areas such as those described in the amendment. In fact, the public sector is already demonstrating its commitment to innovation. We have committed to reviewing the overcomplicated fares system, with a view to simplifying it and introducing digital innovations. Change is already being delivered: for example, by the slightly delayed, extended pay-as-you-go in the south-east and fares reform on LNER. Public ownership is essential to progress these fares and ticketing innovations and other reforms. Unlike under franchising, with public ownership we will be able to get these sorts of reforms done without needing a commercial negotiation with up to 14 different operators, each seeking to boost their profit at the taxpayer’s expense in return for agreeing to implement those reforms.

However, the Government do not consider it appropriate to spell out detailed requirements such as these in the legislation. To do so would constrain future flexibility to adapt operators’ obligations to suit changing circumstances. It is not necessarily the case that constant investment and innovation across all these different aspects of the customer offer is the right approach. The focus of innovation should be on those areas where improvement is most needed at any point in time, and not those that are already working well. Moreover, it will not be coherent for passengers, nor efficient for the taxpayer, if up to 14 separate publicly owned operators in England, plus those in Scotland and Wales, are each pursuing their own separate innovation and investment strategies across all these different aspects of the passenger offer.

A key purpose of our wider reforms, starting with the establishment of shadow GBR, will be to drive a much more coherent, cross-industry approach in areas such as those described in the amendment. GBR will be the right body to consider investment across the railways, and I ask noble Lords to wait to consider the Government’s proposals on GBR in the coming months, though I feel very confident that a coherent guiding mind for the railways will produce a longer-term and more consistently argued approach for investment than has been true in the past.

In summary, I support the underlying sentiment that investment and innovation are needed to drive improvements in many aspects of the passenger offer, but the proposed amendment is not the right way to deliver it. I offer my reassurance that investment and innovation are critical to our plans to reform the railways, but I urge the noble Lord to withdraw his amendment.

[Lord Teverson (LD)]

I asked the Minister to tell me how we can isolate, to some degree, consistent investment decisions in the new railway structure from Treasury decisions that tend to move public investment up and down very regularly—I do not understand how that happens. We are moving from a situation where, if I have got this right, we have, effectively, investment being off-balance sheet through train operating companies and other organisations to on-balance sheet public expenditure. I am still desperate to understand how the new public sector train operating companies can properly rely on consistent investment. I would be interested to hear from the Minister what he expects the average level of investment in railways to be, per annum, over the next five years.

[Lord Hendy of Richmond Hill (Lab)]

A coherent guiding mind is far more likely to produce a long-term business plan for the railway that justifies future investment than the previous fragmented system. Very few of the owning groups or train operating companies have ever made any significant investment. The principal investment that has been made in passenger services is with the rolling stock companies, whose position is unaltered in the proposition of this Bill.

[Lord Moylan (Con)]

My Lords, I come away from each of the Minister’s responses slightly more baffled and frustrated than I was before. Let us try and get clear what I think he is saying. This in part is my attempt to frame at least a model answer to the question raised by the noble Lord, Lord Teverson.

At the moment, the Minister would say that there are in principle three sources of investment in the railway. There is what is put in by the private sector—that happens to be a nil set, the number is zero, but in principle it is there. There is what is provided by the private sector for the purpose of acquiring trains for the purpose of leasing them out—that is unaffected by the Bill, so that is not going to change, and nor is there any suggestion, incidentally, although I may be wrong about this, of course, we wait to see, that that is going to change as part of the Great British Railways Bill coming down the track. Then there is the part that is put in directly by the Government and that is currently negotiated by Network Rail in a series of five-year control periods. I forget where we are in the current control period, but we are vaguely half way through a five-year control period.

So, in the future, what is the Minister holding out to us that is going to be different? The contribution from the train operating companies will continue to be zero, because they are now going to be simply shell companies or part of that. He is quite clear we are not losing or gaining anything on that particular front. There will be no change to the way in which the roscos are set up for the purpose of leasing trains. So everything is thrown back on the comparison with the Network Rail negotiations in relation to the current control periods. Somehow, because that is Great British Railways, it is going to be transformed.

We have just heard that it will be longer term, so it will not be a five-year control period, it will be a 10-year control period or a 15-year control period. That might be very desirable—but why? Why is the Treasury going to agree to a 10 or 15-year control period or whatever the number is beyond the five years that exist? And if it is not going to be a larger sum—he did not say a larger sum—it will at least be a more efficiently deployed sum, so that every pound will buy a little bit more than it would have bought under the current arrangement? Again, the question is: why?

The sort of answer we get is, “It is all going to be absolutely wonderful. It will be different and it will be wonderful, but it’s going to be the same and I can’t explain why”. That is where we seem to be left the whole time. Anyway, with that, I beg leave to withdraw my amendment.

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[Lord Moylan (Con)]

In response, I say only that seven would be a fantastically tiny number compared to the number of internal boards, committees, liaison bodies and so forth that Great British Railways is likely to require to explain to itself what it is doing, before it even gets round to explaining to the public what it is up to. I regard seven as a very modest and economical number.

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend Lord Berkeley for his Amendment 11, regarding rest-day working. Rest-day working provides resilience in response to spikes in leave, sickness and training, and it rewards the workforce when extra hours and days are worked. It can offer benefits to rail employees, as well as to passengers. It is likely that it will always be necessary, to some extent, to effectively deliver the timetable. However, rest-day working should be used where there is an operational benefit and employees are willing to volunteer, rather than trying to mandate in legislation how and where it is used. Our focus is instead on ensuring, as soon as possible, that the railway industry has enough staff to operate services reliably for the benefit of passengers and employees, without excessive rest-day working.

My noble friend Lord Berkeley referenced the new trains on South Western Railway. I say to him that they are now entering service and, further, that Network Rail in fact substantially changed terms and conditions two years ago for greater flexibility and in agreement with the workforce, and that is now reflected in greater efficiency. That deal demonstrates what can be achieved in the public sector.

The noble Baroness, Lady Pidgeon, referred to uncertainty. There can be no greater uncertainty than has existed for the last 30 years on the railway, in which anybody of long service has changed their employer at least once, sometimes several times, while doing the same job. The people whom I meet going around the railway talk about it as “the railway”, many of them because their employer has changed so often that they cannot even remember the name of the company that they used to work for. Some stability in respect of the employers of staff on the railway, many of whom are deeply committed and have had long service, is overdue, and this Bill will move towards it.

Will there be a workforce plan? Yes. Is there one at the moment? No. As the train operating companies come into public ownership, they will have to have a workforce plan. Personally, I am absolutely committed to the maximum recruitment of drivers as early as possible, to the benefit of the drivers themselves and the service that the railway operates.

I also very much thank the noble Lord, Lord Young of Cookham, for Amendment 18, which suggests that an independent body should be established to advise the Government on the pay and terms and conditions for railway staff under public ownership. We are committed to delivering the biggest overhaul of our railways in a generation. It is right that, as part of that process, these matters are considered. Employment conditions are an important issue and one that we are determined to get right.

My officials are at the early stages of exploring a number of options, including a pay review body, so that we can consider the most appropriate approach to meet the needs of a transformed industry. A number of different approaches exist across the public sector, including pay review bodies and wider guidance, and, as my noble friend Lord Snape said, the use of the Advisory, Conciliation and Arbitration Service. We need more time to reach an informed conclusion on the best approach for the rail sector. It would be inappropriate to commit to the introduction of an independent body before that work is completed. In particular, we do not need to do this now in relation to this Bill.

Amendment 49 is in the name of the noble Lord, Lord Moylan. It seeks to require the Secretary of State to produce a report on how public ownership will impact the implementation of the Strikes (Minimum Service Levels) Act 2023. The noble Lord must surely be aware, however, that the Government have already committed to repealing the Strikes (Minimum Service Levels) Act 2023. That is because this Government are committed to strengthening the rights of working people by empowering workers to organise collectively through trade unions.

No relevant employer, under the Strikes (Minimum Service Levels: Passenger Railway Services) Regulations, has chosen to implement minimum service levels under this legislation and, in fact, they will not work. Instead, we will work in partnership with trade unions, as we have done in recent weeks to bring an end to two years of disputes that have meant needless disruption and misery for passengers. So I must say to the noble Lord that the Strikes (Minimum Service Levels) Act will not be implemented for publicly owned services, or indeed at all under this Government—as, in fact, it was not under the last one. The suggested report, therefore, would be redundant.

Finally, I will respond to the points made by the noble Lord, Lord Young, on the classification of the costs of rolling stock for publicly owned train operating companies when I respond to Amendment 19 in group 10 in the resumed Committee stage on Wednesday. I note for now that, whatever the position is, it must already apply to the four publicly owned train companies. I urge the noble Lord to withdraw his amendment.

[Baroness Randerson (LD)]

Before the noble Lord sits down, can I ask a question in reference to the fact that the Minister mentioned that there was no need to sort out terms and conditions now? What timeframe do the Government assume that they must follow in order to ensure that the first train operating companies to be taken into public ownership do so in an organised way so that new staff are recruited with modern terms and conditions of employment.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Baroness, Lady Randerson, for her intervention. In fact, I did not say that there was no need to sort out the terms and conditions now; I said there was no need to sort out the particular matter of how the overall pay and conditions might be dealt with, including with the pay review body. As a matter of fact, the employees would transfer under the transfer of undertakings regulations. At that stage, no change is possible on the transfer. That will need to be resolved and I am sure that changes are in fact needed, if only because, at least in my view, some of the existing train operating companies have failed to develop the terms and conditions in the way that they should have, both to operate a better service and to reward the staff more effectively.

[Lord Berkeley (Lab)]

My Lords, I am very grateful to all noble Lords who took part in this short debate. My amendment was a probing one, as I said, and I have no regrets about tabling it because we have learned a great deal this evening. It has been easier to blame what has gone wrong in the railways and the strikes in the last few years on the trade unions or even the present Government, but most of the passenger franchises that have been operated in the last 10 or 20 years have had Department for Transport puppet-string holders behind them, telling them what they can and cannot do, which is not the way to negotiate. Most successful negotiations take place on the background of a client, customer or owner who knows what they are doing and has done it before, and trade unions that also know what they are doing.

I am pleased that my noble friend has given us a progress report on where this is likely to go and I thank him for the information and for updating me on some things, but I hope that it will not be too long before we see an even better arrangement for the workforce, whether it is a workforce plan or whatever, including Network Rail workers. Then everybody could get their heads down and get on with providing a good service to the customers—which is, of course, what everybody wants. On that basis, I beg leave to withdraw the amendment.

Passenger Railway Services (Public Ownership) Bill

Lord Hendy of Richmond Hill Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Moylan (Con)]

The noble Lord puts the Government’s case very well. How much the House has lost in not seeing him on the Front Bench as the Minister, given that he was the shadow Minister up until the general election.

We are told by the noble Lord that the Government have a package of reforms. We all have a package of reforms. We know what the package of reforms looks like; it is in the Shapps-Williams review. Yet what we are seeing from the Government is a package of reforms that differs significantly from the Williams review; that is why it needs such careful scrutiny.

Given the passage of time, I will be brief on the remaining amendments. All the amendments in my name seek to test the effects of this measure on the performance of the industry in the light of the nationalisation that the Government are proposing.

Taken separately, the amendments deal with different types of performance. Some deal with the performance of the railways in so far as they engage with passengers; that is, on timeliness, efficiency, service quality and so forth. Some relate to the performance of the railways in relation to finances; we will come to finances in more detail later. The Government claim that this Bill has no financial consequences—there are those of us on this side of the House, including the noble Baroness, Lady Randerson, who treat that approach with great scepticism. Other amendments seek to examine the measure’s effect in relation to the performance of the network as a whole.

I hope that all these amendments will be accepted by the Government. If they are to make these changes, there needs to be transparency and the public need to be able to see metrics published, possibly by an independent body or possibly by the Department for Transport—we are open to persuasion on that—which show how the railway is performing.

Having come to power committed to transparency, I know the Government would not want to resile from that. So, if they are not able to support the detailed amendments as tabled, I expect that the Minister will have no difficulty in saying that the Government will put forward amendments on Report showing how this Bill will be monitored in its implementation.

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

First, I thank the noble Lord, Lord Gascoigne, for his welcome; it is nice to see him again in different and more august circumstances—different, at least, from those that applied in the old City Hall. I thank him, and the noble Lord, Lord Moylan, for their explanations of this group of amendments, most of which require some form of reporting or assessment of the impacts of public ownership or the performance of publicly owned operators.

Like my noble friend Lord Snape, I am fascinated by the plethora of reports proposed at this stage of railway reform. Given that LNER has been in the public sector for six years, and Northern for four, it is strange that the measures now proposed for public sector train operators were never contemplated or enacted by the previous Government, who clearly never thought that they needed them. In simple terms, this Government do not either.

I welcome the support of the noble Lord, Lord Gascoigne, for railway reform. His Amendment A1 does not call for any reports but requires the Secretary of State to have regard to a specific purpose —to improve the performance of passenger services—when exercising functions under the Bill. I entirely support that purpose, and it is at the heart of what we are doing, but there are also many other purposes: stripping out inefficiency and waste on behalf of the taxpayers who fund the railway, simplifying fares and increasing patronage, connecting communities, driving economic growth and promoting opportunity for all. It is not right that the Bill should suggest that it has only that one purpose, important though it is.

Amendment 2, tabled by the noble Lord, Lord Moylan, would require the publication of two reports: the first outlining the anticipated impact of public ownership, and the second assessing its actual impact some years after the event. Regarding the first of these reports, the Government have already fulfilled the proposed obligation through the impact assessment published earlier in the year. Among other expected impacts, the taxpayer will no longer have to fund many tens of millions of pounds in fees currently payable to private sector operators each year, even when their performance is sub-standard. Furthermore, public sector operators will prioritise the interests of passengers and taxpayers, not the demands of their shareholders.

A similar report is envisaged in Amendment 48A, tabled by the noble Lord, Lord Gascoigne, but focused specifically on the impact on performance. I can assure the noble Lord that the Government certainly expect public ownership, and our broader reform proposals, to unlock the significant improvement in the performance and efficiency of the railway which he is looking for; we do not need to publish a report to say that.

Turning to the second proposed report envisaged in Amendment 2, there is no need to wait for three years before we start to consider whether train operators’ performance is improving. A wide variety of data is already routinely published about the performance of both public and private sector train operators. This includes reliability and punctuality, service quality, customer complaints, financial performance and efficiency, among other measures. This Bill does not change any of that, but as part of our wider reform plans, we will further improve access to data. This will be specific to individual routes and/or service groups, not just aggregated at the level of whole franchises, so that passengers can see at each station how services are performing on their local routes and, importantly, what is going to be done to improve them.

The Government can and will monitor performance closely on a continuing basis. We will hold operators’ feet to the fire when their performance is inadequate, irrespective of whether they are privately or publicly owned. The Secretary of State and I have already demonstrated that we will not accept the poor standards that have been tolerated in the past. We have demonstrated that from our first days in office by holding meetings with the managing directors of several train operators alongside their Network Rail counterparts to address poor performance and demand immediate action to raise standards.

In that respect, in answer to the noble Lord, Lord Grayling, we are not discriminating between the public and private sectors and will not do so, as indeed he did not in his time. He rightly gave me a hard time in 2018 in respect of electrification in the north-west of England; even if it was not Network Rail’s responsibility, it related to the failings of GTR as an operator.

Amendment 26, tabled by the noble Lord, Lord Moylan, would require the publication of a further report—or perhaps 10 reports, one after each transfer—setting out the expected impact of the transfers on various aspects of train operators’ performance. Again, once transfers have taken place, it would be more instructive to consider the actual performance of train operators.

Amendments 21 and 22, also tabled by the noble Lord, Lord Moylan, would require the reporting and independent assessment of the performance of publicly owned train operators. That is unnecessary because, as I have set out, the Government will themselves be monitoring their performance closely and will work to ensure that as much performance data as possible is published for the benefit of the travelling public, in a form that is useful to them and that allows for effective scrutiny.

My department is currently reviewing the standard terms of the service agreements that are entered into between the Secretary of State and public sector operators, in readiness for future transitions to public ownership. Public operators will be set targets in key areas such as punctuality and reliability and other aspects of the service. Work is under way to identify the right targets and measures for the period ahead in order to focus operators on delivering the best possible outcomes for passengers and taxpayers. As part of the service agreement review, we will consider the arrangements for publishing those targets and operators’ actual performance in comparison to them.

Amendment 22 refers to performance improvement plans. I reassure the noble Lord that improvement plans are already a feature of the Government’s service agreements with each public sector operator. I confirm for noble Lords that similar mechanisms will continue to exist in future, both through contractual terms and through the controls that DOHL exerts over its operators on behalf of the Secretary of State. As I have said, where performance is falling short, we will not hesitate to demand that things are put right, regardless of whether the operator is privately or publicly owned.

Amendment 45, tabled by the noble Lord, Lord Moylan, requires the publication of an independent assessment of the performance and efficiency of the rail network five years after the enactment of this Bill. By that time, the Government will have established Great British Railways, which will have taken over responsibility for both track and train. New arrangements will need to be put in place to oversee and scrutinise the effectiveness and efficiency of GBR, so in due course we will set out our plans for holding it to account as part of our plans for the wider railways Bill. We should not pre-empt those future arrangements by seeking to legislate for them now.

I hope we will deal with all the noble Lord’s other points during the rest of Committee, as we shall with the detailed comments of the noble Baroness, Lady Randerson, on staff morale and the British Transport Police. In answer to the noble Lord, Lord Lansley, I confirm that there are no changes to Section 4 of the 1993 Act.

In answer to my noble friend Lord Snape, in the present Bill there will be no change to the role of Office of Rail and Road; he needs to await the substantive railway Bill for that, at least with regard to the railway element of the ORR. There will be public consultation on the wider Bill before it comes, so there is no need to wait until the publication of the Bill itself.

I also say to the noble Lord, Lord Moylan, that there is currently no meaningful private investment by train operating companies, so we are not losing anything in the Bill that is on the table today. Contrary to his assertion about the Williams report, its author, Keith Williams, envisaged public ownership as a necessary condition to rationalise a number of things on the railways, in particular fares, ticketing and information.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

I should respond to the noble Lord on three or four points. First, whatever the Williams report said—and it was adequate in what it said at the time—I took the trouble, only a few days ago, to confirm with its author that he acknowledged we could not change the fares, ticketing and information systems without taking the train operating companies or their activities into public ownership.

Secondly, the noble Lord knows perfectly well how a large public body can behave in monitoring activities, whether it carries them out itself or has contractors or concessionaires to do it, because he will be as familiar as I am with the experience of Transport for London. It monitored its own activities, published them and allowed others to scrutinise them. That principle is the one which should be adopted by Great British Railways.

[Lord Moylan (Con)]

So is it Great British Railways that will be doing it, like TfL, and not the Department for Transport? I am very confused.

[Lord Hendy of Richmond Hill (Lab)]

Well, the noble Lord should not be, because it is quite clear to me that the Government intend to take a large amount of activity out of the Department for Transport and put it in a body that is responsible for the performance of the railways. That being the case, it would be extremely logical that monitoring performance is done by GBR but properly scrutinised by others.

Lastly, I simply say to the noble Lord opposite that there has been a change of government. The policies that this Bill and the railways Bill will seek to enact are the policies that the Government were elected to carry out.

[Lord Gascoigne (Con)]

My Lords, I am grateful to everyone who spoke in what I thought was going to be a relatively brief debate, but I think we have clocked up over an hour and it has become far-reaching, showing the wealth of knowledge in your Lordships’ Committee.

I will cover some of the points that were raised. The noble Lord, Lord Grocott, raised HS2 and my own position. As a northerner, I have my own personal views, but I have to say that I was merely a Whip on the Government Front Bench and, as powerful as I may have been in controlling speaking times from the Dispatch Box, I did not have the power to control spending. It is something I will raise with the Opposition Chief Whip, my former boss, later. With respect, perhaps the noble Lord may want to speak to his own Front Bench about future spending plans. If I may say so, I think the Prime Minister’s own position on HS2 has been perhaps confused over the years.

Turning back to the debate, I think this group was about the future plans covered by this Bill. The noble Lord, Lord Snape, suggested that my Amendment A1 would create bureaucracy, and I think the Minister said that it would not; it is merely a purpose clause. I repeat what I said earlier: my only wish is to make it clear that services will improve.

I am grateful for the Minister’s response, but I would have thought that the Government could have at least supported Amendment A1 as it is a purpose clause. It could demonstrate that the Government do not believe that the Bill will improve services. Although the Minister said at the Dispatch Box that it would improve services, he then listed a number of other things it would do. I do not know if I should take that as meaning that the Government will accept my amendment but also list all the other points they believe it will do as a purpose clause. That said, obviously this will be an ongoing conversation and for now I beg leave to withdraw my amendment.

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[Lord Moylan (Con)]

My Lords, I begin by speaking briefly to Amendment 30, standing in my name, which proposes the deletion of the word “reasonably” from Clause 2, line 29. At this point in the Bill, the prohibition on the Secretary of State from renewing franchises is alleviated by this clause in certain circumstances. One of them is where the Secretary of State is satisfied that it will not be reasonably practicable to provide or secure the provision of the franchise service, et cetera.

This is a simple probing amendment, on which I do not want to spend a great deal of time, other than to simply ask what the Government mean by the word “reasonably” here. What is “reasonably” adding to “practicable”? It seems that it is creating potential difficulties for the Government. On one hand, if they were challenged in court about this—I hasten to add that I am not a lawyer—I think they would find that one of the tests they would be put to is whether they had acted reasonably, and that would be true whether the word was in the statute or not. Here, it seems to me that there is a double standard of “reasonably” being applied to them. What do they mean by “reasonably”? In what circumstances do they envisage having recourse to it, and would the Bill not actually be better without it? I would be grateful for the Minister’s comments on those points.

On the substance of the debate, I congratulate the noble Baroness, Lady Scott of Needham Market, on having secured universal approbation for her proposal from all speakers who have spoken today. She wants something that appears to be very common-sensical: that the poor franchises should be terminated and cleared out as soon as possible and before the well-operating franchises are cleared out, so that we do not have a situation where good operators are removed from service while poor operators are left in place.

Yet, because of the rush with which the Government have come at the Bill, and because of their determination to be able to say, “We’ve achieved something in the manifesto as fast as we possibly can”, that is exactly the effect of the Bill as it is constructed. Operators that we know to be poor will continue for considerably longer than those that are in fact performing very satisfactorily. I suspect that the Government will say that this is because they have to terminate franchises at the time they fall due, because to terminate them any earlier would cost public money and they would need to pay compensation. As the noble Lord, Lord Liddle, said, that is of course the legal advice they would receive, though what exactly some of these poor performers would expect by way of compensation is a political question and one that could easily be put to the test, as the noble Lord said.

The other matter here is that the Government already envisage that some franchise contracts, despite the prohibition in the Bill, may be renewed for practical reasons, reasonably or otherwise. It is possible to renew a franchise on a short-term basis. In fact, nearly all the franchises currently operating are operating on very short-term contracts. The financial liability carried with those short-term contracts is very small. So, even if a good performer were to have their franchise fall in very soon, if an appropriate exemption to the prohibition were inserted in the Bill, they could still be kept going on a short-term contract without creating a significant new liability to the Government, while the poor contracts fell in and were terminated without any risk to the Government. If the Government were not in such a terrible rush, all of this would create a logical structure for the termination of contracts which passengers would understand and which would not run the risks that were stated so clearly by the noble Baroness who moved the amendment.

There is a great deal to be said for this. I hope the Minister, when he replies, will not take refuge in simply saying, “Oh, we’ve got no choice because this is what the public finances dictate and it is all driven by finances and contracts”. The management of these contracts—by a confident Government who know what they are doing and a Secretary of State who wants to achieve something and knows the direction in which she is heading—is essentially a political matter. It can be done and the Government should step up to the plate and do this for their own sake if they wish their reforms to get off to a good start.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank noble Lords for explaining their amendments in this group, which consider some of the practical aspects of the Government’s plans to transfer services to public ownership. Amendments 1 and 48 focus on the contractual arrangements that allow the Secretary of State to terminate a franchise early, following a breach of contract or other sustained poor performance. I make it absolutely clear that this Government will not hesitate to act decisively where an operator’s unacceptable performance means that the contractual conditions for early termination are met. The Secretary of State has made this plain on a number of occasions and I am happy to reiterate it to your Lordships today.

However, I am very much afraid that the terms of the contracts we have inherited from the previous Government do not make this easy. It is far easier for an operator to return the contract to the Government than it is for the Government to take back a contract for poor performance. It is deeply regrettable that in the past couple of years, some of the poorest performing operators have been awarded the longest contracts.

Noble Lords will not be surprised to know that we have looked very hard at the form of the contract. We are closely monitoring train operators’ compliance with their contract, but at present we are not in a position—with any operator—where the Secretary of State has a contractual right to terminate for poor performance. Noble Lords might be amazed to know that Avanti has not yet triggered the need for a remedial plan, although it may well do so. While CrossCountry has triggered the need for a remedial plan, we need to let that work through, together with the timetable reduction that the Secretary of State was deeply reluctant to agree to, before we discover whether its performance then merits some further contractual remedy.

Unless and until that contractual right arises, the only sensible approach is to transfer services to public ownership when the existing contracts expire. Any other approach would require taxpayers to foot the bill for compensation to operators in return for ending their contracts early, which the Government made clear in our manifesto that we would avoid, if only because of the state of the public finances we inherited.

I have also heard representations on behalf of operators—or, rather, their owners—that, rather than transferring services as contracts expire, we should leave their services in private hands for as long as possible. All the owning groups knew of these dates and would have planned financially for them in any event. The concern seems to be that service quality will suddenly collapse, or that current plans for service improvements, or for the rollout of new train fleets, will suddenly grind to a halt.

There is no basis for these claims. DOHL is experienced in transferring services into the public sector smoothly and without disruption, as it has proved in the difficult aftermath of past franchise failures. As services transfer, the same trains will be operated by the same staff as before, and no doubt often by the same management, as happened with LNER six years ago. The improvements that are already in train will continue. I have no reason to think that performance will deteriorate. Extending specific operators’ tenure will simply delay the process of bringing services back to public ownership, where they belong, and the financial savings that will result.

In answer to the noble Lord, Lord Grayling, while there have been transfer costs from franchise to franchise, he will of course recognise that the incoming franchisee would not pay that cost gratuitously; they would simply add it to the subsidy bill for the franchise they were inheriting. In the end, the public sector pays, as it has always done. In fact, since Covid, the operators have not funded anything at all, so the quantum in the future is likely to be extremely limited.

[Lord Grayling (Con)]

I would like some clarification from the Minister on that point. Has the department added up that liability? Does he have a total number for the transfer into the public sector of all the franchises?

[Lord Hendy of Richmond Hill (Lab)]

The answer to the noble Lord is: not yet. He will recognise that those costs materialise only when the franchise transfers, so the department will never have had that total number in the past, and I do not expect it to have it now. As the franchises transfer, the number will become obvious.

[Lord Snape (Lab)]

Before my noble friend leaves that point, I will ask him about the question of performance that has been raised on both sides of the House. The public performance measure national average is 88.7%, but the Avanti West Coast performance measure is only 62.2%—some 25% less. What has to be done to remove a franchisee which has performed so badly, as in the case of Avanti, other than knocking down the buffers at Euston and heading a Pendolino down Eversholt Street?

[Lord Hendy of Richmond Hill (Lab)]

In answer to my noble friend, and in recognition of some of what I have done in the past, it is sometimes a surprise when you read the performance requirements for contracts that you inherit. This is clearly one of those cases. I cannot defend the statistics that my noble friend cited, and I cannot defend a contract that allows that to happen without remedy.

In answer to the noble Baroness, Lady Randerson, we will come to devolution later in Committee.

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[Lord Moylan (Con)]

I will not pursue the question of “reasonably” at this stage, but I was struck by the Minister saying that the Bill should not trammel the Secretary of State’s power in relation to how she manages contracts and franchises. However, that is exactly what the Bill does in Clause 2. What he wants is the liberty, within reason, of the Secretary of State to terminate franchises. But Clause 2 specifically sets out, in very clear language, a prohibition on the Secretary of State to award a contract to anything that is not a public sector company. It says that she may do so only

“by making a direct award of a public service contract to a public sector company”.

Admittedly, further down the page, there are, as we have discussed and as the Minister said, one or two very narrow exceptions for practicality, or reasonable practicality. But why do the Government feel that the Secretary of State should have complete liberty when it comes to terminating franchises, but is so untrustworthy and unreliable, so enamoured of the private sector and so easily seduced into re-awarding them the contract that there has to be a legal prohibition on her doing it here? All Members of the Committee are asking for is some flexibility in Clause 2 about what the Secretary of State is allowed to do—why not? Can she not be trusted?

[Lord Hendy of Richmond Hill (Lab)]

The answer is that it is the Government’s policy to take train operations into public ownership. The words the noble Lord mentions in Clause 2 just emphasise that intention.

[Lord Liddle (Lab)]

I would like to raise another point about Avanti. As I understand the law, the Secretary of State has a clear right to withdraw contracts on the basis of passenger service performance. Is it the case that the present Secretary of State cannot make her own judgment of that and is bound by whatever was decided before the last election? Would a court really not accept that the present Secretary of State has the right to make that judgment and act on it?

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[Lord Berkeley (Lab)]

Before the Minister responds, perhaps I could add something to my noble friend’s comments on Avanti and performance. My noble friend Lord Snape mentioned, I think, a 60-something per cent public performance measure. What we do not know is the difference between delays caused by Avanti itself and Network Rail, the infrastructure manager. GBR will be in charge of the infrastructure as well as the trains, and it is pretty important that we know the balance between the causes of the delay, and how this will improve. Maybe my noble friend the Minister could write to us and give us a breakdown of the performances of the existing services and Network Rail. I believe, at the moment, that Network Rail is responsible for something like 70% of the delays, but maybe I am wrong. I look forward to his comments.

[Lord Hendy of Richmond Hill (Lab)]

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

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

[Baroness Randerson (LD)]

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

[Lord Hendy of Richmond Hill (Lab)]

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

[Baroness Scott of Needham Market (LD)]

My Lords, I am very grateful for the support I have received from across the Committee for my amendment. I am not sure I can remember it happening to me before, and I was basking in the warm glow until the Minister stood up to reply. I am sure that all Members of the Committee will be disappointed because, at the bottom of this, we will be renationalising the Greater Anglia franchise with a performance rating in the 90 per cents, and leaving Avanti in place with its performance in the 60 per cents. Whatever the policy or legal niceties, people will be bewildered by that. I have every sympathy with the Minister; the Government inherited a contract that seems to have allowed extraordinary latitude to Avanti for poor performance. I also recognise the twin problem that it has an extraordinarily long franchise, but I am sure that he has heard very clearly what everyone is saying here. The message to him is: please be absolutely sure that there is not some extent to which political will can find a way through this. A failure to deal with this will leave the travelling public absolutely bewildered. With that, I beg leave to withdraw the amendment.

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The Government are going to allow public service contracts to be awarded “only” to public sector companies. How much better things might be if they had the flexibility that would allow us to head towards a better railway and one for which we might have a plan. I now realise, having carried this weighty and valuable document around in recent weeks to prepare myself for this debate, that it is as nothing, it is as writ in water, a mere telephone call, and a ghostly intervention from outside the Chamber can rewrite it at any moment. We have no direction. We have no idea where we are going. The train is setting off and we are completely adrift.

[Lord Hendy of Richmond Hill (Lab)]

The next time I see our mutual friend Keith Williams I shall tell him that the noble Lord, Lord Moylan, said he was ghostly.

I thank noble Lords for explaining their amendments in this group, which consider, as we have heard, various alternatives to public ownership. Amendments 3 and 5, tabled by the noble Lord, Lord Lansley, would allow contracts to be awarded to private operators following a competitive process. Amendments 28 and 29, from the noble Lords, Lord Young of Cookham and Lord Moylan, would allow franchises to be continued where the current operator is providing a satisfactory service. I do not support these amendments.

The Government were elected on a manifesto commitment to return passenger services into public ownership—having published, for the avoidance of doubt, the detailed plan entitled Getting Britain Moving—and we have a clear democratic mandate to do so. Despite what has been heard this afternoon, public ownership is a change with clear public support. Last month, YouGov published a survey showing that 66% of people nationally agree that railway companies should be run in the public sector; only 12% favoured private operation.

We are determined to return to a passenger railway which is run for the public, by the public, with passengers, not private shareholders, at the heart of the system. We will not leave the back door open to franchising, a model which has failed passengers and taxpayers. We are committed to public ownership because continuing with franchising would mean continuing to pay fees to private operators, ultimately for the benefit of their shareholders, when that money could be retained for the public good. Franchising would not allow us to integrate track and train in the way we propose to do under Great British Railways, which is the only way to put a stop to the fragmentation and waste of the franchising system, otherwise we will not be able to sweep away the outdated, complex and costly mechanisms that make the fares system impossible to understand for passengers, and even now prevent rational change because of “commercial confidentiality”, even though all the revenue risk is now taken by government. There is no benefit to continuing franchised operations on our railways.

Contrary to views expressed by noble Lords previously, there is no meaningful private sector investment being funded by franchised operators at present, so we are losing nothing by moving to a public ownership model. The Government are already reimbursing the legitimate operating costs of private sector operators and receiving all their revenue. Even before Covid, the main private investment in our railways was in rolling stock, which was generally funded by the rolling stock market and not by train operators or their owning groups.

I turn to Amendments 4, 14 and 15, tabled by the noble Lord, Lord Moylan. These amendments require competitive awards to be made to private sector companies on the basis of a concession model, along the lines of Transport for London’s approach, rather than bringing them into public ownership. These amendments would remove the opportunity to deliver the benefits of public ownership, which, as I have said, a clear majority of the public support and which was a specific commitment in the manifesto on which this Government were elected.

The Government’s first objection is that a concession model would mean the private sector continuing to earn substantial profits. Public ownership will put a stop to the flow of money that already sees in excess of £100 million paid out in fees to the private sector each year, even when operators are bearing no significant financial risk.

A TfL-style concession model would expose operators to more financial risk than the current national rail contracts, which means that operators would want to earn significantly more in profits at the taxpayers’ expense and would price their bids accordingly. Not only would concessions be more expensive than this Government’s plans for public ownership but they would be even more costly to taxpayers than the current contracts.

In addition, the TfL concession model involves a very closely defined and largely unchangeable service specification developed in detail by the public authority, with therefore little room for the operator to negotiate changes post tender award in circumstances where they would always have the upper hand on pricing. Our national railway system is much larger, flows alter over time, and one of the great benefits of GBR is that it will be able far more easily to adapt to changing and growing markets and to save costs without endless contract renegotiation with contractors which, except at the point of contract award, always have the upper hand.

The noble Lord, Lord Moylan, referred to the TfL experience of contracting the London bus market. In two previous jobs I was responsible for that market for virtually 15 years. It is a different market because there are a large number of small contracts changing hands, so if a contractor is sufficiently unwise to suggest expensive changes when contracts need to be altered then there is the opportunity to at least counter that by the next award of contracts for other bus routes. That has not been the case in the railway market. It is never likely to be the case. It is a different circumstance.

As a practical point, this amendment would abolish the option for the Secretary of State to appoint a public sector company to run services once a franchise agreement comes to an end. What does the noble Lord envisage would happen under this amendment if an operator went bust at short notice, or lost its licence to operate or its safety certificate? What if a competition failed to deliver a satisfactory outcome? Passengers could not wait a couple of years while the Government run a competition for a new concession. I would also ask whether it is the noble Lord’s intention to tie the hands of the Scottish and Welsh Governments, as this amendment would do, and whether they support these amendments. I think he knows that they certainly would not.

Amendment 10, as the noble Lord, Lord Moylan, said, was to facilitate Amendments 4, 14 and 15, so I will pass over it.

Amendment 35, tabled by my noble friend Lord Liddle, would allow the Secretary of State, and Scottish and Welsh Ministers to award contracts to either a public/private partnership or a co-operative venture involving staff and passengers. The Government’s approach to this is driven by pragmatism, not ideology, and we are certainly not seeking to close the door on private investment, as I will explain later in Committee when we come to discuss rolling stock.

However, I point out that examples of private investment in our railway infrastructure have been fairly thin on the ground in the privatisation era. Nearly all the enhancements to the network have been publicly funded. The noble Lord, Lord Young, referred to electrification, but, as far as I can tell, there has been no electrification ever funded by any party except the Government.

The Government are certainly open to hearing proposals for how private investment might be brought to bear to improve the railway in the future. If noble Lords and others have good ideas, I encourage them to bring them forward as we develop and engage on our plans and consult in due course for Great British Railways and the wider railway reforms.

However, I do not think that involving private finance means that our plans for public ownership of train operations should change. It is fundamental to the Government’s plans for the railway that services should be run by the public, for the public. There are other ways of engaging private capital, short of ownership, and for the most part, even 100% private sector ownership of train operating companies under franchising has not resulted in large investments being funded by those companies.

As for co-operative ventures, I am all in favour of giving passengers and communities a stronger say in the decisions that affect them, but the likelihood of any co-operative venture raising any significant amount of capital—let alone the current circumstances of the owning groups of the present train operators—is, frankly, very small. Our plans are designed to give passengers and communities a stronger say in the decisions that affect them, not least by establishing a new passenger standards authority and by providing a new statutory role for devolved and mayoral combined authorities. We will get to the question of devolution in due course. The Government have shown, through our approach to resolving long-running disputes left to us to resolve by the previous Government, that we are committed to working with the workforce to address the challenges facing our railways.

The noble Lord, Lord Lansley, raised a question about future flexibility. The last legislation for the railways has lasted 31 years, and I note that it had a specific prohibition of public operation of the railways system. That might have been reasonable then but it is certainly reasonable now in the present circumstances, given our policies and manifesto commitment, to replicate our belief that public ownership is the right way of going forward with passenger railway operation.

In conclusion, the Government’s plans for the railways are founded on consolidating responsibility for track and train operations within a single entity, Great British Railways, particularly at a route and operating company level. Already, in my short period in this post, as I have said previously, we have had performance meetings with an operator and a Network Rail route. In one meeting, I enjoyed considerably one manager telling me how great collaboration was between the two parties, which were not owned by the same organisation, while the other simultaneously sat there shaking her head vigorously, demonstrating an absence of the very co-operation that I was being told would happen.

My whole professional history tells me that the railway will run better with somebody in charge of both track and train together at a route and operating company level. That is the way that we will deliver better revenue, decreased costs and, particularly, better reliability. This is not consistent with seeking to preserve private sector operation, whether through franchises or concessions, or with awarding contracts to public/private partnerships or arm’s-length co-operative ventures. I am amused to see that Rail Partners has reversed its previous opposition to the concession model post the election, having spent several years previously explaining why it would not work on the national railway network. I rather agree with its previous analysis. I therefore urge noble Lords to withdraw and not press their amendments.

[Lord Lansley (Con)]

My Lords, I am most grateful to all noble Lords who have participated in this not terrifically long but interesting debate—not least my noble friend Lord Young of Cookham, who admirably demonstrated the potential benefits of a mixed economy in the provision of rail services and referred to reasons why the Government might in the future need the flexibility that these amendments would offer.

I go back as far as the mid-1980s, when I was a civil servant participating in a spending round not dissimilar to the present one in a Star Chamber, where different nationalised industries had their capital programmes traded off against each other. I have to say that cost-benefit analysis was not a significant part of that discussion; it was mostly a discussion of the political benefits or otherwise. I fear the same will be true in the future and that some investment projects that should be funded will not be. It will be a great pity if that turns out to be the case for rail services in future.

I do not have the benefit of knowing Mr Keith Williams personally. I am tempted, as a former Leader of the House of Commons, to say that we instituted evidence sessions in committee. I wonder whether we could take an evidence session before a committee in this House as well; perhaps we will think about that for the future.

I thank the Minister for at least laying it all out pretty straightforwardly. He may come to regret saying that, essentially, as the 1993 Act was an ideological determination that there should not be public sector operators on the railways, we must now have legislation that says there must be only public sector operators on the railways. I am with the many of those who take another view—not least the noble Lord, Lord Berkeley, whose point on open access was about giving the private sector the opportunity under limited circumstances.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

I will first say that I am delighted to see the noble Baroness, Lady Pidgeon, in her place. I hope that her questions will be easier than the ones she has asked me for the last 16 years.

I thank noble Lords for explaining their amendments in this group, which consider the impacts of public ownership on the freight sector and the British Transport Police. I shall speak first to Amendment 6, in the names of my noble friend Lord Berkeley and the noble Lord, Lord Moylan, and Amendment 41 in the names of the noble Baroness, Lady Randerson, and the noble Lords, Lord Bradshaw and Lord Moylan.

These amendments highlight the importance of the rail freight sector, which has a crucial role to play in supporting a productive economy and in helping to decarbonise transport on the way to net zero. The Bill in front of the House sets out with two very specific purposes: to enable franchised passenger services to be brought into public ownership as existing contracts expire, and then to enable the Government to keep them there in accordance with their manifesto commitment. As such, the Bill has no direct impact on freight operators or on the availability of network capacity to accommodate freight services. Indirectly, though, freight operators should benefit from public ownership of passenger services, for reasons I am happy to explain.

In the old franchising model before the pandemic, a franchise operator’s commercial motivation was to maximise its own profit—evidently, the difference between its revenues and its costs. If that meant running additional services, it would seek to do so through the usual industry processes of bidding for access rights and then for a timetable that included the extra services. It would not matter, and has not mattered, to the franchise operators that this might deprive freight operators of the opportunity to serve new markets in the future. There are various examples of franchise bidders seeking to win contracts on the back of proposed service enhancements that risked crowding out, or actually have crowded out, potential future freight growth.

Under public ownership, that unfortunate incentive will no longer exist. Publicly owned operators will instead be remitted to act in the interests of all users of the railway, including freight customers. We have made it clear that the forthcoming railways Bill will require Great British Railways to enable the growth of rail freight and that the Secretary of State will set an overall freight growth target to ensure that it remains a key priority. I am sure that we will debate these points further once the railways Bill is before your Lordships’ House.

The noble Lords, Lord Bradshaw and Lord Young, my noble friend Lord Berkeley and others asked how capacity will be allocated. I can certainly tell them how it is done now, because we have had an immense struggle to obtain a timetable on the east coast main line which seeks to justify the £4 billion-worth of public investment to speed up services and provide more passenger capacity. One reason we have had that struggle is that, although there is an appeal mechanism to the Office of Rail and Road, there is in fact no current decision-making process to allow a timetable to be completed, except by agreement. I believe and hope that it is currently in its last stages, but I am not certain.

One of the things that the Government have in mind is that Great British Railways ought to be the body that decides. The noble Lord, Lord Bradshaw, will recall what was the case on the old railway: somebody had to decide which services were of greatest priority and which ones had to be fitted round them. Under the current Bill, however, there is no change to the existing role of the ORR in access decisions for passenger and freight services. Under the future railways Bill—and we will consult on this—there will be appropriate safeguards for both freight and open access operators. We will set out details on that in due course, before any changes to the current approach are made. There is no need to require the publication of a report on this matter. Commissioning a report after this Bill, when in fact there will be no change at this point, will not add benefit to the debate.

I turn next to Amendment 40, in the names of the noble Baronesses, Lady Pidgeon and Lady Randerson, and the noble Lord, Lord Moylan.

[Lord Liddle (Lab)]

Before we move on to the British Transport Police and while we are still considering freight paths, the noble Lord, Lord Bradshaw, for whom I have enormous respect because of his experience on the railway, made the point that investment decisions are very important to getting more freight on to the railway. Is not the real question about freight the priority it is given in the investment decision-making process? I know the Bill is not about that, but, since there is concern about this in the Committee, can the Minister give us any guidance as to how investment will be prioritised?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend Lord Liddle for that intervention. All I can say at this point is that I would hope the rail network enhancement programme is published more frequently, and with more success in what it contains, than it has been for some years. We will have to wait and see what the fiscal situation allows.

[Lord Liddle (Lab)]

Would that be a decision for the Secretary of State or for Great British Railways?

[Lord Hendy of Richmond Hill (Lab)]

I think in due course we will have to come back in the substantive Bill with a proposition on how those decisions are made, who makes them, and for what period of time the plan is valid.

[Lord Berkeley (Lab)]

My Lords, I am grateful to my noble friend for his response to my amendment and other people’s. I have one or two questions that I hope will help the extended debate, because I do not believe we can leave the most important question of competition, which a number of noble Lords have mentioned.

[Lord Teverson (LD)]

Before the noble Lord sums up on his amendment, I think the Minister has yet to reply on the issue of the police.

[Lord Hendy of Richmond Hill (Lab)]

I apologise to the Committee; it is my novice inexperience. I thank the noble Lord for that intervention.

I turn to Amendment 40 in the names of the noble Baronesses, Lady Pidgeon and Lady Randerson, and the noble Lord, Lord Moylan. Amendment 40 would require the Secretary of State to report to Parliament on the impact of the Bill on the British Transport Police 12 months after its enactment. The BTP is governed by the Railways and Transport Safety Act 2003, which is not affected by this Bill. Under the 2003 Act, the British Transport Police Authority is responsible for the efficient and effective policing of the railways and for maintaining the British Transport Police force. The authority sets annual budgets for the BTP and recovers the costs of the BTP from the rail industry—of course, now, notably, this is all paid for by government—by entering into police service agreements. The authority sets the funding contributions for each railway service provider via a cost allocation model to ensure that contributions reflect the services provided by BTP and cover its costs.

Under the 2003 Act, the Secretary of State has made an order which requires railway service operators, as well as Network Rail, to enter into police services agreements. This obligation applies equally to public sector operators and private sector franchisees, and I can confirm that all four existing operators under DOHL have a police services agreement in place.

In conclusion, there is no reason to believe that public ownership under this Bill would have any adverse impacts on the freight industry or the BTP, so I hope my noble friend will be persuaded to withdraw his amendment.

[Lord Berkeley (Lab)]

My Lords, I apologise for intervening earlier and preventing my noble friend responding on the British Transport Police issue, which is most important. I would like to ask him whether it applies to Scotland.

About 10 years ago we had a debate here when the Scottish Government wished the Scottish police to take over British Transport Police activities in Scotland. My noble friend Lord Faulkner of Worcester and I tried to argue—I think the noble Lord, Lord Bradshaw, was there too—that this was a bad idea because policing the railways is fairly specialist work, as the noble Baroness, Lady Pidgeon, has told us. We ended up trying to divide the House at about midnight, which my Chief Whip at that time did not think was a particularly good idea because I had not told him about it. I pointed out that he was probably in bed asleep by then. Anyway, we did not win that time, but we did manage to achieve BTP having responsibility for railways in Scotland. It would be nice if my noble friend the Minister could explain how that will work under the new GBR system.

I will respond to my noble friend’s comments on the other issue, which is mainly about capacity and competition—whether it is freight, open-access operators or whatever. It was interesting that he said that the Government invested £4 billion in the east coast main line. That must have been in order to get an extra train per hour and a few other trains between Edinburgh and London. I am wondering who decided that it was a good thing to invest in the east coast main line to get more intercity services, rather than more freight or cross-country services. That it has not been delivered yet indicates that something else needs resolving, and we will have to see what that is.

The other issue is straight competition. I was not working on the railways before privatisation. I am assuming that Great British Railways in its 1990s shape had a number of divisions, as a noble Lord told us, including a freight division. That obviously worked very well at that stage, but when those in the freight division wanted another pass or two on a main line, I would hazard a guess that they had quite a job persuading the passenger people to move over a bit and give them space.

Great British Railways will be a monolith organisation. I am sure that underneath, it will have lots of subdivisions, which we will debate at some point. This will probably include the intercity services and regional services, and it will have to take into account open-access passenger and freight services. I cannot see how it will be able to demonstrate a fair allocation of paths when, as the noble Lord, Lord Young, mentioned, it will get all the extra revenue from an extra train if it is a GBR train, but no revenue apart from track access charges if it is an open-access train or a freight train.

This is a really serious and financially challenging discussion that we will need to have. I hope my noble friend will be able to respond in part to what I have said. I hope he will be prepared to meet me and anybody else who is interested in this competition issue before Report. I would like to see some wording in the Bill that would give open access passenger and freight some comfort that what goes in the next Bill will not send them over the edge. Could my noble friend respond to those points? I do not know whether he is prepared to.

[Lord Hendy of Richmond Hill (Lab)]

I will respond to my noble friend by either talking to him outside or writing to him.

[Lord Berkeley (Lab)]

I beg leave to withdraw the amendment.

Bus Franchising

Lord Hendy of Richmond Hill Excerpts

Thursday 12th September 2024 Lords Chamber

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

It is the turn of the Minister.

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

I thank the noble Lord, Lord Moylan, and the noble Baroness, Lady Randerson, for their comments on this subject. Despite the noble Lord, Lord Moylan, having just congratulated me on my position, I find myself virtually wholly disagreeing with what he said, save only one thing, which is that the quality, frequency and reliability of bus services are very important to all those who use the most popular form of public transport.

The noble Lord raised the issue of the £2 fare cap. As the noble Baroness, Lady Randerson, observes, the money for it runs out in December. The Government are looking urgently at this to determine its future, and we will respond on it as soon as we can.

The noble Lord talked about the TfL system, which of course I am as familiar with as maybe he is, having administrated it for the best part of 15 years. He said that the fares risk is borne by TfL and questions the capacity of local authorities to deliver that. His observations about the capacity of other places in England to do this do not need to be theoretical, because the Mayor of Manchester, a combined authority, has had bus franchising in place for some time.

One of the features which distinguished it in London is being replicated in Manchester: in the last six months alone, the first tranche of franchising in Manchester has produced revenue growth of 5%. It has enabled the introduction of more buses, the service is more reliable, and a night bus service has been introduced. Those are features which occur because of the comprehensive network, its promise of stability, its consistent information, ticketing and planning, a closer interaction with traffic authorities to allow buses to progress more freely, and the introduction of real-time information. Those are all features that local authorities can deliver if they choose to go down the franchising road.

The noble Lord questions the capacity of local authorities to put in such a system. My department is building its capacity in order to give assistance on the ground to local authorities that want to proceed down this route.

On the full assessment of the impact of this policy, I have already described the interim assessment from Manchester, which is wholly good. Throughout England, in towns and cities and in the countryside, there are huge variations in the quality, volume and reliability of bus services. The Government’s suite of measures, of which the introduction of franchising is one for those local authorities that wish to take advantage of it, will stabilise things so that the quality, frequency and reliability of the bus service is more certain. That will encourage people to travel and give the bus service itself more passenger volume and revenue.

The noble Baroness, Lady Randerson, supports local devolution, and this Government strongly support that too. Franchising is a measure which will be available to all local authorities. They can choose what to do in their particular circumstances. She refers to the end of temporary funding. We certainly have a keenness to amalgamate funding streams; there are several, and it would be easier for local authorities and bus companies to understand one funding stream. We would like to give certainty on multiyear funding, but that must be subject to the parlous state of public finances that this Government have inherited. She is right that giving certainty in this direction will improve the quality, frequency and reliability of bus services in Britain.

Lastly, the noble Baroness refers to young people. Greater local authority control of bus services gives the opportunity for more local authorities to give concessions to young people, where that is justified. There are already concessions for young people, but we agree that getting young people into the habit of public transport usage is extremely important.

[Lord Snape (Lab)]

My Lords, I apologise for leaving the depot prematurely a few moments ago.

I rarely agree with anything that the main Opposition spokesperson on transport has to say, and I notice that he glossed over the fact that hundreds of bus routes and thousands of bus miles disappeared under the previous Government’s policies. However, he does have a point as far as the financing of franchising is concerned. Does my noble friend accept from me, the former chairman of a major bus operator, that franchising outside our major cities in particular will be an expensive business, and that if franchising is to succeed, as most of us on these Benches would hope, it must be properly funded? What discussions have been held between his department and His Majesty’s Treasury to ensure that proper funding is in place?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for his contribution. I should have said in my previous remarks that this is all preliminary to a buses Bill, which will be introduced to the House in due course and cover a wider range of subjects.

This is offering a choice to local authorities. It gives them the opportunity of franchising, if they believe that it is the right thing to do. Of course, all funding is being considered in the round as part of the spending review. I cannot share details about the discussions with His Majesty’s Treasury at this stage, but, in the meantime, the department is building its capacity to provide tangible, on-the-ground support to local transport authorities that wish to take back public control of bus services. We are also working with all stakeholders to determine how the buses Bill will make franchising easier and cheaper to deliver and further reduce the barriers to its introduction.

[Lord Berkeley (Lab)]

My Lords, I very much welcome my noble friend’s Statement, because it is about time that buses fulfilled their role of providing local transport for so many people. I worry about where they will get the money from and how many people will use them, if they use them to start with. As the noble Baroness said, it is important to get young people into the idea of using buses. How young is young? They need to be school kids right up to people starting their first job, who may well be in their 20s. If they live a long way from an established bus route, they will not get a job.

It is quite clear from what my noble friend said that all local authorities will be invited to do this and to participate one way or another, be it concession or franchise. But what happens if they do not want to do it? How will the Government encourage them? It is important to enable everyone who needs it to access public transport.

I have one example that I ask my noble friend to look into, although he may not be able to answer today. For those who live in the Isles of Scilly who want to go between the islands, the average fare in the winter is somewhere between £10 and £100—to get to the doctor, to the chemist or to work. It seems to me that what is good for city centres and the countryside in England could also be useful to people who live on islands. It might apply to the Isle of Wight as well, I do not know. I look forward to my noble friend’s comments.

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for his contributions. What would happen if local authorities did not want to pursue this course? The existing and partnership arrangements for bus operations, which have been in place locally for some time, would continue. It is a fair observation that there is a huge variation in standards of bus provision across Britain. If local authorities do not wish to participate or to pursue franchising, they can continue to pursue the arrangements that they currently have with their bus operators.

I cannot, of course, comment on the costs of transport between the islands of the Isles of Scilly or the minimal bus service on St Mary’s. However, as my noble friend knows, the provision in Cornwall, which is a largely rural county, is very good. That is an example of an arrangement that has been tailored to a rural area. None of these new arrangements would prevent existing arrangements from continuing.

[The Lord Bishop of Manchester]

My Lords, I declare an interest: I got the bus on Monday, Tuesday, Wednesday and today, and shall be getting it tomorrow. As I live in Greater Manchester, I have been a real beneficiary of what the previous Government allowed for franchising in my city and its surrounds. The buses have become more reliable: I can now go to a bus stop and expect a bus to turn up within 10 minutes, not 40 minutes, which I sometimes had to wait for before.

I have two questions. First, I am old enough to remember when local authorities in Greater Manchester often had joint boards. The wonderfully named Stalybridge, Hyde, Mossley and Dukinfield joint board provided buses in parts of what is now Tameside.

[The Lord Bishop of Manchester]

They were indeed green. I remember them very well. I wonder what the possibilities are for rural areas that are not part of a combined authority like Greater Manchester. Will local authorities have the capacity to combine together to franchise bus services jointly, rather than doing it by themselves?

Secondly, we made great progress in Greater Manchester; we got the buses and the fantastic Metrolink tram system. It would help to integrate the whole thing if we gained control of local rail services at the same time. For many people, local rail, as well as buses and trams, is necessary to make journeys. Could the Minister give any indications of plans to allow the franchisement of local rail services in places such as Greater Manchester?

[Lord Hendy of Richmond Hill (Lab)]

I thank the right reverend Prelate for his comments. I particularly note his support for the effects of the initial tranches of franchising in Manchester, which have indeed increased service and produced better reliability. He refers to the very old organisation of public transport in Manchester. Many of those magnificent vehicles are in the Manchester transport museum at Queens Road.

These days, the increasing number of combined authorities are of a good size to take advantage of this Government’s franchising proposition. It is, in effect, bringing together local authorities of sufficient size to be able to take advantage of the benefits of a network. I do not have an answer to whether this will allow individual local authorities to join together, but I am happy to write to the right reverend Prelate about that.

The right reverent Prelate raised the subject of the integration of rail services. We have already made a lot of progress with the Mayor of Greater Manchester, and with the Mayor of the West Midlands, in integrating rail services into the local transport network in information and in ticketing. Although this is not the subject of today’s discussion, I have no doubt that there will be some announcements on that. He is right to aspire to an integrated local network that is modally agnostic and includes rail and, in Manchester’s case, metro and buses.

[Lord Hampton (CB)]

My Lords, if we are going to use TfL and the London bus network as the example for going around the country, the dread problem of safety goes around again. Carrying on from the question I asked the Minister earlier this week, it often seems that in London—where, from memory, someone is killed by a bus every six weeks—the bus companies investigate their own incidents, with the DVSA checking for legalities. Who will be responsibility for safety in these franchises, and will they have teeth?

[Lord Hendy of Richmond Hill (Lab)]

One of the benefits of London’s large system of bus franchising is the work that Transport for London has done on the design and safety of bus travel. The noble Lord has to remember that those vehicles are on the road for 18, 20 or 24 hours a day, and they form a major part of the mileage of vehicles in London, even though their numbers are fairly small.

A significant amount of work has been done on the safety of driving and drivers, and on the design of vehicles. I know that has been shared with manufacturers and bus operators across the country, and with organisations such as Transport for Greater Manchester and the Urban Transport Group. I would expect more of that to happen.

The safety of buses is considered by the Driver and Vehicle Standards Authority, which is an executive arm of the Department for Transport and has the power to investigate serious bus accidents, which it does. It has the power to prosecute the drivers and operators of those vehicles. None of these proposals would alter its powers to continue to do so.

Pedal Cycles

Lord Hendy of Richmond Hill Excerpts

Thursday 12th September 2024 Lords Chamber

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

My Lords, I thank all noble Lords for their contributions and thank particularly the noble Lord, Lord Hogan-Howe, for the opportunity to debate these important issues—indeed, it is my first debate since I became a Minister. I also thank the noble Lord, Lord Moylan, opposite, for his welcome, and I welcome him to his position too. He and I, on a couple of occasions a long time ago, cycled around London. We at least stopped at red traffic lights, unlike the former Mayor of London. I also hope that he is similarly as knowledgeable and effective; we can check with each other from time to time what we think of each other’s performance.

I hope to respond to everybody who has spoken but, if I do not, I will write following this debate. I note the many strong and, frankly, conflicting views that we have heard on the subject of cycling. This Government are being bold and ambitious on active travel, whether walking, wheeling or cycling. We want to set out ambitious plans to promote greener journeys, no matter how people choose to travel.

As my right honourable friend the Secretary of State for Transport has made clear, the department is committed to delivering greener transport and maintaining and renewing our road network to ensure that it serves everyone. Investment in active travel supports the Government’s economic growth, health and net-zero missions by helping to revitalise high streets, improving air quality and supporting people to live longer, healthier lives.

No one at all is simply a motorist, cyclist or pedestrian. We are all people who may choose to walk, cycle and drive at different times. However, with power comes responsibility and, whether cycling or driving, the Highway Code outlines a clear hierarchy of road users. This starts from the premise that those road users who can do the greatest harm have the greatest responsibility to reduce the danger or threat they may pose to others. Therefore, people cycling have a duty to behave in a safe and responsible manner, particularly around pedestrians, and to follow the rules set out in the Highway Code.

As we have heard today, many of us have seen instances of poor cycling behaviour, whether jumping red lights when people are crossing, riding on crowded pavements or wearing earphones. Dangerous cycling can put lives at risk, including that of the cyclist, and it is completely unacceptable. It also has the effect of intimidating other people cycling and therefore deterring people currently cycling and those considering cycling for the first time. In that might be a clue to the gender gap to which the noble Baroness, Lady Randerson, refers.

Like all road users, people cycling are required to comply with road traffic law in the interests of their own safety and that of other road users, and this is reflected in the Highway Code. If they cycle irresponsibly, if they do not use lights or are not visible, or if their use of the highway creates an unsafe environment or causes a nuisance, they may be committing a number of offences that can make them liable for prosecution.

The enforcement of road traffic offences has been referred to by virtually everyone who has spoken in this debate. Enforcement, including of cycling offences, is an operational matter for the police. The noble Lord, Lord Hogan-Howe, will know from his time as the Commissioner of the Metropolitan Police of the success of the dedicated Metropolitan Police Service cycle safety team, funded by Transport for London. I hope that he and the House would commend this approach to other chief police officers elsewhere in the UK. Such a dedicated force can deal with not only cycling offences and cyclists’ behaviour but the issue of theft by cyclists, referred to earlier.

I turn to the specific points raised by several noble Lords concerning registration and insurance. With more than 20 million cycles in Britain, a national licensing system for all cycles similar to the one for cars and motor cycles would be complex and expensive to design and administer. Cycles would need to be fitted with registration plates that were sufficiently visible and robust and that could not easily be transferred from one cycle to another. The costs of administering such a scheme would be likely to outweigh any benefits, and it would also be likely to lead to a reduction in the number of people cycling. This would have adverse impacts on health and congestion, particularly if those cycling chose instead to use their cars for short journeys.

I was interested to hear some suggestions from the noble Lord, Lord Hogan-Howe, about licensing and adding cycling to driving licences, and particularly about maybe making cycling offences endorsable on driving licences for motor vehicles. We will certainly look at that.

Mandatory insurance is similar to licensing. People cycling are already encouraged, but not required, to take out some form of insurance, and many people have insurance cover through their membership of cycling organisations. For example, membership of Cycling UK provides £10 million of third-party liability insurance. This will cover members if they damage another person or their property—for example, if a cyclist accidentally causes injury to a fellow rider or hits a car. But it is not currently mandatory, and we believe that mandatory insurance would be as difficult as mandatory licensing. These and other matters would therefore need to be very carefully considered before any change to the law could be contemplated.

On the question of data concerning cycling and collisions, data is available from the department, several noble Lords have quoted from it, and I would be happy to consider any request that noble Lords wish to make for further data beyond that quoted today.

A number of noble Lords referred to the previous Administration’s plans to introduce new offences concerning dangerous and careless cycling through the Criminal Justice Bill, which fell due to the general election. We are currently considering a range of different interventions, including those, to improve road safety for all users.

I turn to some further specific points. There has been a lot of debate here about electric cycles and their speed and power. The current legal situation is that e-cycles are legal only where their electric motor cuts out at 15.5 mph and where the electric motor does not exceed a power of 250 watts. If they can reach greater speeds or greater power, they are classed as a moped or a motorbike and must be registered, taxed and insured. The previous Government consulted on potential changes to the existing regulations which would allow more powerful e-cycles and would enable them to be powered by the throttle all the way up to 15.5 mph. Ministers are carefully considering next steps in this policy area, including whether to proceed with these changes. We will respond on this in due course.

On the speed limit and the speed of cycles, it is the case that speed limits set under the Road Traffic Regulation Act 1984 apply only to motor vehicles, but cyclists can still be charged with careless or dangerous cycling, depending on the circumstances. The introduction of a speed limit would bring many challenges. Many cyclists are, in practice, seldom able to exceed the speed limits that apply to motorised vehicles, other than perhaps in 20 mph zones, when going down a steep hill or in the case of those with Olympian levels of fitness. More prosaically, very few cycles are fitted with a speedometer. Again, enforcement would have to be a matter for the police, but they are already able to stop cyclists for offences such as cycling without due care and attention or without reasonable consideration for other persons using the road.

The design of cycling facilities was mentioned. Active Travel England has initiated and produced design standards which have been shown to dramatically reduce collisions and conflict, giving users greater confidence. Local authority officers need the right skills to help deliver that agenda and Active Travel England trained more than 3,500 local government officers across England last year, which has already led to real improvements. Similarly, funding for active travel has been significant. This Government will make an announcement on plans beyond 2025, including the development of a third cycling and walking investment strategy, in due course. Since it was established in 2022, Active Travel England has invested just under £250 million to deliver 260 miles of walking and cycling routes and hundreds of safer crossings and junctions. This includes funding for the national cycle network.

I turn to the question of bus stop bypasses, raised by the noble Lord, Lord Moylan, The Government are committed to championing the rights of active and disabled people, putting their views at the heart of our actions. We are fully aware of the concerns raised by some groups, particularly visually impaired people, over the use of floating bus stops. It is a complex issue and we are carefully considering next steps, following the Living Streets research the department co-funded with Transport Scotland and which was published in April this year. We will respond to that in due course.

I was much encouraged by the contribution of the noble Lord, Lord Young, about progress in the last 50 years. I was around 50 years ago and I too remember that there were no cycle lanes, no dedicated traffic lights and a reluctance to make any provision. I was interested by his and other noble Lords’ contributions about rental bikes abandoned on pavements. They are clearly a considerable impediment to pedestrians in general and to those with visual disabilities in particular. I will write on this subject because it is so important. The department is also consulting on micro-mobility and e-scooters.

The question of helmets was raised. The Highway Code very strongly advises cyclists to use helmets, but any change to mandatory use would pose the same issues about enforcement that are related to other matters raised today.

I was sorry to hear about noble Lords who have personal experience of accidents, either cycling or caused by cyclists, and I hope they are all fully recovered.

I do not currently have information about off-road bikes, but I will write to the noble Baroness, Lady Hodgson, about them.

The noble Lord, Lord Hastings, raised the matter of potholes, which was raised in an Oral Question yesterday. The Government are committed to a programme of filling many more potholes and making road surfaces smoother.

A noble Lord raised the question of prosecutions in advanced stop areas. I do not currently have information about that, but I will write if it is available.

The noble Lord, Lord Macpherson, raised the question of road safety campaigns. The THINK! campaign, which I hope noble Lords will recognise as a long-standing and successful road safety campaign, deals particularly with the proper behaviour of all road users.

The noble Baroness, Lady McIntosh, and others asked about the e-scooter trials which have been extended to 3 May 2026, whereupon the Government will consider what legislation is appropriate, including registration, because it is clearly an important and growing subject.

The noble Lord, Lord Shinkwin, raised the Policy Exchange report, which he asked me to read and reply to, and I shall do that.

The noble Baroness, Lady Randerson, raised training and education. Active Travel England has a £50 million programme for young people’s education on cycling. This is, of course, extremely welcome because understanding the Highway Code and the correct way to behave on the road is really important, so I am sure that all noble Lords fully support that programme.

In conclusion, the Government are being bold and ambitious on active travel, but the safety of our roads is an absolute priority, whether people are walking, wheeling, cycling or driving. As the noble Lord, Lord Moylan, says, that should be delivered for all road users, including the vulnerable and the disabled. We want to see more people cycling but doing so safely and with consideration for their fellow road users.

The Government are committed to delivering a new road safety strategy, the first in over a decade. Many of the points made today will be considered as part of that, and we will set out our next steps in due course.

Road Investment Strategy

Lord Hendy of Richmond Hill Excerpts

Wednesday 11th September 2024 Lords Chamber

[Lord Snape]

To ask His Majesty’s Government whether they intend to continue with the Road Investment Strategy 2: 2020–2025; and what are their plans for the road network.

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

My Lords, the second road investment strategy is being delivered by National Highways and runs until 31 March 2025. The strategy covers the day-to-day running of the network, continuing operations, maintenance and renewals and the delivery of schemes and construction. Our plans for the future of the road network will be informed by the spending review and by the review of the department’s capital spend portfolio commissioned by my right honourable friend the Secretary of State for Transport.

[Lord Snape (Lab)]

My Lords, I am grateful to the Minister for that reply. Does he accept that a substantial chunk of this budget ought to be spent on repairing the roads we already have, rather than building new ones? Will he consider allocating more funds from this budget to public transport, particularly to our bus network, in view of his recent welcome announcements about bus franchising? Finally, if there is anything left over, could he put it towards the enormous deficit left by the party opposite when in government?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend. In the current circumstances, he is a bit optimistic about having any money left. Of course, a substantial amount of the road investment strategy 2 money is, in fact, spent on the operation, maintenance and renewal of the national highways network. The review of the capital spend portfolio embraces all the modes of transport the department is responsible for, so there will be the opportunity to choose the best schemes that deliver the most for growth, jobs and housing.

[Lord Geddes (Con)]

Can the noble Lord confirm the singularly ill-conceived and unbelievably expensive plan to tunnel under Stonehenge to avoid congestion on the A303, when there is plenty of open land immediately to the south of that single carriageway?

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

I can confirm that, following the Chancellor’s Statement and a review of the Treasury’s spending audit, which identified more than £2.9 billion-worth of unfunded transport spend this year, the scheme for the A303 at Stonehenge will no longer go ahead.

[Lord Trefgarne (Con)]

My Lords, can the noble Lord say what progress has been made with constructing the new junction for the A3 and the M25, when he expects it to be complete and what he expects it to cost?

[Lord Hendy of Richmond Hill (Lab)]

I do not have the precise answer to that question, so I will be delighted to write to the noble Lord to clarify the questions he asked.

[The Lord Bishop of Leeds]

My Lords, the answers we have had so far, which are welcome, refer to future strategy in terms of economics and finance, but there is another element that this Government have built into their programme, which is making long-term decisions. Is any future road strategy being looked at holistically in relation to public transport development? They cannot run in separate grooves.

[Lord Hendy of Richmond Hill (Lab)]

The way the road investment strategy works is that the Infrastructure Act 2015 requires a road investment strategy—known as RIS to the initiated—to be set. As I said, this strategy expires in March 2025. We might normally have expected to see the publication of a draft road investment strategy 3, for the five years beyond 2025, published by the previous Government, but in fact it was not. We are now required to do that and the Government will, in due course, do just that. It is stand- alone, but it must be recognised that the department, which is responsible for all modes of transport, including public transport, will have to consider how it spends both its capital and its revenue in the best way to achieve the targets of growth, jobs and housing.

[Baroness Randerson (LD)]

My Lords, more than a fifth of the UK’s emissions come from surface transport, primarily from fossil fuel vehicles, so if this new Government value the future of our planet and the health of our nation, they will reconsider road-building plans. I am pleased to hear what the Minister said about that. Will he agree that the priority for government spending on roads should first be with the £20 billion backlog of road repairs, which makes our crumbling roads very dangerous at the moment, in order to put safety first? Will he commit to the completion of the ongoing programme to bring so-called smart motorways up to an acceptable safety standard?

[Lord Hendy of Richmond Hill (Lab)]

The point about emissions and the environment will be covered by the capital spend portfolio review. I think potholes are a major part of what the noble Baroness referred to. The state of the roads is pretty disgraceful, and the Government are committed to doing far more on filling potholes and making roads safe than the previous Government. There will be no more smart motorways, and my understanding is that the programme to modify those already installed will be completed.

[Lord Moylan (Con)]

My Lords, I welcome the noble Lord’s admission that road transport contributes to growth, jobs and housing, but when one looks throughout the country, wherever the Labour Party is in power, be it in Wales, London or many local authorities, one sees increasing costs and restrictions being imposed on the motorist, many of them felt most deeply by working people who are struggling to make ends meet. Does his welcome statement today about the value of road transport mean that Labour’s war on the motorist is now at an end?

[Lord Hendy of Richmond Hill (Lab)]

If the objective is economic growth, jobs and housing—I am pleased that the noble Lord agrees—we should choose those transport projects that contribute the most to it in various parts of the country. I have a wry smile because he was the deputy chair of Transport for London when I was the commissioner, and between us we probably removed more road space from the streets of central London for a Conservative mayor, so I am not sure that this alleged war on motorists is quite as one-sided as he might suppose. It is very important that the highways are managed in the best way possible because transport is a facilitator of growth, jobs and housing. The projects that we are able to choose to fund in these difficult circumstances should always be the ones that deliver the most in those categories.

[Lord Watts (Lab)]

My Lords, filling in potholes is a temporary measure. On many of our roads, the substructure has gone because of a lack of investment over many years, especially under the last Government. Are the Government trying to do something about the long-term state of our roads?

[Lord Hendy of Richmond Hill (Lab)]

I agree with the noble Lord that filling potholes is a temporary measure. It is a shorthand for having the roads in better condition. I could bore the House with how the condition of roads is measured, but I will not. Filling potholes is a temporary measure; we are using that phrase to seek to improve the general condition of roads for the safety of all road users.

[Lord Forsyth of Drumlean (Con)]

My Lords, will the noble Lord take this opportunity to rule out introducing road pricing as part of the Government’s plans to increase the tax burden on this country?

[Lord Hendy of Richmond Hill (Lab)]

There are no plans for road pricing. Indeed, to clarify what I thought I said on Monday to the noble Lord, Lord Moylan, there are no plans for the withdrawal, reduced eligibility or means testing of the English national concessionary fares scheme, commonly known as the freedom pass.

[Lord Ranger of Northwood (Con)]

My Lords, I welcome the noble Lord to his role. I worked with him at City Hall all those years ago, and we worked on smoothing traffic flow in London to improve journey time reliability and help motorists, especially as we knew that autonomous vehicles, electric vehicles and mass-person mobility would be a key part of the public mix in future. Will he look at that as he looks to the future of the road network?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord recalls the project to smooth traffic. A key element of that is the use of modern technology in managing traffic signals. The Government are enthusiastic for the use of modern technology. For too long, not enough modern technology has been used in the control of traffic signals, and we will endeavour to use the latest technology to improve the flow of traffic for all road users.

Local Bus Sector

Lord Hendy of Richmond Hill Excerpts

Monday 9th September 2024 Lords Chamber

[Lord Berkeley]

To ask His Majesty’s Government what plans they have to provide longer-term support to the local bus sector.

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

The Government are determined to deliver better bus services. We are setting out an action plan allowing every community the opportunity to take back control of local bus services to deliver improvements for passengers and giving local leaders more control and flexibility over bus funding to deliver their local transport priorities for growth, jobs and housing. We will consider how best to support buses in the longer term as part of the forthcoming spending review.

[Lord Berkeley (Lab)]

I am grateful to my noble friend for that Answer. He has long experience in the bus industry. Would he look, in particular, at the problem of rural bus services, which on the whole do not get much visibility? He may know of a very good one in Cornwall; buses go every half hour, with cheap fares. How will he ensure that the whole country benefits? Will the funding be there and will it be ring-fenced? Will the Government encourage or force local authorities to pick up their offer?

[Lord Hendy of Richmond Hill (Lab)]

The proposition for local authorities and communities throughout the country is to take advantage of the proposals that the Government will table, which will ensure the right solutions for each area. My noble friend knows that the bus service in Cornwall is particularly well organised; it is not franchised but is subject to a large degree of local authority control. Consistency of information, ticketing, fares and service standards is an important feature, wherever in the country buses operate.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the Minister, whom I congratulate on his new position, pay tribute to rural bus services such as those in North Yorkshire? If the bus arrangements transfer back to the local authorities, will he ensure that the funds will follow the responsibility for, in particular, concessionary bus fares, which are so important for older people in rural areas?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Baroness for her compliment. I hope the House will see it repaid in what I do. Concessionary bus fare funding will, without any doubt, follow the control of bus services, and that will be as important in North Yorkshire as it will be everywhere else in the country.

[Baroness Randerson (LD)]

My Lords, the Minister will be fully aware from his extensive experience how much young people in London benefit from free bus travel. Unfortunately, in the rest of the country the picture is different—it is very patchy and uneven. Does the Minister agree that there is a strong argument for a standard system of highly reduced or free bus fares for young people across the country, to help them into jobs, apprenticeships and education, to create a fairer society and to create a new generation of bus travellers?

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness will recognise the important ability of the Mayor of London to fund cheap and free fares for young people. The opportunity that the Government’s franchising proposals will give is that other local authority leaders and combined authority mayors will also have the ability to fund fare concessions for the purposes that she mentions.

[Lord Moylan (Con)]

My Lords, the Minister is right to emphasise the importance of bus services, particularly for the elderly. I speak as somebody who has reached pension age. In that light, and given the Government’s, shall we say, cavalier attitude to pensioners that we have seen on display, can he give an unshakeable commitment that the Government will maintain the national bus pass and the statutory freedom pass scheme in London? Or is there the possibility that they too could find themselves subject to means testing?

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

At my age, I share the noble Lord’s enthusiasm for the freedom pass scheme. He is attempting to put me in the invidious position of making a concrete commitment for all time. The freedom pass, and the local authority and national scheme for free travel for pensioners, has lasted a long time and we would all hope that it continues into the future. The Government are not in a good position with the state of public finances they have been left with, but we will bear in mind his enthusiasm, and that of many others, for free travel for elderly people on buses as we move forward with our commitments for the bus service.

[Lord Berkeley (Lab)]

My Lords, in addition to the work that my noble friend is doing with buses, we will soon hear about the Great British Railways changes, with Ministers taking much greater control of the railways. Does this not provide an opportunity for some proper timetabling, so that when a bus arrives at a station there is a train soon ready to go, rather than one that has just left, which happens in so many parts of the country at the moment?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for that question. It is a subject that has engaged the bus and railway industries for generations. In fact, it is more likely that the bus will have to alter its timetable to suit the railway, because the railways are a national, integrated system, but he is right to suggest that the opportunity arises as a consequence of the Government’s proposals for Great British Railways and for buses as part of a more integrated public transport service across the entire country. The Government will do their best to make sure those opportunities are built on.

[Lord Kirkhope of Harrogate (Con)]

My Lords, my colleagues and I are concerned about the amount of pollution which diesel buses in particular present. We used to have trams and vehicles that were run on electricity. Can the Minister confirm what the Government are doing to encourage better environmental standards in buses and other means of public transport?

[Lord Hendy of Richmond Hill (Lab)]

The programme to reduce emissions from the bus fleet has been carried out by successive Governments over many years. There is no doubt at all that government intervention has created both cleaner diesel buses, which now meet that Euro 6 standard, and an increasing fleet of electric buses, which are the modern equivalent of tram-cars. This Government hope to continue that, subject to funding, because it is clearly a very important contribution to air quality in urban and other areas.

[Lord Hampton (CB)]

My Lords, while we talk about support for buses, I think we ought also to talk about support for bus safety. I quote the BBC website from this morning:

“At present there is no independent investigator and no independent recommendations when it comes to bus collisions. The families want to know why there is one policy for trains and another for buses”.


Perhaps the Minister could comment on that.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

It is clearly critical that bus services and buses should be safe. The DVSA, which is an agency of the Department for Transport, does look at serious bus accidents. It can deal with the drivers and the operators of those vehicles, and take into account whether standards should be changed for bus design.

[Baroness Blackwood of North Oxford (Con)]

My Lords, for many of those dependent on buses, whether they are travelling to work or to hospital appointments, lateness can have a real impact. Can the Minister say what actions he will take to improve real-time tracking of buses?

[Lord Hendy of Richmond Hill (Lab)]

The technology for real-time tracking has changed enormously in 20 years. One of the opportunities for franchising, which is part of the Government’s programme for bus services, is to provide consistent real-time information. It is important. It is quite clear that, where that information is provided—which is not limited to signs on bus stops; it can also be accessed on mobile phones and at home—patronage increases, so we have every enthusiasm for increasing it. The proposals on bus franchising will enable it to be more easily supplied where bus franchising takes place.

High-speed Rail Services: West Coast Main Line

Lord Hendy of Richmond Hill Excerpts

Wednesday 4th September 2024 Lords Chamber

[Lord Liddle]

To ask His Majesty’s Government what plans they have to facilitate improved high-speed rail services between (1) London Euston and Manchester, and (2) on the West Coast Mainline north of Crewe.

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

This Government are currently reviewing the position that they have inherited on rail infrastructure and will consider how we address capacity needs while maintaining financial discipline. We will set out our plans in due course. We need a long-term approach to infrastructure and investment, taking account of local transport priorities, which is what we will provide.

[Lord Liddle (Lab)]

I thank my noble friend for his reply. Of course we need a long-term plan for investment, but does he agree that there is a huge problem of congestion and capacity on the west coast main line, which is a key artery of our transport system? These problems have been made worse by the former Prime Minister’s impulsive and ill-thought-through cancellation of the second stage of HS2; the National Audit Office says that this will reduce capacity on the west coast main line by a further 17%. We need an investment solution to this. Will my noble friend also confirm that the Government have not ruled out use of the existing HS2 route to provide that extra capacity?

[Lord Hendy of Richmond Hill (Lab)]

Following the cancellation of HS2 phase 2, the Government are looking at all options to improve rail journeys to the north-west and Scotland, including managing the long-term issues that my noble friend describes, with capacity that HS2 phase 2 would have alleviated. In the meantime, Network Rail is progressing a programme to renew and modernise the west coast main line between Crewe and Scotland, and work on that will continue through the next three five-year control periods.

[Lord Wigley (PC)]

My Lords, before the last election, the previous Government announced that, in lieu of a Barnett consequential to Wales arising out of HS2, they would move forward with plans to electrify the line from Crewe to Holyhead. Do the Labour Government intend to honour that pledge and, if not, will they ensure that Wales does indeed get a full Barnett consequential related to the spending on the HS2 project?

[Lord Hendy of Richmond Hill (Lab)]

As with a number of other projects suggested by the previous Government, the electrification from Crewe to Holyhead had never been funded and has not been developed. In relation to the Barnett formula, I had a very good meeting with the Welsh Government’s Cabinet Secretary for the Economy, Transport and North Wales. He put his point of view on that subject and I responded to him.

[Lord Austin of Dudley (Non-Afl)]

My Lords, the noble Lord, Lord Liddle, is absolutely right that we need a long-term plan for the west coast main line north of Manchester. But the service that Avanti is providing right now is also a complete disgrace and needs to be dealt with. Trains between the West Midlands and London are often late, frequently cancelled, and dangerously overcrowded. When will the Government get a grip of Avanti’s services? While we are on the subject of rail services in the West Midlands, can the Minister explain why CrossCountry was allowed to do engineering works and replace the trains with a bus service between Birmingham and Leicester last Saturday—the one day in the year thousands of people from Birmingham were travelling to Leicester to watch Aston Villa beat Leicester?

[Lord Hendy of Richmond Hill (Lab)]

The first performance meeting that my right honourable friend the Secretary of State for Transport had was with the Avanti management on the Network Rail route. Its performance is far from satisfactory. The contractual position prevents the rapid action that one might want to take, but we are pressing it extraordinarily hard to deliver the service that passengers and taxpayers need. On the football match last Saturday, I do not have the details to hand but I will write to the noble Lord.

[Baroness Wilcox of Newport (Lab)]

My Lords, notwithstanding the issues in train services to the north of England, can my noble friend the Minister say whether the department could also look at the constant difficulties experienced on the south Wales to London main line, an important link between our two countries that fails on a daily basis?

[Lord Hendy of Richmond Hill (Lab)]

The performance of the Great Western main line has been the subject of a great deal of discussion and a change of management in Network Rail, and the infrastructure is improving. Nevertheless, I will take away my noble friend’s remarks on it, and we will press both Network Rail and the train operator to do better.

[Lord Moylan (Con)]

My Lords, I welcome the Minister to his place. I did not feel that the very good question asked by the noble Lord, Lord Liddle, was adequately answered, particularly in relation to Euston. Can the Minister be candid with the House and say how much public money his department is bidding for in the current spending round to extend the operation of HS2 from Old Oak Common to Euston—or does he hold the view that this can be achieved entirely by private sector investment?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord’s question in relation to Euston is germane in relation to the usefulness of HS2. The Government have been left with a position where many things have been promised and there is not enough funding for them all. However, we are reviewing the position on Euston urgently and intend to respond when we can to the proposition to extend HS2 from Old Oak Common to Euston.

[Lord Watts (Lab)]

My Lords—

[Lord Goddard of Stockport (LD)]

My Lords, it is this side. I have been waiting for a train for 20 minutes.

I congratulate the noble Lord, Lord Liddle, for asking the first friendly Question on railways in the almost 10 years that I have been in this House. He hits the nail on the head. What matters is capacity; this was never about speed. Many times, you get on a train at Euston and the train manager says, “If we don’t leave in two minutes, we’ll be behind the slow train to Milton Keynes or Watford”, and, similarly, from Crewe. Will the Minister liaise with the elected mayors of Liverpool, Manchester and Birmingham and keep trying to work with them? They are the people who understand more about the need to move people around for business, pleasure, leisure and life opportunities.

Also, in the spirit of glasnost, can the Minister keep this House involved in future progress? As the noble Lord, Lord Moylan, just said, the money must come from somewhere. It has been found for the pay offer for the rail drivers. Perhaps it can now be found for the public who travel on those trains.

[Lord Hendy of Richmond Hill (Lab)]

Of course the combined authority mayors have a very important part to play in determining the rail services in their areas. This Government are absolutely committed to discussing with them, on the capacity of the railway, the balance between long-distance travel and travel needed within those areas to create growth, jobs and housing. On future progress, the Government must review the railway as a whole. It is a network. As we do so, no doubt we will be asked questions about it and this House will be fully involved.

[Lord Hope of Craighead (CB)]

My Lords, I return to the Minister’s response to the noble Lord, Lord Liddle. Does the Minister accept that it was a mistake to discontinue the HS2 phase 2b line to Crewe? If that line had been extended to Crewe it would have benefited services to Wales, directly linked into the west coast main line, and—if I may put it this way—added much needed credibility to the whole project. Are the Government willing to look at that matter again?

[Lord Hendy of Richmond Hill (Lab)]

The Government are reviewing the position that we have inherited on HS2. The connectivity points that the noble and learned Lord raises are good ones. The proposals for the development of the railway network will indeed have to take those things into account and will look at solving some of the issues that he mentions.

[Lord Bellingham (Con)]

My Lords—

--- Later in debate ---

[Lord Bellingham (Con)]

I thank the noble Baroness very much. I declare an interest as a former member of the Select Committee on HS2, which spent nearly two years hearing copious evidence from many different experts. The one underlying recurring theme was the crucial importance of getting the link through to central London and Euston. Without that, we will not be able to solve a capacity issue.

[Lord Hendy of Richmond Hill (Lab)]

The link to Euston must be considered alongside many other commitments for railway investment, not all of which can be funded in the present financial situation. However, we hope to come back quickly on Euston because it is easy to recognise that it is part of the integral HS2 project.