Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Report stage
Monday 13th July 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The answer to that is that the Secretary of State does not have any power to intervene because, as I said, the core principle of the slot allocation regime is that slots are allocated by an independent co-ordinator. There are suggestions from noble Lords opposite that in fact the Government should have less power here, so I am not sure that I see that the Secretary of State can easily intervene in something that is already allocated fairly neutrally and without bias towards any airline, airport or Government.

[Lord Grayling (Con)]

My Lords, I will pick up that latter point. The Minister has perhaps misunderstood my points. I set out the four areas where I felt the Government did have a role, and I said that the legislation goes much further than that. I cited the example of proposed new subsection (4), which appears to give the Government the power to do absolutely anything they want in this field. The issue is a Government who want to be able to control everything, and we are saying that there are only a certain number of things they should be involved in.

I agree with the noble Lord, Lord Empey, that regional connectivity is one example. I mentioned the easyJet situation to the Minister. A lot of the commentary has been around the value of that business being much higher by breaking it up, stripping out new plane orders and the rest. As we know, slots at Heathrow have huge value, and you could well imagine a situation where slots that were important within the United Kingdom were auctioned off for another purpose. So, yes, I believe in a more constrained slot regime, or more constrained government involvement in the slot regime, but I am not arguing and I have not argued that the Government should have no involvement in that regime. Regional connectivity is one area where the noble Lord, Lord Empey, has made some good and important points.

However, I can see that the Government are not going to concede on this point tonight. I simply ask the Minister to reflect further ahead of Third Reading, particularly on the regional connectivity point. In the interests of progress this evening, I beg leave to withdraw my Amendment 42.

Railways Bill

Debate between Lord Hendy of Richmond Hill and Lord Grayling

2nd reading
Tuesday 7th July 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank all noble Lords who have taken part in this thorough and thoughtful debate. I would like to start by paying tribute to the remarks of the noble Lord, Lord Wilson. His distinguished record of service in this place and the Civil Service is a beacon of dedication and commitment to public good. He has brought to our proceedings a deep experience in the heart of government and his contributions are always thoughtful, measured and influential. As always, he is well informed about the railways. Gladstone made provision for the nationalisation of railways in the 1844 Railway Regulation Act. It was not pursued, but it was an early indication that running the railway as one system might be a good idea. I know that the House will join me in thanking the noble Lord, Lord Wilson, for everything he has done and wishing him all the best for the future after he retires in September.

Turning to the debate at hand, we have heard that everyone across the House can agree that the railways require reform. The current system is clearly no longer working for passengers, operators or taxpayers. Services have been unreliable, customers have been unhappy and the system has provided poor value for money. We have begun taking services into public ownership, but that was never a long-term solution. The Railways Bill is the answer to the issues that have plagued our railways for far too long, providing new leadership, accountability and long-term thinking to the sector and better meeting the needs and expectations of those who rely on it. The Bill continues the great work of the Passenger Railway Services (Public Ownership) Act 2024, enabling us to finally reform the wider railway and provide a better service to taxpayers.

I am grateful to all noble Lords who have expressed support, with one exception, in my doing this job in the future. I am sure everything they have said will have no effect whatever on the new Prime Minister. I also will not tell my wife. The noble Lord, Lord Evans of Guisborough, referred to me as the “guiding mind”. I just say to him that the one thing that the Bill is designed to produce is to stop Ministers being the guiding mind of the railway. The purpose of the Bill is to have a body of people that can run the railway and who are professional and committed to it.

This has been a varied debate. I am going to do my best to cover as many as possible of the topics that were raised. As ever, it is subject to my handwriting and the vagaries of my notes, and I may write to noble Lords in some cases.

I want to start with access reform because the noble Lord, Lord Redwood, said that the infrastructure was not used efficiently. He is right, actually. He talked about digital signalling, as did the noble Lord, Lord Holmes of Richmond, and they are both right. One of the issues that we have had is that we have not had a long-term plan for the railway. We have not had a long-term strategy in which to decide where to put those investments and where the capacity that they would give would be best utilised. That is one of the reasons for the provisions in the Bill.

On open access, which was raised by the noble Lords, Lord Lansley and Lord Moylan, and my noble friend Lord Berkeley, and others, the truth is that open access has been severely constrained recently. Most of the applications that have been made to the ORR have been declined simply because the view of the ORR is that there is insufficient capacity on the main lines in Britain to accept more trains. I would contend that one of the reasons for that is that, without a whole system look at the use of the infrastructure, we will never create more paths.

Interestingly, that whole system view of the infrastructure on the east coast main line, which took place several years ago but was not implemented—it could not be implemented because there was nobody to authorise it until I did—did create more capacity. The chances are that, if GBR looks at the job that the Bill will give it, to correctly look at capacity across the railway, I think it is far more likely that there will be capacity on the main lines and that therefore open access will in fact have more chance in the future than it has had in the recent past.

On freight, I thank all those who have said that the freight target is welcome. As the noble Baroness, Lady Whitaker, said, it will drive the Government’s net-zero policies. The noble Baroness, Lady Pidgeon, was looking for clarity that there was no intention to interfere in private sector infrastructure. I am happy to give her that clarity: there is no intention to interfere in that. The private sector has invested in rail connections to warehouses and so forth, so I am happy to give that assurance.

The noble Baroness, Lady Leaman, referred to fares and in particular to Delay Repay. There is great inconsistency in the way that that is done currently. I welcome her support for some consistency, as we will talk about elsewhere in the Bill, because that is one of the things that is simply lacking in all the retail arrangements of the railway. It is one of the reasons to move forward with the Bill.

The noble Baroness, Lady Harding of Winscombe, talked about ticket retailing, as did the noble Lords, Lord Dixon of Jericho, Lord Harper and Lord Moylan. We have asked the Office of Rail and Road to provide an industry code of practice, which will also have a clear enforcement regime. We remain in discussion with independent ticket retailers, including the one dominant player, and there will be separation of decision-making between GBR’s retail and other functions.

The noble Lord, Lord Moylan, is right: I am keen on open data. It is important that GBR will share open data. As the noble Lord, Lord Dixon of Jericho, said, open data is vital. I am very sympathetic to the development of alternative websites, but it is equally important that we rationalise the 14 that we already have, which either are in or will come into public ownership. If noble Lords listened to the noble Baroness, Lady Grey-Thompson, they will have heard about the inconsistency in approaches to ticketing, particularly for people who need help and are disabled. That is one of the things that we propose to remedy.

That subject of accessibility, as I said when I introduced the Bill, is a major issue. A number of noble Lords, including the noble Baronesses, Lady Grey-Thompson, Lady Brinton and Lady Humphreys, and the noble Lords, Lord Blencathra and Lord Holmes of Richmond, all remarked on the need to make this better and to do more. I completely agree. It is really important. Again, the fragmentation of the railway has led to great inconsistency. It is one of the things that badly needs to be sorted out. We had several debates during the passage of the public ownership Act and I am sure we will have some more this time. I agree with the noble Lord, Lord Holmes of Richmond, that getting the passenger experience right will also get accessibility right. I know that we will come back to that subject; it is one on which the Government place great importance.

As for a passenger target, the implication that there is somehow no incentive to do that if it is not written in the Bill is wrong. The noble Baronesses, Lady Jones of Moulsecoomb and Lady Pidgeon, and the noble Lord, Lord Mohammed of Tinsley, all raised this. There will be a great incentive to grow passengers for GBR, as well as to reduce costs, because GBR will need growth and will need to treat passengers properly in order to reduce the cost to the taxpayer of running the railway. I think there are sufficient incentives in here, but I am sure that we will discuss them further.

Several noble Lords referred to the possibility of the Secretary of State micromanaging the railways. The first thing to say is that that is already the case. The present circumstances leave civil servants, reporting to me and the Secretary of State, deciding how long trains are, where they stop and what the timetable looks like at every station in Britain. You cannot get more micromanagement than that. The intention of the Bill is to turn that round; we do not want the Secretary of State to be deciding those sorts of things, we do not want the Rail Minister to decide them, and we do not want civil servants to decide them. We need a body that will take an overall view of the value of the provision of passenger services and freight on the railway and derive the best timetables with the best train service to achieve it. I am very clear that one of the intentions of this Bill is to stop that.

The Secretary of State will, of course, have significant powers, as one would expect, bearing in mind the amount of public money that goes into the railways, but these powers exist in other places in government. They are not commonly used. The Oil and Gas Authority has received only one ministerial direction in its 10-year history. That contrasts with the situation for several years now where the Secretary of State or the Rail Minister has been invited to approve detailed business plans every year, which more or less go down to the trains stopping at every station. That is something that we need to stop.

There are clearly different views about the powers of the regulator, the Office of Rail and Road. The noble Baroness, Lady May, deprecated the apparent reduction in its powers, as did other noble Lords. I always listen very carefully to the noble Lord, Lord Bradshaw, who has long experience in this. He has said to me, both outwith the discussions today and in the course of this debate, that the regulator should not be in charge; of course there is a role for regulation, but the regulator should not be in charge of the railway. The sad history of the fragmentation of decision-making on the timetable is good evidence that having the regulator deciding how the system is used is not the best way of doing it.

I turn to a long-term railway strategy, which we have not had for 30 years. My noble friend Lady Alexander of Cleveden is right that a long-term railway strategy makes it possible for GBR to drive economic growth in regional and local communities.

The noble Lord, Lord Grayling, raised the question of enhancements. I agree with him about the challenges to standards. I do not think the fragmentation of the railway between operations and infrastructure led to any significant challenge on standards—it was certainly difficult to achieve it in a railway infrastructure organisation. There is more likelihood of this challenge in the future where operators will be challenging the cost of running and enhancing the railway, and there is also far more chance of the right schemes being authorised because a long-term plan will set out the best things to do with the best returns on the railway, the best capacity increases, in a way that we have not seen for a very long time. We can discuss the point made by the noble Lord, Lord Lansley—

[Lord Grayling (Con)]

I hate to disagree with the Minister, but he will know that the programme of enhancement set aside for CP6 was carefully discussed with him and the executive of Network Rail and represented a significant plan to do precisely the things that the industry said would make the most difference. The tragedy is that it did not happen, and even now under this Government, it is still not happening.

[Lord Hendy of Richmond Hill (Lab)]

Recollections are a great thing. I recollect that not one of the of schemes that I was invited to by the predecessor of the noble Lord, Lord Grayling, had a business case attached to it. It was a list of schemes that was just a list of schemes. I think that we can do a lot better than that. A long-term railway strategy that invites the railway to list and make business cases for the right schemes is entirely right.

My noble friend Lord Faulkner of Worcester made the most important point, which is that if you do not have a list of schemes prioritised by business case, you have no chance of getting private sector contributions to railway enhancements which create growth and wealth. That is an important point and something that a long-term railway strategy and the resulting GBR business plan will deal with.

On private sector involvement, the first thing to say is that this Government are not fundamentally opposed to it at all. At the end of this process, when this Bill becomes an Act, 60% of the expenditure by GBR, once established, will be spent in the private sector.

On the balance sheet implications raised by the noble Lord, Lord Young of Cookham, I say that the Railways Bill will not impact the way that the rolling stock leases will be classified by the ONS. I have previously discussed with him the confidence of the rolling stock leasing companies that this will not be the case. The story that the noble Lord, Lord Tunnicliffe, told about how Network Rail crept back into the public sector in 2014 is absolutely right. It did go back on the balance sheet. No fuss was made about it at all. It turned out to be—all the time—a nationalised industry.

The experience of the franchises in recent times is interesting. A number of noble Lords said that concessions could have been adopted. Of course, the last Government had the chance to do that. They already had four private sector operations in their control, but they did not choose to do anything with any of them; that is an interesting feature. One noble Lord—I am afraid I omitted to note the name—said that, in fact, the private sector operators before the last election were not enamoured at all of that model and, therefore, they were not very keen on it. The truth of it is that the railway had stagnated, and this Bill is the way of retrieving the situation.

In answer to the noble Lord, Lord Hampton, Platform4, which is a successful amalgamation of the Network Rail property function and London and Continental Railways, will undoubtedly continue. The railway has an important role in developing land on and around stations, and the rest of the railway land. It is very important that the railway plays its part in the economic development of the places that it serves.

The noble Lord, Lord Bradshaw, raised the question of funding certainty. Of course, the Bill continues the infrastructure funding in five-year periods, and it is shown through the provisions of the Bill to continue. The Bill also gives the opportunity to Ministers in due course to give longer funding periods for the operations, but I think that most Ministers would want to see GBR making a success of its job to do so.

As to passenger safety, the noble Baroness, Lady Pidgeon, rightly draws the attention of noble Lords to the importance of passenger safety. GBR will have to face this subject directly; I think it will be more equipped to do so than the current railways. The noble Baroness is absolutely right that the safety of women and girls is crucial. This is true in relation to personal safety but also, frankly, for encouraging more travel by half the population.

The noble Baroness, Lady Whitaker, referred to staff safety. I am happy to confirm to her that the Office of Rail and Road will continue its function of managing safety on the railway and, indeed, prosecuting where that is the appropriate thing to do.

A number of noble Lords raised questions about the passenger watchdog and I know we will have a lot of discussion about this. The noble Lord, Lord Mohammed of Tinsley, and the noble Baroness, Lady Pidgeon, raised the question of a passenger charter and the importance of passengers, which is of course right. I am sure that we will have some discussion about how much power the passenger watchdog should have. I disagree, as I generally do, sadly, with the noble Lord, Lord Moylan. I think that enforcement of what the passenger watchdog wants to do in relation to the Office of Rail and Road is quite sufficient, and I do not see any problem in doing it.

On devolution issues, which the noble Lord, Lord Grayling, raised first, the limitations of some of this are the limitations of railway geography as opposed to political boundaries. As the still current Mayor of Greater Manchester has discovered, very few train services within mayoral boundaries are wholly within the boundary. The other point is that they run on lines which are part of a national network. That does not at all mean that devolution cannot be done with success, and it does not at all mean that mayors cannot have the passenger services they want. Look at the growth of the Overground network in London. In some cases, those services go outside the London boundary, as several noble Lords will recall from their history in London government.

The way that we achieve that is through intelligent discussion about the balance between the network and its local influence and the network and its national influence. The provisions in the Bill are currently quite sufficient and will allow for a discussion between mayors who have an aspiration for economic development in their part of the country and on the connections that their cities and towns need to have with other parts of the country. The Bill is drafted in precisely the way it is for that reason. My current belief is that the Bill allows that to happen and gives sufficient powers for them to influence how the railway is structured.

The noble Lord, Lord Wigley, raised several points about Wales. He will know, of course, that the Barnett formula and how it is applied are matters for His Majesty’s Treasury and the Chancellor. I am sure that the new First Minister of Wales will be asking any new Prime Minister shortly about not only that but fiscal devolution in general. All I can say is that the £445 million that this Government have provided for rail enhancements in Wales is far in excess of that of any previous Government. It includes the north Wales coast and Wrexham, and it is a very good start to the Transport for Wales investment plan, which the noble Baroness, Lady Humphreys, referred to. I am sure it will continue like that. I have already met the new Transport Minister for Wales and I am sure we will have some powerful discussions.

As to the design of GBR, I hope noble Lords will know that the Government’s firm intention is to devolve GBR to a route and regional basis. It is quite clear that it should not be some grand, centralised and distant organisation. There will have to be functions that are centralised—the access and use policies are one such example—but, in general, this Government want the railway run by people who are identifiable to elected politicians and the local communities they serve. The noble and right reverend Lord, Lord Sentamu, is right that it is about leadership—not mine, but the leadership of people who can be appointed to run both operations and infrastructure and produce a better service.

One thing that was lost in the previous 30 years is that franchisees changed quite regularly and so did their managements. Local communities and elected Members could never quite get used to who was in charge because it changed quite regularly. That is not right. I have told the people we are appointing now to integrated business units that they should behave as though they are there for the rest of their careers and that they should get on with it.

I am told my time is up, so there is a limit to what I can answer, other than—

[Lord Grayling (Con)]

My Lords—

[Lord Hendy of Richmond Hill (Lab)]

I will not take any more interventions.

[Lord Grayling (Con)]

It is a procedural point. There has been a discussion about whether the Bill is going to be committed to the Moses Room or to the Chamber, and there is no Motion before us tonight. Could the Minister reassure us that the discussion now is with a view to having Committee stage in the Chamber?

Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Thursday 18th June 2026 Grand Committee

[Lord Grayling (Con)]

May I just ask a specific question? If we countenance the situation where, for example, a plan coming from Heathrow to amend the routes into that airport clash with the routes into Farnborough and it has been through extensive process and, effectively, there is a logjam where one says one thing and the other says another, my understanding is that the Government, using their direction power, can say, “Right, we vote for Farnborough, not Heathrow”, or vice versa. In that situation, where the Government say they are voting for Farnborough, is there still a duty to consult on that decision before it is implemented?

[Lord Hendy of Richmond Hill (Lab)]

I will take some advice and respond further. But I note in response to the comments from the noble Lord, Lord Grayling, that both proposals will have been consulted on and agreed, so it is not the case that consultation would not have applied to either of them. I will write to him with the precise answer to his very reasonable question and copy it to other noble Lords.

Amendment 63 is from the noble Lord, Lord Holmes of Richmond, and he is right that information about airspace changes should be secure and transparent. I take the noble Lord’s point about the choice of technology. The Civil Aviation Authority’s CAP1616 airspace change process is designed to ensure transparency throughout. There is already a legal requirement for directions related to airspace change to be published, as well as any steps the CAA takes to enforce them. In addition, both the sponsor of an airspace change and the CAA are required to publish relevant documentation throughout the process, which is held on the CAA’s airspace change portal—a secure platform which acts as a single source of truth. When an approved design is implemented, it is published in the UK Aeronautical Information Publication, as required by international law.

This is not an area where there is a lack of trust or accountability requiring a more complex or novel audit mechanism. The CAA operates within a well-established statutory framework with clear oversight and requirements for publication and traceability. Introducing a requirement to store this information in a prescriptive or novel format risks adding complexity without corresponding benefit, given that the core objectives of transparency, accessibility, and auditability are already being met. It would also apply irrespective of any identified gap, creating additional cost and rigidity on how information is managed, so I respectfully ask the noble Lord not to press his amendment.

Amendment 64 from the noble Lord, Lord Moylan, relates to a technical change arising from the proposed expansion of who can pay charges for air traffic services, which will ensure that the “user pays” principle can continue to be fairly applied in future. Air traffic services are provided for all users within a block of airspace. Even when an airspace user does not use a service directly, they may still benefit from it. For example, if two aircraft avoid a collision because one is directed away from the other, both benefit even though one did not directly receive the service.

It is right that the charging framework reflects this. The Bill does not say that charges may be imposed on persons who cannot use or benefit from them. We reassure noble Lords that charges are not set without safeguards and that the Bill maintains them. The Civil Aviation Authority accounts for factors such as efficiency and proportionality and follows an established process, including extensive engagement, statutory consultation and rights of appeal.

A requirement to prove the precise level of use or benefit for every airspace user would be disproportionate and unworkable, particularly as an increasing number of emerging uses, especially drones and other unmanned aircraft systems, are integrated into shared airspace and require air traffic services in future. That issue is what the existing provision is designed to avoid and what the changes in the Bill seek to maintain. For that reason, I ask the noble Lord to withdraw his amendment.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, as we have heard, this group concerns the airport slots regime. I am grateful to noble Lords for their amendments. I will address each one in turn but first note two common points that apply across this group.

The UK slots regime depends on independent, fair, transparent and non-discriminatory allocation by the slot co-ordinator. It also operates within international frameworks, such as the Worldwide Airport Slot Guidelines, the global standard for managing airport capacity at congested level 3 and capacity-constrained level 2 airports. The regime already recognises commercial expectations that require clarity, consistency and timely decision-making. Where I refer to independence, proportionality, flexibility or international alignment, these are the common justifications I have in mind. I also say to the noble Baroness, Lady Pidgeon, that the processes in this Bill do not in themselves allow airport expansion; they are about the efficient allocation of capacity created by expansion, which is a different issue.

I begin with Amendment 66, tabled by the noble Lord, Lord Grayling. I understand the concern that the Government should not interfere in a liberalised and well-functioning sector, and our policy intent is not to interfere in this. These provisions, however, largely replicate provisions previously available through EU legislation. All the Government are doing is replicating the powers we think we appropriately need to continue. I refer the noble Lord to paragraphs 20 to 24 of the Explanatory Notes to the Bill.

Neither the Government nor airlines have a role in the day-to-day allocation of slots. As noble Lords have noted, that is undertaken by an independent slot co-ordinator who must allocate slots openly, fairly, transparently and without discrimination. The amendment would therefore not have the intended effect and would create uncertainty. The temporary reallocation or suspension of unused slots during an international crisis is already addressed by Clause 7. In our view, Amendment 66 is therefore unnecessary and duplicative.

I turn to Amendment 67, tabled by the noble Lord, Lord Empey, which would require sufficient slots at hub airports such as Heathrow to be allocated to flights from UK regional airports. The Government recognise the importance of strong regional connectivity and effective access to hub airports for people and businesses across the United Kingdom.

However, I cannot support the amendment because requiring hub airports to prioritise domestic regional services over international routes could conflict with non-discrimination and fair competition obligations in the UK’s bilateral air services agreements. It could also require the reallocation of slots from incumbent operators that have historic rights where usage requirements are met, raising legal and practical issues. I therefore ask the noble Lord not to press his amendment.

The next amendment, from the noble Lord, Lord Grayling, seeks to remove the ability to create regulations on enforcement of the slots regime through criminal and civil sanctions. Existing assimilated law already contains criminal and civil enforcement provisions, which the Government believe are necessary. Removing this power would freeze the current enforcement regime, meaning that even proportionate updates could be made only through further primary legislation. I do not believe that that is the noble Lord’s intention.

[Lord Grayling (Con)]

Can the Minister illustrate to me the kind of circumstance in which a criminal sanction is required?

[Lord Hendy of Richmond Hill (Lab)]

I will respond to the noble Lord after today.

Clause 7 already reduces the severity of sanctions by removing the possibility of imprisonment for breaches of slots regulations. Any exercise of the power to amend enforcement provisions would be subject to the affirmative procedure, ensuring scrutiny and debate in both Houses. For those reasons, I ask the noble Lord not to press his amendment.

I turn to Amendment 70, tabled by the noble Lord, Lord Moylan, which would place a statutory duty on the Secretary of State to consult airlines, airport operators and others before making any slots regulations under Clause 7. The Government recognise the importance of proper engagement and, where new policy is developed under this power, will carry out appropriate consultation, including with industry and, where relevant, communities. However, an inflexible statutory consultation duty would not be appropriate. The power may need to be used urgently in response to significant disruption, as was necessary during the pandemic. In those circumstances, government must be able to act swiftly and proportionately. I therefore ask the noble Lord not to press Amendment 70.

I will take Amendments 71 and 72, also tabled by the noble Lord, Lord Moylan, together. They would require all regulations relating to slots to be subject to the affirmative procedure. I recognise the desire for parliamentary scrutiny, but the Bill already draws a proportionate distinction. The negative procedure is available only where there is a significant threat to public health, or another substantial reason, and only for temporary changes to slot-usage requirements. Requiring the affirmative procedure in every case could delay necessary action during disruption, where speed may be essential. I therefore ask the noble Lord not to press Amendments 71 and 72.

Amendment 73, tabled by the noble Lord, Lord Harper, would—

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

If I may, I shall respond to the noble Lord by saying that, if I have not understood his point clearly, I shall indeed go away and have a further discussion with him.

[Lord Grayling (Con)]

My Lords, we have had an interesting debate. Again, some important issues were raised. The noble Lord, Lord Empey, makes an important point. In fact, when reflecting on my own amendment at the start, I thought that what he was saying might be an element missing from mine. I have a lot of sympathy with what he has said.

I want to be frank with the Minister. He knows that I have the highest regard for him; he knows that I regard him as knowing more about much of the transport system than anyone I know, so I do not direct this comment at him, but at the Government. I am really quite unimpressed by the Government’s inability to explain what are relatively simple things, or should be relatively simple, if they had thought this through properly, in the measures that they are taking in this Bill and those in the debate that we had last week over the slot regime. If the Government want to take powers or continue powers to enforce criminal sanctions, they should at least be able to say what kind of issues those criminal sanctions are designed to address, because I do not think that this is simply a replication of existing EU law—and were it so, I would be asking what we can we do less of, rather than more of, outside the European Union.

However, if the Government’s intention is purely to replicate what is there already, they do not need new Section 34A(4), which says:

“The regulations may make different provision for different purposes”.


What does that mean? What it does is create a blank cheque for the Government to expand their remit in the slots regime beyond where it is at the moment. They are also seeking, as I say, to continue with criminal sanctions. That does not feel to me like a Government who are trying to maintain a light touch in what the Minister rightly says is a commercial marketplace with established processes that are part of international agreements that go beyond the European Union. So some of this should not be necessary, and it should not be necessary to continue some of it on from what we had before. Where it is continuing, there needs to be a good explanation for it. I am sorry, but I do not think that the Minister has been able to give that good explanation. The Government need to do a better job on what should be pretty basic questions about what they are proposing.

I will of course seek to withdraw this amendment today, but I give notice to the Minister that these questions need to be answered properly before we get to Report, because I can see no justification for having what are clear Henry VIII powers in the slots regime. There is not even a provision for the affirmative resolution so, frankly, in six or 12 months’ time, another Minister—I am sure that it would not be this Minister—could simply come back and take a much more interventionist approach to the slots regime, which would be absolutely out of kilter with anything that we have done either inside or outside the European Union. For now, I beg leave to withdraw the amendment, but I will not leave this issue untouched when we come back on Report.

Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Tuesday 16th June 2026 Grand Committee

[Lord Hendy of Richmond Hill (Lab)]

My Lords, this group concerns the consumer rights powers in the Bill and the scrutiny of those powers. I am grateful to noble Lords for their amendments. The Government’s objective is a coherent, effective and proportionate consumer protection regime for aviation passengers.

Before I turn to the individual amendments, I will make three points that apply across this group. First, Clause 1 does not in itself create new powers of entry or financial penalties; it simply enables regulations to be made, with their scope, safeguards and detail being considered when they are brought forward. Secondly, the Government believe that detailed requirements should be developed through secondary legislation, with consultation, options appraisal and an impact assessment where appropriate. Thirdly, the Bill preserves flexibility so that the CAA, the CMA and the Government can respond effectively to consumer harms that may cut across aviation and wider markets. Where I refer to duplication, proportionality or flexibility, these are the common justifications that I have in mind.

Let me begin with Amendments 8 and 18 in the name of the noble Lord, Lord Moylan, which are supported by the noble Baroness, Lady Foster, and concern the role of the Competition and Markets Authority. Although most aviation-specific enforcement relating to information gathering and powers of entry will sit with the CAA in practice, the CMA has a broader, market-wide role—including in sectors that overlap with aviation, such as travel and holidays. The CAA and the CMA already have concurrent powers in relation to general consumer law. Removing the CMA from this framework could limit flexibility and make it harder to address problems that span aviation and wider consumer markets. Therefore, in the Government’s view, it is right to retain the ability to include the CMA where necessary. The precise role of each regulator will be considered when secondary legislation is drafted. I therefore ask the noble Lord not to press his amendments.

I turn next to the amendment from the noble Lord, Lord Grayling, which seeks to remove the power of entry provision in Clause 1. I am afraid that I cannot support it. The Bill is designed to improve the CAA’s enforcement ability and to reduce reliance on slow, resource-intensive court processes. Clause 2 strengthens the CAA’s direct information-gathering powers. Clause 1 enables those powers to be strengthened further, if needed, including by enabling powers to enter premises or to require documents and information during the course of an investigation. Any such power would be considered carefully, consulted on and include appropriate safeguards when regulations are brought forward.

I also assure the noble Lord that these wide enforcement powers, including powers of entry, fell within Section 2 of the European Communities Act 1972. Much passenger rights law originated in EU law and has now been assimilated into UK law. Since our exit from the EU, primary legislation has generally been needed to amend it. Clause 1 restores the necessary degree of flexibility while preserving parliamentary scrutiny and future consultation. I ask the noble Lord not to press his amendment.

[Lord Grayling (Con)]

I have a simple question. What the Minister has not done is explain why it is necessary. What are the problems that this is designed to solve?

[Lord Hendy of Richmond Hill (Lab)]

I understand the noble Lord’s question. I will come back to him on that.

Amendment 22, also from the noble Lord, Lord Grayling, concerns financial penalties and the circumstances in which the CAA may act. The CAA’s role is to enforce consumer rights where breaches cause collective consumer harm, rather than to resolve individual disputes. Clause 1 does not in itself create financial penalties; it enables regulations to grant such powers in future where that is justified and appropriately framed. Any regulations creating penalties would be subject to the affirmative procedure. Thus the amendment would be unduly restrictive, so I ask the noble Lord not to press it. Having listened to noble Lords on the need for better enforcement, I would not wish to constrain the CAA’s powers in this respect.

I will address Amendments 26 and 27 from the noble Lord, Lord Moylan, together. I agree that future regulations must receive appropriate parliamentary scrutiny. Clause 1 already provides a balanced approach: the affirmative procedure applies to the most significant matters, including criminal offences and financial penalties. Some amendments could be more minor or technical changes, such as updating an organisation’s name. Requiring the affirmative procedure in all cases would not be proportionate and would place unnecessary demands on parliamentary time. I ask the noble Lord not to press his amendments.

On Amendment 28, also from the noble Lord, Lord Moylan, I absolutely agree on the importance of reviewing the impact of regulations. However, post-implementation review requirements are already considered when developing secondary legislation and included where appropriate. Not every regulation will warrant a review, particularly where changes are minor or technical. For the common reason of proportionality, I ask the noble Lord not to press this amendment.

Amendment 33, also from the noble Lord, Lord Moylan, concerns the procedure for regulations on co-operation between enforcement authorities. I do not consider the affirmative procedure necessary. These regulations are administrative in nature. They may cover information sharing, notification arrangements and how direct enforcers determine which authority should act in a particular case. There are precedents for such regulations using the negative procedure, which provides proportionate scrutiny. I ask the noble Lord not to press this amendment.

Amendment 34 in the name of the noble Lord, Lord Moylan, concerns the jurisdiction of the CAA and the CMA in aviation consumer protection. Paragraph 6 of Schedule 1 already enables regulations to set out how the two authorities co-ordinate, decide which is best placed to act and avoid duplication, including through joint working. The CAA will also have regard to the CMA’s rules, supporting consistent enforcement. A fixed approach in primary legislation would reduce flexibility and risk constraining effective enforcement. I therefore ask the noble Lord not to press Amendment 34.

Airports Slot Allocation (Alleviation of Usage Requirements) Regulations 2026

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Wednesday 10th June 2026 Grand Committee

[Lord Hendy of Richmond Hill (Lab)]

I thank all noble Lords for their consideration of these draft regulations and for the thoughtful points that have been raised. I will attempt to answer as many as I can now. On those that I cannot, I will write to the noble Lord concerned and to other noble Lords present.

I thank the noble Lord, Lord Kirkhope of Harrogate, who has considerable experience. I cannot find in the draft statutory instrument any reference to a five-year term. The measure put forward today is about only the summer season and the winter season of 2026. He will find the permanent proposition for slot regulation in the civil aviation Bill, which I have no doubt he is studying more or less as we speak. I hope that will satisfy him, but if not we can discuss it afterwards.

My understanding about the three types of airport and what might trigger a change in categorisation is that it is triggered by the airport itself and by the level of potential use and, therefore, congestion. The company itself, Airport Coordination Limited, is clearly very efficient, with 40 employees, but there is a wider point that goes to some of the questions. A lot of this is about the stability of both the airlines and the airports sector. We are good at this in Britain, and we want the airline sector to prosper. We have to give it some stability in circumstances in which the international situation has destabilised it a bit.

I cannot answer the noble Lord, Lord Grayling, about the impact on individual airlines. He is clearly right that airlines that fly directly to the Middle East will be more affected than those that do not. On the impact of the wider geopolitical circumstances for any potential fuel shortage, I am very happy to confirm that the Government do not currently believe that there is an airline fuel shortage, but there could be in future, and if there is, we need to make adequate preparation for it in advance. It is quite hard to know where that might apply, so we have to apply some general thought to how we manage this. A lot of what is going on here is about giving some stability and certainty to airlines to resume normal business when they can, and it is about what happens, proportionately, to airports that rely on a throughput of passengers.

[Lord Grayling (Con)]

The question I raised with the Minister is absolutely central to the Government’s decision to take a 5% or 10% figure. He said that the airlines wanted more. I explained a very specific circumstance in which one particular airline—there will be many others affected in that way—would need more. He therefore needs to explain why the Government have fixed on this figure when the airlines said that it was not the right figure and common sense says that many would need more.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord. The answer is that the airlines provided little or no evidence of any figure but would prefer more because that would give them more flexibility in circumstances where airports would have preferred this not to happen.

[Lord Grayling (Con)]

I am not interested in what the airlines said they wanted, because the department took the decision to alight on a particular figure. The Minister has not explained why the department took that decision, when simple common sense says that many airlines would need a different figure because of the basic arithmetic I described to him earlier.

[Lord Hendy of Richmond Hill (Lab)]

The answer to that point, whether or not it satisfies the noble Lord, is that we have to do something in general in these circumstances. Previous circumstances of various sorts have produced different figures. The Covid figure was 30%; I do not know how that was calculated. We feel the need to do something because we have to give some certainty both to airlines and to potential airline passengers. I take his point about the geographical differences and will certainly write to him further about what individual airlines in those circumstances said. I have no evidence that certain airlines proposed huge differences, but I will certainly go away and find out about that.

Sustainable Aviation Fuel Bill

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Report stage
Tuesday 10th February 2026 Lords Chamber

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

My Lords, I thank all noble Lords for their extensive engagement between Committee and Report. Amendments 1, 2 and 4 in my name will ensure that the Secretary of State can enter into revenue certainty contracts only where the supported SAF is produced at a facility in the United Kingdom. This will provide the industry with a clear signal of support. I hope that this measure reassures noble Lords that I have considered the contents of the amendments tabled in Committee by the noble Baroness, Lady Pidgeon, the noble Earl, Lord Russell, and the noble Lord, Lord Grayling. I thank noble Lords for their constructive engagement in reaching this position. I urge noble Lords to support the inclusion of these amendments in the Bill. I beg to move.

[Lord Grayling (Con)]

My Lords, I apologise to the Minister and the House that I was unable to be here in Committee because of a family crisis. I am very glad to be here today and to welcome these amendments. I have no intention of moving my own amendment since the Minister has addressed my concerns. The important thing was to ensure that nobody could game the system: that we knew that we were supporting UK manufacturing and not somebody playing a fast one on us by shipping mostly complete fuel to our country, polishing it up a bit and claiming it was British. The Minister has done that with these amendments and I very much welcome them. I am grateful to him and I support them.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank noble Lords for this debate. Amendments 8 and 9, tabled by the noble Lord, Lord Grayling, seek to address how funds from the levy are used. I am happy to reassure the noble Lord from the Dispatch Box that money raised through the levy will be used only to support eligible SAF plants in the United Kingdom, and that that is already set out in the Bill.

Clause 6 restricts the costs incurred by the counterparty under the revenue certainty contracts and in carrying out its functions under the Bill. Under this clause, the levy funds will be used only to meet the cost of the revenue certainty mechanism scheme. It is important that the counterparty is able to recover its costs, which include the cost of administering the contracts, the levy and the payment of surpluses.

Amendment 10 intends to ensure that there is a specific mandatory point at which the supplier becomes liable to pay the levy. The Government agree with the intention of the amendment but believe that it is unnecessary because Clause 6(7) already provides that a person becomes liable to pay the levy at the same point when they become liable to an obligation under the SAF mandate.

On how individual levy contributions are calculated, it is important that the Bill provides sufficient flexibility to ensure that final levy design decisions deliver our design principles, including simplicity, solvency, affordability and fairness. The Government are currently reviewing responses to their recent consultation on the detailed design of the levy and engaging with stakeholders to deliver these objectives. I remind noble Lords that the regulations made under Clause 6(1), to set out how the levy will work, will be subject to scrutiny under the affirmative procedure, which will give Parliament the opportunity to continue to consider the approach.

Amendments 17 and 18, tabled by the noble Lord, Lord Grayling, seek to prevent the levy being imposed until a domestic sustainable aviation fuel producer is approaching readiness to receive payments under the Act. I reassure the noble Lord that the purpose of the levy, as set out in Clause 6, is to meet the costs of payments made by the counterparty to SAF producers and to cover the counterparty’s administrative costs. The costs of payments under RCM contracts will be insured only once eligible SAF is being produced and sold by producers who have entered into RCM contracts, which is the outcome sought by these amendments.

The Government are currently reviewing responses to their recent consultation on levy design. Some stakeholders have expressed a desire to build up a reserve fund prior to the first producer payments, which could help smooth out the costs of the scheme and help manage risks of underforecasting required payments. As the Government consider their response to the consultation, it is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny.

Amendment 11, tabled by the noble Lord, Lord Moylan, intends to introduce a standardised rate for the levy. We are currently reviewing responses to our recent consultation on the detailed design of the levy and continue to engage with stakeholders to help inform the drafting of levy regulations. Within the consultation, we sought views on the publication of a forecast levy rate, expressed in pence per litre, which could help provide greater transparency for the supply chain.

The Bill as drafted does not specify a particular mechanism and allows the Secretary of State to consider a range of options for calculating the levy paid by individual companies. It is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny. Therefore, I do not consider the amendment to be necessary.

To reassure noble Lords, the Government are live to the potential impacts of different levy designs and recognise industry’s desire for certainty and transparency, while ensuring fairness and affordability for the consumer. We recognise that the levy must be dynamic and responsive to the changing market, while ensuring that the counterparty has funds to make payments under the scheme. But, to be clear, this levy will not be used to generate unnecessary funds and will raise sufficient money to cover only the counterparty’s costs under the revenue certainty scheme.

Although final decisions will be informed by the consultation, we are exploring options that deliver this and many of the proposals, and options set out in that consultation could help provide greater certainty and transparency. As I have said, the levy regulations will be subject to the affirmative procedure, which will allow further parliamentary scrutiny. I hope noble Lords will note the steps the Government have taken in the levy design and that they therefore will not press their amendments.

[Lord Grayling (Con)]

My Lords, I am grateful to the Minister for a detailed explanation of the situation. I am greatly reassured by what he said. What matters in all this is that we provide the right balance. This is something the airlines are calling for, but we do not want it to unduly penalise fare payers, and to end up with disinvestment in conventional aviation fuel. I am reassured by much of what the Minister said, but I am looking to him and his colleagues to ensure over the coming months that that balance is properly found, so that we do not end up with legislation that has unintended consequences.

The Minister made a point about the reserve. I proposed six months because I believe it essential to have a short period of reserve building, but it must be short—it cannot be year after year. That was the point of my amendment. I am reassured by what he said, and I shall watch with interest what the Government do, but in the meantime, I beg leave to withdraw my amendment.

Nationalised Passenger Rail Services

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Monday 2nd February 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I travelled this morning and it was pretty good.

[Lord Grayling (Con)]

My Lords, I have asked the Minister a couple of times about transition payments made during the renationalisation process by the Government to the private operators, and the way that happened previously when franchises changed hands. Is he yet in a position to tell us—this is nearly 12 months later, so he really ought to be—how much money has actually been paid in transition payments to the private operators so far?

[Lord Hendy of Richmond Hill (Lab)]

I should have foreseen that the noble Lord would ask that question. I will have to write to him because I knew he would ask it, but I forgot to research the answer.

Buses: Safety and Security

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Thursday 8th January 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I refer my noble friend to the Road Safety Strategy that has just been published—the first for many years—which sets out a whole variety of actions to be taken with vehicles, drivers, pedestrians, other road users and infrastructure, which he refers to, in order to reduce deaths and serious injuries on the roads. Nevertheless, travelling by bus is a very safe mode of travel.

[Lord Grayling (Con)]

My Lords, given the current weather conditions, buses on icy roads are obviously an issue. Does the Minister know whether we mandate bus companies to have winter tyres on buses? If we do not, should we do so?

[Lord Hendy of Richmond Hill (Lab)]

I have never heard of any mandate for winter tyres. The speed at which the weather changes, given the climate change just discussed in this Chamber, would make changing tyres overnight a seriously impractical activity. What is needed when the roads are frosty and temperatures are below freezing is adequate gritting and care by local transport authorities. Ministers in my department in the other place have this week been looking into the adequacy of gritting across the country.

South Western Railway

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Thursday 20th November 2025 Lords Chamber

[Lord Grayling (Con)]

My Lords, a few months ago I asked the Minister about the transition payments that were previously paid when a franchise ended and a new operator came in. He was not at that point able to answer the question about SWR, so I ask him again now, as a few months have passed: have the Government paid any money to FirstGroup as a result of the transition from private to public, and have any further payments been made since the time of the transition?

[Lord Hendy of Richmond Hill (Lab)]

The Government are very reluctant to pay any money to the previous owners, bearing in mind the condition in which the service was left. That discussion is still carrying on, but I am not aware of any money so far being paid and I would not be keen to pay any in the future.

Airport Expansion

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Tuesday 11th November 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

Well, what can I say to my noble friend, who not only asks this question but gives all the answers as well? I think that will do.

[Lord Grayling (Con)]

My Lords, the Government are absolutely right to be pressing ahead with the expansion of Heathrow Airport; it is long overdue. The Sustainable Aviation Fuel Bill will, I hope, answer some of the questions about the environmental impacts.

However, I am concerned about the debate between a short runway and a long runway. Whatever the outcome in the medium term, may I seek assurance from the Minister that we will at least still go ahead with the DCO for the full plan? If we do not, we are going to end up short-changing ourselves again. In the end, Heathrow needs to expand, and it needs to expand properly. Please ensure that that is what happens.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for that. That is a premature request, because he will know—and maybe the rest of the House does as well—that the two schemes being taken forward are different, and the length of the runway proposed is different. A decision such as the one he suggests ought to be taken as we go forward with one of the two schemes.

Open Access Rail Services

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Wednesday 22nd October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

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

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

[Lord Grayling (Con)]

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

[Lord Hendy of Richmond Hill (Lab)]

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

Planning and Infrastructure Bill

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Thursday 24th July 2025 Lords Chamber

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

My Lords, the first three amendments in this group seek to ensure that the fees charged by the prescribed bodies to highways authorities under the Highways Act 1980 are not excessive, that the level of fees charged does not cause highways authorities financial hardship, and that the regulations detail financial mechanisms and arrangements to support highways authorities in meeting any charges that may be forthcoming under Clause 29. I welcome the noble Lords, Lord Moylan and Lord Grayling, raising points related to the public purse. The ability of organisations to plan and fund resources accordingly is important to the successful implementation of these reform measures.

Clause 29 is an enabling power that allows the Secretary of State in England and Welsh Ministers in Wales to make provision for, through regulations, the charging of fees for services provided to support Highways Act 1980 applications. I underscore that Clause 29 is intended only to allow prescribed bodies to charge fees on a cost-recovery basis. Its implementation, through supporting regulations, will not allow them to make a profit. The ability to recover reasonable costs will support the capacity and capability of specified public bodies. This in turn will encourage timely and high-quality inputs into the process.

As in other infrastructure consenting regimes where cost-recovery principles have been introduced, the regulations will be used to set out that fees may not exceed the costs reasonably incurred in providing the relevant services. The clause states that the regulations may make provision in respect of

“what may, and may not, be taken into account in calculating the amount charged”.

This provides a satisfactory basis on which to achieve the intention of the amendment. As part of stakeholder engagement, the Government will rightly continue to engage to understand the potential financial implications for highways authorities, prior to introducing regulations. The Government believe that, taken together, our commitments to produce statutory guidance alongside the regulations will ensure that the fees charged by prescribed bodies are done only on a cost-recovery basis and will provide appropriate flexibility in the light of changing circumstances to review and adjust fees where necessary and justified.

In respect of transparency, local authorities are already under a duty to maintain a system of internal audit and to appoint external auditors to audit their accounts annually. Government departments and their non-departmental public bodies in England are audited by the National Audit Office on behalf of the Comptroller and Auditor-General. The Welsh Government and their non-departmental public bodies in Wales are audited by Audit Wales on behalf of the Auditor-General for Wales. The department allocates capital funding to local highways authorities so that they can most effectively spend this funding on maintaining and improving their respective networks based upon their local knowledge, circumstances and priorities. It is therefore for the respective highways authorities to determine how best to spend this funding to fulfil their statutory duty under Section 41 of the Highways Act 1980.

Precedent from other regimes with cost-recovery principles directs that the matters identified in the proposed amendments can be satisfactorily addressed through secondary legislation and guidance. In so doing, that will provide suitable flexibility for the operation of a cost-recovery regime in the event of changing circumstances.

The points proposed in the noble Lord’s Amendment 53F are important. It is the intention, as in other transport-consenting regimes with cost recovery, that they will be addressed through secondary legislation. The regulations will, among other things, explain how fees should be calculated and when fees can and cannot be charged, as well as specify which bodies can charge fees.

I turn finally to Amendment 53M. Clause 40 is an enabling power that allows the Secretary of State in England and Welsh Ministers in Wales to make provision through regulations to charge fees for services provided to support Transport and Works Act applications. As in other infrastructure-consenting regimes, where cost-recovery principles have been introduced, the regulations will be used to set out that fees must not exceed the costs reasonably incurred in providing the relevant services. These regulations will detail not only the bodies that will be able to recover fees but the basis on which fees should be calculated. The regulations will also consider circumstances in which fees may or may not be charged and when these fees may be waived or reduced.

Taken together, the Government believe that our commitments to produce statutory guidance alongside regulations will ensure that fees charged by prescribed bodies are done only on a cost-recovery basis and provide appropriate flexibility in the light of changing circumstances to review and adjust fees where necessary and justified.

The noble Lord, Lord Moylan, asked what the prescribed bodies are. I am happy to write to him to set out which bodies the Government have in mind. The sorts of services that might be included are, for example, providing advice on significant adverse effects on the environment and mitigating those effects. The Environment Agency might, for example, provide advice on surface water flood risk from a new highway and how to mitigate it.

The noble Lord, Lord Grayling, referred to punitive charges in certain circumstances. While I sympathise greatly with the idea that all public bodies should behave in a timely and proper manner, I am not entirely sure that punitive charges ought to be set out in an arrangement that seeks just to make the system work better.

[Lord Grayling (Con)]

It may be that this is not the right vehicle for this, but most local authorities do not have the resource to inspect works carried out by utility companies, for example. As a result, the works tend to deteriorate faster than they should do. Putting in place a punitive regime to enable a local authority to apply fines would provide additional resource for extra inspections. That is something that, in hindsight, I wish I had been able to do and which the current Government could do.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention and I am very sympathetic to his point. He is quite right. He and I both know that, on many occasions, reinstatement works are done badly and do not last long. The recovery of inspection charges to find that out is reasonable; punitive charges beyond those levied for work reasonably incurred are probably not reasonable. This may not quite be the vehicle to do it, but I have every sympathy with what the noble Lord is saying. As he probably does, I inspect pavements and roads almost daily and despair at their condition.

I will deal with my noble friend Lord Liddle’s point on Amendment 71 when we get there, even though he will probably be in transit to somewhere else. I will take away the points about run-off water, which were debated by the noble Lord, Lord Whitty, and the noble Baroness, Lady Pinnock, and reflect on the extent to which they are covered by these amendments.

I thank the noble Lord, Lord Moylan, for tabling these amendments and appreciate his interest in these clauses. However, I ask that he withdraws Amendment 53C.

Rail Freight

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Monday 14th July 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness may know that, actually, that is not a new scheme. In respect of rail freight to Europe, the Government clearly have an interest in promoting it. The Channel Tunnel has plenty of spare capacity, as does HS1. In respect of carrying lorries by rail in the UK, that has been tried before. I think it is up to the private sector freight market to develop its own flows, but the Government are there to help with access and access charges in order to get that traffic on the railway.

[Lord Grayling (Con)]

My Lords, I refer to my entry in the register as an adviser to Hutchison Ports. I looked carefully through last week’s announcement. I could not see anything in the Government’s plans that would deal with the bottlenecks in the system that prevent rail freight growth. Can the Minister enlighten us as to when those might be addressed?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord has, of course, some background in this subject, but the Government in his time were unable to invest significantly in increased access for freight, and the fiscal position has not allowed as much investment in that area as the Government would clearly like in unconstrained circumstances. Nevertheless, there are investments to be made now in the network which have been announced, such as the investments in the TransPennine upgrade and in East West Rail, which will facilitate more rail freight.

Passenger Standards Authority

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Tuesday 11th February 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

We have been working hard to ensure that the new PSA will be a powerful watchdog, making sure that passengers have an independent voice in the industry which stands up for them. It will have increased powers, enabling it to become a strong advocate through holding GBR to account for improving the passenger experience, and particularly for disabled people, as discussed during the passage of the public ownership Bill. The public consultation I referred to will seek the views of the public and industry on the proposed scope and functions of the PSA. After the consultation is published, I will be happy to meet the noble Baroness and other interested noble Lords to discuss it.

[Lord Grayling (Con)]

My Lords, the Government are establishing a passenger standards authority, but Network Rail says that the industry should not use the word “passenger”. Who is right?

[Lord Hendy of Richmond Hill (Lab)]

The document that the noble Lord refers to was actually published during the time he was the Secretary of State for Transport—by Network Rail, I should say—so it is not a recent document. It is advice about writing letters using words of fewer than four syllables, and it is in fact good advice. Much of the correspondence that the noble Lord must have been given in his time as Secretary of State, which I am given as the Minister and which I was given as the chair of Network Rail, was indigestible in practical terms, so a guide for people about how to write letters in simple English is a really good thing.

Airport Expansion

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Monday 3rd February 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for that question, and this department will do all it can to facilitate the reopening of Doncaster Sheffield Airport.

[Lord Grayling (Con)]

My Lords, I was the Secretary of State who took this proposal through the Commons seven years ago, and I declare an interest as an adviser to AtkinsRéalis. The Chancellor suggested that work on the runway could begin before the end of this Parliament, which is only in four years’ time, and that for that to happen, it would be necessary for the process to start part-way through it. Do the Minister and the department believe they have to go back to square 1 and start from the beginning with a national policy statement and then a DCO again, or do they believe that that process can be short-circuited and they could start somewhere further down the track?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord is very familiar with the processes that have been gone through so far. The answer to that question is that it really depends on what is submitted by the promoter this summer. We all know that there was a proposal for a third runway in the north-eastern quadrant of the airport. To start with, it depends very largely on whether that submission is very similar to the one the promoter made previously or if there is something substantially different.

Bus Services (No. 2) Bill [HL]

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Tuesday 28th January 2025 Grand Committee

[Lord Grayling (Con)]

Will the Minister accept a challenge on that point? He will know that, in terms of the current role of local authorities in areas such as mine, if that happens, they will step in and provide a service where the private sector cannot do so. It is not as if there is a total vacuum and the local community is completely exposed to the decisions taken by the bus operator.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his interjection. In his case, it is true, but there are other cases where the market has shown a considerable inability to respond across the country.

To conclude on Amendment 14, it is for the reasons I gave that I ask the noble Lord, Lord Moylan, not to press his amendment.

Amendment 15 in the name of the noble Lord, Lord Moylan, would require a local transport authority to carry out a preliminary assessment if it was considering franchising its bus services. Much of what the noble Lord has proposed to be included in the preliminary assessment is already included in the current legislation and must be included in the local transport authority’s franchising assessment. An assessment may or may not conclude that franchising is the best option. The assessment would then be published if an independent assessment had been carried out and the decision was that franchising was the best option. This amendment is therefore unnecessary, and I would welcome the noble Lord not pressing it.

Amendment 16 in the name of the noble Lord, Lord Moylan, seeks to impose a five-year moratorium on repeating franchising scheme assessments in the same area if the previous attempt was unsuccessful. The aim of the Bill is to simplify the process for authorities wishing to pursue franchising, ensuring that decisions are made at the appropriate level and in a timely manner. This amendment would introduce unnecessary constraints on local transport authorities by adopting an overly rigid approach. There are many factors that might lead an authority to decide against pursuing franchising initially, only to reconsider this later; indeed, the period of time suggested by the noble Lord would in some cases exceed the cycle of local authority elections, in which a different party that chooses to do something different might be elected. Imposing a blanket restriction limits authorities’ ability to respond flexibly to evolving conditions and opportunities. Assessments are costly and time-consuming so will not be undertaken lightly. This amendment is unnecessary; I hope that the noble Lord will not press it.

Driving Tests: Secondary Market

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Monday 13th January 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I have no need to do that; my noble friend has just done it for me.

[Lord Grayling (Con)]

My Lords, the Minister has just said that 25% of tests appear to go through some of these third-party sites. My noble friend has also said that some of these sites are genuine scams. Why is it that any driving test can be booked anywhere except on the official DVSA website? Why can he not just sort that?

[Lord Hendy of Richmond Hill (Lab)]

One of my colleagues said, sotto voce, “For the same reason that you did not”, which is perhaps not an unreasonable point.

Cost of Living: Rail Fares

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Monday 6th January 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his comments on Baroness Randerson.

On the future of the fares structure of the railway, it is overwhelmingly likely that, whoever the Secretary of State is, they will continue to have a strong interest in the fares structure of the railway. However, the proposition is that Great British Railways will be responsible for both revenue and cost, and therefore will have some freedom to set fares. It is true that I had hoped that the consultation document would be available before Christmas, but clearly that was not the case. The passage of the seasons in political time is variable, but I am going to promise that it will be available in the next few weeks.

[Lord Grayling (Con)]

My Lords, the Government promised us that public ownership of the railways would mean lower fares and better performance. We already have four previous franchises run by the state—that is, run by him and his department. Have those four areas experienced lower fares and better performance?

[Lord Hendy of Richmond Hill (Lab)]

The first thing to say is that public ownership of the railways, as the noble Lord knows, is not the only issue that needs to be resolved for the railway to run better. He will also know, because he was there at the time, that two of the companies were taken over at times of great distress in either performance or commercial performance, and that there are companies among those four where better performance and innovative fare structures have delivered a real result, notably the London North Eastern Railway.

The noble Lord must know that the performance of Northern is not very good, but also that it has been in public ownership for six years. I have said from this position before that industrial disputes there have been going on for so long that the management could not immediately enumerate how many they had got. That seems to me to be a failure of the previous Government and of the previous regime, because if you take a railway company into public ownership then you should seek to resolve its performance issues. This Government intend to do just that with those train companies which are already in public ownership but not performing in the way that London North Eastern Railway is.

Franchising Schemes (Franchising Authorities) (England) Regulations 2024

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Tuesday 5th November 2024 Grand Committee

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

My Lords, these draft regulations relate to access to bus franchising powers for all types of local transport authorities in England outside London. The regulations bring into effect paragraphs (b) to (g) of Section 123A(4) of the Transport Act 2000, such that the types of authorities listed in those paragraphs come within the meaning of “franchising authority”.

These powers were previously limited to mayoral combined authorities and mayoral county combined authorities. However, these regulations give all types of local transport authorities access to powers to franchise their bus services. In doing so, they will ensure that decisions are made at the right level. These regulations aim to give the power to local leaders to determine the most appropriate action to deliver an improved bus network, based on the needs and circumstances of their areas. This step does not mandate local transport authorities to franchise; it is about providing them with a suite of tools to support their communities and deliver better bus services.

The department will build on the progress of these draft regulations through the introduction of the buses Bill later in this parliamentary Session. The Bill will deliver further changes to make bus franchising easier to deliver, alongside other measures on areas such as accessible travel. It will also improve bus services for local transport authorities that choose not to franchise, allowing greater flexibility over bus funding and letting local leaders deliver their own local transport priorities. Alongside this, the department is building its capacity to provide practical support to local transport authorities throughout the franchising process, should they wish to pursue it.

I will now provide some background information about these regulations. Bus franchising powers for local transport authorities in England, outside London, were created in the Bus Services Act 2017. Powers were automatically given to mayoral combined authorities and mayoral county combined authorities to allow them to prepare a franchising scheme assessment—essentially a business case—if they chose to do so, without requiring consent from the Secretary of State for Transport.

Currently, all other types of local transport authorities wishing to prepare a franchising scheme assessment face a two-stage pre-assessment process. First, regulations must be made which switch on access to the franchising powers. Secondly, the Secretary of State for Transport must give her consent to any individual authority to prepare an assessment of their proposed franchising scheme. This instrument implements the initial stage of this process for non-mayoral combined authorities, ensuring that they will need to obtain the Secretary of State’s consent only to prepare a franchising scheme assessment. This will reduce the barriers facing these types of local transport authorities in pursuing bus franchising.

I turn to the detail of the regulations. Bus franchising is a model for providing bus services where a local authority determines the details of the service and private operators are contracted to run the services. Alternatively, in a deregulated market, any company, subject to minimum safety and operating standards, can operate and have control over bus services. These regulations seek to empower local leaders to choose the model that works best in their area to manage their bus services. Bus franchising is one of those tools. Alternatively, local transport authorities can pursue high-quality enhanced partnerships with private operators or public ownership.

These regulations are part of the Government’s delivery of their manifesto commitment to give

“new powers for local leaders to franchise local bus services”.

Bus franchising will give communities a greater say in the services they can use, connect people to opportunities and benefit those on lower incomes, who disproportionately use buses.

This instrument implements the first stage of this process for all types of local transport authorities so that they require the Secretary of State’s consent only to proceed with the assessment. The department is also revising the bus franchising guidance to streamline the franchising process. The Government consider that this onerous process has acted as a barrier to local authorities. Removing the first stage of this process will make it easier for local transport authorities to pursue franchising if they wish to do so. The regulations improve the suite of tools on offer for local transport authorities to deliver better buses.

I am pleased to say that the statutory instrument was cleared without comment by the Joint Committee on Statutory Instruments. To address the only request made by the Secondary Legislation Scrutiny Committee, for more information on franchising, the department is also revising its bus franchising guidance, which sets out the franchising process accessibly and in detail.

These regulations represent an important first step towards delivering on the Government’s aim of ensuring that local authorities have the tools they need to plan and deliver services in a way that suits their communities. The forthcoming buses Bill, which will be introduced later in this parliamentary Session, will build on this progress. Through this instrument and the forthcoming Bill, the Government will deliver on their plan for improving the bus network and ending the postcode lottery of bus services. The plan is centred on putting control of local bus services back into the hands of the communities that use them and will give local leaders the freedom to take decisions to deliver their local transport priorities. I beg to move.

[Lord Grayling (Con)]

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

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

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

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

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

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

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Tuesday 29th October 2024 Lords Chamber

[Lord Grayling (Con)]

My Lords, I rise briefly to support my noble friend’s amendment but perhaps from a slightly different perspective to his, given his—and indeed the Minister’s—track record, which had a strong focus on London. I believe it is very important to ensure that there is a clear explanation and, frankly, that there are detailed rules about how the interaction takes place around the London boundary, simply because there is a democratic issue here as well.

The noble Lord, Lord Berkeley, made reference to the attempt by the mayor to take control of the Southeastern franchise some years ago. I blocked that, for two reasons. First, there was a significant level of opposition outside London to that transition taking place—the sense that the mayor should not be running services that cross into Kent, Surrey and so forth—including strong opposition from local MPs. Secondly, there is the issue of fragmentation: who operates which depot, how do you divide the franchise in half and so forth? It is important to maintain a system that is simple and as easy to run as possible.

None the less, there is and will always be an issue around how the mayoral responsibility for services that cross the boundary interacts with services operating under the control of shadow Great British Railways and subsequently Great British Railways, how they interact and work together, and how the whole system is managed. While I do not support my noble friend’s level of enthusiasm for devolution because I worry about fragmentation, it is none the less important in this new world to have very clear guidance, rules and methodology about how the system in London will operate with the system that crosses paths with it around the London boundary and, indeed, into the termini in London.

I think my noble friend has put forward an important point here. Although we have a slightly different perspective on this, I very much hope that the Government will adopt this proposal, because I think it is the right one.

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

My Lords, I start by reminding the Committee that this is a short Bill, simply to bring back the national railway operations into public ownership. This is a popular policy with the public, absolutely necessary to making the railway run properly, and a necessary precursor to a more major Bill next year.

I thank the noble Lord, Lord Moylan, for this amendment, which would require not a report this time—although he has sought to require many—but Statements to Parliament about the relationship between services in Greater London provided under contract to TfL and those for which the Secretary of State is responsible.

There is no reason to expect the Bill, which allows train operations to transfer from private operators into public ownership, to have any adverse effect whatever on the existing collaboration between operators and TfL. The Bill makes no change to the existing duties on the Secretary of State for Transport and on Transport for London under Section 175 of the Greater London Authority Act 1999 to co-operate and co-ordinate passenger rail services in London. Like many noble Lords in the Committee, I know from my own experience how that works. I think we can all conclude that it has worked very satisfactorily so far and there is no reason why it should not continue.

The Bill will not have any adverse effect on those services: substantially the same staff will be running those trains under public ownership on the national railway network, as they do now, so there should be no concern about a sudden deterioration of service. In fact, I expect it to improve: publicly owned operators will prioritise the interests of passengers, rather than exploiting contractual conditions in pursuit of short-term profit.

The Bill says nothing about the devolution of further passenger rail service to the Mayor of London. It would not prevent further devolution, and nothing I have said would prevent that. If they were devolved, they could be operated in the same way as the current London Overground services are operated, under a concession from Transport for London.

When I said, as the noble Lord, Lord Moylan, quoted, that there is no current plan for further devolution, that was an accurate statement. Of course, it may not be an accurate statement in the future, but when I wrote the letter to him and other noble Lords and Baronesses, it was true. We will see what happens. It is only a few weeks since what the mayor said in July and, if he does have aspirations to operate further services, I am sure there will be a cordial discussion under the auspices of Section 175 to discuss whether and how that is carried out and the costs of doing it.

The noble Lord is also mistaken on Manchester. Certainly, the evolving situation I described with the Mayor of Manchester and Transport for Greater Manchester is that services would be operated not by Network Rail, because that is currently an infrastructure provider, but by a train company. In fact, it is most likely to be Northern Trains, which is already owned by the public sector and has been for four years.

As I have already said, I give a commitment that the future, wider Bill will give a statutory role for combined authority mayors that is better than any they have now. I have just repeated it for the avoidance of doubt. In that case, it is under Section 24 of the 1993 Act. If they were to want to operate train services, this Bill does not alter Section 24 and that would be a discussion that could be had. I described the situation as I understand it currently unfolding; in fact, they do not wish to do that, but the Secretary of State could devolve more under Section 24 if she chose to.

At the moment, if I have counted correctly, the operation of rail services in London is currently the responsibility of eight different franchised operators, plus two more under contract to Transport for London. That is without the long-distance operators whose services start and finish in London but do not otherwise serve the London market directly and, indeed, Network Rail, which is responsible for the physical railway infra- structure. Public ownership and subsequent integration into Great British Railways will simplify all this by bringing the currently franchised services together in ownership in one place. If TfL wishes to discuss or influence the provision of other rail services across Greater London in the future, it will have an easier job of engaging with Great British Railways. It will be assured that the train operators that are performing will be interested in acting in the interests of passengers.

The noble Lord, Lord Berkeley, asked where I think it is all going. I will come back and answer that on Report.

It was a pleasure to hear the noble Baroness, Lady O’Neill, talking about the particular circumstances of Bexley, and it is nice to see her in her place. I do not envisage any immediate change to the railway geography of south-east London. I cannot answer for much of the rest of what she said in the way that I once could, as the commissioner of Transport for London, but I am sure that she knows where to go to make the points about the Superloop, ULEZ and the other things she referred to for the benefit of her borough of Bexley.

The noble Lord, Lord Gascoigne, referred to Crossrail 2. It should be evident—I hope it is from what I have now said about Section 175—that, were Crossrail 2 to be promoted and come into effect, it would, like Crossrail 1, be complex, but the outcome would be a significant transfer of services to the mayor, because it would, and hopefully will, eventually take over some national railway services. The ease with which Crossrail has taken over former national railway services in London and transformed them into a coherent service for the benefit not only of London but the national economy would be replicated in Crossrail 2. Nothing in the Bill would change that; nor would it change the way that Crossrail was funded had it been proposed now, or the way Crossrail 2 would be funded if it were proposed in the future.

The answer to a lot of what has been said about the Overground is that the Bill primarily seeks to remedy those parts of the railway network that patently do not work well. I would contend—I have always contended in all my roles and in this one too—that the railway service in London works. It works because it is coherent, and there is no reason for the Bill to interfere with it.

I was very interested to hear from the noble Lord, Lord Grayling. I remember well his position on the devolution of Southeastern services, and he is right that many of them go well beyond the London boundary. There is a democratic issue about how well they serve the areas outside the boundary, and his recollection is correct that at the stage at which it was proposed— I recall it well because I proposed it, even if it was politically advocated by the mayor—it cost more to operate those services separately than it did together. That would be quite a good reason to think carefully about whether a proposition could now be made to do it differently. In a sense, he is making my case because one of the things that we need to have some regard to in a post-Covid railway, with less revenue but similar costs, is the cost of the whole thing. One of the reasons for the proposition in the Bill is to start to sort out the costs of the railway, increase its revenue and improve its performance.

I listened carefully to the remarks made by the noble Baroness, Lady Pidgeon, on devolution and I intend to come back to them on Report.

The Government’s plans will improve co-operation, not hinder it, so I see no need for the statement envisaged in the amendment of the noble Lord, Lord Moylan. I am sure that all involved will work together to ensure that publicly owned and TfL services can co-exist effectively side by side. On that basis, I urge the noble Lord to withdraw his amendment.

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Hendy of Richmond Hill and Lord Grayling

Committee stage
Monday 21st October 2024 Lords Chamber

[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.