Road and Rail Projects

Debate between Lord Hendy of Richmond Hill and Lord Teverson

Monday 14th July 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord is right: this subject has come up before. There is a real difference in the current circumstances. Rail projects are all classified as England and Wales in the way that this is done. The real difference in this list is that, for the first time, there is a significant commitment to funding rail enhancements in Wales: £300 million or so in the spending review period, and a total of over £450 million in 10 years.

The current Welsh Government, particularly Ken Skates—whom I happened to meet this morning on the subject—and the Secretary of State for Wales, agree that the schemes that have been announced for development and implementation are the right ones. There are schemes for the south Wales main line arising from the Burns report, and there are schemes for the north Wales main line to improve train frequency and connectivity. There is a scheme for Wrexham to Bidston—curiously, in these documents it is referred to as Padeswood sidings, about the most obscure title that you could imagine—which is designed to make some freight improvements to double the frequency from Wrexham to Bidston. There are also a number of other things. The significance of this announcement is that it commits money to Welsh railway schemes— schemes that the Welsh Government agree need to be taken forward as the most urgent—and I hope that the noble Lord welcomes that.

[Lord Teverson (LD)]

My Lords, like my noble friend, I was rather surprised by the tone of the Official Opposition, given the billions of pounds wasted on HS2 just to provide a shuttle—a high-speed shuttle, admittedly—between a north London suburb and Birmingham. What a waste of time and national resource that was.

I very much welcome a number of initiatives in the Statement. Like the noble Lord, Lord Berkeley, I travel up from Cornwall normally, and I welcome the stations at Wellington and Cullompton, and the opening of the line to Portishead, for which we have waited for some time. The Minister mentioned the Tavistock line, and I rather regret that it looks like that will not happen in my lifetime, but we will see.

As someone who is not a rail expert, I will ask the Minister two things. I do not understand why we do not have a regular electrification programme in this country for the whole of the rest of our network, because of both running cost—the cost of rails and the weight of the machines—and our carbon footprint. Why do we not just have the skills and ability to roll out electrification each year in a standard way that makes that work at minimum cost?

On signalling, I notice that there is one signalling exercise—on Newcastle metro—but a number of schemes are needed for signalling. I do not understand why, in these days of advanced technical expertise, AI and the rest, we do not just have in-cab signalling, rather than having to continually replace—very expensively—the physical signalling resources across our network.

[Lord Hendy of Richmond Hill (Lab)]

I am pleased that the noble Lord welcomes Wellington, Cullompton and Portishead. The answer with Tavistock is that there were so many schemes in what the previous Government promoted as Restoring Your Railway, which on the face of it looked to be an invitation to any community in the country to wish back the railway that was taken away 50, 60 or 70 years ago because, frankly, it did not have many people or goods using it. The answer to the noble Lord is for Tavistock and Plymouth to put forward a sound business case for that investment that would reflect the actual costs of building that railway. I have some experience of that scheme at a much earlier stage, when somebody rather optimistically claimed that it would cost £30 million to extend from Bere Alston to Tavistock. The reality is that it would be not reopening a railway but building a new one, and to do that you need very substantial economic activity there.

The regular electrification programme would of course reduce costs, but we have significant electrification going on in this country. The trans-Pennine upgrade is a very significant electrification project from York to Manchester, and that is in the course of delivery at the moment. When Mark Wild has sorted out HS2 in management and governance terms, as he will, it will be a very significant piece of electrification to be carried out by those people.

In the medium term, one of the answers is for us to have a strategy that embraces both rolling stock and electrification, because it is clear that modern technology allows battery trains and that battery trains could replace diesel trains on quite a lot of the network; they would not need total electrification, but they would need some wires. The noble Lord may have seen that the proposals for East West Rail do precisely that—there will be wires up where it is cheap and convenient to put them up to charge the train in order to charge the batteries for when it would need to go through other places.

The noble Lord raises an interesting point about signalling, but I think the noble Baroness, Lady Pidgeon, had it right about the European train control system on the south end of the east coast main line. We need to move away from like-for-like replacement of existing signalling. Still more difficult, the cost of those schemes means that, almost inevitably, while the aspiration to replace 1950s and 1960s signalling always starts with more flexibility and more capacity, that flexibility and capacity have always been deleted out of those schemes because they cost too much, and what you actually get is a like-for-like replacement at really quite significant cost.

The opportunity with the ETCS on the south end of the east coast main line is to embed a system that has in-cab signalling and does not require fixed assets on the railway but can run more trains on the same railway, because the trains are intelligent and know where each other are. The advantage of doing it on the south end of the east coast main line is that many classes of locomotive and multiple unit will be fitted with equipment, which will mean extending it. Therefore, using it to replace conventional resignalling will be far more possible in future than it is now. It is a thoroughly good thing, and the noble Lord is right that that is the way forward.

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Hendy of Richmond Hill and Lord Teverson

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Berkeley (Lab)]

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

[Lord Teverson (LD)]

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

[Lord Hendy of Richmond Hill (Lab)]

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

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

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

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

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Hendy of Richmond Hill and Lord Teverson

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Teverson (LD)]

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

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

[Lord Hendy of Richmond Hill (Lab)]

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

[Lord Hendy of Richmond Hill (Lab)]

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

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

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

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

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

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

[Lord Teverson (LD)]

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

[Lord Hendy of Richmond Hill (Lab)]

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