Passenger Railway Services (Public Ownership) Bill

Lord Kennedy of Southwark Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

Amendments 45 and 46 not moved.

[Lord Kennedy of Southwark (Lab Co-op)]

It is now 10.18 pm. I am unable to get agreement from the usual channels to finish the last amendment, which is a bit disappointing. If I cannot get agreement then we will have to adjourn. In all my years as Opposition Chief Whip, I have never been in a situation where one amendment cannot be finished off.

[Lord Moylan (Con)]

My Lords, I understand that there has been agreement with the usual channels. I do not think that the matter is in my hands.

[Lord Kennedy of Southwark (Lab Co-op)]

In this situation, the House will resume. It is very disappointing. Never in my time as Opposition Chief Whip would I have acted like that.

House resumed.

West Coast Main Line

Lord Kennedy of Southwark Excerpts

Tuesday 19th September 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

Many national rail contracts are already in place. Eventually, in due course, the Government would like to move to a different sort of passenger service contract. There is nothing out of the ordinary with this contract. It compares well to those of other train operating companies.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, in response to questions from my noble friend Lady Taylor and other noble Lords, the Minister talked about passenger satisfaction statistics. Can she say a bit more about the datasets behind these? What is the dataset? Who collected it? What was the sample size? I find these are often very small. I appreciate that the Minister may not have the information with her, but perhaps she could write to me and to other Members of the House with these details.

[Baroness Vere of Norbiton (Con)]

I will happily write to the noble Lord and to all Members of the House with an interest in this to set out how the net advocacy scores are calculated. Unfortunately, I do not have the information to hand.

Rail Services

Lord Kennedy of Southwark Excerpts

Tuesday 21st March 2023 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, may I just ask the Minister—perhaps I missed it—about bonus payments to executives? I may have missed it, but why do we think those are paid?

[Baroness Vere of Norbiton (Con)]

I am very happy to discuss what I know about it. Obviously, bonus payments are a matter for the companies themselves. They are not authorised by DfT or anything like that; it is a matter for the companies. There is often this thing about—and I think the noble Baroness referred to it—dividends, and I think it was £12 million. I cannot attest as to whether that £12 million is right or not, but I know that dividends that were agreed quite some time ago relate to a period from pre-Covid. Noble Lords may or may not be aware that the independent evaluation of the different rail contracts has been published only up to September 2021. There is still some more information to come; there is always a lag. Sometimes people say, “You are rewarding for failure.” No, that would be for a period that is not the current period; it would be for a period that was quite some time ago, because we, quite rightly given the complexities of the railway system, take the time for independent people to evaluate by the different criteria that are clearly set out, the different reasons why delays happen, why cancellations happen or why a company may or may not be performing as it should. Of course, we publish those things, but there is always a delay. Therefore, the money might not match up with the period that we are currently in. That is always important to remember.

[Baroness Vere of Norbiton (Con)]

I will put that in writing. I have some data here on executive bonuses. The total amount for the executive team for the financial year to 31 March 2021—a little while ago, which obviously covers a prior period—was £279,059. For the executive team, the Virgin Trains bit, it was more, at £2.5 million, but that of course related to a period a long time previously. The following year, total bonuses were £461,000.

I want to put on record that 20% of train drivers earn over £70,000 a year. I am not necessarily comparing the two, but this focus on bonuses for senior executives sometimes means that we do not look at what has happened to train drivers’ pay, which has gone up by more than the average over 10 years. As I say, 20% of them earn over £70,000 a year.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, the Statement refers to an extension to 15 October this year and says that the department is looking for improvements from Avanti over the next few months. It talks about more reliable weekend services, continued reductions in cancellations and improvements in passenger information during planned and unplanned disruption. Can the Minister say more about the measures that will be used to ensure that we get those improvements? If we are back here again in September and we have not had those improvements, where will we stand? Avanti needs to know that the Government are prepared, if need be, to take away its contract. At the moment, looking at the report, I am worried that they are not prepared to do that, and Avanti needs to hear from the Government that they are. Otherwise, there is no impetus to improve.

[Baroness Vere of Norbiton (Con)]

Absolutely. For the complete and utter avoidance of doubt, the Government are considering and will consider all options for both Avanti and TPE if they do not meet the required level of service. All the improvements we are talking about—to weekend services and passenger communications, and reducing cancellations—are set out in the recovery plan agreed with the Office of Rail and Road. It is content with it, and I know that the Rail Minister meets certain train operating companies weekly to go through the recovery plan. As I say, all possible options remain on the table. We have given the six-month extension to Avanti, until October. We will be making a further Statement on TPE when its contract ends towards the end of May, but it is too early to prejudge what the outcome will be.

As I say, we continue to look closely at the improvements that have been made. There have been significant improvements in the face of some challenging industrial relations, but I believe we are potentially over the worst now. I very much hope that we can bring our railway back to where I am sure all railway workers and passengers want it to be, and where our nation needs it to be.

[Lord Kennedy of Southwark (Lab Co-op)]

The Minister has told the House that there is a weekly meeting with the Rail Minister, and that is good to hear, but what else is happening behind the scenes? We would like to know a bit more about what is going on, because we all want to ensure a better rail service. Although I do not live in the north-east, I am conscious that many Members here do. What more is going on with the department? The Minister works with the Rail Minister every day, so what is actually happening?

[Baroness Vere of Norbiton (Con)]

I am struggling to understand the basis of the noble Lord’s question. What is happening is that the officials are working with the train operating companies and those companies are working with their workforces. Any contractual relationship with an organisation within the Department for Transport requires greater or lesser oversight, depending on what is happening. I cannot really add much more, other than it is government being government with one of its contractors.

[Baroness Vere of Norbiton (Con)]

I am happy to do so but, given that I have a tiny bit of extra time, I will knock another one on the head. On the booking window, I agree that it is very important that passengers have the confidence to book ahead. The booking window now extends to 12 June—another area where Avanti has shown real improvement. We understand that the weekend booking window is shorter, at five weeks, but that is in order to take into account engineering works. That is another example of the infrastructure side of the business impacting on the services side, and of course we want them to work closely together.

I will look at some of the noble Baroness’s other questions. I cannot see too many that I have not answered, but I will ask officials to look through Hansard and we will write accordingly.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, my apologies: maybe I am not explaining myself very well. Clearly, many Members here, and the travelling public, are frustrated by what is going on at the moment. I am trying to find out from the Minister, in addition to what is in the Statement and the weekly meetings, what work is going on between the officials and the rail companies. How do we ensure that when we get to October, we have those improvements? If there are still problems, what is happening next week, the week after and the week after that to ensure that we are not sitting here in September saying, “We’ve got another extension for six months. What we need to see is more improvements”? Currently, we still have all these problems, and it appears to the public that actually, not much is happening.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

The noble Baroness is of course in an extremely privileged position in that she can table Oral Questions or ask me Parliamentary Written Questions whenever she likes. I would be happy to answer those. I am sure that over the period, we will be back in your Lordships’ House to discuss Avanti; indeed, I believe there is a topical Oral Question on Thursday. I am not expecting that I will have anything at all different to say by then, but perhaps we can have a rehash of where we are.

Every now and again I have a little look at Avanti on social media, and things are much quieter than they used to be. What I see much more of now is the disruption caused by the strikes.

[Lord Kennedy of Southwark (Lab Co-op)]

I would like to move on to TPE. Will the Minister confirm that when we get the report—and I accept there will be another Statement about TPE before the end of May—taking the contract off it is still one of the options on the table?

[Baroness Vere of Norbiton (Con)]

It is.

Avanti West Coast

Lord Kennedy of Southwark Excerpts

Wednesday 7th September 2022 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, listening to the Answer, I am even more puzzled that the Department for Transport has awarded Avanti a £4 million bonus for operational performance, customer satisfaction and acting as a good and efficient operator.

When this issue was last raised, on 4 July, the Minister conceded that Avanti’s management of the west coast main line was terrible. Since then, ticket sales have been suspended, timetables have been cut, and now only 53% of trains are arriving on time. I am sure she can hear the frustration of the travelling public. Can she explain why the Government are not doing something immediately to end this shambles and outrage on one of our country’s major lines?

[Baroness Vere of Norbiton (Con)]

I absolutely agree that there is considerable passenger outrage, and rightly so, but this is not an issue that can be solved quickly. It is a twofold problem. On the first level, there is a backlog of training due to Covid. Training simply had to stop during that time. To train a train driver takes two years, and rightly so, because it is a safety-critical environment; we need to make sure that our train drivers drive our trains safely. However, that means that there is a backlog in training which will take a while to resolve. With the slightly reduced number of services, that could be coped with. As I said in the Answer, this problem stems from the unprecedented, immediate and near-total cessation of drivers volunteering for rest-day working. Do I think that operators should need to rely on rest-day working? No, I do not. We should run a modern, seven-day railway, and I hope that the unions will agree.

Railways: Bridge Strikes

Lord Kennedy of Southwark Excerpts

Tuesday 7th September 2021 Lords Chamber

[Baroness Vere of Norbiton (Con)]

Absolutely, and I can reassure the noble Baroness that I have already been on the case in this matter. Bridge strikes have not suddenly arrived on our doorstep recently, although I am pleased to say they seem to be coming down in number, which is a relief. I wrote to the Traffic Commissioners on 17 September last year, after a terrible bus crash—noble Lords may remember it—where the top of the bus, which had children on board, went into the bridge. It was a very serious matter. I asked the commissioner to remind all operators of their obligations, and he wrote me a very helpful response just a week later setting out a range of measures he would take, not only communicating with the drivers and operators but setting out what steps must happen when an event has occurred—there is usually a public inquiry, the driver may face suspension or revocation in more serious cases, and the operator can face sanctions relating to their licensing. So the Government do take this matter very seriously.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, my noble friend Lord Berkeley has highlighted a very important issue. Is the noble Baroness satisfied that the signage as set out in the Highway Code is as clear as it should be? I lived in the east Midlands, in Derbyshire, where there are a number of bridges. It is about not only the height of the vehicle but its width; sometimes the lorry arrives and the signage has not been put out properly for it to see the problem in advance. Can we look at that? If the noble Baroness is going to tell me that the signage is correct, what procedures are there to review the advice from time to time to ensure that the prevailing view is actually correct?

[Baroness Vere of Norbiton (Con)]

The regulations setting out what signs are needed are actually set out in chapter 4 of the Traffic Signs Manual, which is published by the DfT. We set out comprehensive advice on signage approaching a bridge to make sure that reduced height clearances are clearly set out in advance. It is up to the highways authority, under Section 41 of the Highways Act 1980, to make sure that the signage is appropriate. If noble Lords are aware of signs which they feel are insufficient, they should get in touch with the local highways authority, which has a responsibility to make sure the signage is correct. We feel confident that the Traffic Signs Manual sets out exactly what is required.

Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020

Lord Kennedy of Southwark Excerpts

Thursday 18th June 2020 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op) [V]]

My Lords, I agree with the call by my noble friend Lord Foulkes of Cumnock and the noble Lord, Lord Goddard of Stockport, for the Government to make every effort to get the Minister standing at the Dispatch Box on all occasions. I hope the Government Whip in the Chamber will take that point back to her noble friends the Leader of the House and the Government Chief Whip.

The noble Baroness, Lady McIntosh of Pickering, and my noble friend Lady Kennedy of Cradley raised important points regarding consumer rights with respect to refunds and vouchers. I look forward to the Minister’s response to these points, and to those raised by the noble Lord, Lord Goddard of Stockport, regarding the conduct of airlines and how they treat their staff and customers, echoed by my noble friends Lord McConnell of Glenscorrodale and Lady Ritchie of Downpatrick.

As we heard, these regulations are, on the face of it, fairly minor. We are using this transition period to make long-term changes and adjustments but, as we read at paragraph 2.4 of the Explanatory Memorandum, the policy context remains unchanged. Powers that were exercised by the European Commission are to be excised by the Secretary of State. It would be helpful to the House if the Minister could answer the point about what will happen in the future. The Government have taken these powers. Do they always intend to follow without question the European Commission’s decisions? “Take back control” does not appear to fit very well there. Or is the Government’s intention to take different decisions over time? If the latter is the case, could the Minister set out the process for doing so? How will that happen?

Aviation is global, by its very nature, and being global Britain it seems that we have to be part of international agreements to ensure that the UK aviation industry can compete in this new world we all find ourselves in. On that point, could the Minister set out any work done by the department to see what the cost will be of deciding to differ from the European Commission’s decisions, and what the process is for ensuring that any decisions made will not put us in breach of any further international agreements beyond the European Commission and cause our aviation industry further difficulties?

Paragraph 10.1 of the Explanatory Memorandum says that

“The Civil Aviation Authority has been consulted”,


but a subsequent sentence says:

“The devolved administrations and the aviation industry have been informed”.


Could the Minister please set out for the record what, in the Government’s view, is the difference and why the different approaches were taken? Who took the decision only to “inform” the devolved Administrations and the aviation industry, not “consult” them?

Finally, what discussions have taken place with the insurance industry? A number of noble Lords raised this point and I cannot find any reference to it in the Explanatory Memorandum.

Motor Vehicles (Tests) (Amendment) (Coronavirus) Regulations 2020

Lord Kennedy of Southwark Excerpts

Wednesday 13th May 2020 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, first, I thank my noble friend Lord Rosser for tabling this take-note Motion. It has enabled us to look at an important issue and to hear responses to questions from the noble Baroness, Lady Vere.

I support the extension but, as with much that the Government have done to address the Covid-19 pandemic, the communication has let them down. Therefore, my first question to the noble Baroness is: what can she say about the communication side and what lessons has she learned?

The purpose of the MoT is that, three years after buying a new car and then every year after that, you will get a professional to look at the car and certify that it is roadworthy. A car’s roadworthiness is a prime consideration for insurance companies. Can the noble Baroness tell the House what discussions she or her officials have had on this matter with the Association of British Insurers? Maybe the change brought in by this measure will not mean that your insurance is automatically invalidated, but it must raise questions if you are involved in an accident. Can she confirm what data is held on the DVLA’s motor insurance database, and has this data been updated to take account of the decision to grant this extension? Has she or her officials ensured that no driver will have a problem in getting their car insurance renewed as a result of the extension?

My noble friend Lord Rosser raised a number of serious points regarding the risk of an increase in the number of accidents due to a number of vehicles with serious or major defects that would have failed an MoT being on the road in an unroadworthy condition. I look forward to the noble Baroness responding carefully to the points raised by my noble friend. If a response cannot be given today, perhaps a detailed letter can be circulated to all speakers in this debate. What is the noble Baroness’s estimate of the time it will take to get the backlog of tests completed when this extension is ended?

I agree with the noble Lord, Lord Carrington of Fulham, about the risks to small businesses in Great Britain which do the testing and, often, the repairs to the vehicle that has just failed. I have done that myself when I have owned a car that has failed the MoT test: I have asked the garage that the car was at to do the repairs to bring the vehicle up to standard. It is convenient for the car owner; it is part of the business model of the garage; and it has qualified staff doing the tests and the work on the vehicle to bring it up to standard. What assessment have the Government made of the risks to businesses in those cases?

I thank all those who have taken part in this debate and look forward to the response of the Minister.

Railway Services: The Pennines

Lord Kennedy of Southwark Excerpts

Thursday 17th January 2019 Lords Chamber

[Baroness Sugg]

My Lords, passenger safety is our top priority. Driver-controlled operation is safe, and more than 50% of all rail journeys in the UK are made on driver-controlled trains. On the specific issue in question, the Transport Secretary has offered guarantees of employment to members who currently fulfil the role of a second person on the train—that is beyond the length of the franchise.

[Lord Kennedy of Southwark (Lab Co-op)]

Will the Minister outline what improvements there will be for Bradford? It is our fifth-largest city, and yet it still takes more than 20 minutes to make the seven-mile journey to Leeds. It is not good enough.

[Baroness Sugg]

We have extensive investment planned for the north. Northern Powerhouse Rail is currently in the development stage, and options are being considered which include serving Bradford. We will be working closely with cities across the north to deliver those improvements and services.

Buses

Lord Kennedy of Southwark Excerpts

Thursday 8th March 2018 Grand Committee

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I join other noble Lords in thanking the noble Lord, Lord Bradshaw, for tabling this Question for Short Debate. It is very good to be able to discuss this important issue. I also draw the attention of the Grand Committee to my interest as a vice-president of the Local Government Association. As we have heard, buses are an important lifeline for people, and the decline in bus use outside London is a serious problem that is affecting the viability of communities, particularly rural communities and those areas in our towns and cities less well served by other modes of transport, as they strive to be sustainable.

The noble Earl, Lord Arran, referred to the cuts in funding to bus schemes by local authorities and the effect that this has had on rural communities. I agree with him. I also agree with his comments about the need for effective bus services to enable people to get to work. Rural areas will suffer further decline if working people cannot live there and get to work—a point made by the right reverend Prelate the Bishop of St Albans.

The noble Baroness, Lady Scott of Needham Market, also spoke about rural areas and the dire problems experienced there with the decline in bus services. The risk of course is that they become places where people in cities have second or weekend homes, and that further exacerbates the problem until an area becomes unsustainable and dies. The right reverend Prelate spoke about the need for thriving communities, and I agreed with his comments about loneliness. Bus use and the provision of bus services have to be part of integrated services to make communities viable. Their decline is doing huge damage. The noble Lord, Lord Bradshaw, spoke about car use and car parking. Work is going on to deter this but, as he said, it is not matched by a good bus service being in place to encourage people to get out of their cars and on to buses.

As we have heard, about half the bus journeys in England are made outside London, and, since bus deregulation in 1986, these are largely delivered by private operators. The Bus Services Bill was passed into law in 2017 and generally it is a good piece of legislation. It certainly seeks to help reduce the decline in bus use outside London. It has been on the statute book for only a year, which is probably too short a period to see whether it is having the desired effect.

However, generally there has been a downward trend in bus use over a number of years in both metropolitan and non-metropolitan areas. Bus deregulation may have played a part in that, as operators have sought to work on the more profitable routes without the constraint of the routes, timetables and fares being set for them, as has been the case in London for many years. I agreed with the point that the noble Lord, Lord Bradshaw, made about congestion. That has been a real issue affecting bus use in recent years.

Of course, the decline in bus use could be attributed to other forms of public transport coming on stream in addition to the railways. I have certainly noticed light rail and modern tram services in some of our major conurbations, such as Greater Manchester, the West Midlands and Nottingham. There may also be other issues affecting bus use. We have heard about the reductions in spending as local authorities have had to take account of their resources, and that has had a knock-on effect on the money spent on buses.

Car use is still high in rural areas and, as services have declined, the reliance on car journeys has increased even more. One bus in and one bus out a day from a town to nearby villages five days a week does not deliver the required level of service. You then get a self-fulfilling prophecy of decline, which has a huge impact on communities.

There are also issues with bus fares, operator revenues and government grant schemes, which, again, have had an effect on bus numbers and need to be taken account of. The noble Lord, Lord Bradshaw, made a point about the effect of bus punctuality. We in London are very lucky with the number of buses that we have but in fact London has the worst punctuality rate in the whole of England. There is always another bus coming along, so no one knows whether it is late or not.

Earlier, I mentioned the Bus Services Act 2017. As I said, this was an attempt if not to increase bus use then certainly to halt its decline, and I wish that legislation every success. Work being done to make buses more user-friendly is to be welcomed. I was particularly pleased to hear that audio-visual services on buses outside London are to be improved. That should help to make disabled people more confident about getting on buses. Perhaps the noble Baroness, Lady Sugg, can update us on that when she responds to the debate.

We have had various partnership schemes between bus operators and local authorities for many years. These have not stopped the decline in bus use but they may have slowed it. The enhanced partnership schemes introduced by the Bus Services Act are a further extension of that. If the noble Baroness can say what has happened since the Act was brought forward, that would be helpful, although I appreciate that it has been in force for only a year. I am aware that there is a procedure to go through, including consultation and the issuing of notices, but anything that she can say will be helpful and I look forward to hearing from her.

One thing introduced in the Act, of course, was bus franchising, which was very welcome. But one thing that I was unhappy about was the obsession of the Government with metro mayors. You got these powers by default rather than having to apply to the Secretary of State only if you had a metro mayor. That is a regrettable decision and not very localist. I am aware that Andy Burnham in Greater Manchester, Steve Rotheram in Liverpool and Tim Bowles in the West of England have all pledged to use the powers. I am not sure how far they have got yet in establishing a scheme, but I was surprised that Andy Street, the Conservative metro mayor for the West Midlands, had not made any pledges at all. I actually know the West Midlands really well. I lived there for many years, and that certainly is one area that could do with a system where a bus franchise could have its timetable, fares and routes regulated much more by the metro mayor. I hope that he changes his mind. If the Minister has any more information, I would be pleased to hear it.

We have heard about open days, which would be useful to make things more helpful for bus users. I was particularly interested to read the briefing from Age UK about the problems older people have in getting to, for example, hospital appointments. As I said, having one bus in and one bus out a day really is not helpful to get you to hospital appointments. The quality of the buses, uncomfortable journeys and inconvenient times are all issues. Of course, what happens then is that people either have to have very difficult journeys or they revert to cars or taxis, which cost more money. I think that is a shame. Perhaps the Minister could say something about what we can do to ensure that there is better non-emergency transport for patients, either through better bus services or through other schemes. That, again, is one of the regrets we had in the Bus Services Act. I won an amendment here to delete that ridiculous clause about no more municipal bus companies, but then it was reversed. We never intended to have a stampede of bus companies, but it was a shame that councils could not now do something in little local areas to deal with the problems there.

I think my time is up, so I will cut my remarks there. I look forward to the Minister’s response.

Rail Update

Lord Kennedy of Southwark Excerpts

Monday 5th February 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

I thank the noble Baroness for repeating the Statement made in the other place earlier today. Railways were privatised in 1994. Whatever we think of privatisation—there was lots going on at that time—it is fair to say that it has not gone well over the last few years. There were problems with Railtrack, Network Rail and various companies, and here we are again with another problem with the railways.

Today’s announcement by the Secretary of State, repeated by the noble Baroness, is just another monumental misjudgment, and adds to a growing list of miscalculations by the Secretary of State. I do not think that taxpayers or rail passengers are at the heart of this, or the rail industry itself. The culture in the Department for Transport is not serving the taxpayer or the travelling public well. I regularly use the railways in and around London as well as to and from the Midlands and the north of Scotland. With all the times that I have been detrained at Doncaster and elsewhere, and the problems and frustrations on the east coast line, it is really just not good enough.

It is frustrating to hear in the Statement what the Minister said about the new tender, that of course we cannot prevent the provider from actually tendering, because legally we are not allowed to do that. That is fair enough, but I recall the public sector being prevented from tendering for this contract; it was running it very well but was not even allowed to tender, which is very frustrating. If we want to get the best value for taxpayers, you want to get the best service possible.

I just do not believe that making direct awards to Virgin/Stagecoach on the west coast or east coast represents good value for money at all. I am really not convinced by that one little bit. We now have a number of train companies getting contracts without competition; many of our routes are now run that way—west coast, Great Western, east Midlands, CrossCountry and now east coast. That is because the Secretary of State is ideologically opposed to the public sector running railways; that is the political dogma that we have here today in front of us.

The Statement from the Minister is lengthy, and I have a couple of questions. The Statement said that the problem was that Stagecoach got the numbers wrong, that it overbid and is now paying the price. Maybe the Minister can explain to the House whether, when the bid was submitted—I assume that it was analysed and looked at—anybody anywhere thought, “Oh, maybe they’ve got their figures wrong here”. At the end of the day, of course you want to get a lot of money for your contract but, if it was actually not going to work, why did nobody spot that? Were any questions raised anywhere, when that contract came in? I would be very interested to hear what happened with that contract. Also, with regard to contracts in future, what is going to happen there?

The Statement talks about ensuring the,

“smooth running of the east coast franchise for its passengers”.

Can the Minister say a bit more about that? How will the Government ensure that it will be a smooth operation with no problems for passengers? I like the idea of this short-term, not-for-profit basis for a railway. That is the policy of the Co-operative Party. I have been a member of that party for many years, and we have a policy for a people’s railway, with the whole railway run on a not-for-profit basis. So I am delighted to see that, even if it is only in one small part of the policy, the Government have actually taken that point on board.

Can the Minister say a bit more about the operator of last resort? Who would that operator actually be? How would it actually be done? On the legal advice, the Minister said that they could not actually exclude Stagecoach or anyone who failed. Would it not be wise to draw up the contract in such a way that, if an operator fails to deliver on it, they cannot come straight back in and have that contract again? They may need to look at that as well because, if they cannot get the bid right, what is the point of having people running it who cannot get it done properly?

I shall leave it there and look forward to the Minister’s response on the issues that I have raised.

[Baroness Randerson (LD)]

I start from a rather different position, as I do not believe that the answer lies in renationalisation—but I am sure that the Minister will accept that things are not going well. We have had the fiasco of Southern and we have had Carillion being given more and more contracts, despite the profit warnings. We have had HS2 and the unauthorised payments, and now we have the east coast. The DfT seems to be presiding over a tale of muddle and huge commercial misjudgment.

The Secretary of State in his Statement says that Stagecoach/Virgin overbid. We all knew that it had done so; there was commentary in the commercial press at the time by other operators that this was a hugely overoptimistic bid. Why did the DfT allow that bid to go ahead if it was unrealistic?

The Statement says that,

“the franchise had breached a key financial covenant”.

Can the Minister please explain to us what that is, and why they are stepping in now as opposed to at any other point?

Much is made in the Statement of the £1 billion return to the public purse, but does the Minister accept that the railways are run as a service to passengers and that maybe the DfT is expecting far too great a return to the public purse, and the whole concept on which this is based is unrealistic? The Government are slowly reducing the percentage subsidy to our railways at a time when the railways are expanding and the number of passengers is generally increasing. Does the Minister accept that this is actually unrealistic as a way forward?

I am glad that the Statement includes options for the future and that among them it has the DfT as the operator of last resort. When that happened before, rather a good job was done by the state stepping in, and I urge the Government to do that in the case of Southern. Does the Minister consider that the concept of a franchisee needs to be expanded so that it includes public/private partnership and public sector bodies? Maybe mutual models, which involve staff and passengers, could be allowed to bid as well.

I also want to ask about the knock-on effect on other franchises. It is known that other franchisees are having a tough time. We need only a small hint of further problems in the economy and those franchisees could say, “The Government stepped in this time—why can they not step in and help us?”.

Finally, how is it that there is no adequate legal ground to exclude Stagecoach from further bids at this point? Surely the DfT should be writing the franchises more tightly than this.