Payments to Train Operating Companies

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Tuesday 15th March 2022 Lords Chamber

[Lord Lea of Crondall (Non-Afl)]

Can the Minister draw our attention to any statistical evidence for the notion, which is counterintuitive, that a vicious circle is not developing here between cutting services and raising fares?

[Baroness Vere of Norbiton (Con)]

I do not accept that at all. It is right that we ensure that our services meet the needs of passengers and are punctual and reliable, and that the contribution from the national taxpayer is appropriate. There will be areas of duplication and areas where efficiencies can be found. The Williams-Shapps Plan for Rail states that in five years’ time, savings of about £1.5 billion should be available after simplification and efficiencies. Those are the things we are trying to drive out of the system. We want passenger services to be as good as we can possibly make them because we really would like people to travel on our railways.

Integrated Rail Plan: North and Midlands

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Monday 22nd November 2021 Lords Chamber

[Baroness Vere of Norbiton (Con)]

Well, I am very happy to write to the noble Lord on the detail of his question, as I am not well versed on the tunnels et cetera in the area to which he referred. I apologise if he felt that I was condescending to the House on Thursday. It is, of course, always very funny to be asked lots of questions based on the media rather than the actual documents, which had not been published at that time—and of course the questions were about upgrading, and I could not answer them. Maybe the noble Baroness had read the documents, but I had not, so I could not answer.

Bradford will benefit from electrification of the line to Leeds, and improved journey times will mean that you can get from Bradford to Leeds in 12 minutes—that is quite some distance in 12 minutes. I wish I could get that far in London. So it will benefit, and I think that we will look at various other projects as well. Part of the whole issue we are looking is the core pipeline work, which is set out in the Integrated Rail Plan, but we will look at any other scheme and service that will offer further improvements. This is exactly what the National Infrastructure Commission suggested that we do. This is the Integrated Rail Plan, and this is the core pipeline of work and, if noble Lords have suggestions for other schemes that would be affordable, would further improve our ability to improve services, and would be deliverable, I would really appreciate it if noble Lords would forward them to us.

[Lord Lea of Crondall (Non-Afl)]

My Lords, is it not the case that the credibility of these proposals depends on long-term political consensus? We are not here until 2040 and 2060, sitting around this Chamber. Years ago, I did a couple of jobs for the World Bank on transport infrastructure investment, returns and so on. It is absolutely vital that you nail down the fact that it has got to have long-term political consensus. In this country we are not even trying to do that in terms of the Government opening the door to other people to try to agree on some proposals.

Does the Minister recognise what Hilary Benn said the other day, that the proposals put forward as a long-term plan—for nearly a hundred years, as the Victorians did—would have had

“Victorian railway engineers scratching their heads in disbelief”?—[Official Report, Commons, 18/11/21; col. 740.]

What will the Government do to ensure there is scope for getting together proposals—including some of these—systematically to achieve a long-term cross-party consensus? That is the only way that they will not fall flat on their face.

[Baroness Vere of Norbiton (Con)]

I hope that I have just outlined to the noble Lord that we will continue to look at schemes that we can put in place in addition to the core pipeline. The RNIP will be published in due course. I hope that will reassure noble Lords that there is a programme in place, and that we will take forward some of the commitments that we have already made. As I have said, I look forward to hearing suggestions from whichever side of the House.

Covid-19: Transport

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Thursday 14th May 2020 Lords Chamber

[Baroness Vere of Norbiton]

This is an incredibly important topic. The Rail Delivery Group—the organisation made up of the train operating companies—is finalising staff guidance, which includes suggested example questions around where a customer may have a preference in the nature of the assistance provided. It has not been finalised. There will be public communications on this in due course, so the RDG will be able to provide further information. The rail industry is currently undertaking a comprehensive review of the passenger journey to understand better the needs of those passengers who have invisible impairments because, as the noble Baroness quite rightly says, sometimes those passengers have other needs.

[Lord Lea of Crondall (Non-Afl)]

My Lords, what strikes me about this is that the virus is the subject of a huge amount of numerical modelling and forecasting. I am amazed at the lack of numerical modelling in passenger transport of intermodal splits on different scenarios. In the medium term—in the autumn or something like that—we will need to sustain public confidence with more information, options and explanations of the dilemmas in the trade-offs of social distancing, in this case, with the rate of growth or decline of GDP et cetera. It is very important to have a higher level of public engagement and understanding.

Initially, will the Government institute more transparency on where the pinch points will be later in the year—information on which I am sure exists in the files of the Department for Transport—so that we can have an adult conversation, as called for by one of the Minister’s colleagues the other day? The modal split in town, country, big cities and so on will be different for rail, bus, car et cetera, but we need to make sure that we do not run into gridlock in some centres by digging up the road to put in a wider pavement, such as Piccadilly Circus et cetera being dug up at the same time as Oxford Circus. Is that not a danger? I do not know which forum might be useful, but I know that there are a lot of very well-informed and interested parties. Would this be something to look into so that we can have some numerical forecasts to scrutinise, with no skin off the Government’s nose? Public engagement will heighten public understanding.

[Baroness Vere of Norbiton]

The noble Lord raises interesting issues to do with data and modelling. I reassure him that the Department for Transport has a vast amount of data and does a huge amount of modelling. However, the sort of thing that he is talking about—a very centralised, top-down approach to solving our local transport needs—is not what we are proposing at the moment. In fact, we think the right way to go is to talk to the metropolitan mayors and local authority groups and get them to refresh their local transport plans, because they are the ones who know what is going to happen in their local communities. They can really put into practice what will need to be done to support the future forecasts for the different splits on the different modes of transport.

I agree with the noble Lord that there is much to be done—much data and much modelling—and that there are things we can crack on with, but this is best done locally. The Department for Transport is very happy to help. We review these plans and have asked these groups to refresh their local plans in light of the changed circumstances.

Railways: South-eastern Franchise

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Thursday 4th July 2019 Lords Chamber

[Baroness Vere of Norbiton]

I am afraid that the noble Lord has me stumped on that one, because I have not seen those press reports. I will certainly write to him if I can find out any more information.

[Lord Lea of Crondall (Lab)]

My Lords, does not this debate reveal that there is still a contradiction in the Government’s own transport policy on the benefits of freight traffic being on rail? This extraordinary increase in charges from HS1 should be investigated. The Government have not answered the question from the noble Baroness on the Liberal Democrat Benches about whether this is compatible with the Government’s transport policy.

[Baroness Vere of Norbiton]

The Government absolutely support the movement of freight on rail. We were interested to read the report on freight by the National Infrastructure Commission. It is a very good study, and we will be taking forward further work in this area. I remind the noble Lord that we have invested £500 million through the strategic freight network fund and made very important investments at some of our ports and elsewhere. We also provide rail freight subsidy through the mode shift revenue support grants for national rail track of £15.6 million, which takes 800,000 lorries off the road.

Heathrow Airport

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Wednesday 15th May 2019 Lords Chamber

[Baroness Vere of Norbiton]

I hope that I can reassure my noble friend. Heathrow is working closely with the communities around the site. I am pleased to say that the compensation being proposed is 10 times that which was proposed 10 years ago. It will amount to £2.6 billion-worth of compensation, which will also cover noise insulation and public facilities. I should also remind all noble Lords that this is being done at no cost to the taxpayer; the compensation will be funded by Heathrow.

[Lord Lea of Crondall (Lab)]

My Lords, is it not the case that since the Earth Summit in 1992 we have all been committed to proportionate measures to deal with the rise in sea and air temperatures? To go from that to shutting down airport capacity, which I think is the policy of the Green Party, would simply reduce Britain’s market share in airlines—and in some other industries by the same criterion—and allow other countries to have a bigger market share. We have to keep all these factors in some sort of proportion.

[Baroness Vere of Norbiton]

The noble Lord is completely right. The UK has the third-largest aviation sector in the world; it is very successful indeed. The way in which we will achieve decarbonisation of the aviation sector is twofold: first, by working with all other countries around the world to reach international agreements and, secondly, by making sure that it is successful and able to put money back into innovation so that we can decarbonise aircraft and look for other sustainable fuels.

Honda in Swindon

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Tuesday 19th February 2019 Lords Chamber

[Baroness Vere of Norbiton]

I thank my noble friend for his comments. Nearly all noble Lords will agree that no deal would not be a good outcome for the automotive sector or the economy as a whole. The Government are working extremely hard to get a deal. In the meantime, we are doing what any responsible Government would do and putting in place the necessary legislation for no-deal exit.

[Lord Lea of Crondall (Lab)]

My Lords, was it not Baroness Thatcher who said that, for Japan, one of the unique selling features of Britain was that it was in the European Union, part of the customs union and part of the single market, and therefore cars could be sold freely around the European Union? What part of that analysis is no longer true?

[Baroness Vere of Norbiton]

I am sure Margaret Thatcher’s analysis was correct in her time. However, it is also the case that Britain remains a very strong place for inward investment. Indeed, I think it was Deloitte that earlier this year analysed 3,600 projects that have generated £140 billion of capital for our country—that has obviously come from all over the world. The UK is still an attractive place for inward investment, and we hope it will continue to be.

Employee Shareholding and Participation in Corporate Governance

Debate between Lord Lea of Crondall and Baroness Vere of Norbiton

Thursday 11th October 2018 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, I thank the noble Lord, Lord Haskel, for securing this important and timely debate. Giving employees a stake and a voice in the organisation that they work for is important. As the noble Lord very powerfully noted in his opening remarks, it can lead to better outcomes for all stakeholders—employees, shareholders, customers, suppliers and, indeed, the Exchequer—through better-quality boardroom decision-making, stronger worker commitment to the business, higher productivity and greater influence of workers over the strategic decisions that will affect them. This has been noted by many people, not just in the Chamber today but outside. This debate is indeed very timely. The IPPR report has recently come out. It was mentioned by the right reverend Prelate and the noble Lord, Lord Stevenson.

We can all agree that employees are the lifeblood of all successful organisations and that their participation is crucial. Where I suspect we will disagree is on how government should encourage—some would prefer “force”—listed and non-listed privately owned companies to increase employee participation. Some in today’s debate—I note the comments of the noble Lord, Lord Stevenson—have criticised the speed at which the Government are acting. I cannot agree.

I will turn first to worker participation in corporate governance. As the noble Lord, Lord Stevenson, noted, the recent comments by Andy Haldane, the chief economist of the Bank of England, are welcome and timely. I am sure that noble Lords were very pleased to see his appointment as chair of the Industrial Strategy Council announced a few days ago. That council will meet for the first time in a couple of weeks’ time.

In 2016, we consulted on the Corporate Governance Reform Green Paper which, among many other things, sought views on how best to strengthen the worker voice in the boardroom. It was an extensive consultation. There were 375 thoughtful responses from businesses, trade unions and wider society. One thing was particularly striking from the responses: that no single way is the best way to strengthen the employee voice and influence at board level. Some companies favour the direct appointment of employees to company boards. Others favour dedicated and diverse workers’ councils which can reach into all aspects of the organisation. There is a huge range of approaches, each suiting the specific needs of the company, its structure and the sector in which it operates. So it became clear to us over the course of the consultation that one method would not suit all and that it would be wrong, and possibly quite damaging, for the Government to dictate a single method of worker participation.

[Lord Lea of Crondall]

Does the doctrine of diversity not mean that the Government are ruling out, almost for all time, any legislation?

[Baroness Vere of Norbiton]

Not at all—but at this moment legislation is not needed. If I am allowed to make a bit of progress I will explain how this is being put into practice.

Our reforms achieve change not by forcing companies into a one-size-fits-all approach but by providing options, supported by a clear and transparent accountability system. There are two main elements to our approach. First, we have put new reporting requirements on the statute book. They require all large companies—those with more than 250 UK employees—to explain in their directors’ reports how they have had regard to the interests of employees, including how they have engaged with them and, crucially, the effect of that engagement on decisions taken by the board during the year.

Secondly, at the Government’s request the Financial Reporting Council has revised the UK Corporate Governance Code to require boards to have in place at least one of three worker voice mechanisms: a director appointed from the workforce, a formal workforce advisory panel or a designated non-executive director. If a board has not chosen one of those methods, it will have to explain to its shareholders what alternative arrangements are in place and why they are effective.

The noble Lord, Lord Haskel, questioned the statutory underpinning of the code. It is mandatory for all listed companies. Noble Lords will be aware that Sir John Kingman is reviewing the FRC and all its activities, and we look forward to receiving his report in due course.

The Government expect these reforms to drive real change, with our large companies having effective mechanisms in place to engage with employees at boardroom level.

Many noble Lords on the Labour Benches have spoken in today’s debate and talked about Labour Party policy in this area. What do we see? We see exactly what the consultation showed us would not work. Labour is proposing a one-size-fits-all approach which we know will not suit many companies. Labour would force all large companies to do exactly the same thing, irrespective of their type, size, ownership and sector. For the reasons I have set out, we believe this would be wrong. Indeed, the personal experiences shared in the Chamber today by the noble Lord, Lord Monks, Lord Cotter, Lord Lea and Lord Davies, further support our view that one size simply does not fit all.

I turn to employee shareholding and ownership. Many businesses choose employee share ownership to involve and motivate their employees. But, crucially, employee share ownership must remain a free choice for businesses to make. However, the Government have a role to play. We can remove the barriers to employee shareholding and to employee ownership to make these easier for business. The Nuttall review in 2012, commissioned by the previous Government, identified three barriers to growth: a lack of awareness of the concept, a lack of resources to support implementation, and actual or perceived legal, tax or other regulatory barriers. The review made 28 recommendations, and these have been addressed by the Government in awareness-raising initiatives and by simplifying the relevant regulations through changes in the Finance Act 2014. So we have tackled the barriers; it is now up to the private sector to set this up and help employees to participate.

This Government back businesses, whichever ownership model they have. It is in that context that we keep under review our approach to employee share ownership schemes. I noted the comments by the noble Baroness, Lady Bowles of Berkhamsted. I have read her very good report, and one thing that struck me was that she said:

“That is not to say employee ownership is the ‘ideal’ business model, or that its impact is automatically and universally transformative”.


She is right, and that point was made also by the noble Lord, Lord Liddle. We have to be aware of people investing not only their job in a company but also perhaps their life savings.

However, we would like to see more employee-owned companies, and we have noted the recommendations. The Government keep all areas of the tax system under review and, I am sure, are looking at the proposal that the noble Baroness mentioned that was sent recently to HMT. We already offer four tax-advantaged employee share schemes that allow 4 million employees to invest in the future performance of their companies. This is alongside employee ownership trusts, which the Government have promoted since in 2014 and which offer generous tax reliefs both for employees and for business owners who sell to a trust.

Perhaps it is worth taking a moment to look at Labour Party policy in this area, which was cited by a number of noble Lords today. It is certainly radical. It would involve an immediate and significant diminution to the pension assets of all pension holders, and indeed anyone with any shares in a larger listed company. It would be an astonishing confiscation of private wealth. There would be no actual employee share ownership, merely ownership by proxy, and a cap on any upside for the employee. I wonder whether noble Lords on the opposition Benches have any estimate of quite how much extra tax the Exchequer would get as a result of this cap. Some say that it would be around £6 billion— that is, £6 billion of extra corporation tax targeted only at companies with a high dividend yield. The policy is extraordinary, and not in a good way. It would have a devastating impact on UK business and the UK as an attractive place to invest.

Noble Lords touched briefly on Section 172 of the Companies Act 2006, which is the cornerstone of the company law framework. Directors have a duty to promote the success of a company for the benefit of their shareholders. However, in doing so they must have regard to a range of stakeholders. This is the enlightened shareholder value model and we are not minded to review it at this time.

The UK has an international reputation for the strength of its corporate governance framework, which we have kept up to date with reviews and carefully considered improvements. As the noble Lord, Lord Monks, suggested, we will look at best practice in other countries, but a one-size-fits-all approach will not work.