Passenger Railway Services (Public Ownership) Bill

Lord Liddle Excerpts

2nd reading
Monday 7th October 2024 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I welcome my noble friend Lady Blake to the Front Bench and congratulate her in leading the Second Reading of this Bill so well. In my view, she has a lot to contribute to transport. After years of experience as leader of Leeds City Council, she saw at first hand how, over the decades, we have grossly neglected public transport investment in our metropolitan areas outside London. This must change, and I hope it will change under the Labour Government.

I support the Bill. I have no ideological bias in favour of public ownership. My bible as a social democrat many decades ago was Tony Crosland’s The Future of Socialism, which totally persuaded me that there was no virtue in public ownership per se. Therefore, these issues have to be addressed in a pragmatic way. I was always sceptical of rail privatisation. The general argument for separating the natural-monopoly elements of business from the operating elements is a sound one economically; it works in telecoms, for instance, where the infrastructure has vast capacity. But that is not true of the railways. There is not infinite capacity in the natural monopoly, and someone somewhere has to decide which services get priority and which do not.

If I might say so, I thought that the noble Lord, Lord Bradshaw, gave an excellent speech in which he outlined some of the major failures of the 1990s privatisation. The railways need a guiding hand, and on this side of the House I fully supported the conclusions of the Williams review. If I might put it this way, it was a bit rich for the noble Earl, Lord Effingham, to say that we want to see the comprehensive reform of the railways. The truth is that his Government sat on the Williams review for five years and did very little about it, because some Back-Benchers thought that it sounded a bit too socialist. I think he should recognise that Labour here is trying to pick up from the mess that the Conservative Government have left.

Some people will say that, yes, they support the Williams review but it does not necessitate public ownership throughout the system, that we lose the benefits of competition, and all that. As someone who has now been a Member of this House for getting on for 15 years and has gone up and down the west coast main line virtually every week, I must say that we had a reasonable service with Virgin, but we have had a disaster with Avanti. I do not understand how anyone can think that this has been a good example of the private sector contributing to public service.

In fact, since Covid, we have not had a competitive railway in any sense. What we have had is the most centralised system of management of the trains in recent times. The Department for Transport lays down the costs for every service and the Treasury collects the revenues. The franchise operators have very little incentive to make any improvements of any kind; all they want to do is collect their fees. We need a fresh start and I think that this Bill gets us part of the way to it.

The only part of my noble friend’s great introduction to this Bill that I paused at was her announcement that we might have to put up with two more years of Avanti. I would like to know why. Can we please see what the contract is that the Government feel they cannot withdraw from? Can we see what performance standards the last Government set for Avanti and whether they are being met? As a Government, let us not hesitate too much about taking drastic action. I know that my noble friend Lord Adonis, when he was Transport Minister in 2009, was advised by the department and its lawyers that it was quite impossible to take LNER into public ownership at the time. He said, “Well, what’s the risk that they’re going to sue?”, and went ahead with it. I cannot see the public rushing to support Avanti if it is deprived of its franchise.

I have some detailed points on the Bill that I think are important and on which I hope we can have a decent discussion in Committee. They are concerned mainly with new Section 30C, on the definition of what kinds of public service contract and public service company are allowed to operate on our public railway. One of my concerns—it relates to what I said earlier about my noble friend Lady Blake and her experience in Leeds—is whether combined authorities and mayors would be able, under the remit in new Section 30C, to run services in their metropolitan areas. It would be a shame if we had in our minds the wonders of the British rail model of the past, because I do not think that it was very wonderful. We need a much more decentralised structure for our public railway, and we need to find the mechanisms to make that decentralised structure work.

My second point is that I do not see any ideological objection to public/private partnerships in running the railway. Let me give an example. You might have a situation where a private company was prepared to commit to electrification plans for a particular line that would not be in the public sector investment plan. My view is that we should allow public/private partnerships on a net additionality rule. If they are going to bring more investment into the rail system, what on earth is the case for not allowing them to do so?

With those points, I say that it is clear that this is a good start—but it is only a start. The whole scheme of reform has to be worked on very hard by the department and its Ministers in the coming months, but, in the meantime, I welcome the Bill.