Passenger Railway Services (Public Ownership) Bill

Debate between Lord Moylan and Baroness Randerson

Consideration of Commons amendments
Wednesday 20th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I do not follow the Government’s logic so far. They accepted our amendment, in the names of my noble friend Lady Brinton and others across the House, on disability access and the equality issue. That was and is a hugely challenging issue for the railway and for the Government, and a very expensive one to fulfil. Yet they reject this simple statement, which, as the noble Lord, Lord Gascoigne, just pointed out, is simply a statement of purpose.

We are very grateful to the Minister for the discussions and for the way he has moved to address our concerns. But, as the Government have said, nationalisation is not a silver bullet. Across the world, there are examples of both publicly and privately owned railways that provide an excellent service. Unlike both the Labour Party and the Conservative Party, we on these Benches judge a railway not by its ownership but by its efficiency: how good a service provided to passengers is and putting passengers at the heart of things, always. Incidentally, we welcome the Conservative Party’s new-found enthusiasm for passenger efficiency.

This amendment would make it clear that the primary —but not the only—purpose of the Bill is to improve passenger railway services. This should be a statement of the obvious, so I am mystified as to why there is any debate about incorporating it in the Bill. I am also concerned about the points the Secretary of State made in the other place yesterday. It is unrealistic to assert that you can interpret the amendment, specifically the words

“improve the performance of passenger railway services”,

as meaning that the Secretary of State could decide to run fewer services on time, which is, in essence, what she said. I add that if the Government are not happy with the precise wording, because they believe it could be misinterpreted and misused, they could, of course, have offered to amend it.

We would have preferred the issues of ownership to be more closely linked with improvements, passenger standards and other key issues that need to change if we are to have a robust 21st-century rail service. The Government, in our view, have therefore put the vehicle ahead of the delivery. However, we accept that they have a mandate; we accept that there is more than one way to deliver these improvements. We will be listening carefully to the Minister’s response, and I hope that he will be able to be more persuasive than the Secretary of State, because his expertise and reputation are always taken very seriously in this House. If he is able, today, to commit the Government to improvements to passenger services at the core of future legislation, at the core of the responsibility of the Secretary of State, we will be able to support the Government. Passengers desperately need to see improvements, having had a decline in service for so many years under the previous Government. So let us get that commitment on the record; let us get it in legislation, if possible, as soon as possible, so that the work can start.

Very briefly on Motion B, we acknowledge the primacy of the other place on financial issues, but we hope that the Government will continue to apply the flexibility that current legislation affords them so that they will not, unnecessarily rapidly, bring to an end very successful franchises.

[Lord Moylan (Con)]

My Lords, I shall endeavour to be brief. I repeat what other noble Lords have said in expressing my gratitude to the Minister, as I mentioned at Third Reading and when the Bill passed, for his courtesy and collaboration in our debates on the Bill.

The Government’s problem is this: they wish to reform the railways. There is a great deal of support in your Lordships’ House, across all parties, and generally among the public for a reform of the railways. We would like to discuss what the Government are going to do on a number of issues. Had they brought forward the measure in this Bill as part of a large and comprehensive Bill introducing those reforms to the railways, we would have had the opportunity to have those discussions. We would have been able to discuss, for example, the role of freight, and the tension between the priority given to passenger services and freight services that inevitably exists in a constrained system. We would have had the chance to discuss the continuation of open access and competition on the railways. We could have discussed the devolution of the operation of train services to regional and local authorities, such as exists in London and might exist in other parts of the country. We would have been able to do all those things as part of a comprehensive reform Bill.

But the Government have decided not to bring forward a comprehensive reform Bill, of which this is part; they have decided to take this step first—that is, to seize control of the train operating companies—and the great Bill of reform is promised for the future. The Government say that it will be brought forward within 12 to 18 months—that is a challenging target. As I have said, tediously, in the past, over and over again, even after that Bill has gone through its parliamentary process and passed, it will still take several years for it to be implemented.

Bus Funding

Debate between Lord Moylan and Baroness Randerson

Tuesday 19th November 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, another week and another highly operatic Statement from the person in the other place who wishes to be known as the passenger-in-chief. But, unlike the Statement we had last week, this one has some substance. Its purpose is to announce how the Government are going to spend on buses the approximately £1 billion allocated for that purpose by the Chancellor in her Budget a few weeks ago. About £750 million is to be given to local authorities and the other quarter to bus companies.

There is an important methodological change in this that I would like to explore with the Minister, which is that the Secretary of State announced that previously councils had to compete for funding—wasting resources and delaying decisions. In making that statement she puts her finger on something that has come to the attention of quite a number of noble Lords, not least those who are members of the Built Environment Select Committee of your Lordships’ House, which I have the privilege to chair, which is that the widespread use of bidding by local authorities is time consuming, costs money and is particularly wasteful for local authorities that bid and receive nothing at the end of the process.

Perhaps there is a case for something being done about this—perhaps. I also understand that Governments want to know that the money they are allocating will go to good projects that stand up to scrutiny, so there is a balance to be struck. None the less, the right honourable Lady has made a point of interest. She has said that funding will be allocated based on a “formula”, saying:

“We are taking a fundamentally different approach. We have allocated funding based on local need, population, the distance that buses travel, and levels of deprivation”.—[Official Report, Commons, 18/11/24; col. 43.]


I know what a formula looks like: it has pluses and minuses, multipliers and weightings, and it shows how money is to be allocated according to certain criteria. I would love to explore this formula and know more about it, but it has not been published. That is the most astonishing thing. We do not know what the formula is or how these criteria have been melded together to produce an outcome. Indeed, what do these criteria mean? Local needs—how many Governments are going to allocate money that is not related to local needs? Population—does that mean that areas with higher populations get more or less money? If it means they get more money, what is that saying to rural areas, which are very dependent on buses? The distance that buses travel—what does that mean? Again, in rural areas buses may travel very long distances. Does that mean that they get more money or less because it is the shorter distances that are being rewarded? Levels of deprivation—I think we have a reasonable idea what that means.

What does it all mean? Was it consulted on? I think we should know. Local authorities might have wanted to have a say in how this money was allocated and how a formula was developed. Was an independent assessment made of what its effects and impacts would be? Were alternatives considered by Department for Transport officials before this particular formula was alighted on? How crucially does it relate to what the Deputy Prime Minister might do when she comes to allocate money to local authorities? It is very likely that she too will say that the bidding system is discredited and she wants to move to a more formulaic allocation of funding. As I say, there is an argument for doing that but it depends fundamentally on the credibility of the formula used, which means that it has to be exposed to light.

Finally, I do not mean to be rude about anybody, certainly not the Minister or his Government, and I also know that £1 billion is just loose change for a Government who are determined to spend their way to growth. But we on this side of the House would still like to be assured about a formula that nobody can see, which depends on criteria that need to be interpreted and are not in any sense plain, and which could simply be a way of spending money to reward your mates. Is that what is going on here? There is every reason to think that it might be.

[Baroness Randerson (LD)]

My Lords, I am pleased to welcome the Statement made by the Secretary of State in the other place. Bus services outside London have been allowed to atrophy and die for far too long. They are vital to society and our economy. They are used by the poorest, the oldest and the youngest. Although we love to talk about trains here, buses are the most used form of public transport.

The funding information in the Statement, as far as it goes, is welcome, as are the commitments to reform. The situation with buses has been too complex, too fragmented, too short-term and too competitive. In practice, the competition has led to money going to, in effect, the councils that are best at filling in the forms rather than those most in need.

Courtesy of the Campaign for Better Transport, I have some illustrative statistics. Why should Swindon get £3.98 per head for buses and Reading, just down the road and not dissimilar in size, get £168.68 per head? No formula would explain that. Of course, Reading has extremely good buses as a result of extremely good funding.

There are currently six different funding pots. We need one single integrated fund with “long-term” written all over it, so can the Minister explain in more detail exactly how the current six funds will be amalgamated and repurposed?

I turn to the £3 bus fare cap and its impact. It is, of course, effectively a 50% fare increase in an industry that has already seen fares rise by 59% since 2015, so it will have a huge impact. Yet there were reports at the weekend that the Secretary of State had said that maybe it would be linked in some way to the rate of inflation. Will the £3 cap be applied in the same way as the £2 cap, or will it be amended in some way? What analysis have the Government made to lead them to abandon the £2 cap, which appeared to be working well?

In many areas, particularly rural areas, demand-responsive and Dial-a-Ride services are vital. I ask the Minister, because this is not mentioned in the Statement: what will the Government do to encourage these services to ensure proper co-ordination between local authorities, bus operators and other bodies, such as NHS trusts, so that rural areas get a better deal from the providers at various levels in their area and a structure that local people can rely on?

Aviation Safety (Amendment) Regulations 2024

Debate between Lord Moylan and Baroness Randerson

Monday 18th November 2024 Grand Committee

[Baroness Randerson (LD)]

My Lords, first, I thank the Minister for his useful introduction. I stress that I perceive this SI as important because it introduces amendments to bring the UK into line with ICAO standards and practices. It will allow commercial operators to use more advanced and efficient fuel-planning systems, which will lead to the saving of fuel and lower emissions, which is in itself very important indeed, and will lead to significant savings for those operating in the business.

Secondly, this SI will also permit the use of new technology and procedures at take-off and landing in what you or I would call poor visibility but what the aviation sector calls “all-weather operations”—that is a masterful understatement—which will, of course, mean much safer aviation.

Thirdly, this SI will introduce improvements to mandatory crew training and safety checks. I have a question for the Minister: does that tightening up on safety deal in practice with the grey area between commercial pilots and leisure pilots in general aviation? I am sure that those in the aviation industry knew all about this issue, but it first became publicly known after the air crash that led to the death of Emiliano Sala, a player at Cardiff Football Club. It involved a pilot who was not qualified for commercial aviation and not licensed to fly at night. It turned out, according to the news stories, that this was a frequent blurring of the edges; there was general agreement in the House that that should be dealt with. If this SI goes as far as dealing with that blurring of the edges, I would very much welcome that.

There is a general concern that the Department for Transport may have fallen behind on updating aviation legislation, just as it did with maritime legislation, because, according to the report by the Secondary Legislation Scrutiny Committee—I am a member of that committee, although I did not attend the particular meeting that produced the report—we have been out of step with the ICAO requirements for anything from four to 12 years. According to that report, the Department for Transport says that this time lapse has not posed a safety risk. That may be questioned, I think: if one is updating safety legislation in a whole series of bits of legislation, one assumes that one is doing it to make things safer. In any event, this has put UK operators at a competitive disadvantage because, for example, the EU implemented it nearly three years ago.

The Secondary Legislation Scrutiny Committee also states that the UK has filed differences—that means that we are not in alignment with ICAO standards and regulations—in 9% of cases. That is a significant minority. The Department for Transport also told the committee that it was up to date with other international agreements. I am delighted to hear that, and I invite the Minister to confirm it here today. Maybe the department has now had time to look more thoroughly. My concern is the waste of precious time in improving fuel efficiency, but I am also concerned that the UK is not fully up to date with the latest safety techniques, especially in relation to helicopters, which are notoriously complex to fly.

Can the Minister update us on where the new Government stand on our previous withdrawal from the EGNOS satellite system operated by the EU? That is something that we have discussed in this Room on several occasions. The withdrawal from EGNOS has undoubtedly put smaller airports, such as Bournemouth and the Isles of Scilly, at a disadvantage, because they have been unable to operate safely in poor visibility. I would welcome it if the new Government were looking again at that costly decision for the aviation industry. I believe that the problems with training for commercial pilots also involved the issue of access to EGNOS. If the new Government have not addressed that issue yet, I urge them to look at it in detail.

Finally, paragraph 4.9 of the Explanatory Memorandum says that the instrument

“applies to aircraft registered in the UK wherever they are”.

Can the Minister confirm the flip side of that, if I can put it that way—that if an aircraft is operated in the UK, wherever it is registered, it will be subject to the same safety criteria? The same accident to which I referred earlier also revealed, as a result of CAA investigations, that there was a gap between the safety of those aircraft registered in the UK and the standards, for example, of those registered in the USA. Those are legitimate issues of concern.

[Lord Moylan (Con)]

My Lords, I shall be disappointingly brief. I thank the Minister for arranging a briefing with his officials, and I thank those officials for the time that they gave. Various pertinent questions have been raised in the course of this short debate, and I look forward to hearing the Minister answer them. I had one question that I raised with his officials, relating to the extent and effectiveness of the consultation exercise with the smaller operators in particular. I understand that, if the Minister is unable to give an answer to that this afternoon, his officials are preparing to give a written answer to that question later.

The previous Government prepared these regulations. At their heart is not a question about alignment of texts or legality but the question of safety in practice. We are all agreed that we want aviation to be, as the Minister said, one of the safest modes of travel. It has been for a very long time, and we want it to continue to be so. The Minister has assured us that these regulations represent a further step in ensuring safety in aviation and, on that basis, this side is more than happy to support them.

Rail Performance

Debate between Lord Moylan and Baroness Randerson

Wednesday 13th November 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, when a Secretary of State comes to the House of Commons to make a Statement, I have always imagined it to be a rather portentous matter; something serious must be afoot. I note that the Minister has not exercised his right to read this Statement to the House and I can understand why, because it is almost completely vacuous. There is nothing in it at all, really. They must be having a very quiet time in the House of Commons if they want to sit and listen to this.

We learn of a few modest but welcome improvements. We learn that there are going to be new signboards at Euston. We know that people will have their tickets accepted across publicly owned train operating companies in the event of disruption. We are even told that there are “green shoots emerging” at LNER—I thought that that phrase had rather been cast into history, but possibly it is better than “leaves on the line”. But the performance improvements that the Secretary of State claims credit for in the Statement are not all what they seem.

Cancellations on CrossCountry have been reduced but the Secretary of State does not reveal—or she does slightly reveal if you read it carefully—that this has been achieved largely by reducing the number of time- tabled trains. Cancellations have also improved on TransPennine Express, we learn in the Statement, but she does not mention that, according to the Office of Rail and Road, delays have increased. The passenger-in-chief, as she wishes to be known, claims great progress as a result of her “getting around the table with unions”. Those of us who remember her first encounter with the unions recall that she barely stayed long enough, I imagine, even to sit at the table before she conceded all their demands.

This is not serious stuff from the Government about the railways. The serious stuff was put very squarely by the Minister earlier this week, and it is that the railways cost as much as they did before Covid but they have only 80% of the revenues. That is the problem, that is how he summarised it, and that is what the Secretary of State should be coming to the Commons to talk about, not green shoots at LNER and possible improvements in cancellations on TransPennine Express. She said, as the Minister himself said earlier this week, that there is to be a consultation on the Government’s plans. He said he hoped it would be published before Christmas. She says it will be soon. We look forward to it. We will be judging it according to the standard of whether or not it addresses the problem. The railways do not have enough revenue. We want to know what the Government are doing about it. Statements such as this are merely faffing around.

[Baroness Randerson (LD)]

My Lords, I agree with the noble Lord, Lord Moylan, that this is a real time filler of a Statement, and I will not waste the time of this House by repeating some of the points he has just made that I had picked up on. Instead, I will ask the Minister some questions that flow from the rather superficial things in the Statement.

The Statement refers to ticket simplification but that is obviously still a long way off and what is being offered is a very modest measure. What passengers want to see is some kind of outward sign that the Government are taking seriously the fact that they are getting a very poor service at a very high price.

Fares went up by 5% this year and are scheduled to go up by a similar amount in March. I urge the Government to look at that again. Indeed, I challenge them to look at it again and to freeze fares in March at the current levels in recognition of the fact that rail services are not good enough to justify fare increases.

The Statement includes an update on LNER and refers to improvements in driver availability on the line. Unfortunately, that is not a general picture. Both Great Western Railway and Northern Trains regularly cite non-availability of drivers and train crew as a reason for cancellation. Can the Minister tell us what the Government are doing, across all train operators, to deal with failures of recruitment and training? That is clearly what must be happening at the moment. I fear this situation could get worse as train operators come towards the end of their franchises. I am interested in the Government’s strategy to stop this system, which is bad and getting worse.

Finally, the Statement references an improvement in industrial relations, but the Government face a big challenge as the nationalised train operator moves to one harmonised set of terms and conditions. What are the Government intending to do to ensure that the inevitable levelling up of terms and conditions properly modernises the industry and does so at a cost that taxpayers and passengers can afford, and when will they do it?

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Moylan and Baroness Randerson

3rd reading
Wednesday 13th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I thank the Minister and his team, who have been exceptionally generous with their time in offering advice and assistance on the Bill. The Minister has been willing to give many of the details that we sought about the much-anticipated big Bill that we expect next year.

In addition, the Minister offered an important amendment to the Bill, which he has just referred to, on disability access. That was in response to an amendment in the names of my noble friend Lady Brinton, the noble Baroness, Lady Grey-Thompson, and the noble Lords, Lord Blunkett and Lord Holmes. These new legal obligations will have significant implications for train operators and the rail network generally, and we are very grateful for that commitment, which will make a real difference to the lives of people with disabilities.

From these Benches, we have made it clear that we would not have adopted the same approach as the Government. We would not have divided the issue of ownership from the details of how the system will be organised and how the parts will fit together. The Secretary of State stated on Monday, absolutely correctly, that nationalisation is no silver bullet. In essence, most of the amendments that were put forward, both from our Benches and from the Conservative Benches, simply sought more information on how it would work and where the powers would lie.

As Liberal Democrats, beyond our concern about disabled access, we wanted assurances that passengers would be at the heart of the reforms and that devolution would not just be tolerated but be allowed to grow. We appreciate that the Minister did his best to reassure us on those issues; in particular, he moved some way on devolution. We therefore look forward with enthusiasm to the big Bill, when we can promise him very thorough scrutiny.

I remain sceptical that the Government have the answers to everything; for instance, whether they will genuinely be able to accept private sector operators under a public/private partnership scheme within devolution. I also have reservations about the cost to passengers of the harmonisation of terms and conditions for staff. But I always accept that the Minister understands his brief comprehensively and is absolutely in good faith in his assurances.

We send this Bill back to the other place with the amendments that were passed against the wishes of the Government and are strongly aware of the Government’s majority in the other place. We are realistic about what will happen, but I say to the Government that it would do their cause no harm to accept the good intentions of the first amendment that passed here, which simply stated that it is the duty of the Secretary of State to improve passenger standards. That is, or should be, a statement of the obvious. I hope they might consider bringing forward an amendment of their own on that.

Finally, I thank my colleagues on these Benches for their support and contributions: the noble Baronesses, Lady Brinton, Lady Pidgeon and Lady Scott, and the noble Lords, Lord Bradshaw and Lord Teverson. Finally, I must thank Elizabeth Plummer, our legislative adviser, who was responsible—as always—for excellent advice and for amendments from these Benches.

[Lord Moylan (Con)]

My Lords, before I turn to the substance of the Bill, and in response to what the Minister said, I remind noble Lords who may have forgotten that the remarkable thing about election night in 2010 was that it initiated a period of approximately a week in which, in effect, the country had no Government at all. Labour had lost and the victors were locked in some room in Whitehall trying to work out terms of their agreement. In those circumstances, there was nobody to stop us doing what we did to Tube lines; it shows that you can move fast and fix things when you get the opportunity.

I am very grateful to the Minister for the courtesy he has shown me outside the Chamber as he has given me assistance in relation to this Bill and for the patience he has shown inside the Chamber. It is always difficult for a new Minister when dealing with a Bill which is open to such criticism, but he has handled it with great good grace.

I am also grateful to the Minister’s officials whom I have met and who have offered me advice and briefings. On our own side, I received support in our Opposition Whips’ Office from Abid Hussain and Henry Mitson, and I am very grateful to them. I am also grateful to all noble Lords who spoke in debate in considering this Bill. I shall not attempt to name them; the Minister has already mentioned their names. We had a very good series of debates on this Bill.

None the less, it is not a good Bill. Everyone agrees that the railways need reform. The privatisation model has produced record growth in passenger numbers. There has been a true rail renaissance over the last 25 or 30 years in this country, but the railway has not recovered from the effects of Covid on its operations and reform is definitely needed. The basis of that reform appeared to be the Williams review, which gained a wide measure of cross-party support. It envisaged an important role for private train operating companies but on a different financial and operational model from the existing privatisation model.

Labour has broken that consensus. Why? It is hard to tell, but it is noticeable that the rail unions have been pushing hard for full nationalisation, which will of course increase their power and leverage over the travelling public. Labour now owns the train set and can call the shots. I suspect it will fall to the Conservatives to fix it again when it all goes wrong, as in 2010, on election night, it fell to a Conservative mayor to fix the problems created for London Underground by Labour’s disastrous PPP.

However, the Bill now goes forward to the Commons greatly improved. As the noble Baroness, Lady Randerson, said, it would be churlish and wrong of the Government to refuse to accept those amendments or some variation on them. If we see it back here at all, I hope it will be rather different from how it was when it first came to us.

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Moylan and Baroness Randerson

Report stage
Wednesday 6th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, Amendment 1 is impossible to disagree with. It is fundamental to the survival of our railways that things improve. They have reached crisis point because of decades of under- investment, poor management and poor political decision- making. However, the presence of this reminder might be useful for the Secretary of State. It might be a statement of the obvious in some ways but useful for her because the big problem with nationalisation is that Governments in the UK have consistently failed to invest long-term. We can improve buses by investing within a couple of years, but when you invest in the railways it takes a couple of decades for it to make a big difference. That is the Government’s challenge in renationalising the railways and the buck now stops with them.

On Amendment 16, I understand and strongly support the wish for thorough and transparent public consultation on the contents of the forthcoming rail Bill. I remind noble Lords of the example of the public consultation undertaken by the previous Government on their plan to close ticket offices. It led to a massive national outcry, forcing them to drop the plan, so I am a great believer in the impact of public consultations. The Bill that we are expecting in the near future is considerably more complex, but the problem with this amendment as written is that it extends the timescale that it all will take. It will take far too long before we get the legislation that we all hope will make the big difference. I will listen very carefully to the Minister. We hope that there will be some legislation by the end of next year at the very latest.

One way or another, the Minister has been associated with plans for the future of the railways and the creation of Great British Railways for some years now. There is surely nothing raised in our debates that he has not thought of, he has not worked on, or that would come as a surprise to him. He has been exceptionally generous with his time in cross-party discussions in the last couple of weeks. I urge him to explain when he replies what the timescale is likely to be and to assure us that there will be full consultation and that there is a grand plan.

[Lord Moylan (Con)]

My Lords, we have had lengthy discussion on this Bill in Committee, and it is not my intention today to repeat unnecessarily the arguments and the evidence adduced during those debates. The longer that we went on in Committee, the clearer it became that this is a very bad Bill that has been accompanied by a degree of arrogance. I do not say this as a personal comment on the Minister; it is on the part of the Government in general. There has been a tone, sometimes said quite explicitly, of “We won so we can do what we want”. That is an argument. It has some merit, but the merit that you would expect to find in an argument made in a playground.

Another type of arrogance has also been underlying our debates: “We want a better railway, but we are not going to tell you what it will look like. That’s all going to come in the future—don’t ask your pesky questions now. That will all be dealt with, and you have to trust us”. That is not a basis on which the House should be passing this type of legislation. The amendment in the name of the noble Lord, Lord Berkeley, goes some way to address that latter point. We all have a common desire for a better railway, but we will no doubt disagree on the details of how it is to be achieved. My noble friend Lord Grayling said that these are very complex issues. I do not think that anyone would disagree.

Therefore, on the prospect of having the Bill published in draft for pre-legislative scrutiny, I disagree with the noble Baroness, Lady Randerson. I do not think that will add materially to the time taken before legislation is enacted because it is likely to produce a better Bill when it eventually arrives in your Lordships’ House, one that can go through faster and be implemented better with better outcomes. It is the outcomes that we are interested in, not a particular timescale, although like her I will hold the Government to their undertaking that a Bill will come forward within 12 to 18 months.

It is more important to get the outcome right than to worry about a few weeks here or there, which is as much as we would be discussing in relation to the amendment tabled by the noble Lord, Lord Berkeley. I am deeply disappointed that he is not going to press it to a Division as I would be very tempted to support it if he did. However, I expect and hope that the Minister, when he stands up, can satisfy the noble Lord, Lord Berkeley, by saying that there will be some sort of pre-legislative scrutiny of the very large and complex Bill that he is expecting to bring before your Lordships’ House in the next 12 or 18 months, to use his phrase.

The amendment in the name of my noble friend Lord Lansley is very good and commends itself. Like him, I would like to hear what the Minister says in response. I note that my noble friend does not intend to press it to a Division.

Amendment 1, tabled by my noble friend Lord Gascoigne, is indispensable. A number of things are missing from this Bill. A number of important parties have been wholly excluded. One of them, for example, which we will come to later in debate, is the staff. There is no reference to the staff in this Bill. We take for granted that they will be TUPE-ed. That basic legislative cover is there and does not need to be stated. They will not lose their jobs as a result of this but will be TUPE-ed over. However, has any consultation been carried out with the staff? You would expect that normally, would you not? Do they want to change their employer? Do they want to be working for the Government? They may all say yes, but one would have thought that in an undertaking such as this the Government would have bothered to ask them. There has been no consultation with the staff.

The other glaring omission from the Bill is, of course, the passenger. It is a passenger railway services Bill, yet it says nothing at all about the passenger. My noble friend Lord Gascoigne is attempting to put this lacuna right and to put the passenger back at the head of the Bill, as the driving force of what the Government are trying to do and to require Ministers to test their actions under this Bill against the standard of whether it will improve matters for the passenger. That is why, if my noble friend intends to divide the House and seek its opinion on this matter, I recommend that we support him.

--- Later in debate ---

[Lord Moylan (Con)]

My Lords, in the course of debate at Second Reading and in Committee, numerous noble Lords drew attention to the fact that the manner in which the Government are approaching the termination of franchises is going to result in some very perverse outcomes. Admittedly, most of the franchises still in existence are relatively short, but the Government—with a view to saving money, as far as I can make out—are determined to terminate them in the order in which the contract falls in.

That has the bizarre consequence that some of the most popular, effective and highly rated franchises are going to be terminated early at the head of the list, while those that are most reviled by the public—I am not going to mention any names in the course of this brief speech—and regarded as being hopeless at what they do will have the longest continuation in existence. It is of course the case that if they fell into default, the Government could terminate them early without expense, but we heard from the Minister earlier that none of them is as bad as that. None the less, some of them are very bad indeed.

This case was made most compellingly at Second Reading by the noble Lord, Lord Browne of Ladyton, but it has been made by other noble Lords as well. I think there is strong demand among noble Lords for the worst franchises to be brought to the head of the queue. My Amendment 2 would have the effect of bringing that about: the worst-performing operators would be terminated first, while services that are currently working well would be enabled to continue. Amendment 10 in the name of the noble Baroness, Lady Randerson, has a similar intent and effect. It is drafted differently—it is expressed as providing flexibility to the Government, whereas mine is perhaps a little more mandatory in its tone—but they are similar in various ways.

With the time the Government have had for reflection on the strength of feeling in the House about this issue, they should be able to come forward and say something now that would alleviate noble Lords’ concerns. Otherwise, I will be interested in testing the opinion of the House on my Amendment 2.

[Baroness Randerson (LD)]

My Lords, I will speak to Amendment 2, and to Amendment 10 in my name and that of my noble friend Lady Scott. Amendment 2 was the Liberal Democrats’ Amendment 1 in Committee, requiring the Secretary of State to terminate franchises for default and to nationalise the worst-performing operators first, while allowing train operating companies that are currently working well to continue.

The Minister explained to us, both in this Chamber in response to our amendment and in private discussions, that this cannot be done without major costs to the taxpayer. The existing contracts have been written and signed by the previous Government so as to make it difficult to penalise defaulters. We accept what the Minister says and we are not prepared to cause the taxpayer greater costs than necessary in this process. So, having listened and learned, we turned our amendment around and wrote Amendment 10, which simply proposes giving the Secretary of State the freedom to enable services that are working well to have an extension to their franchise and to continue for a period of time suitable to the Government. Can the Minister explain to us the Government’s approach to this and whether existing contracts could be extended, as our amendment suggests?

Our view is that the Government are going to be hard pressed in dealing with the numerous parts of the rail systems that are failing, and they need to allow themselves a bit of space by letting the bits that are working well continue until they get around to the overall process of nationalisation. The Government’s whole approach has been nationalisation gradually rather than one big effort, and I hope this amendment works with the grain of their intentions.

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[Lord Moylan (Con)]

My Lords, I will speak to the amendments in this group, particularly Amendment 12 standing in my name. I have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Pidgeon. Both amendments are aiming at the same thing.

I said earlier today that there are a number of crucial things missing from this Bill: one is staff, and we will come to that, and another is the passenger, and we have dealt with that. The third is the local authorities, the regions, the metropolitan authorities and devolution as a whole. On this side of the House we have always had great aspirations for the powers of combined metropolitan authorities and regional government, and for their expansion. We are largely responsible for promoting and establishing mayoralties in Manchester and the West Midlands, and in other places as well, such as Teesside and so forth. We have done that with a view to expanding their powers, and part of that was to take on a greater role in transport. We are seeing the beginning of that in Manchester with the buses, and Merseyrail is operated by the combined authority.

In doing that, we are coming from a successful metropolitan model, London, which already has many of these powers. As far as we can make out, these powers, where rail is concerned—not buses—are effectively to be closed down where they do not already exist. They will not be expanded further—the Minister has been quite clear about that—and we will not see the growth of rail on a metropolitan basis.

My Amendment 12 is simpler than that advanced by the noble Baroness, Lady Pidgeon. It would require a preliminary report that outlines the proposed framework in which Great British Railways is going to communicate with local authorities and regional authorities about passenger railway services. That it is going to communicate is something that the Government have committed to, as the Labour Party document Getting Britain Moving said so. There is going to be a great deal of consultation and involvement on every possible front, but, again, we are told that we have to take all of this on trust—that none of this will become manifest until we see the great rail Bill that will come in the future, with a bit of consultation but without seeing a proper text in advance for pre-legislative scrutiny.

We are trying to get it established now, as a principle at least, that the Government can initiate these communications before that Bill comes into effect. They can set up structures that allow those communications to take place; this amendment requires the Government effectively to do that.

If the Minister cannot agree to the precise amendment tabled by the noble Baroness, Lady Pidgeon, I very much hope that he will at least be able to agree to my amendment, which asks him to get those structures—which he envisages happening—in place as soon as possible, so that local authorities and the relevant regional authorities can be involved.

[Baroness Randerson (LD)]

My Lords, in response to the previous group, the Minister emphasised— I think it was in reply to the noble Lord, Lord Moylan—that the concession model would not comfortably fit national rail services. I accept that, and he made my point for me in making his response. The Government must not be allowed to create a national monolith, because one size will not fit all. Part of the variability that we should celebrate in this House is that which comes with devolution, because it fits local areas comfortably.

The Government have made a great deal of the £22 billion or £40 billion black hole and the shortage of public money. Money is undoubtedly in short supply. The Government have also made a lot of their support for devolution, but if devolution on rail transport services is to flourish then there has to be an alternative source of funding and of investment. Local authorities, even on the big scale of metro mayors, will not have the resources to invest in a pure public sector model.

Our concern in our Amendment 7 is that the Government leave themselves the scope to access or call upon alternative models of funding. That would be very much along the lines of what the noble Lord, Lord Liddle, suggested: some form of local partnership or an alternative structure, other than a pure public sector company. As my noble friend Lady Pidgeon says, we will be listening carefully to the Minister’s reply.

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[Baroness Randerson (LD)]

My Lords, I am very pleased to speak in support of my noble friend Lady Brinton and the significant group of signatories to this amendment. This eye-catching group of people campaign on disability-related issues and have made important points in this debate and others aligned with it. In addition to that amendment, which speaks for itself, there is Amendment 11 in my name and that of my noble friend Lady Scott.

Although the experiences of people using wheelchairs and those who do not have perfect sight and so on are very much at the sharp end of passengers’ experiences, the passenger body generally does not have a good experience in Britain these days. There are huge problems for passengers of every age group and every level of physical ability, so there is a massive job to be done in improving that experience. People would put up with a second-rate experience, perhaps, if they were paying second-level fares, but they are paying premium fares for a very rough deal, and those two just do not sit together.

Amendment 11 seeks to establish a body that will work on behalf of passengers: a body dedicated to passengers’ needs and to creating the kind of experience that those of us who are lucky enough to travel abroad on trains know can be achieved with a perfectly normal, non-premium rail service in other countries. If they can do it, I do not see why we cannot.

I am very pleased to see Amendment 15 in the name of the Minister, and I look forward with great interest to what he is going to say about it, because I hope it will reassure us that the Government’s plans include the creation of a passenger standards authority —or something similarly named—that will look out for passengers. I also hope that the Government will produce a commitment that suits the needs of the signatories of Amendment 8.

[Lord Moylan (Con)]

My Lords, I rise with some humility to make a few comments on Amendment 8, which, of course, is one where the noble Baronesses, Lady Brinton and Lady Grey-Thompson, bring an experience that cannot be gainsaid in your Lordships’ House. I said in Committee that I fully acknowledge—from my own personal knowledge—that the Minister is personally committed to seeing improvements in regard to accessibility. I know that it is a matter of importance to him, but none the less, fine words and parsnips come to mind. Action is needed and we need to see real progress. If Great British Railways offers something in that regard that has not been offered before, that would be greatly to its credit.

In relation to Amendment 11, from the noble Baroness, Lady Randerson, this is another example of what the Government could be doing now. It is already the Government’s policy to have a passenger standards authority; they have set that out in the document Getting Britain Moving. Like so many other things, it is wrapped up in a Bill that we are told we might see in 12 or 18 months. I have expressed in Committee a degree of doubt and scepticism as to whether the Government will meet that target. I hope they will, but these are very complex issues, and it could take even longer than that before we see the Bill. Then, of course, it has to be passed and enacted, and then, as I keep pointing out, it has to be implemented. Change on that scale does not happen overnight; it will take several years for it to be implemented. Where in that timeframe is the passenger standards authority going to stand? Will we see it coming to life at the beginning of the process or at the end? Could it be four or five years away before it comes into existence? We have no idea.

The amendment from the noble Baroness, Lady Randerson, would at least say, “This is one thing you can get started on now. You can get it up and running very quickly and it could be something that passengers could benefit from at a really early stage”. I really do not understand why the Government cannot accept, if it turns out that is the case, what the noble Baroness is proposing.

I have no comment on Amendment 15 in the name of the Government except to say that it is, of course, entirely unobjectionable from our point of view.

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[Baroness Randerson (LD)]

My Lords, I have one very brief question for the Minister, following the warnings by the noble Lord, Lord Young. Have the Government looked at this from the point of view not just of what I would call the finished product of the nationalised railway system but of how the categorisation of a mixed economy would work? We, the nation, will be in a situation of a mixed, some-and-some economy for a significant number of years to come.

[Lord Moylan (Con)]

My Lords, my noble friend Lord Young sought throughout Committee, with great forensic precision and courtesy, to get answers to the sort of questions he has been raising today, and I have sought, with rather blundering efforts, to get answers to very similar questions. Here we are on Report, still asking questions that the Government have consistently failed to answer throughout. The reason is that, as I said earlier today, this is a rushed Bill that has not been thought through properly as to its broader consequences. These are consequences not to be dealt with in a future Bill coming down the road but that flow directly from the measures in this Bill. I very much hope the Minister can give some account of them today and explain how the Bill and this nationalisation will affect the public finances in what I call, in my blundering way, balance sheet terms.

There are other items. Since we discussed this Bill in Committee, we and the country have had the body blow of the employers’ national insurance increase delivered by the Chancellor of the Exchequer. Amendment 19 in my name is there to probe what the consequences of that will be for Great British Railways. Will there be a very significant increase in staff costs on the railways as a result, and what impact is that likely to have on the revenue expenditure that the railways can undertake?

In Amendment 18, I ask for clarity on something that also flows directly from the Bill—it is a direct consequence of it, and not something to be dealt with in a future Bill—to do with the harmonisation of staff wages, terms and conditions as they transfer from diverse employers in the private sector to a single employer owned by the state. Drivers and other staff are employed by the railway companies on terms agreed with trade unions but not necessarily the same terms as between one company and another, so drivers’ pay, terms and conditions will vary somewhat between one company and another. The Government have resisted saying, at any point, what they will do about this if they are a single employer. Of course, theoretically, each franchise as it falls due will be placed in a separate company from the others, so it is perfectly possible, legally, for it to have a separate agreement with its staff, different from that which another nationalised company has with its staff, replicating the current arrangements, if it chooses to do so. Is that the Government’s intention, or is there an intention that wages, terms and conditions should be harmonised? If the latter, do the Government imagine that they will be harmonised on the basis of the lowest common denominator, the highest common denominator, or some denominator that might be found in the middle as a sort of average? This is a direct consequence of the Bill, but nothing has been said by the Minister about it.

I come back to the question of staff consultation. There has been no staff consultation about the change of employer. The idea that the Minister might wander around Waterloo station randomly consulting drivers as he accosts them, which he held out when he spoke earlier, is an attractive and enticing one. That is to be encouraged—there are not enough Ministers going around randomly accosting staff whom they employ in the public sector—but it hardly constitutes what might be called formal consultation in industrial relations terms.

I hope I am forgiven for saying this, but earlier I saw the Minister having a quiet chat in a break for a Division with his brother, the noble Lord, Lord Hendy, with his great industrial relations experience. Who knows? Perhaps he was pointing out to the Minister that normal industrial relations consultation requires a little more than simply wandering around and chatting to the staff on the station as you meet them, welcome though that is.

I very much hope that by now, with all the warning that the Minister had about these issues in Committee, he will be able to give an account of himself that will satisfy the legitimate questions of my noble friend Lord Young, and will be able to explain to us what his employment and industrial relations strategy is as a direct consequence of the nationalisations that will take place under the Bill.

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Moylan and Baroness Randerson

Committee stage
Wednesday 23rd October 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, I suspect that this will be one of the shorter debates in our consideration of this Bill in Committee, but it is one of the most important. It will be short, I suspect, because this group is rather technical, but it has very great significance, not only for the operation of the railways but for the passenger experience.

There are four amendments in this group, all of them in my name. The first two, Amendments 19 and 20, are closely related. They relate to the very peculiar situation in which we are now going to see the railways operated in this country: that is, that they are going to be practically unmonitored independently as far as their finance is concerned. Compare the railway sector to the water sector or to electricity. These sectors have economic monitoring to ensure that best value is being delivered to the customer. Nothing of the sort is envisaged in relation to our new nationalised railway. There is to be no economic monitoring and no supervision of the setting of fares, and that is what these amendments relate to. One is to do with charges to customers—that is Amendment 19—and the other is to do with the costs incurred by the utility. The railways are a utility, and that is how they are going to be run.

Of course, if they were run by the private sector—as they would be if they were water or electricity—that economic monitoring would cover both the costs charged to the customer and the costs incurred by the operator, because their efficiency would be monitored. As I say, none of that is envisaged here. We are asked to assume that, in public ownership—I am not now talking about a Bill that is going to come to us in 18 months; I am talking about the direct consequences of this Bill as soon as it starts to come into effect and as these franchises move over—the Government are going to set fares in a reasonable way that is not exploitative of customers.

It could be said that that can be assumed because it is not going to be run by the private sector—that the Government are not going to gouge our eyes out, because Governments do not do things like that. But they do. Tell somebody who is applying for an urgent passport at a cost of £1,000 that they are not having their eyes gouged out. Tell someone applying for a statement of their nationality that recognises an existing British nationality who is charged well over £1,000, including each time for their children on top, that they are not having their eyes gouged out—that is several thousand pounds for a family that are already British and simply want to have it recognised, as they are allowed to do, and register as British because they are already British.

We know from experience that Governments are perfectly willing to charge very high fees for their services in order to make a profit. Sometimes, this profit has been complained about—for example, in relation to nationality, not least by the noble Baroness, Lady Lister of Burtersett, and others on the Labour Benches when we have debated matters such as that.

Who will decide how fares are set, what the logic is, and what the railways’ aim is in setting those fares? This is particularly true in the case of railways, because they inevitably have variable fares. It is part of the nature of a railway that they aim for the highest return they can get from particular passengers; they are then willing, because of the nature of the structure of the business, to take marginal fares to cover marginal costs from other passengers who might pay very little for the same journey because they are willing to go at a certain time or book a certain distance in advance, and things of that sort. Those who do not have that advantage may find themselves being gouged because they need to travel at the last minute or because they are captive customers. Do not forget how many captive customers the railways have. There are not necessarily a lot of captive customers on the long-distance railways, but on the commuter network, especially around London, they are, in effect, captive customers. How attractive to the Treasury to turn the railways into a mill for generating money for the Government, if that is what it wants to do.

I am not saying what the fares policy should be. What I am saying is that there should be some independent monitoring of how it is done so that customers—or passengers, as I must remember to call them, remembering what I said to the noble Lord, Lord Snape, the other day—do not find themselves trapped in a system and exploited. No independent monitor is proposed, so we have to trust either the Department for Transport or Great British Railways. I am not sure which it will be in the long term, but in the short term, over the next few years, we have to trust the Department for Transport to set fares in a way that is not designed to maximise revenues from those who cannot resist paying them.

Similarly, if this were in the private sector, through the setting of charges there would be economic regulation—as there is in the water industry, at Heathrow Airport and so forth—of the efficiency of the costs with which the railways conduct themselves. There is no sign of that either in the Bill. Again, we are asked to trust the Department for Transport to ensure efficiency. Considering how many staff the Department for Transport employed to monitor and shadow the staff employed by HS2 Ltd, I do not regard it as a great guarantor of the efficiency of delivery and the control of costs. There ought to be an independent body to do that.

That deals, as far as I am concerned, with Amendments 19 and 20. We then come to Amendment 23, which is rather different but again relates to something the public should be entitled to know about: the great transfer of pension liabilities that will occur as a result of moving pension responsibilities from the train operating companies to the Department for Transport. I want to be clear about this: I completely understand that the staff are largely currently members of the national rail pension fund and that they will remain members of the same pension fund. The contributions and so forth should not in themselves change simply because of the Bill—I perfectly follow that. The costs will not increase as a result, but the purpose of this amendment is to probe where they will lie in balance sheet terms. Will they be a liability fully on the Government’s balance sheet? What consequence will that have for the national debt? This is something that we should know, because the railway pension scheme is, obviously, one of the largest pension schemes in the country. These are not trivial sums; they are very significant sums in terms of pension funds.

Finally, I have Amendment 25 on lease payments. I will not trespass into this very deeply because a similar amendment in the name of my noble friend Lord Young of Cookham is due to be debated later, and I know that he is much more knowledgeable about these matters than I am, but it is certainly the case that the lease arrangements that exist for the rolling stock are between the train operating companies and the roscos, the rolling stock finance companies. That is where the lease liability exists. Are these to be transferred to the Government? If they are, where will they sit in balance sheet terms? What balance sheet effect would that have? Therefore, there is the question of public debt.

There are two separate strands to these four amendments. One strand relates to balance sheet liabilities and the effect on the Government’s balance sheet of the measures proposed. We are told that this Bill has no cost implications, but is that true? The other relates to how we ensure that the railways are properly and independently monitored to make sure that the fares they charge are not exploitative in circumstances where exploitation is open to them, that their costs are efficient and that they are efficiently delivered. Simply saying that we should trust the Government or the Department for Transport on this is, I suggest, not a satisfactory answer.

[Baroness Randerson (LD)]

My Lords, one of the clear attractions of the new system should be increased transparency. There should be no chance that the new authority would be able to hide behind commercial confidentiality. One public body would make life very much easier in terms of national answerability. I do not agree with the mechanism suggested by the noble Lord, Lord Moylan, but he is making a valid point. Can the Minister confirm that the passenger standards authority, the passenger body that is going to be the champion of passenger standards, will have the power to investigate fares and report on problems? I gently point out that the Government will no longer be able to blame the train operators. All the blame will now fall on the Government, and passengers will make judgments based on that. It is therefore important that there is a public way for the Government to explain their decisions in relation to train fares and the fare structure overall.

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[Baroness Randerson (LD)]

My Lords, the amendment and the speech of the noble Lord, Lord Young, indicate the obvious advantages of nationalisation in terms of greater access to information and transparency; it has disadvantages, which the noble Lord set out, but it also has advantages. The speech by the noble Lord, Lord Sikka, was compelling: the evidence and information he gave us illustrated much better than I have heard before the issues that have been referred to—I referred to them on Second Reading and on Monday—regarding the imbalance between the attitude of the Government towards the speed of taking over the train operators and the fact that they are prepared to leave well alone the roscos, which can quite clearly be seen to be exploiting their situation and therefore getting excess profits as a result. I will be very interested to listen to the Minister’s explanation of why that is happening.

[Lord Moylan (Con)]

My Lords, at this hour I would like to expand considerably on my noble friend Lord Young of Cookham’s remarks on his amendment, but I find there is nothing I can add, given how well expressed his argument was technically. I shall say only that I hope the Minister, by contrast to his response to the previous group, will recognise the serious balance sheet issues that arise in relation to lease obligations. I understand that, while the department currently recognises its obligations to the end of the current contracts, most of which are a matter of months or very few years away, when the responsibility transfers to the Government, they will be responsible for the lease payments for the whole of the life of the remaining contracts for the lease of the trains and these will therefore represent a balance sheet liability, not simply an ongoing cost, that may well need to be recognised. I am not, as I say, as proficient in these matters as my noble friend, but I hope very much that the Minister treats that seriously and gives us a proper and robust answer about how this is to be treated.

I shall save the bulk of my remarks for the amendment moved by the noble Lord, Lord Sikka, with which, it may surprise noble Lords, I have a great deal more sympathy than they might expect, certainly as far as his analysis is concerned, though not necessarily with his solution of total nationalisation and so forth.

The fact is that there is a very large amount of capital in the world, and a capital is seeking a return. However, this capital is not buccaneering 19th-century capital of the sort that built the railways in the first place; this is not capital that is looking for investments at risk; and this is not capital that sees that it might win a large prize on one investment in its portfolio but is willing to tolerate the total loss of another investment in its portfolio. This is capital that is looking for risk-free returns—or returns that are close to being risk free—but at a rate of return that is considerably higher than it would achieve if it invested in government bonds.

Such capital is to be found throughout our economy—this is a criticism not of the current Government but of the previous Government and of the Labour Government as managed by Gordon Brown—because it is the basis on which funding is now provided to most of our utilities. That is why they all belong to large, foreign—although they are not necessarily foreign, and I do not object to the fact that they are foreign, so I will drop that word—investors who are looking for super returns and are achieving them because the Government are so accommodating towards them.

The noble Lord, Lord Sikka, asked why the Government do not do something about this and why they do not nationalise the roscos as well. That would be a true nationalisation. As I said at Second Reading, this Bill is not really a nationalisation of the railways; as I said in Committee on Monday, it is more like dismissing your chauffeur at the end of his contract. That is all that is really happening. If you are nationalising something, you normally have to pay for it and you normally acquire assets. That is not what is happening here, because the assets are all left in the private sector. The Bill’s headline claim of nationalising the railways—after all, that is the main purpose of this Bill: to get a headline out there quickly—is largely bogus. The main reason that the Government are not acquiring the roscos is that they cannot afford to do so.

There is a second reason that the Government are not acquiring the roscos or going even further—as I suspect the noble Lord, Lord Sikka, would—by seizing their super profits and acquiring them at a price that would reflect a reasonable rate of return closer to the risk-free rate of return for the rest of the period of their leases. That reason is that this Government, rather like the previous one, are wholly dependent on that source of funding for nearly every infrastructure project that they want to carry out, be it railways, environmental stuff, net zero and so forth.

In fact, there was a great conclave of these investors only a week or so ago, at which the Government told them what wonderful prospects they would have with their super, close-to-risk-free returns if only they would invest in Britain. It is not that we will get less of this sort of finance that is so objectionable to the noble Lord, Lord Sikka, under this Government; we will get a great deal more of it. That is the simple explanation, whatever the Government say, as to why they will not do what the noble Lord would like them to do, and which anybody who values true competitive capitalism would also consider to be moving towards terminating an outrage.

Passenger Railway Services (Public Ownership) Bill

Debate between Lord Moylan and Baroness Randerson

Committee stage
Monday 21st October 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, this has been a very interesting group of amendments to debate so far, and I am very taken by the latest thoughts from the noble Lord, Lord Berkeley, on playing around with the definition of open access operators and what will be accepted. I was interested, too, in Amendments 28 and 29 and the thoughts of the noble Lord, Lord Young, who is always very thought-provoking. His amendment, as he said, is very much the obverse of the ones put down from these Benches. I urge the Government to look at this and allow themselves the flexibility to change the order of nationalisation in order to allow good franchises to flourish and to give themselves time to unravel privatisation more slowly and more logically. It has to be more than just, “This was in the manifesto and therefore it will happen whether or not it is logical”.

I am really sorry that the noble Lord, Lord Liddle, is not in his place, because Amendment 35 is fascinating. It refers to a broader definition of what a public sector company should be, so that it includes public/private partnerships and co-operative ventures. I do not need to remind noble Lords opposite that some of them have been, or may still be, members of the Co-operative Party. As Liberal Democrats, we share an enthusiasm for co-operatives as a form of company and operation. I can envisage that a smaller rail line, perhaps in a rural area, would work very well on a co-operative or a public/private partnership basis. After all, it would bring in fresh investment without, in any way, undermining the Government’s commitment to a nationalised structure overall for the railways.

Finally, I urge the Government to look again at their plans and the precise terms of the Bill through a post-Covid lens. Covid caused the collapse of the railway system, necessitating a whole new approach to franchising for the train operators. It could happen again, either for similar reasons or as a result of a financial crisis, and I urge the Government to look again at the terms of the Bill. Have they allowed themselves sufficient flexibility to cope with the unexpected, to allow rail services to continue to operate even if there is a series of unlikely events that have upset the market for those services?

[Lord Moylan (Con)]

My Lords, my noble friend Lord Young of Cookham said that he thought that the Government’s determination to trammel itself in the way that Clause 2 does was ideologically driven—a commitment to a certain vision of the railways based essentially on a political ideology. I would not be so bold as to disagree—he may well be right—but there is another way of looking at this, which I referred to at Second Reading. What is really driving the Government’s approach to this is that they have absolutely convinced themselves that the only way in which the railways can operate is if there is a single controlling brain, so that every train run in this country for passenger service purposes is run by Great British Railways, and that this body will be the sole provider of railway services.

This is a truly ideological obsession. It is almost a psychological fixation that appears to have gripped the Government, and it needs to be tested. Questions are being asked from every side of the House about its practical effects, and we are getting no answer except, “It’s in the manifesto”, which really is no answer to a passenger standing on a platform waiting for a train that was operating perfectly satisfactorily under private ownership and is now simply not arriving.

I turn first to Amendments 4, 10, 14 and 15 in this group standing in my name. If I had written the explanatory statements rather better, Members would understand—perhaps they do—that these four operate as one. They are consequential on each other and have a single effect, which is to say that the Secretary of State in awarding new services must put them out to tender but on a “concession” basis. Amendment 14 defines a “concession” as

“a contract under which the franchising authority specifies rail services to be provided by a private sector entity and retains the risk of fluctuations in the receipt of fares”.

In other words, this amendment does something that Transport for London has done with great success in relation to buses, London Overground rail services, the Wimbledon tram and the Docklands Light Railway. They are all operated on this basis and although there might be complaints from customers about this, that or the other, there are no complaints about the basis on which the services are operated contractually. Of course, TfL has chosen to brand them all under its own branding, so members of the public and passengers are often not even aware that they are operated on this basis. We have a system that works and that we should consider very seriously by contrast to the determination of the Government that all these services are to be taken in-house and run by a single employer with a great, single, controlling brain.

Amendment 14 does something else: it is in conformity with the Williams review, which I thought was the plan that there was, generally speaking, consensus that we should operate to. There is no other plan or document of any weight or substance that has been produced as a result of an independent review for the future of the railways. When I drew attention in our last debate to what is said on page 55 of the Williams review about the concession model being the pattern taken from TfL that should be used nationally, there was a slightly astonishing intervention from the Minister in which he said that Mr Williams no longer thought that, because he had rung him up and said that we need to have it nationalised. How much else in the Williams review has been vitiated by random phone calls made by the Minister to its author? How much is left of the Williams review, if it is capable of being rewritten by the Minister on the basis of claimed phone calls with Mr Williams?

It happens that Mr Williams and I served together on the board of Transport for London when the Minister was its commissioner. I have to tell him that if I were to look into the contacts in my telephone I think I would find that Mr Williams’s telephone number was in my telephone as well. It is perfectly possible that we could pursue this debate on the basis of various individual and private phone calls that we had had with Mr Williams about what he actually meant, what he thinks now, and whether his view has changed —and then what will be left of this report? Without this report, there is no plan. The Government are, it turns out, now inviting us to take a step completely into the dark. It is not just an act of faith, as I said on an earlier group, that they can run the trains better. It is a belief that they are going to give us a better plan for the future, but that they cannot tell us what the plan is, whereas at least previously they had some basis for saying what it would be. The whole thing really is turning into the most dreadful shambles.

I would like to know why concessions do not work, why something so successful in London will not be allowed, and why what was recommended by Williams is not allowed. I do not, I am sad to say, expect to hear the detailed explanation from the Minister that those questions deserve. The other amendments in this group have similar effect.

My noble friend Lord Lansley would like the Government to have the power, where they choose to, to go out to tender and allow some of these wicked private entities to submit tenders. I may myself be wicked when I say that many of these private entities are not very private—some are the subsidiaries of our great European railway friends. They are state-owned bodies from Europe. Who knows whether the Prime Minister, as he creeps towards a great reset and love-in with the European Union, would not find it quite useful to be able to say that the Italian railways, Deutsche Bahn and Renfe could bid for services running on our railways—just as they can at the moment—and that they are not going to be kicked out of Britain? “Mrs von der Leyen, we are going to let them back in.” Would not that little bit of flexibility that my noble friend Lord Lansley would like to be able to give to the Government possibly be rather welcome in the future?

My noble friend Lord Young of Cookham made a good case for his amendments. I echo the comments of the noble Baroness, Lady Randerson, who said that it is a great pity that the noble Lord, Lord Liddle, is not here to speak to his very intriguing amendment. To a large extent, the argument for it was made very well by my noble friend Lord Young of Cookham.

The possibilities of collaboration with the private sector—indeed, with community groups and, when we come to later amendments relating to devolution, local authorities and local government—are all worth exploring if we are going to reform our railway. All of these are being shut off and closed down now by the word “only”, which the noble Lord, Lord Lansley, and others are effectively suggesting be deleted.

--- Later in debate ---

[Baroness Randerson (LD)]

My Lords, this small group of amendments addresses a number of issues that inevitably raise questions, because this very tightly drawn Bill provides no hint of how they are to be dealt with. I participate in this debate with some temerity following contributions by the noble Lord, Lord Berkeley, and my noble friend Lord Bradshaw, who know so much detail about the freight industry.

Liberal Democrat Amendments 40 and 41, to which I have added my name, are therefore probing amendments looking for details of government plans, which I hope the Minister can supply today. There are thousands of jobs and potentially billions of pounds of investment riding on the Government’s answers to these questions.

Amendment 40 is about a very specific issue but, as my noble friend Lady Pidgeon has emphasised, the role of the British Transport Police is vital, providing the rule of law on our trains. It is important to remember that the rule of law provides consumer and passenger confidence. Those of us who are older, younger or weaker are particularly dependent on the good offices of the BTP because they provide the assurance that people need before they are prepared to travel on our trains.

I emphasise that, as my noble friend said, British Transport Police funding has been provided virtually unseen from within the industry for a very long time. The total amount of money, at nearly £500 million a year, is not inconsiderable. It is therefore important that we have a clear answer now from the Government about they intend to deal with BTP in the future. In particular, how will it be overseen? Will that be with independence and at arm’s length from the Government? Which body will do that supervision?

Amendment 41, on freight, deals with a much more substantial and complex issue, because the freight industry is so complex. As the noble Lord, Lord Berkeley, said, it is essential that the new system be set up to encourage rail freight to improve its efficiency. That will be difficult, as he emphasised, because a centralised, nationalised Great British Railways will be bound to feel pressure to prioritise passenger services. We have crowded tracks running at capacity. We have vocal passengers who want trains at a time and a frequency convenient to them. We have a Government who have sponsored a nationalisation project, and their reputation will be damaged if passengers’ interests suffer. We also have a Government who emphasise that they are facing a financial black hole. Will they be willing to invest in track and signal modernisation of the sort outlined by my noble friend Lord Bradshaw, to benefit freight rather than passengers?

I fear that freight could rapidly become a poor relation, so I am keen to hear details and reassurance from the Minister. I thank him for his letter, but I point out that it says that next year’s railways Bill will “enable” the growth of freight. I emphasise that I would much prefer a duty to promote the growth of freight, rather than simply enabling it.

[Lord Moylan (Con)]

My Lords, I shall speak first to Amendment 40, concerning the British Transport Police, in the name of the noble Baroness, Lady Pidgeon. I associate myself with everything she has said about the importance of the British Transport Police in maintaining safety and law on the railway network and indeed in promoting a sense of safety, which is almost as important. That is particularly true, if I may say this, for women travelling on the railways, perhaps on their own. If they do not feel safe, they will not travel on the railways, it is as simple as that, and the British Transport Police have an important role to play in that regard. Fortunately, there is generally a good record of personal safety on the railways, but we want to see how the Bill will enhance that.

My figures may be terribly out of date, but when I was last involved, half the funding that the British Transport Police received came from Transport for London for services in London, and the rest was spread throughout the rest of the country. I will not say that the railway companies were not procuring enough British Transport Police to do the job—the test of that, of course, is whether there is criminality on the system—but they were not procuring at the same rate of coverage that Transport for London was procuring at. This is an opportunity for the Government to say, as they take control of the companies, how they are going to ramp that up and what investment they are going to make in it. I hope to hear from the Minister on that point.

A very interesting constitutional point was raised by the noble Baroness, Lady Pidgeon, which I had not heard expressed in any way before: how is the British Transport Police Authority to be constituted? At the moment it is constituted in large measure through representatives of the train operating companies. If there is effectively only one train operating company, which is the Government, how is it going to be constituted? As the noble Baroness says, it operates out of the Department for Transport. Is it going to become the first government department in this country—I think this is correct—to have its own police force? Even the Home Office, out of which ordinary policing operates, does not have its own police force; they are all accountable to police authorities or, now, to elected police and crime commissioners in appropriate areas, or to the Mayor of London in his capacity in London, and so forth. Could we end up in a constitutional nightmare here, a car crash that the Government have not properly thought through, as a result of this proposal to nationalise all these railways? Again, I would be interested to hear what the Minister has to say.

Turning to freight, I share the concern of the noble Baroness, Lady Randerson, about expressing too definite opinions on this topic, especially in the presence of the noble Lords, Lord Berkeley and Lord Bradshaw, who have such considerable and long-term prior knowledge of it. I have some slight sympathy with the Government on the point because, while I may be wrong about this, I understand that there are freight companies that have rights to paths which they do not use but will not relinquish because they may be useful in the future—and why should they relinquish them?—while, at the same time, they might want to have access to other paths which they cannot get hold of. This is slightly a mess, so perhaps there is some work for the Government to do here to sort it out.

The previous Government also had, as I understand it, a rail freight growth target: to increase rail freight by 75% by 2050. So far, that has not been mentioned and we have not heard yet whether the new Government wish to commit themselves to that target. Again, there is an opportunity for the Minister to say that that is his target when he gets to his feet. We would like to hear more about that.

The Minister may want to say that some of those points can be addressed in the future Bill—the Bill we are promised that is further down the road—but he cannot say that of the points raised by my noble friend Lord Young of Cookham and the noble Lord, Lord Berkeley, both of whom made the point that the way in which this is now proceeding, by contrast with the Williams report, creates a fundamental and ineradicable conflict of interest in the role of Great British Railways. When it was the body—the great controlling brain, as I referred to it—that was going to establish who could run what railway services where and, where appropriate, award franchises or concessions for passenger railway services, while also allowing open access and allowing freight services to take place, it could do that from a disinterested position. It would be allocating resource presumably according to some sort of rational principle that could be explained and interrogated by interested members of the public and other parties with a stake in the matter.

Now, of course, it is always going to be the case that Great British Railways will also be the operator of the passenger services—so what about the other services? What about open access and, most particularly as far as this group of amendments is concerned, where does freight get a look in? How does it make its case and to whom does it appeal if it feels it is unjustly done by? Is it to be allowed to appeal only to the courts or could there be a truly independent body outside Great British Railways—perhaps the Office of Rail and Road; I do not know—to which appeals could be made and which would decide and allocate these paths, where they are constrained, on a rational basis?

We have no idea about this because the Bill, as I said earlier, is being rushed through for manifesto and publicity reasons—for headline reasons, fundamentally—without these crucial questions that it throws up being answered. They are not my questions; I did not table these amendments. They come from Benches on all sides of the House. These questions are being thrown up and the Government have no answer, except the tune we are getting accustomed to, which has as its first verse, “It’s in the manifesto” and as its second verse, “We’ll tell you when we get to it some time next year”. I hope we can do better than that when the Minister gets to his feet.

Bus Franchising

Debate between Lord Moylan and Baroness Randerson

Thursday 12th September 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, I thank the Minister for the Statement. The Official Opposition share the Government’s desire for high-quality public transport and we will hold the Government to account on this.

In government, the Conservatives prioritised buses, protecting our network during the pandemic and introducing the “Get Around for £2” scheme, saving millions of people money on their commute and, most importantly, incentivising them to travel by bus again quickly after the impact that the pandemic had on travel. We know that our public transport sector desperately needs increasing passenger numbers to make routes viable and this is an especially acute problem in rural areas. The previous Government’s policy, driven by the “Get Around for £2” scheme, was successful in driving up the number of passenger journeys in the year to March 2023 by almost 20%. While this is not yet at pre-pandemic levels, our scheme is supporting the return of passengers and boosting the bus sector. So, before addressing the specific issue of bus franchising, can the Minister say what the Government’s intention is for the “Get Around for £2” scheme and whether it is also at risk of means testing? Will the Minister rule that out?

I turn now to the subject of the Statement: the statutory instrument. It seeks to give to all local authorities the powers on bus franchising that are currently exercised in major conurbations such as London and Manchester. Broadly and generally, the Official Opposition welcome the granting and devolution of more powers to local authorities, but this statutory instrument, like a number of announcements from the Government to date, is fundamentally bogus, for two reasons. First, it is often argued that cities and towns outside London should have the sorts of public transport services that London has and the sort of system that provides those transport services. As noble Lords will no doubt be aware, the bus service in London is provided by private companies that operate under concessions that have been granted to them, competitively, by Transport for London in a way that ensures a degree of coherence and system in the operation of the bus service across the conurbation.

The fares risk, which is the crucial question in all this, is borne by Transport for London. The bus companies themselves simply supply the service for a fee. The truth is that this is not something that just happened overnight. TfL did not suddenly find a way to do something that nobody else had ever done. Transport for London, in various guises, has been operating transport services in London for over 150 years, and bus services going back at least to the foundation of the General Omnibus Company—a French company, actually—in the 1850s in London. It is the historical core of what we now call London Buses. The capacity of most local authorities to deliver these services is extremely limited. They do not have those roots or those abilities. Where, out of nowhere, are they to conjure the ability to set up a bus concession management system?

The second reason that this is a fundamentally bogus statutory instrument is the cost of doing it. Running bus services, on the sort of basis that local authorities wish to provide them, is very expensive and requires large subsidies. My figures might be slightly out of date, but when the last Mayor of London, Boris Johnson, left office, the subsidy to London Buses was of the order of £450 million a year. The last I heard, and it may not be totally up to date, was that under his successor the cost of London Buses is of the order of £700 million a year. That is in a very large city, of course, but £700 million a year is a huge amount to have to find to subsidise bus services.

Throughout the country, local authorities will have to subsidise buses if they are to provide the sorts of services that this statutory instrument and this Government are holding out as being possible. Where is the money going to come from? Without massive investment in capacity and the subsidisation of operations, this statutory instrument is fundamentally meaningless.

So do the Government intend to publish a full assessment of the expected impact of this policy on the quality, frequency and accessibility of bus services? Will the Minister commit to assessing the relative impact of this policy on rural communities in particular, as opposed to urban communities?

Finally, the Official Opposition, as I say, support the desire for improved public transport and we generally support the increase of powers to local authorities. But this policy appears to put showmanship ahead of practical improvements. The Government have yet again got their priorities wrong, focusing on who runs local bus services rather than on delivering the people’s priorities, which are the quality, frequency and reliability of our public transport network.

[Baroness Randerson (LD)]

My Lords, the Liberal Democrats welcome this Statement. As it has emphasised, it is clear that buses are crucial to our economy and society. They provide services for many of the poorest groups—the young, the old, more women than men—and are crucial for access to education, jobs, health services and other aspects.

We welcome rapid action to deal with our rapidly declining bus network outside London and we are fundamentally in favour of devolution, believing that decisions made locally are generally more effective and efficient. If the Minister looks back to Hansard in 2017, he will see that I put down during debates on the Bus Services Bill amendments that did roughly what the Government’s proposed measures will do—allow all local authorities to franchise and set up their own bus services. The response from the then Minister was that it was all about issues of capacity. To be fair, that is still an issue. On its own, this will not be enough, so what are the Government going to do? Will they provide additional funding and funding changes in the Budget in order to ensure that franchising is enabled in those local authorities that are not generally as big as, for example, Manchester.

As with the rail Bill, our concern is that the key issues are not necessarily included in the Government’s proposals in order to be broad enough to solve the problems. I have a couple of associated questions. Reference has been made to government subsidies to support the £2 fare cap. That will run out in December, and another funding stream that is designed to support improved services will run out in April. Can the Minister give us a commitment that we will see the end of temporary funding and that it will be replaced with a multiyear, more encompassing set of funding that is less divided up? There are four sets of funding that go to local authorities. They need, as the bus industry needs, certainty and a long-term approach, so I hope the Government will do that.

Finally, can we have an assurance that the Government will look at badly needed incentives and assistance to encourage young people on to our buses? For years and years, we have had free fares for elderly people. Young people need a nationwide scheme of at least reduced fares in order to get them on the buses and encourage them to become the bus users of the future. Many rural areas in particular need additional bus services, and young people using the buses would be a great incentive to the establishment of new bus services in those areas.