Railways Bill

Lord Tunnicliffe Excerpts

2nd reading
Tuesday 7th July 2026 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, it is a privilege to be the last Back-Bench speaker. We all know that at least it is almost over.

I am totally in favour of the Bill. It will create a much better situation and a much better structure than the one we have at the moment. There is a wonderful myth going through this debate that privatisation was a great success. It was not quite said in so many words but somehow, by involving the private sector, things changed massively and those were wonderful days. Of course, what they really were was an opportunity for financial manoeuvring. Privatisation, essentially, was a financial and operational failure.

If we go back to when it started, there was a company called Railtrack looking after the track. It started operating in April 1994 and initially had very good results. It borrowed money and the Government gave it various guarantees. It was sort of a proper company, in its legal structure, but it eventually fell apart in 2002. Out of it, we created another company called Network Rail in 2002. I do not think anybody actually got to the bottom of what sort of company that was. It clearly was not a proper plc and we lost sight of worrying about that, for some reason. But we were still in the European Union at that point and part of an organisation which I believe was called Eurostat.

On 1 November 2014, Eurostat said, “That’s a nationalised industry. All the money is guaranteed by government; all the subsidies come from government; all the rules and what it is supposed to do come from government. It’s a nationalised industry”. So we nationalised it and that was fascinating, because it was one of the biggest nationalisations ever. It cost the country £34 billion to transfer the guaranteed debt that Network Rail had at that point to the Treasury, and barely anybody noticed it. That is the sort of money the privatised railway consumed.

On the train operating companies—all those so-called wonderful companies—let us not lose sight of the fact that many of them failed. The state of play in May 2024 was that four of them were being operated by the Government through an organisation called the operator of last resort. I believe that one of the things this Bill will produce is much more clarity over money.

That may not be a happy experience, but I believe we will be in a much better place, because the best brains in the so-called privatised railways compete against each other to win the point on who is to blame or how to get the best paths—the debates on the timetable used to go on for 18 months or so. We will have a situation where the top people in Great British Railways will all be trying to achieve the same thing, and the top teams will share those objectives. I know, because I have done it: I spent 17 years in the railway business. You can have a publicly owned railway, and you can manage it. Obviously, you have to break it up into manageable chunks, but you can transmit a common objective throughout the organisation, and we did. Not only will the teams see the value of working together but workers will see the value of working together. My prediction is that everybody, particularly passengers, including disabled passengers—I am very sensitive to the case that has been made for a better handling of disabled passengers—will get a better deal, as well as the taxpayer.

I have two concerns. One is the level of consultation and involvement. If you go through the whole document from cover to cover, you will discover 34 clauses where the Secretary of State has decisive authority, 11 clauses where the Office of Rail and Road has decisive authority, and 10 where Great British Railways has decisive authority. There are six clauses where the Office of Rail and Road has consultative rights, and two where GBR has them. There are four clauses where GBR is expected to originate action, and at least one where ORR is similarly expected to do so. The whole consultation process is incredibly complex. It is possibly necessary, and perhaps inevitable, for it to be that complex, because of the multiple stakeholders, but it will create friction and noise. The most important set of skills that will be necessary in this new organisation will be for managing that diversity of consultation, and some of the best people in Great British Railways will be needed to manage those various relationships. Consultation is not a bad thing, but it needs to be very carefully managed.

Another problem with this organisation, which I put to the House, is that the money will become very clear. Operating railways is expensive. The only way for a railway to pay for itself is through very high volumes, and high volumes will work. Everything else, virtually everywhere in the world, has to be subsidised. We need to have a debate about what the railway does for us as a society, and we need to look at the real value it produces. We need to get away from the best speech and getting the best chunk of money out of the Treasury and get back to a consensus on the criteria that we need to measure that debate. With that hard financial reality on the one hand, and a unified organisation that can see the whole operation, with an absolute commitment in the top team to the passenger and to society, I believe this will be a success.