(1 week, 5 days ago)
Grand CommitteeMy Lords, it is a pleasure to make the first contribution from the cushion-less seats—perhaps that will change for me when we get to day 4 of Committee.
I congratulate the Minister on everything he did when he was in charge of TfL on innovation and the smart use of data. There is nothing smart about data in itself; it is the uses we put data to that make it smart. That is what is behind my two amendments and those to which my noble friend has eloquently spoken in this group. When the Minister was in charge of TfL, he transformed how the network ran and, critically, the passenger and user experience. His legacy lives large today on that network.
But when we come to this Bill, we do not see very much of that at all—there is nothing that is even a distant echo of what was achieved at TfL—so my amendments are somewhat probing but also offer some solutions. Amendment 130 seeks to put a technology and innovation imperative on GBR. I have set up some technologies but the key when drafting amendments and indeed legislation is to be tech-neutral, because by being tech-neutral we have a good chance of being tech future-proofed.
Whether it concerns passenger safety, passenger experience or the efficient running of the rail network itself, you would imagine that all forms of AI would have a role to play. My second amendment, Amendment 329, goes to the heart of the issue of cyber. We currently have a cyber Bill in your Lordships’ House, but I would really like to see specific cyber requirements across the slate of legislation coming through. Otherwise, how will we have a sense that something as critical as the rail network has the protection and the posture it requires in the face of the key cyber risks? Those risks are here today; this is not something for tomorrow. Surely that must be a key consideration and function, or perhaps direction, for GBR, because without it, we will leave the railways open or with optionality to take a view on this. Cyber is critical, so there should be something in the Bill to this effect.
This is perhaps even more significant than the other technology and innovation amendments in this group. I look forward to the Minister’s response to them all.
My Lords, I intervene briefly to speak to my noble friend’s Amendment 63A, on innovation and new technology. This country has had a fine tradition of both innovation and technology in the railways, right from the beginning. We have had the finest engineers—in Victorian times, and then, in the last century, in the 1920s and 1930s, we produced the fastest steam train.
Under British Rail, the engineering was of the highest quality, but it was focused on the heavier end of the rail industry: rolling stock, signalling and track. Post privatisation, innovation and technology switched to customer service, marketing and cutting costs. That was because, under the franchise system, which you did not have under a monopoly, there was an incentive to win new customers, improve customer service and reduce running costs. None of that was there with the previous monopoly, and there is a risk that once you move again to a state monopoly, the incentives we had in the private sector to innovate and use technology will fall away.
There is a risk of losing another change that happened post privatisation. If one franchise, such as Chiltern Railways, introduced a new innovation or service, customers would then expect the same, or an improvement, on Greater Anglia or Great Western Railway. Once you move to a monopoly, that sort of competitive advantage within the industry falls away, and you rely on looking at what happens overseas. That is why I wanted to intervene: to underline the importance of driving forward innovation in technology in the absence of the drive of the profit motive and the need to win business—a motive that risks falling away once we move over to GBR.
My Lords, I will speak briefly to this group. First, I echo what my noble friend Lord Moylan said about the courtesy of the Minister. I thank him for the two letters I received this week. One, which I think was also sent to my noble friends Lord Moylan and Lord Lansley, was about GBR subsidiaries and clarified in a helpful way that those not doing railway functions can be majority owned by a body other than GBR. The Minister has satisfied me as far as that goes. There was also his further letter to me on licensing, which again was helpful and clarified matters to my satisfaction. I am grateful to the Minister for his courtesy in responding so promptly.
(2 weeks ago)
Lords ChamberI think the noble Lord was not intimately involved with the passage of the civil aviation Bill, which went through this House just a few short sitting weeks ago. On that Bill, there was a discussion, on an amendment principally proposed by the noble Lord, Lord Young, about whether there should be compensation. As the Minister handling the Bill in Committee and on Report, I took great succour from the statements of the noble Lord, Lord Harper, who was the Secretary of State during the last of those events. He said this:
“The conclusion that I came to was that, if you were to change the position so that NATS was responsible for paying compensation, almost half the bill would land on the taxpayer, just over 40% of it would effectively end up on a different group of airlines—not necessarily all the ones hit by it—and a little bit would effectively land on the staff. The conclusion that I reached was that that did not really get you to a significantly better place than the current position, accepting that the current position is suboptimal”.—[Official Report, 16/6/26; col. GC67.]
That is what he said at the time, and that is currently the view of the Government.
My Lords, I have the deepest respect for my noble friend Lord Harper, but three former Secretaries of State for Transport took a different view from the one the noble Lord has just read out. When NATS makes mistakes, the airlines pick up the tab. Last week, the airlines had pilots in the wrong place, planes in the wrong place and pilots running out of hours. Is it not a manifest injustice that the airlines have to pick up the tab for the failures of NATS, which recently paid a dividend of £171 million?
The noble Lord is of course echoing the case he made during the passage of the civil aviation Bill, which the Government disagreed with. Of course the event is unacceptable and we need to get to the bottom of it. The noble Lord, Lord Moylan, said it was another event and of course it is, but it looks, certainly at the moment, as though it is not the same event as in 2023. The Secretary of State and the department are relentlessly focused on finding out what the cause was and on preventing it happening again, which is the way to avoid costs such as the ones the noble Lord referred to being incurred.
(2 weeks, 4 days ago)
Grand CommitteeI am not sure if that is a question to me, but let us assume it is. I am not sure that I am saying that. I am saying that, as things stand under this Bill, the Secretary of State is not providing money to GBR for the purpose of providing railway passenger services. The Secretary of State has the power to do it under the 2005 Act. Nothing I am saying determines how that money is to be used.
My Lords, Amendment 314 in my name, supported by my noble friend Lord Moylan, enters the arcane world of Treasury theology—what is and what is not public expenditure. It would require the Secretary of State to report on the impact of the Bill on public finances. This is important because the Government constantly emphasise, rightly, their commitment to the fiscal rules to contain borrowing, build market confidence and reduce upward pressure on interest rates and taxes.
One of the fiscal rules is the investment rule: public sector net financial liabilities— sometimes known as PSNFL—which is a broad measure of national debt, must be falling as a share of the total economy by 2029-30. Another is the stability rule: the Government must forecast a surplus on day-to-day spending by 2029-30, meaning that regular public services are funded entirely through tax revenues rather than borrowing.
Clearly what GBR spends is public expenditure, but expenditure or borrowing by private companies can be classified as public expenditure if certain qualifications are met. Decisions on that are taken not by the Government but by the Office for National Statistics, and it operates according to international definitions. It does not allow for consideration of political or commercial significance when making its classification decisions; they are essentially statisticians.
The Minister may not have read “UK Economic Statistics Sector and Transaction Classifications: The Classification Process”—he may not even have heard of it—but it is relevant to Amendment 314. I shall summarise: the difference between the public and private sectors is determined by where control over the organisation lies rather than by “ownership” or whether the entity is financed from public funds. Control is the ability to determine general corporate policy. I will come on in a moment to the relevance of this to the rolling stock companies where, under the new scenario, GBR will be the principal customer, but there are two relevant instances where attempts by government to circumvent these rules have come unstuck, with consequences for the balance sheet.
One that will be familiar to the Minister was Network Rail. Network Rail was set up in 2002 as a private company limited by guarantee, primarily to keep its massive debt off the Government’s balance sheet. By structuring Network Rail as a private company limited by guarantee without shareholders, the Government could then borrow large sums of money for infrastructure upgrades without adding those billions to the official national public debt.
However, in 2014, ONS reclassified Network Rail as a central government body in the public sector, and this resulted in roughly £30 billion of debt moving on to the Government’s balance sheet. The Minister will have had direct experience of the consequences of that at Network Rail. We know because we have the Hendy report, which sets out the consequences for Network Rail of this reclassification. Debt was controlled, capital was rationed, assets were sold off and upgrades were postponed. I think the last thing the Minister wants to do is to write another Hendy report, mark 2, when rolling stock is classified as Network Rail is.
(2 weeks, 6 days ago)
Grand CommitteeMy Lords, I have added my name to five amendments in this group. I am the lead name on Amendment 31, which would require the Secretary of State to issue directions to promote fair competition, and on Amendment 48, to which my noble friend referred. It has the same objective as the other amendments, particularly those ably moved by my noble friend, but it does so by making it a condition of GBR’s licence that GBR does not distort the market in ticket sales. The advantage of that amendment is that it is upstream—it is proactive—in that GBR would not get its licence until it had satisfied not just Amendment 48 but, in conjunction with Amendment 47, the CMA had signed off the necessary precautions and provisions that my noble friend has just referred to to make sure that any competition is fair. The other amendments would place a duty on GBR to compete fairly, but they would bite only if it was alleged that it was not doing that. The advantage of Amendment 48, in conjunction with Amendments 47 and 49, is that it is upstream and hopes to avoid the problem.
I am grateful to the Minister for the meeting he held on 3 September when he confirmed that he wanted a fair and open market when it came to retailing. There was some good news at that meeting in that the Minister confirmed that GBR will not be selling tickets that only GBR can sell—a practice to which my noble friend referred. He confirmed that anything that GBR sells will be available to online retailers, and it would be helpful if we could have that on the record. The ORR has already done a review of the benefits of an active retail market, and this is what it said in 2015:
“Third party retailers play a key role in improving ticketing for passengers. They offer different ways to access information about rail fares and journeys and provide more choice in where and how to buy tickets. They also play a role in expanding the rail market (to the benefit of TOCs and taxpayers) and in putting competitive pressure on TOCs to improve their offering, including by innovating”.
A recent review by a firm called Teneo estimated that third-party retailers added an extra £450 million per year in additional revenue for the rail industry by attracting new customers, reducing friction in the rail journey and supporting revenue protection. The independent sector pioneered digital ticketing. It paid 70% of the £30 million upgrade to the new barcode infrastructure. Those benefits can carry through to GBR, but only if there is fair and open competition.
The independent retailers are used to competing with train operating companies. At the moment, they are prevented from unconstrained subsidy of their retailing by the public service obligations in transport. They are happy to continue to compete with GBR, but they are anxious that there should be a level playing field, as my noble friend has just explained. She quoted from the CMA; the following sentence adds force to her argument. About the risks, it said:
“In a more closely integrated model, additional safeguards are likely to be required in order to achieve the government’s aim to ensure the sector benefits from the effects of fair and open competition between GBR and TPRs”.
Those additional safeguards are the subject of all these amendments.
One possible solution would have been to adopt the model of SNCF, a publicly owned French railway company whose website is a separately owned company. However, the Minister has made it absolutely clear that he does not want that option; he wants an integrated GBR, so I will not pursue it in that particular form. But insisting on an integrated model does not mean that the cost of online retailing should not be identified—a point made by my noble friend. Separate and transparent financial accounting should be a cornerstone of the safeguards that the CMA and ORR want. My noble friend referred to British Telecom; there is a parallel here. Both GBR and British Telecom owned the network but sold services using that network in competition with others. As my noble friend said, the solution insisted on by the regulators was clear separation.
May I draw on my experience as a former Treasury Minister and Transport Secretary to outline the risks that I see ahead? In the next few years, there will be enormous pressure on the Department for Transport. It is an unprotected department, and the IFS has estimated that it will have to cut its budget by 3 percentage points between now and 2029. It will get a letter from the Treasury asking it to identify savings of between 5% and 10%, in cash terms, in order to keep the Government within their fiscal target. The Secretary of State will reply by thanking the Treasury in courteous terms and saying that it can meet that target only by either cutting investment, cutting the rolling stock programme, which impacts on growth, putting up ticket prices, which impacts on the CPI, or cutting branch lines that run through a whole lot of ministerial constituencies.
The Treasury will then go through the department’s budget line by line and suggest savings. It will ask why so much has been spent on first-class travel and why it has so many press officers. In relation to this debate, it will say to the GBR, “Why are you paying £200 million in commission to independent retailers when GBR has its own website?” It will suggest to the Department for Transport that it cuts the commission from 4.5% to 2%. It will say that, historically, it was 10%, but it was cut, and it was cut again by the RDG to 4.5% in 2021, I think. The Treasury will argue that the pain should be shared not just by the Department for Transport but by independent retailers, and that with AI and by seeking new markets and doing more advertising, it can reduce its costs. The online retailers will say, “This totally destroys our business model. There is no way we can survive on 2%. It will drive us out of business”. There will then be no pressure to innovate and no consumer choice, and we will be left with a GBR monopoly with no pressure to innovate or improve passenger standards.
They may actually go further and say that the website that should be taken down is actually GBR’s. They will say that there is no way that GBR could survive on 2% and may well allege that the website costs far too much to set up, that it is overstaffed and that the costs of the premises that the website occupies are not accurately reflected. I do not take sides in that great debate, but the only way that the ORR or CMA will resolve it is with some facts and figures that identify exactly what costs are involved in GBR’s exercise.
The Minister may argue that these amendments are not needed because GBR would already be bound by competition law—and it is—and there is already a statutory obligation to do what I have said, so what we are doing would simply duplicate that obligation. But how would that competition law be enforced if we do not have the data?
He may also argue that GBR is an integral entity quite different from an online retailer, that online retailing is lumped together with the ticket offices and call centres, that it is quite impractical for GBR to identify one means of selling its tickets from the others, and that it makes no sense to regulate online retailing separately from them. The Bill wants to lump it all together so that GBR’s online harm—online arm; I am sorry—can hide inside the wider retail function. That argument sits uneasily with a commitment to fair and open competition. The station ticket offices and call centres do not compete with the online market. The website does; online retailing does. Treating all retailing as one function allows GBR to claim that its online arm is merely part of a broader retail activity, enabling it to argue that competition duties do not apply to its online parts. Crucially, it allows the cross-subsidy from infrastructure budgets to be buried inside retailing and enables GBR to avoid the cost of sale parity by hiding online costs.
I noticed that these amendments are signed not just by Conservatives but by Liberal Democrats and Labour Members. So there is a real imperative on the Minister to indicate some flexibility on this matter, and some willingness to have further discussions and, crucially, to table some of the amendments or variations on them with the assurances that all those who have signed these amendments are after.
Baroness Alexander of Cleveden (Lab)
My Lords, I apologise to your Lordships for not being here at the start of proceedings. Noble Lords put me on to the Economic Affairs Committee yesterday; it had its inaugural meeting this afternoon and it demanded my presence. I am so sorry to have missed the first two groupings, but I am here for this one.
I will speak to the two amendments to which I have added my name—Amendment 117, to which the noble Lord, Lord Young, just referred, and Amendment 136, in the name of the noble Baroness, Lady Harding. My reasons for supporting them closely parallel the arguments that we have heard. I do not have the distinguished history of having been a Rail Minister, as the noble Lord, Lord Young, was—at least not in Westminster—but I had that role in the Scottish Parliament and I understand the risks of unprotected departments. Therefore, we have a duty in the Bill to consider how to protect the incredible digital innovation that we have seen in the provision of retailing services that have been widely welcomed by passengers across the country. The noble Baroness, Lady Harding, and I share a common interest in the whole area of digital regulation, as she said. The risk of leaving ambiguity surrounding the role of regulator and not putting obligations in the Bill may lead to unintended consequences down the line.
I thank the Minister and officials for the recent engagement they had with noble Lords around the intent in these areas of rail retailing. I appreciate that the retail code of practice will be published prior to Report; it will go some way to allow all parties to assess whether the code meets the Government’s stated objective of fair competition in retailing.
My Lords, I intervene briefly to support my noble friend Lord Moylan’s amendments on this. In many ways, this debate is similar in its nature to the one we have just had, in that it relates to how the GBR relates to an independent sector. In the previous debate, it was independent retailers; in this case, it is the independent operators using open access. Again, the terms of trade are being changed. If one looks at the consultation document on this, it says that:
“GBR will become the decision maker for key decisions on access terms that are currently led by the ORR: the duration and form of access rights, developing and setting the access charges framework and the design of performance incentive regimes contained in track access regimes”.
It goes on to say that:
“For GBR to have the space and authority to take access decisions on the best use of its network, the ORR’s current role must change”.
At the moment, the ORR has the last word on an open access application, and the department cannot overrule it; that is going to change. We have had representations from the open access operators. I have had also representations about the Elizabeth line and Heathrow Express, which are both anxious that they could be adversely affected by this change in responsibility.
The noble Lord may remember a debate we had in the Moses Room about 18 months ago on this particular subject, which I introduced. At that point, I referred to another debate in the other place, where there was a lot of support from Labour MPs for the principle of open access: their constituents had benefited from it, and they were concerned that it might be curtailed. My noble friend Lord Moylan referred to access charges and how changing the access charge could make it uneconomic.
I want to approach this from a slightly different point of view, which concerns the criteria that the ORR uses to decide whether to grant open access. If there is no capacity on the rail network, it is clear that the application should be refused. If there is capacity, the ORR refers to the NPA—not primarily abstractive—rate. That means that if you want to open a new service, you must add at least 30p of new revenue for every £1 you abstract from the existing ones. In other words, any new service must not rely on more than 70% of its revenue to justify its application. There is concern that that abstraction rate might be changed. One assurance that the Minister could give, which would reassure the operators of open access, is that GBR will not change the abstraction rate. The rate has been in operation for some time. It balances, on one hand, the cost to the taxpayer and, on the other, the benefit to the traveller in terms of improved connectivity and, in many cases, lower fares.
We know that the concern is justified from the letter that the Secretary of State, Heidi Alexander, wrote to the ORR back in January. The ORR is already mindful of the cost to the taxpayer—that is reflected in the abstraction rate—but the letter reminded it of that cost. There was a clear implication that not enough attention was being paid to that factor, hence the concern. I hope the Minister will be able to give assurances that, apart from the issue of the access charges addressed by my noble friend, the abstraction rate will not be altered either.
I understand that we will be having a separate debate on this, but is the Minister able to give the assurance that I asked for that the abstraction rates will not be changed?
I thank the noble Lord for his question. I will not give it now but will come back to that in the debate. I should also say for the benefit of the Committee that Network Rail is publishing the access and use policy consultation tomorrow, which will apparently address the noble Lord’s questions on abstraction. I am sure we can debate his points further when we get to the detailed debate.
(2 months, 2 weeks ago)
Lords ChamberMy Lords, Amendments 13 and 14 are in my name. I declare again my interest as an advisor to AtkinsRéalis in the UK and Ireland.
I have a lot of sympathy with my noble friend on the Front Bench and his comments about various aspects of the Bill; in particular, his comments about the European Union. We should not be looking simply to match the European Union going forward. Indeed, I am very much in favour of having high standards which are not tied to the European Union. Where we can do better—and we should do better—without doing damage to the commercial viability of the UK industry, we should seriously consider taking that kind of step.
While mentioning briefly the international side, in the light of the easyJet takeover proposals, I urge the Minister and his colleagues in the department to use the most muscular approach on this. It would not normally be possible for a UK airline to buy a US one. We need to make sure that the rules and ownership are properly and rigorously enforced. It is urgent to do that.
My two amendments are designed simply to try to put some limitation on the powers that would reside with the Civil Aviation Authority as a result of the Bill. I always envisaged changes upon leaving the European Union as likely to lead to a degree of deregulation and a relaxation of restrictions. The Minister knows that I raised a number of concerns with him in Committee about the extent of the powers to enforce—to enter premises and to impose penalties. These two amendments are designed to put some limitations around the freedoms of the regulator to take enforcement action, so that it does so only in what are genuinely serious situations. I know the Minister is not going to accept these amendments, but I would ask him to give some thought to how this is applied in regulations. Of course, we need a regulator to have the ability to take serious action in a serious situation, but what we do not want is to create a situation where we have undue levels of enforcement on small matters in a way that is overly onerous on the commercial independence and freedom of businesses. We want common sense; these two amendments are designed to apply common sense, and I hope the Minister will be able to take that principle forward.
Finally, I will just comment on my noble friend Lord Young’s amendment, which I am sure he will be speaking to in a moment. Given the impact on the airlines of the failures, when they do happen, in the air traffic control system, I think he makes an important point that is worthy of consideration by the Government.
My Lords, I am grateful to my noble friend for that trailer. The reason behind Amendment 65 in my name is what happened on 28 August 2023, when the air traffic system run by NATS failed. There was an independent review which looked into the debacle, and I want to quote very briefly from the report, which said:
“From CAA estimates, over 700,000 passengers were affected by cancellations and delays ascribed to the incident, including approximately 300,000 impacted by flight cancellations, approximately 95,000 by long delays (over three hours) and at least a further 300,000 by shorter delays”.
The review went on to estimate the costs involved:
“Based on the information provided by the airlines most affected by the incident, the Panel has estimated that the costs to airlines were approximately £65m. In addition, substantial costs were incurred by passengers, airports, tour operators, insurers, and others. The Panel was unable to accurately quantify these costs. It is likely that the total cost was in the region of £75m to £100m”.
Noble Lords may be surprised to learn that the company responsible for those losses—NATS—with a turnover of over £1 billion, with profits of over £200 million in each of the last two years, has immunity from those losses. Those losses instead are borne by the airlines, which are tied into a monopoly provider. To my mind, this is a manifest, wholly indefensible position that flies in the face of natural justice, and that is what my amendment seeks to remedy.
My Lords, I will be brief. I am grateful to all those who supported Amendment 65 several hours ago. I am grateful to the Minister for replying and I recognise that his hands were tied. My noble friend Lord Moylan said that the Minister played his trump card by quoting my noble friend Lord Harper, a former Secretary of State, in his defence. I do not know if you can overtrump three times, but three former Secretaries of State took a different view from my noble friend Lord Harper so I would argue that was indeed overtrumped.
The Minister produced three arguments in defence. First, he said safety was pre-eminent and that was why NATS should not be fined. Safety is pre-eminent. It is pre-eminent for the National Health Service, rail, water and power—all those utilities are subject to penalties if they underperform, so there is no conceivable reason for exempting NATS from the same regime. Secondly, the Minister said that any fines on NATS would result in higher charges for the airlines. I could not have been clearer in my speech that any fines should come out of NATS’ profits and not be added to the base for charging for the airlines. The biggest fine it could have had so far was £63 million and its profits for the last two years were £200 million.
Thirdly, the Minister said that my amendment was not appropriate. The Liberal Democrats indicated that they were going to listen to the Minister before deciding what to do. I hope they share my disappointment at the Minister’s reply and that such Lib Dems who may be still in the House will support my amendment. I beg leave to test the opinion of the House.
(2 months, 3 weeks ago)
Lords ChamberMy Lords, the noble Baroness, Lady Brinton, has just told a very moving story, and I think everyone who listened to that will agree that that state of affairs is simply not acceptable.
I join others in paying tribute to the valedictory speech of the noble Lord, Lord Wilson. He was an excellent Permanent Secretary at the Department of the Environment in the 1990s, when I was Minister of Housing and Planning. He was a source of wise advice, and he kept me out of serious trouble for three or four years.
Speaking in this debate is a bit like attending one’s own funeral, because the Bill basically undoes the reforms I oversaw as Secretary of State between 1995 and 1997. It is worth reminding the House what those reforms achieved. As my noble friend Lord Lansley said, passenger numbers doubled; services improved by one-third; an operating deficit under British Rail was turned into an operating surplus; investment in rolling stock, electrification, signalling, and station modernisation improved, as the dead hand of the Treasury was removed from the capital programme; passenger safety improved; industrial relations improved; branch lines were reopened; and passenger fares were capped at RPI minus 1%, a reformed abandoned by the then incoming Labour Government, who kept everything else the same for about four years. It is worth making the point that many of those improvements and reforms, post privatisation, were driven by former employees of British Rail, who welcomed the challenges and freedoms that came with the policy.
However, we are where we are. The Government have a mandate for what is in the Bill, which is basically to bring the system under one ownership. On that, I was struck by what the Minister said in response to a recent Oral Question:
“Virtually the whole of the world, in countries that run railways, is incredulous that this country managed to separate the infrastructure from the operations for more than 30 years”.—[Official Report, 20/4/26; col. 503.]
That simply is not the case. Most European Union members have legally separated their rail infrastructure management from their train operations, as mandated by a European Union directive. In fact, we can do what is in the Bill only because of Brexit—something I am not sure the Minister mentioned. The countries that have done what he finds incredible include Sweden, which did it before we did, as well as France—where SNCF has two separate subsidiaries to promote competition—Spain, Italy, Denmark and Finland.
That brings me to the related argument that underpins the Government’s policy. According to the White Paper, A Railway Fit for Britain’s Future:
“This is a necessary first step towards ending fragmentation … That is why we will establish Great British Railways … a single ‘directing mind’”.
However, that is not the model used by successful companies throughout the world. What the Minister calls “fragmentation”, they call specialisation: the ability to secure the component goods and services needed from a variety of sources, ensuring innovation, competition and resilience. BAE Systems and AstraZeneca in this country—and Apple abroad—do not do everything themselves; they outsource, commission and buy in the marketplace. They have been successful because of what the Minister calls “fragmentation”.
The Minister may say that this does not apply to transport because it is different—but it is not. The safest and cheapest form of transport in this country is by air, but you could not find an industry that is more fragmented. The airlines do not own the aircraft; they do not own the terminals; they do not run the national air traffic system; and they do not do the security or the baggage handling. Some airlines do not even employ pilots; they hire qualified self-employed pilots. I challenge the assertion that an industry that is fragmented or specialised is less efficient than an integrated one. Nor incidentally does aviation have a single “directing mind”, which has Orwellian overtones.
My concern is that the three main benefits that came with privatisation will be lost under these reforms. Investment in rail was taken almost entirely off the public sector balance sheet in 1995; it created a market of train operators to replace a public monopoly, and the business model forced the industry to look outwards towards its customers not inwards to the sponsoring department.
On the first, I had the pleasure of negotiating the transport budget with the Treasury both before the railways were privatised and after. Before privatisation, I would go to Star Chamber and they would say, “George, we’re really pleased to see you. We’ve just had the Health Secretary, who wants more doctors and nurses; we’ve had the Education Secretary, who wants more teachers; and we’ve had the Secretary of State for Defence, who wants more soldiers. Priority is the language of politics, and politics is the language of priorities. We’re very sorry, George, you can’t have your new train set for Christmas”. After privatisation, that dialogue simply did not take place; the market responded to the business case that was made.
There is also a risk that the Office for National Statistics will put the rolling stock companies on to the Government’s balance sheet—as it did with housing associations—because of the degree of control over the investment that the Government propose. That would play havoc with their borrowing requirement.
The second advantage was to bring in other successful transport operators: people who ran buses, airlines, shipping or train services overseas. Their skills were applied to running the railway here and to breaking the British Rail monopoly. The Government are not even adopting the concessions—the management contracts with the private sector—that were so successful with the bus companies in London and Manchester, as my noble friend Lord Lansley said.
At a meeting with the Minister last week—he has been very generous with his time—he said that the franchise or concession model was not adopted for GBR because the train operators were not interested in the deal. That is strange, because those train operators are the very same companies that run the bus operators that have successfully run exactly those contract arrangements in Manchester and London. Perhaps they overplayed their hand. We are now back to a monopoly, with the risk of a national strike by train drivers, which was avoided by franchising or concessions.
The third innovation was the incentive to grow the market, to look outwards towards the customer. Under privatisation, once a company had won the franchise, the only way that it could increase turnover and profit was by winning more customers. However, when I was Transport Secretary before privatisation, it made little difference to British Rail whether it had more or fewer customers; it just meant that it got more or less subsidy from the Secretary of State. I was its real customer and not the passenger.
For me, the jury is out as to whether what is proposed will give the industry the secure, efficient and customer-focused future that it really needs.
(3 months, 1 week ago)
Grand CommitteeMy Lords, I declare my interest as I was chair of the Aviation Accessibility Task and Finish Group, which published a report last year. I thank the officials at the Department for Transport for their support. The vast majority of the recommendations from that report are now amendments to the Bill. As of today, I have been appointed a board member of Active Travel England, and I also chair the Accessible Transport Policy Commission. We had a useful meeting this morning which looked in a UK context at disabled people’s experience of travelling. I understand that aviation is more complicated than that. The sheer difficulty that disabled people have in using any form of transport came out clearly in the meeting. I make reference to the Transport Select Committee’s report, Access Denied: Rights Versus Reality.
We have probably a once-in-a-generation chance to make a difference to how disabled people are able to access this industry. Since Second Reading, I have had a much-increased number of emails from disabled people who have had truly dreadful experiences of flying, and some of those will be picked up in the next group.
I have two amendments in this group, Amendments 2 and 16, which are in my name and that of the noble Baroness, Lady Brinton. They simply ask that we change “may make provision” to “must make provision”. “May” is too vague in this context, so we have a chance to make a change. The Minister will know from other debates that we have had around disability access, such as the debates around taxis, that it is hard enough when we are trying to enact accessibility legislation that was passed 30 years ago, let alone what we are trying to do now. There have been a lot of promises about what disabled people might have the opportunity to rely on. Unless we have a much bigger commitment to “must make provision”, it feels like we will be kicking the can down the road, as we have done with the rail industry and all the derogations around it.
I am more than happy to discuss a tighter range of regulations that the Secretary of State may make or to work across your Lordships’ Chamber. I am simply looking for assurance that there will be a genuine shift in how disabled people will experience air travel. Both this group and the next have a number of important amendments that both seek to strengthen the Bill and to provide more clarity for disabled people. For them, currently and so far, the experience is far too ad hoc. I beg to move.
My Lords, Amendment 109 in my name aims to remedy a manifest injustice whereby the airlines have to pay for customer compensation when the fault lies not with them but with NATS. I am grateful to my noble friend Lord Kirkhope, who trailed this amendment in his Second Reading speech, but, in the time available, the Minister was not able to address it.
The problem manifested itself on 28 August 2023, when the air traffic system, managed by NATS, failed. An independent review was set up and its report gives the scale of the debacle:
“From CAA estimates, over 700,000 passengers were affected by cancellations and delays ascribed to the incident, including approximately 300,000 impacted by flight cancellations, approximately 95,000 by long delays (over three hours) and at least a further 300,000 by shorter delays”.
It went on to say that
“the incident on 28 August had substantial negative impacts on a large number of passengers, not only on the day of the outage but for several days afterwards, as it took until the following weekend for all the re-routed journeys to be completed”.
The review estimated the costs involved:
“Based on the information provided by the airlines most affected by the incident, the Panel has estimated that the costs to airlines were approximately £65m. In addition, substantial costs were incurred by passengers, airports, tour operators, insurers, and others. The Panel was unable to accurately quantify these costs. It is likely that the total cost was in the region of £75m to £100m”.
Finally, it said about passengers:
“Many passengers incurred costs which they could not recover, for example, the loss of pre-paid holidays, lost income from work to which passengers were not able to return, and other consequential losses. The total costs of this large group would be very difficult to calculate but is likely to have been many millions of pounds”.
However, when one reads the NATS annual report for that year, it puts a slightly different spin on the incident:
“A technical flight handling system issue in August necessitated a considerable reduction in flight capacity for a short period in order to ensure the skies remained safe”.
Noble Lords would expect that the guilty party, NATS, rather than the innocent parties, principally the airlines, would have to bear the costs—not a bit of it. The only cost to NATS was £1.8 million. In the words of the review, that was a
“relatively modest penalty associated with not meeting some of its performance … targets”.
Will my noble friend allow me to help him a little? He may have heard of a company called Network Rail, which, if my memory serves me correctly, must pay compensation to train operators if it goes through the kinds of failing that he has identified. Were he to know anybody who used to chair Network Rail, he might have an interesting point to make.
My noble friend is a mind-reader; I was going to refer to Network Rail in about 40 seconds. As I said, as far as NERL’s ownership is concerned, it is different, but that should not preclude it having to pay up for claims.
The review then produced another pretext, which, again, does not stand up to scrutiny. This is what it said:
“Such a liability would probably lead to a substantial increase in the annual costs of the ATC”—
air traffic control—
“service, which could in turn lead to increased costs to airlines and passengers”.
What happens at the moment? The compensation liability rests with the airlines and, as such, it has already caused increased costs to passengers. If the airlines did not have the liability their costs would go down, but if NATS then passed back all the increased costs we would be back where we started. Crucially, that assumes that the regulator, the CAA, would allow the costs to be passed on by NATS to customers, instead of taking it out of profits. If, as happens with the water companies, costs were not passed on to consumers but funded out of profits then costs to the airlines and passengers would actually go down, not up—the opposite of what the review suggested.
I come to my noble friend’s intervention. The Minister will understand and, I hope, sympathise with the case I am making because of his previous responsibility for Network Rail. If, as my noble friend said, a passenger is delayed, the train operator pays the compensation. If Network Rail was responsible for the delay, it then reimburses the train operator. That is as it should be, and it is exactly what should happen in air transport. A failure in traffic control is paid for by the traffic controller. My amendment is supported by IATA, which actually wants to go further. It would like the amendment to be extended to airports and other parties that provide air services that can cause disruption yet are not liable for passenger compensation. Airlines currently pay all passenger compensation regardless of who is at fault—for example, the power failure at Heathrow last year.
To sum up and use management jargon, we need shared accountability across the value chain. I hope the Minister can respond positively to the case I have made and put right this manifest injustice.
My Lords, I will speak to my Amendment 9, which seeks to strengthen the consumer protection provisions at the heart of the Bill. This amendment would insert two paragraphs into Clause 1. We believe that both are desirable and necessary if this legislation is to deliver meaningful change for the travelling public. The first would add the requirement for
“standardised, comparable information at the point of sale”.
Anyone who has purchased an airline ticket recently will be familiar with the booking experience. I will not go through all the painful detail but suffice to say that, by the time you come to the payment page, the fee you are charged bears little resemblance to the one that first encouraged you to make the booking.
That is not an accident; it is intentional. It is a business model that has moved, frankly, from the sublime to the ridiculous. For example, at the moment, the CMA is investigating Ryanair’s mandatory charge of £8 each way for the privilege of sitting with your own children. It is a business model that harms consumers, distorts competition and corrodes trust in the aviation sector. Airlines that compete fairly on total price are undercut by those which strip out every possible cost, just to put them back in. We do not tolerate these practices in other markets—imagine for one moment that the same situation was in place when you were doing your online grocery shopping. It means that consumers cannot make rational or informed choices. Again, that is the intention. Families on modest budgets find themselves paying significantly more than they had intended to.
My amendment would address this directly by requiring airlines and all ticket sellers—I emphasise all ticket sellers, whether the airlines themselves, online travel agents or price comparison websites—to display the total price up front, including all fees, taxes and unavoidable charges. We believe this is not a radical proposition. It is not difficult for the airlines, if they are selling direct to consumers, or their agents to comply with. Most consumers reasonably believe that this is the case already, so this amendment aims to make it so.
The second element of the amendment concerns passenger rights. When a flight is delayed or cancelled, or a passenger is denied boarding, they are entitled to certain protections, and rightly so. But the evidence consistently shows that a significant portion of affected passengers do not know what those rights are and that airlines do not always volunteer that information. My amendment would require this information about passenger rights in disruption scenarios to be provided clearly at the point of sale, not buried deep in terms and conditions in the small print, and accessible only to those who know how to look for it.
Thirdly, the information element concerns environmental impact. Consumers are increasingly seeking to make informed choices consistent with their values. Aviation, as we know, is a significant contributor to greenhouse gas emissions. While the sector as a whole must decarbonise, individuals, too, wish to understand the environmental impact of their individual journeys. Standardised carbon footprint information at the point of sale would enable informed choices. It would also in time, we hope, drive competition on environmental performance, an outcome that we argue would drive consumer-led carbon-reduction measures.
The second part of the amendment includes mandatory minimum compensation standards and, critically, automated payment mechanisms for flight delays, cancellations and denied boarding. The right to compensation for significant disruption already exists in law. Yet, year after year, consumer bodies and passengers find that it is not happening. They are waiting long times and often having to go to court and take legal action. That is an unacceptable situation.
The solution that I have proposed is an automation system to make sure that, where delays happen, there is an automatic payment so that you do not have to go through a complicated process to do it. The airlines have all this information. They know who is on their planes, they know who is not, they know when they are delayed and they know when compensation needs to be paid. We do not believe that this requirement would be too onerous on the airlines. It would simply make it a more efficient, fair and effective system.
We welcome this Bill. We recognise the consumer protections, but we feel that they need to have real bite. That is what my amendments seek to do. Our worry is that, if we do not put stronger protections in the Bill, we will simply have gestures towards consumer rights without actually putting them in statute. With the inclusion of these amendments, we would take concrete steps to make sure that we are acting in the passengers’ best interests in making these systems fairer and more efficient.
My Lords, I wanted to let all the Members who had amendments speak first, notwithstanding the Front Benches. I just wanted to touch on one amendment where I think I can add some level of knowledge. I agree completely with my noble friend Lord Moylan about the way in which my noble friend Lord Young of Cookham set out his case with some charm and tenaciousness. However, I am afraid to say that I do not agree with the ineluctable logic. Let me just share with the Committee why.
I was in post when NATS had its failure and I will always remember getting that phone call telling me that something terrible had happened, with potentially millions of people whose holidays were going to get messed up. You pay a great deal of attention in that situation. I spent quite a lot of my time over that short period engaging with the aviation sector and ensuring that NATS, the airlines, the airports and everybody else worked incredibly closely together at pace to make sure that passengers had the least terrible experience possible in the circumstances.
Once the initial events had taken place and we had got everybody back to where they should have been, we considered—or I considered, as the then Secretary of State—exactly the point that my noble friend set out, about whether we ought to change the legislative regime around compensation. Superficially, there is a case for doing so, but let me deal with the reason why we decided not to.
The first point is that, if you look at the ownership structure of NATS, which I do not think that my noble friend touched on, almost half the business—49%—is owned by the Government or, in other words, the taxpayer. Some 42% is owned by a group of major airlines, 5% is owned by the staff through a trust and 4% by the company that owns Heathrow Airport. The conclusion that I came to was that, if you were to change the position so that NATS was responsible for paying compensation, almost half the bill would land on the taxpayer, just over 40% of it would effectively end up on a different group of airlines—not necessarily all the ones hit by it—and a little bit would effectively land on the staff. The conclusion that I reached was that that did not really get you to a significantly better place than the current position, accepting that the current position is suboptimal.
What made me think was that my noble friend set out the position with Network Rail, which is and has for a long time been completely owned by the taxpayer. There is a question about whether there is a purpose in doing that. The conclusion that we reached, and the present Government’s conclusion, is that we are not sure that the regime whereby Network Rail has to pay money to train operating companies is an effective lever in driving up standards. The conclusion that we reached, which the current Government are following through on and which we will be debating in due course through the Railways Bill, is that the way you get more effective working between the train operating companies and Network Rail is by bringing them together in what will be GBR. I am not sure, therefore, that getting the taxpayer to pay a chunk of money to airlines is the right way in which to deliver what we actually want, which is to stop these sorts of outages and disruptions happening in the first place.
NATS is a regulated business, so it has quite considerable constraints on how it acts, and the Government have a considerable say in how it operates because of that 49% stake and the Government’s role in nominating a number of members of the NATS board. Certainly, when the outage happened, I had a considerable say in putting pressure on the management of the company and appointing the person who conducted the review, effectively ensuring that the company took steps to make sure that that particular circumstance could not happen again.
I understand the case that my noble friend has made. I considered it at the time, but we did not think that moving from the status quo to that position was particularly compelling. I do not think that I have changed my mind on that, but of course I will happily take a question on it.
I thank my noble friend, who may have saved the Minister a bit of trouble. I will make just two points. First, as my noble friend said, the airlines are one of the major shareholders. The airlines support this amendment. I have a letter from IATA and I have seen correspondence from British Airways; they believe that this change should be made. The second point my noble friend made, which I have real difficulty with, is that the taxpayer picks up the tab when an organisation owned by the taxpayer makes a mistake. Look at the National Health Service, for example. What is happening here is that, where the taxpayer is on the hook, the Government have decided to penalise an innocent party, namely the shareholders of the airlines. As a Conservative, I cannot see how my noble friend began to defend that when he was Secretary of State. Had the incident happened 20 years earlier, when I was Secretary of State, I would have come to a different decision.
(3 months, 2 weeks ago)
Lords ChamberThe Crime and Policing Act 2026 gave police stronger powers to seize vehicles being used anti-socially, without first requiring a warning. It also introduced new respect orders enabling police and councils to ban persistent offenders from areas where they cause harm. I am not familiar with whether that legislation applies to Northern Ireland, but I will write to the noble Lord to confirm that.
My Lords, it is time someone spoke up for the cyclist. Unlike the noble Lord, Lord Shamash, I like e-bikes. I am one of a number of noble Lords on the other side of middle age who use e-bikes—legal e-bikes—to get around. Our case is undermined by illegal e-bikes being driven dangerously, often by delivery drivers. The City of London Police confiscates and destroys five illegal e-bikes every week. Should not more police forces do that and give wide publicity to that, in order to reduce this abuse?
The noble Lord is right, and in pursuit of his desires, the Metropolitan Police recently seized 52 illegal e-bikes and mopeds. A total of 2,741 were seized across 2025-26. West Midlands Police seized more than 50, and Greater Manchester Police seized six and removed 55 locally. Merseyside Police seized over 500, Nottinghamshire Police around 100 and South Yorkshire Police over 150. So, we are starting to see proper enforcement across Britain, and the more publicity all that gets, the better.
(4 months, 1 week ago)
Lords ChamberMy Lords, it is always a pleasure to follow the noble Baroness, Lady Pitkeathley. On social care, she is absolutely right.
On housing, the Government’s target of 1.5 million homes is not a policy but a dream. By their own calculations, they are already 400,000 adrift. In London we need 88,000 new homes a year. Last year they finished 6,000. While I welcome all the plans to speed up planning, much of which are now in place, that is not the problem. The number of sites with planning permission not yet built on is more than 1.5 million. The problem is not potential supply but demand. Builders will not build if there is not a buyer. If there is no buyer, it is not just the market buyers who are hit but the people wanting social homes. Following what the right reverend Prelate said on affordable homes, half the social homes are built through Section 106. They are built on the back of market homes. If we do not get the market homes, we do not get the social homes. That hits those in real need.
On 17 December 2024 the noble Baroness, Lady Taylor, answered questions on a Statement that stated that there were,
“to our shame as a nation, just shy of 160,000 homeless children living right now in temporary accommodation”.—[Official Report, Commons, 12/12/24; col. 1057.]
A year later it had risen to over 176,000.
We need to kick-start both markets—market homes and social homes—and we urgently need a successor to Help to Buy for first-time buyers. Most renters want to buy. The average rent is higher than the average mortgage payment. But, without wealthy relatives, many renters simply cannot afford the deposit. This is where we need urgent government action in conjunction with the financial institutions and developers to find a successor to Help to Buy. I note in passing that the Government made a profit of £1.3 billion on Help to Buy.
On remediation, I warmly welcome the appointment of the noble Lord, Lord Roe, to chair the building safety regulator. I commend him on the progress he has made in reducing the backlog of approvals for new high-rise homes. But there is a real challenge post Grenfell. Almost nine years later, over half a million people are still living in flats with a fire risk. Less than 20% of buildings over 11 metres high with unsafe cladding have been fixed.
The remediation Bill puts a little meat on the bones of the Government’s remediation acceleration plan, but there are still a range of issues on which leaseholders and I have been campaigning: non-cladding defects are not comprehensively funded; non-qualifying leaseholders continue to face ruinous costs; developers in the developer remediation contract are, in far too many cases, doing the bare minimum and marking their own homework; safety risks are being reassessed as tolerable, with buildings left half safe; building insurance premiums remain eye-watering; leaseholders are still having to pay for waking watches; and shared owners still face problems—they cannot sell because their registered social landlord will not buy, so they are having to sublet.
On funding for buildings under 11 metres with the same sort of cladding as Grenfell, we had an announcement in July 2025, but we still have no details. The BSR’s remediation improvement plan is yet to have an effect on high-rise buildings, with the median approval time now at 46 weeks. Leaseholders and residents are pushed from pillar to post, scrambling for simple answers about their homes.
In opposition, Labour understood that accelerating remediation without fixing the structural problems that I have mentioned would not work and recognised that remediation had to be comprehensive and independently overseen, with leaseholders and residents at the centre. Put simply, some leaseholders in some buildings are protected from the costs to fix some safety defects—that is simply not good enough. I look forward to working with this Government, as I did with the last, to do justice to leaseholders, who are in no way to blame for the misfortune that confronts them.
(7 months, 3 weeks ago)
Grand CommitteeMy Lords, I strongly support Amendment 121A from the noble Lord, Lord Blunkett. I apologise for not speaking at Second Reading, but a number of amendments have emerged in this Bill that fit my wider interest in accessibility.
I did not want to repeat myself, as some of the issues fall under the previous group of amendments, such as abandoned bikes causing a lot of difficulty for disabled people, which is a significant issue. I asked quite a large number of disabled people about their experiences and only one said that there might be a need for it where they lived, because local businesses rely on pavement parking to carry out their trade. However, there is a far more negative impact than that. A number of disabled people explained that they have to take very long routes around and that there is a lack of dropped kerbs. If you are pushing along the road at my height, behind cars, you cannot actually see what is on the road. Also, in lots of places, broken paving is a nightmare for wheelchair users and a lack of tactile paving makes it extremely difficult for visually impaired people, who might have to use routes that they had not realised they would need to use.
I spoke to one scooter user who said that, when they were trying to weave their way around a car, they could not see whether there was a driver in that car; there was, but the driver did not see them, so pulled out and knocked them into the road. This is really difficult. The noble Lord, Lord Teverson, raised parents with prams, for whom this can be horrendous. A mum who is a wheelchair user got in touch with me; she cannot use a pram, because she is a wheelchair user, so she trained her child to walk alongside her. I did that with my daughter and it is amazing how, from a young age, they learn what they should or should not do. But this mother found herself having to walk out into the road with a toddler and she felt very disconcerted about it.
Data from Cambridgeshire County Council shows that we spend about £234 million a year fixing pavements damaged by pavement parking. Data from Guide Dogs, admittedly from 2006 to 2010, showed that local authorities spend about £1 billion repairing kerbs and walkways because of pavement parking. This seems not just a ridiculous amount of money but incredibly dangerous.
Disability rights campaigner Judy Heumann suggested that, to be good allies to disabled people, non-disabled people should let the air out the tyres when people have pavement-parked. I do not think that is a very good idea, but this is such a challenge, not least when there is no other route that can be taken: you risk damaging your chair; you might not get through with your guide dog; or you risk damaging somebody’s car or van. A number of disabled people told me that they have experienced quite a lot of verbal abuse and high levels of threat by asking people to move, which is just not acceptable.
In researching this amendment, I watched a public service film from 1982 that says, “Leave the pavement for pedestrians”, but it seems that we have not moved on too much since then. I urge the Minister and his team to look at this issue. It is a real risk for disabled people and we should just be doing much better.
My Lords, I support entirely what the noble Lords, Lord Bassam and Lord Teverson, and the noble Baroness, Lady Grey-Thompson, have said.
I am slightly confused by a comparison between what the Department for Transport said in a press release on 8 January and what the noble Lord, Lord Bassam, has said, which is that powers will be available when legislative time allows. He rightly pointed out that we do not know when that will happen. However, the press release on 8 January said:
“The department will set out guidance to help local authorities use these powers in a proportionate and locally appropriate way later in 2026”.
That implies to me that it can do what is proposed by setting out guidance and that we can be under way by 2026. However, the briefing we have all had from the trust implies that the Government will resist this amendment because they want to narrow the scope and there will be a place for it at a subsequent date. Exactly what is happening this year? If it is not all going to happen this year, what will happen this year? The press release certainly implies something:
“The department will set out guidance to help local authorities use these powers in a proportionate and locally appropriate way later in 2026”.
I am sure the Minister will be able to shed some light on this issue.
That is really interesting, is it not? I am sure the Minister will tell us exactly what all that means.
I am one of those people who challenge people who park on the pavement. Just recently, I saw a huge van parked all the way across a pavement. I went up to challenge the driver and found that it was an ambulance, so I did back off because I thought somebody needed some help. I totally agree that pavement parking means that the kerbside degenerates; it gets broken, which means yet another hazard for all of us, not just for people who are not particularly mobile, at night and so on.
I hugely admire the noble Lord, Lord Teverson, but he should not be parking on the pavement. I do not care that the road is too small. He should park in a legal place and walk the rest of the way. It would be really good for his heart. The thing about pavement parking is that, if your car is too wide to park on the road, your car is too wide. Get a smaller car—do not take up space that pedestrians need. I see no rationale or excuse for that. It is just plain rude, and I loathe it.
If it is the case that only minor amendments are needed to what is now before us, why can that not happen on Report?
As I say, I am very happy to meet the noble Lord and my noble friend Lord Blunkett to see whether we can move this forward.