Railways Bill

Debate between Lord Harper and Baroness Pidgeon

Committee stage
Wednesday 16th September 2026 Grand Committee

[Lord Harper (Con)]

My Lords, I wish to speak to several amendments in this group. They cover the role of the ORR. As my noble friend Lord Grayling has just said, it is arguably a bit weird continuing to have a regulator when you are bringing track and train together in GBR. He also highlighted the reason why it matters: the ORR has an important role in making sure that fair decisions are made. We will talk about it a bit at various stages during the Bill. Fair decisions should be made for access to the network for open access operators and freight, and that those powers are exercised in a fair and reasonable way. We will have some debates later about whether the way in which the Bill is set up for GBR means too much marking of its own homework.

I speak first to Amendment 134 in the name of my noble friend Lord Lansley; he is sadly unable to be here today and asked one or two of us to speak to his amendment. It has been co-signed by my noble friend Lord Moylan. It would have the effect that the ORR’s duty to promote competition continues to apply to its functions under Chapter 1 of Part 3, relating to access and use policy, infrastructure capacity, the working timetable, the capacity duty, the charging scheme, the performance scheme and appeals in respect of those policies.

I shall listen carefully to what the Minister says when he responds to this group. It may be that he says that the reason why the role of the ORR is being constrained in the way it is in the Bill as drafted is so that the ORR does not use its powers to undermine the directing mind of GBR. That is a flawed argument. The great majority of passenger services and ownership of assets are in the hands of GBR, or will be when the remaining franchises have expired and GBR has taken over those routes. The promotion of competition operates at the margin. However, that does not mean that competition does not have enormous value because its role can demonstrate the value of particular routes, and more efficient and consumer-responsive services.

Let me give an example that may appeal to those who are particularly keen on the European Union. The European Commission, in a report based on services in Spain and Italy, found that open access on their high-speed rail network could reduce prices, improve quality and frequency, enlarge the rail market and passenger numbers and—this should be attractive to the noble Baroness, Lady Jones—encouraged modal shift. It is important to recognise that the duty to promote competition is linked to the benefit to consumers. It is important to preserve that element of potential challenge. The ORR has limited powers, but we should maximise the extent to which it can use them.

I shall give an example in this country. The importance of capacity—we have had this debate previously—is that you cannot have competition unless there is capacity. It is important that when decisions about capacity are being taken, they must make sure that we can have competition. The line that has capacity is the east coast main line. There, three open access operators—Grand Central, Lumo and Hull Trains—all provide competition against LNER. That is valuable not just because those three open access operators provide different types of services to those of LNER, and a number of them are focused on providing very low-cost rail services, but the effect of having those three operators—this has been documented by independent economic analysis, I understand—is that it holds down ticket prices on LNER. Even people who never use open access operators but use the existing main operator benefit from the existence of the open access operators. That is why it is important to make sure that we preserve that element of competition.

I listened very carefully to the argument put forward by the noble Lord, Lord Boateng, on his Amendment 142 about promoting regional growth. He is right that there is a lot of evidence that improving rail connectivity—it is true of improving road connectivity as well—can deliver economic growth. We have seen that very clearly in what happened—and it is not even complete yet—once we got to the point where we were constructing the first phase of HS2. Anybody who has been to Birmingham will have seen that, even before the rail line is completed, once it was clear that it was going to happen, there has been an enormous amount of investment and economic development in central Birmingham with companies relocating their operations. That has happened on a prospective basis because people knew that that was going to happen, so the noble Lord is correct that regional economic growth is driven by rail.

I think I can reassure him a little bit. When the Government make these decisions about where they invest—the investment that Network Rail and GBR make in the infrastructure is public money—they look at the cost-benefit ratio. Some of the things they look at are not just time savings, but wider economic benefits. That is not the easiest thing to capture when you are looking at prospective benefits and economic growth. Being able to nail that down and produce an economic analysis that is robust that you can turn into numbers that you can then weigh up against the cost is not that straightforward. I do not know exactly how many, but the Department for Transport has a significant number of economic analysts who produce all this information for Ministers when they are taking these decisions. Whether we need to add it to the Bill, I am not quite sure, but the thrust of the noble Lord’s arguments about the importance of the rail network for regional economic growth is absolutely spot on. There are already a lot of things that make sure that that is taken into account, but I support the thrust of what he says.

I will listen, as will the noble Baroness, Lady, Jones, to the Minister’s response, but I take a much more positive view about the benefits of competition on the rail network. As I said in the points I just made, competition helps to keep down costs to consumers and drive passenger growth, particularly by attracting people on to the rail network who perhaps cannot afford to travel on some of the existing services. Some open access operators have specifically gone for no-frills, low-cost services that attract people who would not otherwise use the rail network. You therefore get modal shift, with people shifting off more environmentally impacting forms of transport that produce more carbon per passenger mile on to the rail network, which I think is a good thing. It is good for consumers and the environment, and competition helps to drive that. That is, in effect, as I know my noble friend Lord Young would say if he were here, what happened post privatisation. There was a vast increase in investment and in passenger numbers, which took a lot of people off roads and aviation and put them on to the rail network, which was good for them, the economy and the environment. I want to make sure we maximise the extent to which competition exists with this new model as we move to GBR.

[Baroness Pidgeon (LD)]

My Lords, this group of amendments on the Office of Rail and Road is clearly seeking a different role or structure for the office than that envisaged by the Government. For many, it is more of the same. The amendments are, on the whole, trying to allow the Office of Rail and Road to assess competition on the railways to allow, it seems, more open-access operators. While I absolutely understand and have seen the benefits that open-access operators have brought to the railway, as noble Lords have described—and I hope those operators can continue to bring their services to passengers—there is the issue we have debated on the setting up of Great British Railways and the Secretary of State having so many powers. We have warned about the marking of their own homework.

I think the Government will not move on these amendments, because this is an area they set out clearly in their manifesto, but I fear there is a real challenge here in how the structure will work in reality and what open access will be allowed. The clarity that the noble Baroness, Lady Jones, is seeking will be helpful. Freight is also an open-access operator, although obviously a different type of service. I think the freight industry would appreciate some assurance from the Minister about its role. We have other groups on this issue later, because it is concerned about the legislation as drafted.

I am interested in Amendments 286 to 288, which would give the ORR a role in monitoring and auditing Great British Railway’s statutory functions. That could help with this whole issue of being judge and jury, while marking one’s own homework.

I really like Amendment 142 from the noble Lord, Lord Boateng. First, I should welcome him to the transport enthusiasts’ club, which has many members across all sides of the House. He is welcome to stay through the many other days of Committee on this Bill.

Railways Bill

Debate between Lord Harper and Baroness Pidgeon

Committee stage
Thursday 10th September 2026 Grand Committee

[Lord Harper (Con)]

My Lords, I will speak briefly to Amendments 35 and 36, which are in the names of my noble friends Lord Grayling and Lord Moylan. Respectively, they deal with amending Clause 7, on the power to give directions, and Clause 9, on the power to give guidance to GBR. They specifically refer to some extra duties that would fall on Ministers if they were giving specific directions around fares and the fare structure. They set out that if Ministers are giving directions or guidance

“about the level or structure of fares”

they would have to set out

“the assumptions, criteria and objectives used … so decisions can be assessed against passenger growth and affordability”.

I support both these amendments, for the following reasons.

One of the important decisions that Ministers have to take about the railways is to balance the cost of running them and how that cost is split between the fare payer—and of course not just that person who actually uses the railways but, when it comes to track access charges, the other users of the railway network—and the taxpayer. It is a very important decision, given that most people in the country either never use the railways or do not use them very often. A relatively small number of people use railways frequently, and it is important to get the balance of costs split correctly.

Ministers also have to make an important decision in their negotiations with the Treasury around the cost that falls on the department—the taxpayer subsidy piece. I think Ministers signed up to some quite challenging targets in the last spending review to reduce the taxpayer subsidy. There are two ways you can do that: either you cut services significantly or you have to grow passenger numbers. If Ministers are making directions or guidance about fares, it is important to understand which model they are using. What are their assumptions and what is the evidence base for the fare structure? What will that do to passenger numbers and, ultimately, to revenue? Then there is any knock-on impact on costs, what it effectively does to the GBR profit and loss account, and therefore the balance of costs that lands on fare payers versus the taxpayer. Having that level of transparency is helpful for the fare-paying public and for taxpayers.

It is also helpful for Ministers, because it would force a level of rigour in the modelling that is undertaken and, importantly, the assumptions that are made about how passenger numbers respond to fares. It will also enable us to have a grown-up conversation about how we grow passenger numbers, given some of the innovations and service changes that I suspect will be required, particularly in offering better services for leisure travellers, because that is where there is the potential for significant growth in passenger numbers and revenue and therefore for reducing the overall cost of the railway.

These two amendments have a very sensible underpinning. They are not just helpful for taxpayers and fare payers; in the end, they will be helpful for the department, because they would force, as I said, a level of rigour and transparency in its financial modelling. They should therefore also commend themselves to our friends in the Treasury, who I think like rigour and robustness in financial modelling, because this just gets it all above board. Everyone has to be clear about their assumptions.

The amendments would also allow us to challenge the assumptions and enable us to have a much better conversation publicly about how we can drive up the usage of our railways and the flexibilities that we will require to do so. That will then, perhaps, provoke some helpful conversations with the trade unions and about the flexibilities that will be necessary to making sure that we have a financially sustainable railway for the long term, which is, in effect, what we need to guarantee secure jobs on the railway. That is the only way in which we are going to do this in the long term, because I do not think that taxpayers are going to continue wanting to subsidise the railway to the level they do now for the foreseeable future, given that many of them do not use railways frequently. I commend these two amendments and look forward to the Minister’s response.

[Baroness Pidgeon (LD)]

My Lords, these amendments cover directions and guidance from the Secretary of State. They push for greater transparency around those, which is something that we really support. Information that has supported key decisions and directions should be placed in the public domain. It is really important that Great British Railways develops an open culture right from the start and that it is clear where and how decisions have been made and on the basis of what evidence. The amendments in the name of the noble Lord, Lord Grayling, focus in particular on any Secretary of State directions relating to the level and structure of fares, which are, I think, of great interest to everyone. Clarity on these points from the Minister would be helpful as we continue our scrutiny of the Bill.

--- Later in debate ---

[Lord Harper (Con)]

I am grateful for the noble Lord’s intervention. I had not yet started dealing with his amendment in detail—I was dealing with my noble friend Lord Moylan’s—but I listened carefully to what he said and will deal with it when I get to his amendment.

I am not sure that I agree with my noble friend Lord Moylan, although I understand that his amendment is probing. I would not want to tie the hands of Ministers in the way that he set out. I understand that it is of course desirable not to change funding for any public service once it has been set—one does not do that if one can avoid it—but there are occasions when that is necessary. If we are looking for the appropriate people to make those decisions, they should be Ministers.

The problem with ring-fencing certain parts of expenditure to make it more difficult to make changes is that, in effect, you are deciding that any changes to public expenditure have to fall in other areas. Those decisions should properly be taken by Ministers at the time that those changes are made, because they have to balance the consequences of making those expenditure changes and the changes that they will necessitate to public services, and they have to make the case about why they are doing that. Those decisions are properly for Ministers, rather than expenditure being arbitrarily ring-fenced in legislation.

The noble Lord, Lord Bradshaw, tabled Amendment 54. I am concerned about this amendment, but I would be very happy if, when I finish my remarks, he comes back to say that I have misunderstood it. He referred to arbitrary changes. “Arbitrary” is a word that people usually use when they do not agree with the changes proposed by somebody else. Ministers may well bring forward changes, and they may be because the overall amount of money available to the Government has had to be changed for some reason or because of some event. It may be that Ministers have decided that expenditure needs to be spent in another area or that the Transport Secretary has decided that there is a higher priority elsewhere. Those are perfectly reasonable decisions that will have to be explained to Parliament, and Ministers will be subject to questioning by Members of both Houses in making those decisions, which are properly for Ministers.

I have a slight problem with this because it involves the Office of Rail and Road. I listened very carefully to the noble Lord, Lord Bradshaw, when he was setting it out and he, I think, suggested that that the Office of Rail and Road could come back with alternative propositions. It could come back by suggesting funding decisions balanced between rail and road, starting from his proposition that rail funding is better than road funding. I think the noble Lord was also talking about decisions on taxation or heavy goods vehicles. I humbly suggest that all those decisions are properly for Ministers.

I accept that the noble Lord was not suggesting that those decisions should be taken by the Office of Rail and Road, but he was suggesting that that office should take some time, produce a report and then make suggestions to Ministers. However, it is not the role of a regulator to get involved in making qualitative opinions about where public money should be spent. Those are not decisions for regulators; they are properly decisions for Ministers, who are accountable to Parliament. Unless I have misunderstood the noble Lord’s amendment, I do not think that getting regulators to come back, second-guess the decisions of Ministers and make alternative public spending propositions is good for the conduct of public policy.

The Bill is currently structured such that Ministers have to notify the ORR if they are going to make funding decisions, so that there are right and proper levels of transparency and people know what is going on. There is quite an important principle to maintain, which is that there are certain things that regulators should do and certain decisions that are properly for Ministers. I do not like to criticise the noble Lord, who I know takes a great interest in this area of policy, but I cannot support his amendment because it has those effects, which I think would be deleterious to public policy-making.

In the spirit of balance, the noble Lord will have noticed that I was also not entirely enthusiastic about the amendment tabled by my noble friend Lord Moylan, which I know is a probing amendment. So I think that I have been quite even-handed in my non-approval of both amendments, which have a similar fault: tying the hands of Ministers in making public spending prioritisation decisions.

[Baroness Pidgeon (LD)]

My Lords, what an absolute pleasure it is to hear from my railway expert noble friend Lord Bradshaw. It is such a delight that he has been able to join us in Committee in person today and to contribute to our debate, particularly after he had a significant birthday yesterday.

Funding certainty is absolutely crucial for the railway going forward. Being able to plan investment and work properly, and deliver it in a timely manner, is essential. My noble friend Lord Bradshaw’s amendments try to show the seriousness of changing mid-programme railway investment and putting in additional steps for any material change to an agreed funding settlement by involving the ORR for an independent assessment, which should be published. This would ensure transparency and expert assessment if funding for the railway is changed, particularly mid-year.

Amendment 65 in the name of the noble Lord, Lord Lansley, would require more transparency. That is welcome, as was the contribution from the noble Lord, Lord Harper. In fact, it is notable that he has spoken on every group apart from the one with solely my amendments on London TravelWatch. I will not take that personally, but I say, “Once a Secretary of State, always a Secretary of State”. I look forward to the Minister’s response.

Railways Bill

Debate between Lord Harper and Baroness Pidgeon

Committee stage
Tuesday 8th September 2026 Grand Committee

[Lord Harper (Con)]

My Lords, I will start by referring to the amendment that the noble Lord, Lord Berkeley, talked to, because it just so happened that, as I was travelling to London yesterday, a car struck a bridge at Burnham. I see that the noble Lord, Lord Faulkner, is nodding; perhaps he was on the same train. The reason why it is important is that, although there was, I think, no significant damage to the bridge, the train was significantly late, which meant that every single person on it was entitled under the Delay Repay scheme to a significant refund of their fare. It was not the only train affected; lots of trains were. The cost to the taxpayer of that single incident was probably very significant, and it does not seem unreasonable that the insurance company of the person who struck the bridge should have to reimburse the taxpayer for the cost of that significant damage. Having had that experience yesterday, I am instinctively supportive of that amendment.

Before I talk about the other amendments in this group, I will make a teensy defence of the Sunak Administration, given what my noble friend Lord Moylan said, and since I was a member of it; I will not make an extensive one because that is not the purpose for which we are here. On this specific issue, we got the Williams review, which my noble friend referred to, and then we set in train the work that has, in effect, come to fruition with this Bill, in starting the process of setting up GBR. A lot of the preparatory work took place when we were in government, and there is a lot of agreement, I think, between how we would have done it and how the Minister is doing it today. The big difference, of course, is on the ownership of the companies but, in terms of bringing together a guiding mind—however one wishes to describe it—and a more seamless operation of track and train, that is certainly something that we intended to do and we started the process. That is my bit of a defence of what we did when we were in government.

Let me now address the amendments, starting with Amendment 7, and Clause 3. The problem with purpose clauses and a list of functions is the danger of what parliamentary draftsmen call undue specificity: as soon as you have a list, you then have a question about whether you are allowed to do the things that are not on the list. In his list, my noble friend Lord Moylan has things that are not in the Government’s list of functions, such as

“providing value for money for passengers and taxpayers”.

But in neither of the lists is what we have talked about: the work that Network Rail currently does, and GBR will continue to do, not just on operating passenger services or facilitating freight services but on maximising the benefit of its property portfolio—not only to generate revenue to offset the cost of providing rail services but to generate a significant amount of economic development and growth in significant parts of the country, as my noble friend Lord Lansley mentioned. The Government are woefully behind their housebuilding targets, but one of their priorities is developing housing around railway stations, and some of that land will be owned by Network Rail and, in due course, GBR. In relation to the amendment, I ask the Minister whether the functions set out in the Bill are sufficiently extensive to give GBR the powers it needs to do its work.

I also want to speak to Amendment 12, and the linked Amendments 80 and 81, on fair and non-discriminatory decisions, which it is important to put in the legislation. GBR will now make important decisions about access for private freight companies to the network, open access operators and—I will not labour this point here, because we will come to it in the next group—ticketing. Unlike the ORR, which did not have any skin in the game, GBR will be making decisions on, for example, freight access or open access, so it will be both a decision-maker and a provider of services, which are in competition. That is also true for ticket retailing. When it makes those decisions, it should have a legal duty to do so in a fair and non-discriminatory way, which is why I support the amendment. It would have two effects: it would govern how GBR operates and it would provide the opportunity for others to challenge it if it does not behave in that way.

Amendments 80 and 81 are linked, because they are about the charges that GBR can make for services where it is a monopoly supplier and, therefore, people do not have any choices. Amendment 81 would provide an appeal mechanism if it charges in a way that people do not think is reasonable. Both amendments would be very sensible to ensure that it behaves in a reasonable way.

There are two other amendments I want to comment on. Amendment 15, which the noble Lord, Lord Davies of Brixton, set out, sounds sensible on the face of it, but I will just flag three issues with it. First, when you move employers, there are potentially pension implications. I understand that the company that provides pensions to rail workers has flagged the time that will be required to do the pensions transition in a sensible way. We have seen in other areas of the public sector that, if you get that wrong, it can cause significant issues.

The second issue is one that we have seen, as the noble Lord, Lord Davies, touched on in his remarks. I suspect that, at the moment, because these are all separate companies, there will be a range of pay structures. We have already seen this—as have the Government, to their own cost—in what they are doing with NHS England. They originally said that they wanted to bring NHS England and all its staff into the Department of Health and Social Care. As they set out on that process, because people in NHS England are in many cases paid significantly more than people in the Department of Health and Social Care, they have discovered either that they cannot do it or that doing it would be very expensive or require the Secretary of State or the Chief Secretary to the Treasury to sign off the move of every single employee above a certain pay band. They have discovered that it is all very complicated, and they are effectively having to do the NHS England/DHSC change in a different way. If you stick everyone in a single company and you have to equalise all their pay and conditions, my concern is that if you do it in a downwards direction, it would clearly not be advantageous to those employees who lose out, but if you do it in an upwards direction then it is clearly damaging for the taxpayer, who has to pay all this increased cost without getting any productivity.

I want to flag one final thing, but will not go into it at length because we have a later group some way down where we will cover it in more detail. The noble Lord, Lord Davies of Brixton, slightly gave the game away when he referred to a letter from the RMT’s parliamentary group: the point of this is to have a single national rail employer so that the trade unions can increase their power and once again be able to deliver national rail strikes, closing down the entire railway network, which they have not been able to do with different rail operating companies, as you could not have a strike in one of them in response to a dispute at another. People should be very clear: if there is a single employer—I have some amendments to test this—we will be back in the days where we have national rail strikes and increase the bargaining power of those trade unions. The experience over history is that that power is not used for the benefit of the passenger and customer but to extract money from the taxpayer. That would be a very damaging thing. I flag that now, but will not go into it in any more detail as I will come back to it later.

Finally, very briefly, I am attracted to Amendment 20 from the noble Baroness, Lady Pidgeon. The only point I would make to her, as I think I said at Second Reading, is that the reason why, when I was Secretary of State, I set up a freight target—there is reference to a freight target in the Bill—was to try to balance the fact that all the conversations we have about railways are always about passengers. The reason for the freight target was to slightly rebalance the conversation and have more of a level playing field. My worry is that, if you put the passenger target in the Bill, you reweight it back towards being all about passengers again. I absolutely agree with her that we want to increase the number of passengers and reduce the taxpayer subsidy, but the reason for having the freight target was to slightly rebalance and have more of a level playing field.

[Baroness Pidgeon (LD)]

My Lords, my Amendments 20 and 110 would require Great British Railways to increase passengers on the railways and to set a passenger target, rather like the freight target, which has just been referred to. One could easily argue that this is not necessary, as any Government will want the railway to grow and passengers and freight to increase. Yet that is not necessarily the case. The Bill currently does not create a clear statutory duty to grow passenger use or to set measurable targets. The reform of the railway should not simply be to stabilise the current system as it is; it should be to actively grow demand and ensure access to the network to support the shift to sustainable modes of transport.

Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]

Debate between Lord Harper and Baroness Pidgeon

Committee stage
Thursday 18th June 2026 Grand Committee

[Baroness Pidgeon (LD)]

My Lords, in moving this amendment, I shall also speak to Amendment 105 in the name of my noble friend Lady Grender, to which I have added my name. Amendments 69 and 105 address what is, for me, the key issue with the Bill: whether the powers could be used to facilitate airport expansion and, if so, on what terms. Amendment 69 would require the Secretary of State to consult affected communities, complete an environmental impact assessment and complete a noise impact assessment before making any regulations that facilitate expansion. Amendment 105 would go further by prohibiting the use of the powers in the Bill for that purpose altogether.

All the communities that are most directly affected by airport expansion—those living under flight paths, those experiencing noise, air quality and traffic impacts and those with a general disturbance from planes flying over them quite some distance from airports—have consistently found themselves presented with fait accompli decisions rather than meaningful consultation. Amendment 69 would, at a minimum, require such consultation, environmental assessment and noise assessment to precede any regulatory action that facilitates expansion. That is not a high bar; it is basic good governance. Although I heard what the Minister said to us in our debate on an earlier group, we believe that this amendment is very much needed, so that it is clearly spelled out.

Airport expansion, at Heathrow in particular, is one of the most contested infrastructure decisions that this country faces. It has planning implications, climate implications and profound implications for communities living under flight paths. Amendment 110 in the name of the noble Lord, Lord Harper, rightly asks for a published assessment of airspace slot and scheduling impact before any decision on a third runway. We think that he makes an important point.

The central question for the Minister is simple: can he give this Committee a clear, unambiguous assurance that nothing at all in the Bill could be used to facilitate airport expansion decisions that have not been subject to full environmental scrutiny, proper community consultation, which goes far further than the exercise we discussed earlier, and meaningful parliamentary oversight? I look forward to his answer with interest and I beg to move.

[Lord Harper (Con)]

My Lords, I will speak to my Amendment 110 and make one or two comments on the amendments that the noble Baroness, Lady Pidgeon, spoke to. Amendment 69 seems perfectly sensible, requiring consultation and so forth. I have more of an issue with Amendment 105. If the processes to determine airport expansion have been complied with, it does not seem sensible to say, “As a result, you can’t use any of the powers in this Act to facilitate that properly taken and consulted-on decision”. While I do not have enormous objection to the noble Baroness’s first amendment, the second one goes a bit too far, so I am half agreeing with her, which is an improvement on where we were last time. I hope that she takes that in the spirit in which it is intended.

My remarks on my own amendment may appear a bit disjointed because I am going to slightly amend them in flight, as it were. Members of the Committee may or may not be aware that, while we have been debating this, the Secretary of State has published a Written Ministerial Statement on the aviation framework, which is specifically to do with Heathrow expansion. I thank the Minister for his courtesy in drawing to my attention, because I have tabled amendments on Heathrow, that the timing of the Written Statement would be during our debate today. I have been through the Statement, but it is quite extensive, so I have done it at speed and might ask things that are covered in it or in some of the attached documentation, which I have not had a chance to study. Given that the noble Baroness, Lady Pidgeon, talked about airport expansion, my amendment might give the Minister a helpful opportunity when he comes to wind up this group of amendments to perhaps set out for the Committee’s benefit one or two of the key points in the Secretary of State’s Written Statement, which I think will interest all noble Lords who are interested in aviation.

My amendment is drafted in such a way as to make sure that it is within scope of the Bill. The purpose of tabling it was to press the Government a bit on the choice that they made, which they set out last November and reiterated in the Written Statement today, to settle on the more expensive of the two options set out: the proposal by Heathrow Airport Ltd for a more ambitious, longer runway with a total price tag of £49 billion. Heathrow Airport has committed that that will be financed entirely privately. Obviously, there will need to be a regulatory funding mechanism for that, but I will not dwell on that now because I have some later amendments, in group 7, which I will touch on at that point, so as not to repeat myself.

I want to understand from the Minister whether the Government are satisfied—I presume that they are, given that they are proceeding in this direction, but I have not seen the underpinning rationale that supports the decision. When she made the decision, the Secretary of State said that the Government’s choice of the more expensive of the two options was “the most credible”, so I would like to understand the Government’s thinking about that.

The Minister and I worked together on HS2 when I was Secretary of State and he was chairman of Network Rail. He knows that infrastructure projects, albeit publicly financed ones, can end up costing rather more money than originally intended. I am worried that this project is now intended to be entirely privately financed. If that does not stick, the Government are very much committed—rightly, in my view—to expanding Heathrow, and I want to make sure that the taxpayer does not at some point end up being on the hook for very significant amounts of public money that they are not currently planning to spend.

Bus Services (No. 2) Bill [HL]

Debate between Lord Harper and Baroness Pidgeon

Consideration of Commons amendments and / or reasons
Monday 13th October 2025 Lords Chamber

[Baroness Pidgeon (LD)]

My Lords, I thank the Minister for his work on this Bill and for meeting me to discuss any concerns that may remain. We on these Benches are pleased to hear from the Government a commitment to a comprehensive review that will cover many of the issues that we discussed at earlier stages of this Bill and were the subject of many amendments to the Bill earlier in the year. These, we hope, will include the impact on SEN bus services, the £3 bus fare cap and the impact on villages and rural areas. The Government have already mentioned their published review of the £2 bus fare cap.

Within this group, for our Benches, the one key area remains the affordability of bus fares. We think the overall package of legislation in this Bill will help to transform bus services across the country and equip local transport authorities with a wide range of powers to deliver the right services to their local communities in the right way, but this needs to go hand in hand with affordable bus fares. The increase in the bus fare cap from £2 to £3 has created real barriers for passengers, particularly those on low incomes who rely on buses to go about their everyday lives. Budgets are tight for many families, forcing difficult choices between transport and other essentials. Bus fares outside cities such as London are very expensive. Without addressing fares, we think the Bill risks deepening existing inequalities and leaving many people isolated. This legislation is about improving bus services and enabling local authorities to have a choice about how local services are provided, but unless there are affordable bus fares, we think there is a hole in the plan.

The amendment that passed in this House on Report was about a review. It was not about providing a £2 bus fare scheme to support bus routes, particularly socially necessary routes, which are a lifeline for many villages and rural areas. The Motion in my name that we will get to would insert Amendment 8C into the Bill and ensure that the legislation contains a statutory commitment to the £2 bus fare scheme for socially necessary routes. It would require the Secretary of State to take all necessary steps to ensure that the £2 bus fare cap is maintained for passengers using socially necessary local services. We believe this is a far clearer amendment to the legislation, putting into action what we are committed to and ensuring a focus on the £2 bus fare cap by the Secretary of State. I hope Members on all sides of the House will see the merit in this provision to enhance further this bus legislation. I look forward to hearing the Minister’s response and look forward to testing the opinion of the House on this later.

[Lord Harper (Con)]

My Lords, I want to say a few words on this issue as the introducer of the £2 bus fare cap and the person who wrote the relevant sections of our manifesto, which committed to keep it for the duration of the Parliament and fund it, importantly, from savings that we were going to make in rail services. We do not spend enough time in this country talking about buses. Two and a half times more journeys are made by bus than by the national rail network. You would not know that from the national press, which is very London-centric on this subject, but in most parts of the country buses are critical, so I welcome the opportunity to contribute to this debate.

I shall say a word or two about my noble friend Lord Moylan’s purpose clause and his remarks on that. He talked about the Government trying to help their friends in local authorities. What is interesting about this legislation is that, if you look at what has happened to bus services, the real challenge, and one of the problems, is that what happened during the pandemic is that a significant number of people stopped using buses for rather obvious reasons and never returned. That caused a huge financial problem for the bus network and has caused lots of routes that were previously profitable not to be profitable. The thing that is missing in the legislation is that you can offer local authorities the powers to franchise services all you like, but unless the Treasury is going to give local authorities the money to pay for those bus services, all you do is take loss-making services that are being reduced by private sector operators or by local authorities that cannot pay for them, and the local authority ends up having to take them away because it has no ability to pay for them.

When this legislation gets on to the statute book, I will be interested to see whether the Government fund the powers to the level that you would have to in order to deliver an improvement to bus services. I suspect, given the dog’s breakfast the Chancellor is making of the economy and the fact that there is less rather than more money available for public services, that that is not going to happen, but we will see how that develops in the future. I think my noble friend Lord Moylan does not have to worry in one sense, because I do not think this cunning plan that the Government have implemented to help local authorities is going to help them at all.

Specifically on the cap, the Minister talked about the review of the £2 bus fare and said that it was not good value for money. What he missed out was that the Government decided, without having concluded the review of the £2 bus fare cap, to have a £3 bus fare cap, which suggests that they like the principle, but introduced it and picked a number without having done the review on the £2 bus fare cap in the first place. That demonstrates not sensible, evidence-based policy-making but a Treasury-driven “Let’s just reduce the cost of the policy and not look at the impact it was having”.

When I talked to bus companies, I found there were two issues relating to the bus fare cap that were important in driving up bus ridership. One was the obvious one, which is that it reduced the cost. Particularly in rural areas—as has been mentioned by a number of noble Lords—where you often have to take a number of parts of a journey with a number of fares, it drove down the cost of those journeys. That is really important for people going to work or accessing education, so that had a big impact.

The other thing was the clarity and the consistency that it provided in communicating the level of bus fare to people, which had, I have to confess, a rather surprising impact. When talking to bus companies, I asked the question, “If we were to take this away, what would you do to your pricing structure?” What was interesting was that they all said having a round-number bus fare had a surprisingly powerful effect on their ability to market services to consumers, rather than people not knowing what a bus fare was going to be and a whole range of complexity. I think it needed a bit more time to bed in, and that is why I support a proper review having been carried out.

To go back to the point I made about funding, what we suggested—to take savings from the reforms that we were going to put in place for rail services and use some of that to fund the bus services—would have rebalanced where people chose to take their journeys. More people depend on bus services for important local journeys. Whether to access education, to access the health service or to access employment, far more people across the whole of the country use bus services to do that than use the rail network.

The Government have done the reverse. The first thing they did was come in and give railway drivers—some of the best-paid public servants—a pay rise and ask for nothing in return; they got no productivity improvements for the rail user. That money could have been spent on improving the quality of bus services across the country. That would have been the right decision, and it is the decision that we were going to make. When we do not see increases to funding for bus services—when we simply give local authorities the powers to franchise but with no money to deliver that—then people on all sides of your Lordships’ House will think that making savings in the rail network and putting the money into buses would have been the right decision. I am sorry the Government chose not to do so.