(2Â weeks, 4Â days ago)
Grand CommitteeI have four amendments in this group: Amendments 26, 64, 304 and 333. They are all on the same point, which is that, in the Bill, the definition of a “relevant local government body” is expressed as mayoral combined authorities, mayoral combined county authorities and passenger transport executives. Those first two—mayoral combined authorities and mayoral county combined authorities—are, I think, based on the proposition from some months back that, over time, all the strategic authorities would move towards being mayoral strategic authorities.
Since the original drafting of this legislation, we have completed the English Devolution and Community Empowerment Act. Those of us who worked on that legislation will recall that Section 1 defines strategic authorities, and it does not do so by reference to whether or not they have a mayor; they are, basically, single-foundation strategic authorities, combined-foundation strategic authorities or county combined strategic authorities. It seems to me that, for the purposes of this legislation, the relevant local government bodies with which Great British Railways, in particular, and the Secretary of State should work would be all the strategic authorities. Why would we exclude those that do not have mayors?
I say this because, whether it takes a year or two—or three or four—there will be some strategic authorities that may not have a mayor for a very long time. I do not say this because I want them not to have mayors; I am in favour of them having mayors. It is just that we are quite a long way from that happening. From my quick survey, looking across England, we probably have two long-term single-foundation strategic authorities: Buckinghamshire and Northamptonshire. By my reckoning, at the moment, we have at least four, perhaps five, combined county authorities—Lancashire, Cornwall, Surrey, Devon and Torbay, and Norfolk and Suffolk—with no intention of having mayors. Interestingly, that includes Cornwall. The Minister will remember that, last week, when the Prime Minister was answering questions in the other place for a very long time, he referenced devolution in Cornwall and said
“with or without a mayor”.
Therefore, we are in a very simple position: we want devolution. We want GBR to have regard to the transport plans of strategic authorities. We want GBR to consult with strategic authorities, with the responsibilities that they have. We want statutory information sharing between GBR and strategic authorities. If we put “mayoral” in this legislation, we will restrict the availability of all the statutory consultation, information-sharing and advisory relationships between GBR and non-mayoral strategic authorities. I am sure that that is not anybody’s intention. The simplest thing to do would be to reference the definition of strategic authorities in Section 1 of the English Devolution and Community Empowerment Act; that would be altogether simpler and better in the long run.
My Lords, I rise briefly to support what my noble friend Lord Lansley has said on his Amendment 26. I had some dealings on this when the Prime Minister was the Mayor of the Greater Manchester and when Andy Street was Mayor of the West Midlands. Both of them engaged with the department on their desire to integrate the national rail network into their plans locally. They wanted to have those conversations, which worked well. In those cases, obviously, they were both mayors.
I agree with my noble friend Lord Lansley. Given the announcement this week that local government reform and the bringing together of unitary authorities, which is, in many cases, a precursor to having mayors, have been held up and there have been legal challenges, it would be much more sensible, as my noble friend says, if we made sure that GBR could have those sensible conversations and had the powers to do that with all appropriate local authorities with a strategic transport function. We should not limit that to those authorities with a mayor.
As my noble friend said, although it was at least the preference of the Government led by Keir Starmer that there should be limits to what you could devolve if you did not have a mayor, it sounds like, from what the Prime Minister said in his answers to Cornish MPs, that he is open-minded about that. Therefore, we could have some significant local authorities with transport powers without a mayor. I know from my own experience that there are a number of proposals in the Cornish area, for example, for some rail infrastructure that would bring significant benefits to the Cornish economy. It would be perverse if the Cornish council could not have those conversations with GBR or if people had to work out weird ways of having to facilitate those conversations because we had not provided for that in this legislation.
I agree with my noble friend. The Minister would be wise either to accept his amendment or, if it needs to be worded differently or other changes need to be made, at least to take it away and come back on Report with a government amendment, or suite of amendments, to achieve the same function. That would improve the position and, in fact, get to a position that I think is the Government’s intention—certainly the current Government’s intention. It may not have been when the legislation was drafted but I think that it would more accurately reflect the position now.
My Lords, there are two sets of issues in this group. Mine is terribly simple and it is by way of a question to the Minister, just to be clear.
I do not understand why, in Clause 7, at the point the Secretary of State may give directions to Great British Railways about the activities in Scotland and Wales, in each case the requirement to obtain consent from Scottish and Welsh Ministers is disapplied if those directions relate to what is in Chapter 1 of Part 3, which is access, charging and timetable capacity.
Timetabling and so on seem, on the face of it, to be tricky things where if these are directions to GBR which impact in Scotland and Wales, they should certainly require the consent of the Scottish Ministers—for reasons that we touched on earlier, a different requirement may rest in relation to Welsh Ministers. But I am surprised to see that the implication of Clause 7 is that the Secretary of State can issue directions to GBR impacting on, for example, the timetable in Scotland but does not require the consent of Scottish Ministers. Amendments 32 and 33 in my name are to probe why that seems to be the case. I beg to move Amendment 32.
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.
I think that was an intervention. I can only speak for myself, but I do not think I am confused now. The Bill does not inhibit this from happening in future and that is a satisfactory position for us to have reached. That is relevant to this debate in that my Amendment 65 is about the relationship between GBR and its companies, and financial transactions—the resources provided to or the resources received from GBR companies—ought to be explicit in the business plan.
I turn to Amendment 73. Now we really are in a happy position. It is many years since I was responsible for the public expenditure of a government department. I do not mean as Secretary of State; I mean as the official responsible. Knowing what powers one is using in relation to spending money is important. Amendment 73 is a probing amendment but I have used the structure of saying that the same activity should not be funded out of both the powers in the Bill, where financial assistance can be provided by the Secretary of State to GBR, and Section 6 of the Railways Act 2005, which noble Lords who know these things better than I do will remember is a broad-ranging power to provide financial assistance to GBR. I want to establish at this point—we might return to it at a later stage to see whether it is a satisfactory position—which GBR activities will be in receipt of financial assistance from the Government under the Section 6 power that exists now under the 2005 Act, or the financial assistance to be provided under this legislation. We need to avoid the confusion of two different powers providing financial assistance to the same activity.
My Lords, I will speak to Amendment 54 in the name of the noble Lord, Lord Bradshaw, and Amendment 55 in the name of my noble friend Lord Moylan. Obviously, I have not heard my noble friend’s exposition of the purpose of his amendment, which I look forward to listening to shortly, but I understand why these amendments have been tabled. I think that they are both intended to make it more difficult to change funding for railways, as opposed to other areas of public expenditure, but I am not sure that that is entirely a good thing. I completely understand why that would be a good thing if you were looking at it through the railway end of the telescope, but if you look at it from the point of view of a taxpayer or a citizen, I am not sure that tying the hands of Ministers in that way is entirely helpful.
I will take the two amendments in turn. In terms of background, it is worth saying that, if I have understood the Bill correctly, in part 1 of Schedule 2,
“Funding by the Secretary of State”,
the structure for setting the budgets in the first place is broadly the position now. The Government set out a plan for funding over a multiyear period, they notify various people of that funding and the funding is set out, as are the things that are expected to be delivered by the funding, so that it is all transparent for us to see what is going on. As far as I understand it, the Bill as drafted requires the Secretary of State purely to notify the ORR if they propose to vary the financial assistance—the Secretary of State has to tell the ORR in various circumstances. It is very clear that only notification is required; there is no requirement for the Minister to await the ORR doing anything before the Minister is able to proceed with the funding change. I am content with that set of circumstances, if I have understood them correctly.
My noble friend Lord Moylan’s amendment, which I understand is a probing amendment to test this, would make it very difficult for the Secretary of State to change that funding settlement, except in two cases: if the things they required GBR to do had changed and therefore the funding was different; or there was an emergency in the country at the level of what is set out in the Civil Contingencies Act. We do not have those very often, but there are lots of circumstances in which the Government have to make changes to public expenditure, for all sorts of reasons, without the country being in an emergency situation at the level defined in the Civil Contingencies Act. It is the proper role of Ministers to have that flexibility and the ability to set budgets, make funding decisions and even to choose within the departmental allocation that they have. Even if the Treasury is not changing anything in terms of the money that the department has, it is the job of Ministers to decide how that money is allocated between the different parts of the department’s expenditure, whether it is a—
(2Â weeks, 6Â days ago)
Grand CommitteeMy Lords, I do not have my name on these amendments, but I thoroughly agree with pretty much everything that has been said. I especially support what my noble friend Lady Harding said in introducing this group and am entirely in agreement with my noble friend Lord Young of Cookham. I do not want to get into the question of appeals, because we will come on to how the appeal process should be structured later.
Amendment 47 in the name of my noble friend about the approved document is particularly important. I assume that the code of practice that we are promised, which the noble Baroness, Lady Alexander, was talking about, is the equivalent of the approved document or some part of it. At the moment, we have this ticketing and settlement agreement. We have to know how this is going to work in future. If we do not, we should expect—indeed, we should call for—the Competition and Markets Authority to step in. As things stand, the relevant aspects of the ticketing and settlement agreement constitute part of a block exemption against a Chapter 1 prohibition under the Competition Act. It is, on the face of it, potentially an anti-competitive agreement, but the block exemption exists. The question is whether the agreement satisfies the requirements of the block exemption. We have to look at the agreement to know whether that is the case, which is why Amendment 47 is right. We have to ask the Competition and Markets Authority whether the code of practice or the approved document under the Bill satisfies the requirements of the block exemption.
The fact is that GBR will be in a dominant position. Under the Competition Act, in addition to the prohibition on anti-competitive agreements there is a prohibition on abuse of a dominant position. Much of this debate is saying that, given that we know that GBR will be in a dominant position, we should be actively looking for the Office of Rail and Road, by way of market investigations in this area if necessary, or the Competition and Markets Authority to step in, as the current jurisdiction enables it to do, to counter any abuse. We know from Clause 2(1) that Great British Railways has no Crown immunity. Under Section 73 of the Competition Act, there is a Crown immunity from the constraints, remedies and directions of the Competition and Markets Authority, so GBR does not want to be in a position where the Competition and Markets Authority comes after it to prevent its abuse of a dominant position. For all those reasons, the Government would be well advised to put into the legislation measures that will prevent GBR being tempted to abuse its dominant position and to ensure that the approved document will satisfy the CMA’s requirements for a block exemption.
I thank my noble friend Lady Harding of Winscombe for her excellent opening of this group, the comprehensive way in which she did it and—I think this is a powerful point—her real experience of a similar process and what actually happens in practice. One of the values of this House is having not just theoretical debates but Members who have experience of how these things work in practice. It is no good just legislating for what we think might happen; it is about what will happen. That was particularly valuable.
In this area, unlike some of the areas in the Bill, there is broad consistency among everybody who has spoken so far. At Second Reading, in other fora and in writing, the Minister set out that the Government want a competitive retail landscape and recognise the benefits of that. So what we are debating here is not the principle but how best to achieve that shared goal in practice. I will try to add to this debate.
Practically, the suggestion in my noble friend Lord Holmes’s Amendment 182 of a functional separation —which the noble Baroness, Lady Harding, also raised—is the cleanest and most sensible solution. That means that GBR is not in a position where it is tempted to abuse a dominant market position. It has a separate retailing arm, the rules can operate in a transparent way, you avoid a lot of trouble and you do not have to set up a complicated mechanism to deal with that abuse. I understand that the Government have set their face against that, but I reinforce that that would be the best solution and would solve a lot of these problems.
If the Government do not want to do that, for whatever reason, we absolutely need to make sure, first, that there is transparency. If all this is hidden away, it is very difficult for whatever mechanisms are put in place, whether it is the CMA, the ORR or whatever legal processes the independent retailers have to do. As the noble Baroness, Lady Harding, said, they are not huge companies with bottomless pits of money to be able to do this. If you do not have transparency, people do not know what is going on.
I will make a slightly different argument, bringing in our friends from the Treasury, than the one my noble friend Lord Young of Cookham made. This is one where the Treasury should be on our side. One of the important things that the Treasury wants to achieve is to reduce the subsidy paid to the rail network because, post Covid, the rail network does not send money to the Treasury; it sucks money away from the Treasury. The only way that will change on the operating side is if there is innovation and more passengers use the rail network. The ticketing retailers are one of the ways, in the innovative way they retail tickets. Importantly, if leisure travel is to be a growth area, the partnerships that they strike with providers of leisure opportunities can then be combined with travel to produce innovative packages. If you are going to do all that, you need that thriving, competitive retailing operation, so the Treasury should want that to be successful.
The other thing the Treasury should want is that the operating cost of GBR’s own ticketing operation should be as low as possible. On the cost of running that operation, I challenge what my noble friend Lord Young said. We know what the third-party retailers get because we know what the percentage commission is. If GBR’s retailing operation is not able to run its services for less money than that, it should not be in business, frankly, because it is adding no value at all and should not be running it. My hunch is it that it will not be able to, which is why, when I was Secretary of State, I said it should not really get involved in this business at all because there were lots of competing providers that were much better at it and, frankly, it should just get those to do it.
However, for reasons I do not quite understand, Ministers want GBR to be involved in this process. So, it is critical that the accounting—I declare my interest here as a chartered accountant—should be absolutely transparent so that we can see what it costs. From the Treasury’s point of view, as I said, it wants to be sure that no subsidy is going into the ticketing operation from the rest of the thing, given that there are competitive operators that can deliver this, I suspect, more cost effectively. That is an argument for the Treasury supporting some of these amendments.
On the subsidy point, I believe there is a question that is not resolved, which the independent retailers are concerned about. I understand that, in written correspondence with the Independent Rail Retailers, the department has asserted that GBR’s online retailer will not be subject to the Subsidy Control Act 2022, arguing instead that it will be governed solely by the Public Service Obligations in Transport Regulations 2023. That approach is inconsistent with the legal framework and assurances given by Ministers during the passage of the Bill so far that GBR will remain subject to public law, competition and subsidy control requirements.
Can I just check that the rail strategy that the Secretary of State will produce will be a strategy for Great Britain, and that the memorandum of understanding will be about how that interacts? If the Secretary of State’s rail strategy is for England only, that does not make sense. What the Minister just said implies that the Secretary of State will produce a rail strategy for Great Britain, in which case there would not be any friction from ensuring that those documents were published together.
Before the Minister responds to that point, I add that I am slightly confused because Clause 15, “Rail strategy”, says that the Secretary of State “may not” include provision relating to the functions of the Scottish Ministers, so it may be a rail strategy for Great Britain, but it cannot deal with the functions of the Scottish Ministers.
I say in response to noble Lords that the long-term rail strategy is for the whole railway. The Scottish and Welsh Governments are being consulted, but Scotland will also have a strategy covering its own functions because that is the meaning of devolution. I hope that is clear.
(9Â months, 3Â weeks ago)
Lords ChamberMy Lords, before I speak to my Amendments 300A and 306A, let me just pick up, briefly, a couple of issues that have been raised in the debate.
First, I was very pleased that the noble and learned Lord, Lord Falconer, said it was very important, in response to the noble Lord, Lord Beith, that we dealt with these border issues. He will remember that I spoke on that on the first day of debate, using my experience as a former Member of Parliament for a border constituency and I raised some of the very practical issues that there will be if we do not get that right. The noble and learned Lord will remember that when I was raising these issues, there were people on the other side of the argument who tried to shout me down before I had even finished. I am pleased, therefore, that he recognises that the issues I was raising are important and valid ones. To make sure these issues work properly, we have to worry about both the England-Scotland border and the England-Wales border.
Secondly, I am very grateful to the noble Lord, Lord Pannick, for the free legal advice he provided to me in answering the question about what the courts could do about a human rights challenge. I did not get an answer from the Minister, so I am grateful to have had it from him.
Thirdly, on the point that came up in the debate about Crown servants, if you are a Crown servant, you can retain your ordinary residence status when you are posted overseas—that applies to diplomats, members of the Armed Forces and civil servants. It does not usually apply, though, to people who work for the NHS, local government and so forth, but we do not have to worry about people who work in embassies.
Let me deal with the issues raised by the amendments from the noble Lord, Lord Lansley, because they are relevant to the nature of this service. He is absolutely right that, for primary care, we do not have the same test on residence that we do for secondary care. There is a reason for that. When we were putting in place the changes for secondary care in the Immigration Act, we considered whether we should implement similar changes for primary care—that was after he was Secretary of State for Health. We did not change that position because there is a very significant community benefit for allowing people, who are physically in the United Kingdom, to have access to primary care, so that they can access all sorts of services, particularly if they have a communicable disease or illness. We absolutely want them to seek early treatment, not just for their own benefit but for the benefit of everyone else. That is why we have wider access for primary care than we do for secondary care, which we limit to people who are ordinarily resident. We allow others to access it, but only if they pay for it.
I argue that, if this is to be provided on the NHS, this service should be treated more like how we provide secondary care, rather than how we provide primary care. It is more akin to that sort of treatment than primary care. That is where I respectfully disagree with the noble Lord.
I do not think that we are disagreeing, because my amendments would have the effect of applying an ordinary residence test. That ordinary residence test for the assisted dying service would be exactly the same as the one for planned secondary care.
In that case, I now understand the noble Lord. When he was talking about primary care, I thought he was suggesting that we had a wider remit, so I am very pleased to hear that.
I will now address my amendments and their purpose. They are intended to deal with the fact that under the Bill, as I understand it, it would be the job of the co-ordinating doctor—a clinician—to make the determination about somebody’s ordinary residence. The Medical Defence Union has expressed concern that requiring medical professionals to do that could put them at legal risk. Indeed, as my noble friend suggested, it sort of turns them into immigration officers. That concern was pointed out when we were making the changes to the then Immigration Bill, which is why the people who make those decisions are not clinicians; they are overseas visitor managers and administrators in the health service.
Therefore, my amendments would shift the responsibility for assessing residency from clinicians back to administrators. If NHS trusts were providing this service, they would use their overseas visitor managers to do it. That is an existing structure: they are people who know how these rules work. As I think the noble Lord, Lord Carlile, mentioned, a tool already exists, which is well understood, to enable people to check people’s eligibility. I think this has already come up in the debate, so I will not dwell on it at length, but I note that ordinary residence is not that straightforward; it is designed in case law, not in statute. When we were bringing forward the Immigration Act, the overseas visitors charging review took place in 2012, which concluded that the vagueness of the definition means that ordinary residence is difficult to interpret and apply on an individual case basis.
I have already been quoted by the noble Baroness, Lady Finlay, and now I am in danger of quoting myself. When I was taking through that legislation, I said that the existing rules were complex. One of the things that came through from the audit was that front-line health professionals find them complex. The evidence we got was not just that this was the opinion of front-line professionals—they were actually complex. We tried to make them more straightforward. It was one of the reasons why we introduced the health surcharge. Rather than try to make it more complex for the health service not to treat people, or to test whether they were treating people, we charged people coming into the country and then let them have access to the health service. That seemed to be a more sensible way of doing it.
That is the essence of my amendment, and I suggest to the noble and learned Lord, Lord Falconer, that he looks at it. On Report, it would be helpful if the Bill was amended to take the test for ordinary residence away from the doctor in charge of this and give it to the organisation that is providing it, so that it can be done as part of an administrative function. From the conversations we had at the time, I know that clinicians and medical professionals feel that it is not for them to gatekeep access to these services, both for legal reasons—as set out by the Medical Defence Union—and, as my noble friend Lord Lansley said, because that is not their job. We already have professionals in the health service whose job is to do that, and it would be better if they were given that task rather than clinicians. That is the purpose of my amendment.