Railways Bill

Baroness Harding of Winscombe Excerpts

2nd reading
Tuesday 7th July 2026 Lords Chamber

[Baroness Harding of Winscombe (Con)]

My Lords, I also congratulate the noble Lord, Lord Wilson of Dinton, on his outstanding valedictory speech. Not for the first time in this Chamber, I am left humbled by his 60 years of service, and I am privileged to have listened to his wisdom and humour in his last speech. We will miss the noble Lord.

I am also humbled, as I am not an expert in the railways—I am afraid I did not even have a train set—and I was not expecting to speak in this debate, but what has brought me here is not the physical railways but the retail ticketing of our travel. Before I get to that, I should say that I am also not a huge fan of creating a single, large state-owned monopoly, and that I wholeheartedly endorse the remarks of my noble friends Lady May of Maidenhead, Lord Redwood and Lord Grayling. However, I do not know much about that topic; I would like to focus on what I do know about, which is retail ticketing.

Retail ticketing might seem small and insignificant if you like playing trains, but, as passengers, our ticketing services are our first contact with our train journey, and, sadly, because of Delay Repay, they are often our last contact. Retail ticketing matters to us as passengers. It shapes our confidence in our railway network and therefore drives or harms demand. It is an area where private sector competition has delivered substantial improvements for passengers over the last decade.

I have considerable experience of the value of competition in retail services, and of the dangers of a vertically integrated monopolist using its control of the end-to-end value chain to stifle competition at the retail end—that was called British Telecom and Openreach. I declare an interest in that I spent eight years battling them when I ran TalkTalk. We have also seen this in other travel markets, such as when Google launched its “flights” tab and, at one stroke, attempted to remove all competition in flight retail ticketing. None of this was good for consumers.

So, whatever your views on the value of state monopoly management of the physical network of the railways, I hope we can all agree that retail booking services do not need to be provided by a state monopoly. However, I am afraid there is a real risk that, as currently drafted, that is exactly what the Bill will do—not intentionally, but by mistake. We have one of the most dynamic retail rail markets in the world. Private sector investment in user-friendly apps, journey planners and real-time information over the past decade has been outstanding. This Government have recognised the significant value of the role that independent retailers play, because they help to innovate and drive-up standards for passengers.

In the other place, the Government relied heavily on a promised code of conduct to ensure that Great British Railways would not abuse its vertically integrated monopoly in ticketing. My experience in telecoms and digital markets is that a principle-based code of conduct or code of practice, without a clear enforcement regime and ex ante powers, will not deliver a competitive market. I am not alone in this—the CMA is very clear that this is a real risk. In April 2025, the CMA set out in writing its concerns that, as currently set out, the Bill could undermine incentives for third-party retailers to invest and compete. It said:

“the role envisaged for GBR as a ticket retailer gives rise to the risk (either actual or perceived) that GBR will self-preference its own retail operation, or otherwise have advantages over TPRs that are not based on merit (for example better access to relevant information). … It is therefore important to give the right signals from the outset that TPRs will be competing on a level playing field with GBR”.

I am afraid that the Bill does not give that reassurance from the outset.

International comparisons are very clear that integrated state monopolies will abuse this vertically integrated power. In both Germany and Spain, where there is no separation, the same basic approach to that proposed in this legislation has required competition authorities to intervene. Deutsche Bahn breached competition law because of restrictive marketing and pricing practices, and the Spanish monopolist had to agree specific behaviour changes with the European Commission because of competition concerns. By contrast, in France —I may get this all wrong, because I am not a rail person—SNCF Connect is a separate business. The ticketing business is completely separate, as it should be, to ensure that the vertically integrated monopolies cannot abuse their power.

Will the Minister confirm that all retailers will compete on equivalent economic terms and that GBR’s own retailer will not benefit from cross-subsidy? Without structural separation between GBR’s online retailer and the wider organisation, self-preferencing will be very difficult to detect, let alone remedy. Will the Minister confirm that GBR’s online retailer will be required to maintain separate governance and accounting arrangements so that the regulator has the transparency it needs to monitor and enforce compliance with its code of conduct?

Finally, will the ORR have ex ante powers under the code, rather than merely the ability to investigate after harm has already occurred—by which time the Government will have ensured that there is no investment from the private sector into this sector at all?

I know these are very detailed issues, and they might seem unimportant if you are more interested in the big physical infrastructure of the rail network, but ticketing experience to passengers really matters. Creating an unwieldy public sector monopolist in a service sector where competition is thriving would be a very big mistake.

Railways Bill

Baroness Harding of Winscombe Excerpts

Committee stage
Tuesday 8th September 2026 Grand Committee

Moved by

[Baroness Harding of Winscombe]

10: Clause 3, page 2, line 28, at end insert “by promoting a thriving competitive market in the retail ticketing market”

[Baroness Harding of Winscombe (Con)]

My Lords, I rise quite nervously as I am definitely not a rail expert, this group of amendments is not really about the railways and the room is full of people who are huge rail enthusiasts. There are quite a lot of amendments in this group and they all, I think, aim to do the same thing, which is to make sure that in creating Great British Railways we do not adversely affect the current competitive market for online retail ticketing services. I will speak to a series of amendments in my name, Amendments 10, 52, 53, 136 and 139, and will also speak to amendments in the name of my noble friend Lord Young, to whose Amendments 48, 117, and 211 I have added my name. I will also support some other amendments that I was just not organised enough to put my name to: Amendments 11, 31, 49, 50, 180, 181, 182, 212, and 328.

If noble Lords will humour me, I will start by trying to set a bit of context for the whole group to try to explain why I think we should be worried about this and why noble Lords not as interested in digital as I am should care about the importance of this group. First, the Competition and Markets Authority has said it is worried. In April 2025, its response to the Government’s consultation on the future of the railways was very clear that this is a problem. It is concerned that the risks of actual and perceived self-preferencing are likely to be greater the more closely ticketing is integrated with GBR’s core activities. In the Bill, ticketing is very closely integrated into GBR’s activities. The CMA was very clear that it is important to send the right signals to independent retailers and investors that this would remain an open, competitive market. The CMA is worried.

Secondly, experience in other networked markets shows that we should all be worried. My experience is, as I said at Second Reading, from the telecoms market, where we know that BT’s ownership of Openreach led to very clear self-preferencing for BT retail and a long consumer campaign to separate out Openreach to force clarity and transparency. Actually, retail competition in telecoms has been hugely helpful, while at the same time acknowledging the need for that single Openreach infrastructure organisation. That happened only because of very clear competition regulation overseen by Ofcom. We know that if you do not have that, you get bad behaviour from the integrated virtual network monopoly.

Thirdly, the other reason why we should be worried is that this is already happening. Anyone who is used to having to use Delay Repay will notice that it has only very recently been integrated, and only partially, into the Trainline app. That is because the train operating companies refused to do it, because they wanted to keep control. Only in the last two months, GWR and Transport for Wales have both announced new ticket products that cannot be sold by third-party retailers. This is not in principle—they are much cleverer than that—but in practice. There are technical reasons why those products cannot be sold by other retailers; it is because the systems integration is not quite there or the data is not gathered. In one case, it is because the independent retailers do not capture date of birth. This is not by accident. This is what vertically integrated monopolies do: they design products that are very hard for their competitors to replicate. We should worry about this as we debate the Bill, even if we are not that interested in digital retailing.

I thank the Minister for his time on this. We had a very constructive meeting yesterday, and I know that he and his team have had constructive meetings with other noble Lords. I came away from my meeting with him, as I did from his speech at Second Reading, with the impression that he agrees that competition in retail ticketing is a good thing. I think we would all welcome him putting that firmly and clearly on the record today. The question is whether there are sufficient safeguards and signals in the Bill to make that the case. I do not think that there are. Just to try to decode this quite large and complex group, I think there are three areas that the amendments are seeking to get clarity on, without which there is a real risk that what is genuine consensus—that we do not want to nationalise ticketing but to have an open, competitive market—will not happen.

The first area is getting clarity in the Bill that GBR will be required to compete on the same economic terms as independent retailers. I do not think that that is currently clear, and there are a number of amendments attempting to make that clear in this group. The second area is getting clarity that the ORR will have a competition duty as it relates to enforcing the retail code of practice, so that there are real ex ante safeguards to prevent anti-competitive behaviour from GBR. The third area is that independent retailers will be able to appeal the decisions of the ORR as it relates to the retail code of conduct. If you think about it, those are the three layers of the onion. First, is GBR required to create a level playing field? Secondly, has the ORR got an obligation to oversee that level playing field? Thirdly, have independent retailers got a means of appealing if it goes wrong?

Let us take each of those in turn, starting with whether there is a level playing field. My experience from telecoms is that by far the best way to do this is functional separation of the network from the competitive retail market. Having spent a decade trying to make that happen in telecoms, I am pretty certain that it is better than trying to design the regulations. I have considerable sympathy with Amendment 182 by my noble friend Lord Holmes, who is beside me, and, if you read in detail the CMA’s response to the consultation last year, I think it does too. But I appreciate that the Government and the Minister have consistently rejected that organisational solution. If the Government are going to reject that solution, we really do need hard and fast guarantees that the obvious risk of abuse of that vertically integrated power can be mitigated. Their refusal of functional separation makes it all the more important that we get into the Bill the requirements on GBR to create economic parity. As the CMA said, the less functionally separate they are, the more important it is that these rules are clear.

A number of amendments in this group—Amendments 10, 11, 31, 48, 49, 50, 117 and 181—all separately try to achieve this. I accept that we do not need all those amendments; it is a function of the strength of feeling across the Committee that we have so many competing amendments attempting to do the same thing. If I had to choose, Amendment 48 in the name of my noble friend Lord Young is the most important and strongest, which would put it very clearly into GBR’s licence. However, I very much hope that we can have a constructive debate with the Minister on how we do this.

I would like to ask him a few questions about this. I fear he will say that we do not need to do this because it will all be set out in the retail code of conduct, but as that has not been published, even in draft form, it is impossible to be sure. Can he confirm when the draft code of conduct will be published? Can he confirm that it will state clearly that GBR’s retail ticketing operation will be subject to the Subsidy Control Act? Can he confirm that GBR will be required to publish separate accounts for its retail operations? I understand that he has indicated it will not, but I am flabbergasted by that because, just to manage the retail operations well, GBR will surely need to know whether it is making money. Those accounts should exist; it is just a question of whether it is willing to be transparent about it.

In confirming that the retail code of conduct will state clearly that GBR’s retail ticketing operation will be subject to the Subsidy Control Act, can he explain why it is better not to be clear that Parliament’s clear intention is that GBR should not adversely affect competition in retail ticketing? I cannot understand why the Government would not put one of these amendments into the Bill if—as I am sure the Minister would agree—we want to have a competitive market. In other digital areas, we have learned to our cost—we have learned it very recently in online safety—that, even when there is real cross-party support for a position, if we do not get it in the Bill, the regulator is capable of misinterpreting it. As the Minister has said himself, this is a once-in-a-generation piece of legislation. It is really important that we get the structure of this market right.

That is the first point; I promise I will be quicker on the second two. The second set of amendments within this group, Amendments 136 and 139 in my name, aims to make sure that we are clear about the role of the ORR. They would make it clear that the ORR’s competition duty should apply to the enforcement of GBR’s licence condition as it relates to the retail code of practice and when the ORR assesses GBR’s performance to the extent that it concerns retail ticketing. I know the Government will say that this is not necessary, it will all be set out in the code of conduct and it is already clear that this is the ORR’s job. In that case, let us make it clear in the Bill. There are a number of reasons why we really need to be clear about this. This not the ORR’s job at the moment. It does not have the skills and experience needed in retail ticketing, and it will need encouragement to build them, especially when there is so much for it to do in its core area of expertise of running the railways.

I am sure that it has the best possible intentions, but we know that running these regulators is really quite hard. We need to make sure that, as we create one of the country’s largest quangos in GBR, the ORR knows that one of its jobs is to keep GBR honest. If we do not have this in the Bill, I worry that, as the retail code of conduct is amended in five, 10 or 15 years, it will gently soften the amount of focus that the ORR needs to have on this. Before we know it, we will have another monopoly market where consumers are the ones who pay the price. It seems unnecessarily risky not to make these quite simple changes.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, this has been a very powerful debate. I am grateful to all noble Lords who tabled amendments and for the contributions of noble Baroness, Lady Alexander, and the noble Lord, Lord Beith. About the only thing that I disagree with the noble Baroness, Lady Harding, on is that this is not railway related. I think it is, it is about selling railway travel, but I have huge respect for her experience of other markets, as I have for the noble Lord, Lord Holmes.

I reassure noble Lords that we are absolutely aligned with the intentions of these amendments. We want an open and competitive retail market, and we completely support the benefits that independent retailers can bring. I may not have time to answer the points that the noble Lord, Lord Moylan, has just made, but if I do not do so now, I will later because there are other ways in which the railway can derive data about its customers. I do not think the acquisition of data is sufficient justification for only the railway to sell its product, but I must have a railway that is able to sell its own product because I want its staff, managers and directors to care about its income and its passengers.

Once GBR is established, it will have a retail function, as provided for by Clause 3. Crucially, this will be accessible via all channels—through station ticket offices, ticket vending machines, onboard trains, access through gates, ticket inspectors and online—ensuring that it serves passengers however they buy their tickets. GBR’s future online retailer, its website and app will operate in a fair, open and competitive market. To be clear, independent retailers help drive innovation, improve passenger experience and increase choice for customers purchasing rail tickets.

We realise that the dual role as a retailer and the provider of certain cross-industry systems and services could create potential conflict of interest risks. That is why we have announced a robust package of safeguards specifically designed to address these concerns. In response to the CMA report in 2025, mentioned by noble Lords in the debate, we are proposing an industry retail code of practice owned by the Office of Rail and Road and backed with the force of a GBR licence condition ensuring that the ORR will enforce GBR’s compliance with it. For the record, paragraph 5 of Schedule 1 is the place where the ORR is required to create the code and enforce it.

I can confirm today that the draft code will require GBR to adhere to a range of principles. These include ensuring access to products, providing services and data on fair, transparent and non-discriminatory terms and supporting new market entrants. We are determined that all retailers can sell all tickets. The draft code will also require safeguards around our decision to separate decision-making between GBR’s retail activity and its cross-industry systems and services, supported by appropriate information protections. This provides more protection for third-party retailers than exist today when competing with myriad train operators.

If GBR does not comply with the code, the ORR can employ enforcement measures up to and including a legally binding mandatory order for GBR to change its actions. These enforcement measures can be employed in response to a third party raising an issue with the regulator or where ORR identifies an issue through its routine monitoring. The full draft code will be published when the ORR launches its consultation before the end the next recess. This follows extensive engagement it has already undertaken with industry. It will consider feedback from the consultation informing the final draft of the code of practice in 2027. In answer to the noble Lord, Lord Lansley, we are expecting the CMA to respond to the consultation that the ORR will launch.

As noble Lords have suggested, we want the ORR to be adequately resourced to carry out these functions. Noble Lords who came to the session we had last week, referred to by the noble Lord, Lord Young, will have heard reassurance from the senior leadership of the ORR that they intend to do this and are prepared to do so.

I should also be clear that GBR will be required to comply with competition law. The ORR and the Competition and Markets Authority will continue to oversee the market, and both already have powers to act where anti-competitive behaviour is identified. Alongside that existing framework, the code will create a framework that represents a more extensive form of regulatory assurance than is currently found in most comparable European rail markets. The Government therefore believe that the objectives of these amendments are already being delivered. The code will provide meaningful protection for independent retailers and can adapt as the market develops.

Amendments 49 and 181 were tabled by the noble Lord, Lord Moylan, and concern cross-subsidisation—

[Baroness Harding of Winscombe (Con)]

I am sorry to interrupt the noble Lord. Before he moves on, I may have misunderstood, but I do not think he addressed whether GBR would be subject to the Subsidy Control Act.

[Lord Hendy of Richmond Hill (Lab)]

I have not got there yet.

[Baroness Harding of Winscombe (Con)]

We wait with bated breath.

[Lord Hendy of Richmond Hill (Lab)]

I am about to get there. In turning to Amendments 49 and 181 concerning cross-subsidisation and subsidy control, I can offer further reassurance. The advantage of interventions is that you make your point; the disadvantage is that you stop hearing. As a public body, GBR is required to comply with Managing Public Money principles and relevant subsidy control legislation. The Public Service Obligations in Transport Regulations is the relevant subsidy control legislation that applies to retail specifically.

GBR’s passenger services business will therefore operate within a clear financial framework, ensuring that public funding is used appropriately and fairly. GBR will be required through its business plan to set out its activities, such as its broad retailing function, the costs of these activities and how it proposes that these costs are met. The business plan must cover everything that GBR does, so there should be no concern about transparency.

It is important to note that GBR will be operating a transport service of which retailing is a part. It will have to use all available channels to serve passengers, however they buy their tickets. If it is allocated more funding for retail than would be needed for a simple online retail platform, it is simply because it also has an obligation to provide physical ticket sales—I listed those activities before—including for people who pay cash. They are far more costly to provide, and other retailers are most unlikely to provide them.

In answer to the noble Lord, Lord Young, it will not be possible for GBR to subsidise retail from infrastructure budgets, for example, as ticket offices are not classed as infrastructure. GBR will not be overcompensated to deliver retail functions in a way that distorts the market. Funding will be allocated based on the costs of delivering those services to passengers.

It will also be subject to the oversight of the ORR as the sector specialist competition regulator, alongside the Competition and Markets Authority. In that role, the ORR will be able to take enforcement steps against GBR, should it suspect that GBR is using public funds to act in an anti-competitive way.

--- Later in debate ---

I also confirm for the noble Baroness that the Government have recently announced plans to consolidate all existing Delay Repay systems into one under Great British Railways, making it more straightforward for passengers to claim Delay Repay. As a result of this change, as I think the Committee has already heard, passengers will also be able to claim Delay Repay through independent retailers, which they could not do before. This is another step towards a fair and open competitive market. No matter where the ticket is bought, it will be much quicker and easier to access compensation than it is today. Given the progress already being made, I hope that the noble Baroness will see that we are already aligned on shared outcomes here and that that provides her with enough reassurance that she will not press her amendment.

[Baroness Harding of Winscombe (Con)]

My Lords, I thank everyone who has contributed to this meaty debate. They included multiple ex-Secretaries of State and Members with private sector, regional and devolved experience. I think there was real unanimity of intent. I also thank the Minister. There was an awful lot in his response, which I suspect we will all need to read carefully to understand properly. I take at face value his opening statement of being in line with the intentions of all these amendments. However, there is a lot of work to do between now and Report. It is encouraging to know that we will see the draft code before the end of Recess. I think it will require a lot of detailed thought and discussion.

I shall close by highlighting what my noble friends on the left and right of me have just said. My noble friend Lord Moylan set out exactly why I still think we are going to need to put more in the Bill, and my noble friend Lord Young of Cookham said the same thing: Governments in the future will want to protect the monopoly of the vertically integrated GBR. A good friend of mine in the tech world once told me that monopolies are like children: until you have one of your own, you do not realise how valuable they are, but once you have one, you will protect it with your life. I therefore think we need to hear the wisdom of everyone in this debate today. Without clear guardrails in the Bill and signals to investors and independent retailers that we really mean it, and that this will live beyond the current Government, I fear that the Minister’s great intent will not turn into reality. I beg leave to withdraw my amendment, but I expect that there will be much debate and discussion between now and Report.

Amendment 10 withdrawn.