Wales Bill

Baroness Morgan of Ely Excerpts

Report stage (Hansard - continued): House of Lords
Wednesday 14th December 2016 Lords Chamber

Moved by

[Baroness Morgan of Ely]

59: After Clause 49, insert the following new Clause—
“Rail: franchising of passenger services
(1) Section 25 of the Railways Act 1993 (England and Wales: public sector operators not to be franchisees) is amended as follows. (2) In the heading, omit “and Wales”.(3) At the end of subsection (2A) insert “or a franchise agreement in respect of services that are or include Wales-only services.”(4) After subsection (2A) insert— “(2B) For the purposes of this section a “Wales-only service” has the same meaning as in section 57 of the Railways Act 2005.”(5) This section does not have effect in relation to any invitation to tender under section 26(2) of the Railways Act 1993 issued before the day on which this section comes into force.”

[Baroness Morgan of Ely (Lab)]

My Lords, this week, with the chaos caused on Southern rail, we have seen how poorly run railways can impact on people’s lives. I know this to be true because the shadow Chief Whip has told me to get a move on as he needs to catch a train—a Southern rail train, which is even more difficult.

One of the key ambitions of the Welsh Government is to establish and develop a dynamic economy in Wales. Central to this is the fact that we will need to ensure that it is supported by an effective integrated transport network—including, crucially, the rail network. The question we are addressing in our amendment is: who should be allowed to bid for the franchise to run the railways in Wales?

With ambitious milestones envisaged for the delivery of the public transport network in Wales, such as electrification, the introduction of the South Wales Metro and widespread structural improvements, it is important to make sure that all possibilities are open in relation to who can run our railways. That is essential for the implementation of our ambitious plans for improved passenger services across Wales. We need to ensure that the development of that franchise and the ability of anyone to bid for it are married with the economic ambitions for the area.

The current franchise saw a surge from 18 million annual passenger journeys on the network in 2003 to 29 million journeys by 2013. With the numbers forecast to grow by a further 74% by 2030, it is imperative that we plan for that growth in a more integrated and responsive way. If we leave it to the UK Government, we will be in trouble, because only about 1% of the money spent on rail infrastructure enhancements across England and Wales from 2011 to 2015 was spent on Network Rail’s routes in Wales. I repeat: 1%. And we wonder why there is disparity in the way that people respond to government in this country. That has to be addressed, and we want to address it. However, that is not what I want to talk about here. I am sorry but I needed to say that, because I am really angry about the fact that only 1% was spent in Wales. It is important that that is understood.

The Welsh Government are currently undertaking a franchise round to decide who will be responsible for running the Wales and Borders franchise, including the operator for the planned Metro. In theory, we understand that a not-for-profit organisation could have bid for this franchise round. But we would like to see the possibility in a future franchise round for the Welsh Government themselves to be able to bid for the franchise if they wish to do so. This is something that has been allowed for in Scotland and was agreed in the Smith report, but it is being denied to Wales.

Let me underline the absurdity of the situation by telling noble Lords about the current bidders for the franchise. The preferred bidders to build the South Wales Metro and run the next Wales and Borders franchise have just been announced. The choices reflect the injustice of British railway politics. Abellio is a subsidiary of a Dutch state-owned rail company; Arriva forms part of a German state-owned company, Deutsche Bahn; Keolis belongs to the French state-owned rail service, SNCF; and the only truly private bidder is MTR, a Hong Kong-based rail company. It is illogical to allow a foreign state-owned company to run a franchise in Wales while prohibiting public sector organisations from running the Welsh franchise. Wales should not be maintained as another nation’s rail colony. It is purely a matter of logic that the Welsh Government should be granted the opportunity to bid if they wish in future to run that railway network.

We understand that the next franchise will run from 2028 but we believe that this is an important matter of principle. We believe that the Government are being ideologically blinkered in their objection to the public sector in Britain being allowed to deliver rail services. I beg to move.

[Baroness Randerson (LD)]

My Lords, I look forward to the Minister’s response to this because he is not on a good wicket at the moment. This is not a good week to be defending privately run franchises or arguing that railways run by the private sector are automatically the solution to all our problems. I reassure the Minister that on these Benches, we are not massive fans of nationalisation either—we are fans of what works. As you study franchises across Britain and railways across Europe and the world, you will see that all sorts of configurations work in different circumstances and that similar configurations do not work in other places. There is no one solution.

I do not think it is necessarily appropriate for the Welsh Government to be trying to run a railway service. However, it is conceivable that the Welsh Government might wish, for example, to enter into a partnership with the private sector on some kind of joint venture, or to set up some sort of novel structure, of which they would be a part, perhaps on a not-for-profit basis. I remind the Minister that Transport for London is a real success story in many respects, and has a structure that quite clearly includes a government element. I also remind the Minister that when the Government were forced to take over the east coast main line from a failing private sector franchise, they did rather a good job of running the railway and saving the situation. Therefore, we support in principle the idea of giving the Welsh Government the freedom to decide what shape of franchise they want and to participate in that process if they wish to do so.

I realise that the Minister will say that there are practical difficulties because the railway runs not just in Wales but in England. If the rail franchise is run by the Welsh Government, it might be regarded as slightly irregular, I suppose, for the service in England, but no more irregular than the private sector franchise being run by the Dutch state railway company, which is what happens in England at the moment. I also realise that we are talking about a long way into the future, because the processes for the next franchise will not be prepared until 2028. For that reason, I hope the Minister will listen and think about this. There is value in playing the long game on the railways and in looking at how we can get the best investment in services in the long term. One thing that would persuade the Welsh Government to invest in railways in Wales would be to give them a little more power and control over them.

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[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I am very grateful for the build-up from the Benches opposite. I thank noble Lords who have participated in the debate on the railways. Perhaps I may say first, although I do not think the noble Baroness, Lady Morgan of Ely, referred to it, that although Amendment 91 is in this group, I would like to return to it on the second day of Report, in the new year. I see that the noble Baroness is content with that.

I turn to Amendment 59 moved by the noble Baroness, Lady Morgan of Ely. She is seeking to press the Government to a decision on a matter that we committed to consider in the St David’s Day Command Paper, as my noble friend Lord Hunt of Wirral has just indicated. That matter is whether to legislate for Wales in a similar manner to the provision in the Scotland Act 2016 regarding the powers of Scottish Ministers as committed to in the Smith commission agreement to enable Welsh Ministers to invite UK public sector operators to bid for rail franchises for which they are the responsible franchising authority. Let me deal first with the point about not-for-profit and not-for-dividend organisations. They are currently able to bid and there is no proposal to alter that, so the likes of Dwr Cymru, as I indicated in Committee, would be able to bid in relation to this.

I know the Welsh Government are keen to have this power, but I have to tell noble Lords that we have no proposal in this area, particularly given that it will be 2028 before it could kick in. I think that by common agreement the current border franchise contract will be agreed in 2018. We do not propose to permit public sector bidders in the interim because we do not see any urgency about this. On that basis, I cannot give the reassurance that is sought.

[Baroness Morgan of Ely]

I am very disappointed with the Minister’s response. I do not understand why we cannot have the same rights as Scotland for the public sector to be able to bid for the franchise. We are not asking to be given it; we are asking for the right to submit a proposal, which, as the noble Lord suggested, is allowed in the Smith commission agreement. It is a double standard to allow German, Dutch and French state-owned companies to bid for the franchise but not Welsh state-owned companies. The noble Lord will understand that when talking about railways you need a long-term approach. That is why we do not think it is premature to be pushing this. I am afraid I am not convinced by the arguments put forward by the Minister and I would like to test the opinion of the House.

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[Lord Murphy of Torfaen (Lab)]

My Lords, I support the amendments. The noble and learned Lord, Lord Judge, referred to Henry V as a Welshman; indeed, he was a Monmouthshire man like myself. Of course, Henry VIII was a Welshman too, and he was less benign to Wales than the other Henry, just as the situation described by noble Lords is not benign.

Over the past 20 years, the way in which legislation has been made in Wales has developed enormously. When it started in the late 1990s, the Welsh Assembly was effectively a big county council, and all it could legislate on initially was secondary legislation. Then my noble friend Lord Hain introduced the 2006 Wales Act, under which we had a sort of hybrid situation with legislative competence orders. Now, as the House knows, primary legislation can be, will be and is being made by the National Assembly for Wales. Those of us who live in Wales are subject to the laws of two parliaments and the diktats of two sets of Ministers.

Over the past two decades, the relationships between the two Governments and the two parliaments have themselves developed. At times, it has been very difficult, as my noble friend Lord Hain and I as Welsh Secretaries knew only too well. But now my noble friend Lord Rowlands has revealed—and the Minister himself revealed it in his letter to Members of this House—that a deeply unpleasant and unconstitutional situation is growing that allows Ministers in one Government to change the laws of another assembly or parliament. That is very wrong.

I rather suspect that the Minister will say that these amendments should not appear in the Bill for various reasons—not least of which is “It doesn’t happen in Scotland”, but that was a major oversight when the Scotland Bill was going through. In previous constitutional Bills, very often a Minister has indicated in the House what the consultation process can be. If the Minister cannot assure us that such provisions will appear in the Bill, perhaps he can reassure the House that there will be proper consultation between the two Governments and the two assemblies and parliaments, whenever the changes are made. That is not as good as putting changes in the Bill, but at least it would be something.

[Baroness Morgan of Ely]

My Lords, we have heard how Clause 60 allows for consequential provisions on Assembly Acts to be made by the UK Secretary of State. In other words, if there is a need for a tweak to be made to a new law introduced, or if there is a need to change a different government Bill as a result of the introduction of a new Bill, it could be done without going through the whole rigmarole of a full-on legislative parliamentary procedure.

We can all see the sense that now and again that is necessary. That is not an unusual state of affairs; it is not unusual for a Minister to be able to make consequential orders in relation to laws made and enacted in the United Kingdom. However, as we have heard, if a consequential law were to be introduced in Westminster, there would be that opportunity for both Houses to approve such changes before they could be enacted. If I may say so, I think that this House carries out that role very well; it is the House that really takes that seriously. As has been underlined, the major difference in relation to Wales is that the opportunity to approve consequential changes is not available to the Welsh Assembly on laws that affect it. That has been criticised vehemently by the Delegated Powers Committee.

My amendments would limit a requirement that statutory instruments would have to be approved by the Assembly so that it applied only if they related to provisions that would be within the Assembly’s competence or would amend the Government of Wales Act 2006. So it is a restricted responsibility. The Assembly would not be trying to grab power in any way—it is just making sure that the Assembly is able to do the work that it has responsibility for.

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[Baroness Morgan of Ely]

Before the Minister sits down, I thank him for the suggestion that there will effectively be some kind of early warning system. But he suggested that it would allow the Assembly to act appropriately. What does he mean by that? What would the Assembly acting appropriately mean?

[Lord Bourne of Aberystwyth]

My Lords, I am too old a hand at devolution to suggest what would be appropriate for the Assembly; that would be a matter for the Assembly in the particular circumstances of the case. I do not think that I can second-guess what it would want to do; it would depend very much on the circumstances and the view of the Assembly on a particular matter, not to me as Minister at the Wales Office here.

[Baroness Morgan of Ely]

What tools are available for the Assembly to use in order to act appropriately? What tools does it have?

[Lord Bourne of Aberystwyth]

Again, the noble Baroness is a Member of the National Assembly; I am not. I would expect her to have a better idea of that than I do.