Railways Bill

Baroness Pidgeon Excerpts

Committee stage
Tuesday 8th September 2026 Grand Committee

[Lord Berkeley (Lab)]

My Lords, I want briefly to reflect on the various amendments that noble Lords have put forward so far this afternoon. Basically, it makes me feel very concerned, because we are lacking information, as the noble Lord said on Amendment 8 but also on many of the other ones, and we do not know what is going to happen. We do not really know who will be running infrastructure or some of the train operators and, if we ever end up with any private sector involvement, I go back to what I experienced when I was on the kind of supervisory board of Railtrack a long time ago. We used to meet every three months with the board, and you could just see that the debt that Railtrack was incurring was getting bigger and bigger. In the end, I said to the chairman, “How long are the Government going to allow you to continue with this debt?” It seemed to increase by 10% or 15% every time we had a meeting. The chairman’s response was, “Well, don’t worry, I had a meeting with the Secretary of State”—none of the former Secretaries of State are here today, so I think I am safe to say this—“and he said it will be all right”. We had a nice meal and it was fine. But the sad thing was that, within a week, not only had he got the sack, but Network Rail was closed down, because the so-called shareholders did not know what they were doing. It was yet one of the many disasters that the infrastructure manager has probably suffered over the last 30 or 40 years.

It would help me and maybe other colleagues to think of some useful criteria as to whether we think all these different elements that we will be discussing in the next seven days will be beneficial or not. What I found rather interesting was a part of a speech by the Secretary of State, Heidi Alexander, on what she saw coming from the nationalisation plan. She that it,

“requires a high performing railway to … support the creation of new jobs and new homes … improve reliability, generate better usage of our trains and reduce public subsidy”.

We can spend a lot of time talking about whether this has happened in the last year or two. If it has not, what has gone wrong? It is much too soon to see what is changing. We should in mind that, in the last three or four years, most of the passenger operators have been effectively controlled by the Department for Transport, even though they are in theory in the private sector. Network Rail, of course, is funded by the Department for Transport anyway. This is something that we need to look at, in going through all the amendments and seeing whether they will meet any of those criteria. Maybe my noble friend, when he responds, will be able to say, “I have got it completely wrong and it is all going to happen anyway”. I look forward to his comments.

[Baroness Pidgeon (LD)]

My Lords, I thank the Minister and his officials for numerous meetings with me and many of my colleagues over the last few months; they have been very helpful for discussing how we can improve the Bill before us.

The dislike for this Bill was very apparent in the opening words from the noble Lord, Lord Moylan. The previous Government could have implemented the concession model that has been mentioned several times—it would be our preferred option—but they did not. The picture that we had painted by the noble Lord, Lord Moylan, of the privatised railway does not reflect many passengers’ experience in recent years. I say to the noble Lord, Lord Harper, that I think the service started to decline before the pandemic, but the pandemic accelerated the fact that this model was not working.

The Government have a mandate for public ownership. In fact, two years ago, we debated the Act on it. I hope that we can focus in these seven days on getting the structure right and delivering for passengers, rather than revisiting the ideology behind what the Government are doing.

The amendments in this group are quite technical in some ways, and they are about the structure rather than focused on passengers. But it is important that we hear from the Government exactly why they have chosen the model that they have. The noble Lords, Lord Moylan and Lord Lansley, in their amendments are seeking some clarity on the exact set up of Great British Railways and why this model has been chosen. It is really important to get some clarity over the status of Great British Railways’ companies, set out very clearly by the noble Lord, Lord Lansley, in some of those examples. How will these partnerships work in practice? There is also the point around civil servants and their role. The noble Baroness, Lady Jones, wants clarity on the subsidiaries of Great British Railways and their potential future ownership. Whatever happens in this Bill, there will still be a huge amount of private sector involvement, because the rolling stock will still be owned by private companies and there is no plan to change that. Even if everything else is fully publicly owned, there will still be a huge amount of private sector involvement through the rolling stock.

There are many ways that you could look at structuring Great British Railways. One could have been a co-operative model. An understanding from the Minister on why this was felt to be the best way to deliver the quality of the railway service that we all want to see would be helpful. I look forward to the Minister’s response and clarification on these structural amendments.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank the noble Lords, Lord Moylan and Lord Lansley, and the noble Baroness, Lady Jones of Moulsecoomb, for their amendments, and the noble Lords, Lord Harper and Berkeley, for their contributions.

I will begin with Amendments 1 and 6, which would specify that the company designated as Great British Railways must be established under existing company law. I can reassure the noble Lord, Lord Moylan, that, as is the case with Network Rail and the train operating companies, GBR will be a private limited company under the Companies Act 2006. It will have its own articles of association. The Bill is constructed around this assumption. For example, Clause 3(6) makes it clear that GBR can carry out business activities by virtue of being a limited company under existing company law. If it were not a Companies Act company, this and other provisions of the Bill would not be appropriate. The alternative to a Companies Act company would be something like a royal charter corporation, such as the BBC, or a statutory corporation, such as the Advanced Research and Invention Agency. GBR is clearly neither of these, given that the Bill does not establish it as such. Body corporate is a general term under UK law, meaning an incorporated organisation, which is what GBR will be. Combined with the drafting in Clause 3(6), the Bill is clear that GBR will be a Companies Act company.

I turn to Amendments 2 and 3. Amendment 2 would remove from the Bill the requirement that GBR be wholly owned by the Crown. As the noble Lord will be aware, this Government were elected with a clear mandate to nationalise the railways, and that is exactly what we are doing. We are ensuring that GBR is owned by the British people and run in their interests—not in the interests of private profit. Public ownership is key to creating a more efficient railway and a better passenger experience. It shifts the focus from profit to passengers and freight, and begins to put an end to the fragmentation and waste of the franchising system, allowing the whole industry to work together in the interests of the passenger. This approach will save the taxpayer hundreds of millions of pounds in fees and allow taxpayers’ money to be spent on things that will benefit the passenger instead.

The requirement in the Bill that GBR must be publicly owned will ensure that any future Government wanting to privatise the railways would have to seek the consent of Parliament to do so. This will put the system on exactly the same footing as it was under privatisation since—as I am sure the noble Lord will acknowledge, given that he is trying to repeal it—an Act of Parliament was required to bring passenger rail services back into public hands. The latest YouGov poll shows that 76% of the public think that railways should be in the public sector and only 13% think they should be in the private sector. As the noble Baroness, Lady Pidgeon, put it so well, previous Governments could have done something about it but they did not. The railway is an asset with significant financial, economic and safety implications, so it is right that Parliament scrutinises every major change to it.

Amendment 3 would ensure that GBR’s subsidiaries do not need to be wholly owned by the Crown. I will speak more about the Government’s policy on this in a moment when I address the amendments in this group from the noble Baroness, Lady Jones, but I am pleased to confirm to the noble Lord, Lord Lansley, that the drafting of Clause 1 already facilitates what he seeks to achieve. The requirement to be wholly owned by the Crown applies only to the parent company that is designated as GBR, not to any of its subsidiaries. For clarity, GBR subsidiaries come within the term “GBR companies”, as defined in the Bill. GBR companies are not subject to the “wholly owned” requirement, so I hope the noble Lord will see that his amendment is unnecessary.

Speaking of GBR’s subsidiaries, I will now address Amendments 5, 334, 335, 337 and 345 from the noble Baroness, Lady Jones. She has said that she is a passionate supporter of public ownership, as we are. Her amendments would mean that GBR must wholly own all its subsidiaries for them to be considered GBR companies. As I have said before, we are committed to the private sector continuing to play a key role in the future rail sector, and this includes within GBR where appropriate. After all, the private sector can bring advantages that the public sector cannot, including greater risk appetite and additional investment that reduces the burden on the taxpayer. GBR will therefore leverage the best of both the public and the private sectors, working in close partnership with private companies, from freight and rolling stock to ticket retailing and the rail supply chain, to unlock benefits and drive growth.

The advantages of this approach were referred to by the noble Lord, Lord Harper, and can already be seen in Network Rail’s successful joint ventures with the private sector, including through Platform4, a subsidiary of Network Rail which uses private sector investment to support community regeneration projects and is expected to deliver up to 40,000 new homes in the next decade through public/private joint ventures. For example, Platform4’s joint venture with Bloc Group has already secured 2,000 new rental homes near major city transport links. These types of investment would simply not be possible were I to accept the noble Baroness’s amendments. In addition, the amendments would prevent GBR from pursuing joint ventures with the devolved Governments, which I hope she agrees would not be the right outcome.

However, I can reassure the noble Baroness that, although the existing Companies Act definition of a subsidiary enables these public/private partnerships, importantly, it does not enable private sector control. Any private sector interest in a GBR company must be a minority shareholding, to ensure that the railway remains owned, controlled and operated by the public. The Government are also clear that certain aspects of the Bill, such as GBR’s access decision-making process and its ticket retailer, passenger services and vital cross-industry functions, will all remain part of the wholly publicly owned and controlled part of the business. This recognises that, while private sector investment is a great enabler of infrastructure development opportunities that can support our communities, it is not always suited to railway functions that must be run in the public interest.

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[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.

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[Lord Hendy of Richmond Hill (Lab)]

I refute that comment, for the avoidance of doubt and for the record.

The noble Lord is correct. It is an important distinction. As I said, let me meet him on that. He referred to Clause 70. I am not equipped to go into that just now, as he will appreciate, so I will talk to him further about it.

Amendment 18 removes the delegated power to add to the list of functions for GBR. While the functions listed in Clause 3 cover the breadth of activities that we expect GBR to undertake as the directing mind for the railways, it is sensible to provide the flexibility to add functions should the railways change significantly enough to warrant a new function being added—for example, due to technological development, such as in the artificial intelligence space.

This power is not expected to be used frequently, if at all, but it future-proofs the Bill in the event that new activities need to be brought within the scope of the functions. Bringing an activity within the functions in the Bill has several benefits, including that the function then becomes subject to GBR’s duties and ORR’s monitoring. This legislation is expected to govern the railways for a long time, as the 1993 Act did, so this is a responsible and sensible power. This power was also reviewed by the Delegated Powers Committee, which deemed it acceptable and did not draw it to the attention of the House in its report on the Bill—I welcome the report and look forward to responding to it formally in due course. The power cannot be used to change or remove functions and is subject to the affirmative resolution. It is also not unprecedented: the National Health Service Act 2006 allows functions to be added to special health authorities via regulations. I therefore hope that the noble Lord will feel able not to press this amendment.

Amendments 20 and 110 from the noble Baroness, Lady Pidgeon, relate to passenger growth. I very much agree with her that growing passenger numbers on the railways is vital. It supports economic growth, jobs and homes, encourages modal shift and can reduce the level of taxpayer subsidy required for the railways. However, GBR’s general duties in Clause 18 already include a duty to promote not only the interests of passengers but potential passengers. This already requires GBR to consider how best to encourage new users on to the railways. GBR’s business plan will also reflect the Government’s ambitions for passenger growth, including measurable outcomes against which GBR can be held to account.

GBR’s other duties, including promoting high performance, such as reliability and punctuality, will also contribute to making the railways more appealing to passengers. Transport Focus recently found reliability to be the single most important issue for passengers. GBR will be able to improve reliability by making better, whole-system decisions on issues such as the choreography of maintenance works.

As a commercially minded organisation, GBR will also be naturally incentivised to attract more people to travel by rail, because increasing passenger numbers will increase its own revenue. By contrast, there is no intrinsic motivation for GBR to increase rail freight when there is limited network capacity and freight services are in the clear minority of services. That is why the Bill already includes a freight duty and a freight target, to ensure that freight is given equal weight to passengers in a system where passengers may have naturally taken priority otherwise. A stronger or additional passenger equivalent duty or target could actually undermine our ambitions on freight. I therefore hope that the noble Baroness will agree that that would not be the right outcome.

[Baroness Pidgeon (LD)]

Before the noble Lord moves on, he has not really addressed the point that I made, which is that in Clause 18 there is a perverse incentive that somebody coming in with a different mindset from many of us in this Room could reduce the frequency of trains and hike up fares and still meet what is in this legislation. Even if the noble Lord does not agree with my amendment about a passenger target, and I accept the debate on that, can the Government agree to look at whether some other wording could be put in to strengthen this and make sure that this legislation does what we all want, which is to see more passengers on the railway?

[Lord Hendy of Richmond Hill (Lab)]

The obligations placed on GBR by the long-term rail strategy, and the consequent approval by the Secretary of State of the business plan, should adequately deter Great British Railways from seeking to achieve that by diminishing services. Indeed, there was an example in the franchising era of the Government being loose with their definition of train services, only to discover that the franchisee had, remarkably, reduced the subsidy by withdrawing a number of services on rural branch lines. That clearly would not be possible with a decent long-term rail strategy and a consequent business plan to which a Government should agree.

Amendments 80 and 81 relate to the Clause 13 provision allowing GBR to charge for its functions. I agree that GBR must act reasonably while setting charges, and I assure the noble Lord that there are already safeguards in the Bill to ensure that charges are reasonable. GBR has a duty to ensure that railway service providers, such as other operators, can plan, invest and make decisions about their own businesses, so GBR must set charges that are consistent with this and do not undermine other people’s ability to run viable and successful businesses.

Competition law will apply to GBR, ensuring that charges it sets are not anti-competitive. In this context, an additional reasonableness test is duplicative without delivering any material additional protection. It is also important that GBR can recover appropriate costs from those who access and benefit from the services it provides. If it were prevented from doing so, the burden would ultimately fall on the taxpayer and passengers.

Amendment 81 would provide an appeal route. All I say to the noble Lord is that an appeal route to the ORR across every possible charge that GBR could levy is disproportionate. I have already mentioned the safeguards in existing law to ensure that those charges are fair.

On the private sector growth target referred to in Amendment 114, nothing in the Bill seeks to exclude or marginalise the contribution of the private sector, but I do not agree that a statutory target is the right approach. The Bill is absolutely an opportunity for the supply chain, but in that case, we have to let the market determine its contribution.

On Amendment 305 from my noble friend Lord Berkeley, I assure him that existing legal rules already allow railway operators to seek recovery of costs and other losses through civil law. A substantial amount of cost recovery is achieved already, and the limit to it is to do not with legal powers but with the identification of perpetrators who drive off. Given what I have set out, I encourage noble Lords and noble Baronesses not to press their amendments.

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That is the key point we should all focus on. What regime will deliver the best outcome for passengers—not just today, with today’s technology, but by delivering investment in new technology as it comes along to continue developing that fantastic passenger and customer experience? I want to make sure that we guarantee that. I know that is what the Minister wants to deliver, so this is an argument about how best to do it rather than an argument about principle. I look forward to what I hope will be a thoughtful and constructive response from the Minister that at least shows that he is open to thinking about some of the ways of delivering on the concerns raised by the Committee.

[Baroness Pidgeon (LD)]

My Lords, this has been a strong debate on an important issue. It is about ensuring that passengers have a wide range of retailers from which to buy their tickets and other associated services, whether for leisure or onward travel and so on, and that there is a level playing field between Great British Railways’ retail arm and the third sector providers. At the start of the discussion on this group, the noble Baroness, Lady Harding, and the noble Lord, Lord Young, made a clear case about the issues, which are uniting members from across the Committee.

Throughout the discussions on all the amendments in these groups there has been a desire for genuine and fair choice for passengers. We want to promote a competitive retail market and equal access to systems, data and products so that they can be used by start-ups and others as well as established practitioners in this area. The latter point is important. It is part of Amendment 211 in the name of the noble Lord, Lord Young of Cookham, and is supported by a number of other Members, including my noble friend Lord Dixon of Jericho. I want to spell out why these issues are so important.

I was really interested to hear about the recent product launched in Wales earlier, which not all third-party retailers were able to promote. In the last week, South Western Railway has had a special discount, some kind of flash sale, on rail tickets on its services. I was not able to find these on my usual app—Trainline, though others are available—but only on the South Western Railway website, which is what I had to use to purchase these super-discounted tickets. It may well be my technological limitations failing me, but, if I had not seen an email from South Western Railway, I would not have known about these special tickets and would have ended up paying three to four times the amount for my travel.

There has to be a genuine level playing field where all retailers can sell the same tickets and discounted tickets and use their skills and innovations to drive more traffic through their sites and apps. Different people read data and information in different ways, and that is why we have such a range of apps; we all look at things differently and have different ways we want to purchase tickets. It is important that this can thrive, with the jobs and innovation that this creates.

Members from different parties are in the same area on this issue, but some go further. Amendment 17 from the noble Lord, Lord Moylan, wishes to prevent Great British Railways having any retail website or application until Parliament has had a say over its full-life cost. This sounds a little bit like what the noble Lord, Lord Harper, was talking about—when he was in the department saying, “Why is Great British Railways getting into this space at all?”

As we have already heard, if you look internationally, SNCF has a retail arm in France, but it is kept separate from the main SNCF network, so there is no conflict. In some ways, that is a bit like the regeneration and planning functions of a local authority. They are a part of the same body, but they have to be kept separate because of their distinct functions. Amendment 182 from the noble Lord, Lord Holmes of Richmond, suggests a way to do this, which may help with this concern.

My noble friend Lord Dixon of Jericho spoke eloquently at Second Reading about this area. I know he has held several meetings with officials to discuss his concerns not just about the existing third-party retailers but the ease for new entrants—start-ups—to come into this marketplace and offer the quality services that passengers desire.

Finally, I want to pick up on Amendments 208 and 339, tabled by my noble friend Lady Leaman. This is so important for passengers. It would ensure automatic Delay Repay compensation, whichever retailer you have bought your tickets with. It is about putting the passenger front and centre so that, if something does go wrong, they are compensated without having to jump through hoop after hoop. It is a basic right if we are to transform our railways into the modern, passenger-focused service that we all desire.

I look forward to the Minister’s response on this really strong debate; I hope that it is far more than simply saying that the retail code of practice, as an approved document, will deal with all these issues. I think the Minister will have heard loudly and clearly—and not just from the transport enthusiasts, though many of us are here in this Room—that noble Lords are rightly concerned about this area, and we must get this right.

[Lord Moylan (Con)]

My Lords, I have a number of amendments in this group, but I will not speak to them because right at the outset my noble friend Lady Harding said that there were quite a lot of amendments in this group which offered different means of achieving the same thing, and it was hard to say which were the better ones. I am not claiming that mine are better than others, and I think my noble friend Lord Harper said something along the same lines. We have put them down because we feel strongly about a very important issue, we want it debated, we want the Government to take note and to do something about it before we get to Report. Whether they do what my amendment or somebody else’s amendment says is something we might have a chance to debate and discuss privately before we get to that point—I do not know—but I am not wedded to my particular solutions and therefore will not speak directly to them.

I will say that we on our side support everything that has been said, in that we are curious about why GBR is doing this. I will come back to this point; I will make the Minister’s case for him in a moment, rather against my own interests. We are curious as to why the Minister wants to do this in the first place but, if he is going to do it, there has to be a level playing field for those who are already in the field and other new entrants, because they have demonstrated the advantages they can bring to passengers. The difficulty here—it will arise in the next group—is that GBR is effectively a huge bear sitting in your front room. That bear is both a competitor and a regulator, and its slightest twitch, even unintentionally, could do serious damage to your business. There are a lot of private sector businesses, not just in ticket retailing but those who want to have access to freight and for other purposes, which we will come to later—open access and so forth —which are very worried about what is being created.

The only assurance we are getting from the Minister is essentially, “We are decent professional people; we will do this well”. That is fine. The noble Lord is a decent and professional person. Having worked with him for many years, I am happy if it is of any value to him to give him that endorsement. However, he lacks the quality of immortality. It is necessary to give at least 30 years’ guarantee, if this is going to be the legislative background for 30 years.

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[Baroness Pidgeon (LD)]

My Lords, these amendments look to ensure a fairness between Great British Railways operations and open access and freight operators in terms of charges and access to the track, and concern the change to the current role of the Office of Rail and Road. Since the publication of the Bill, there has been a big debate in the sector about this over the past 18 months or more. Amendment 16 in the name of the noble Lord, Lord Moylan, seeks to change Great British Railways’ functions so that decisions about access to and the use of railway infrastructure would instead be carried out by the Office of Rail and Road, as is the case now, as he said. On the other hand, Amendment 221 approaches this differently, with a subsequent right of appeal to the ORR after going through the dispute resolution process set out in the Bill. It would leave the function with GBR but bring in more of an appeals function.

The Bill is a real change to open access operations on the railway and it is right that we scrutinise how it will work in practice. As we have heard, a number of innovative open access operators are running good services with competitive fares. With the vast majority of passenger services being in public ownership, there needs to be confidence that Great British Railways is operating in a clear and transparent way, with an appropriate mechanism for challenge set at the right bar. There is concern that removing the current function of the Office of Rail and Road with regards to access will mean that Great British Railways will always prioritise its own services and may choose to not continue open access operations in the future—some of which are very successful, but there is a fear out there.

We have some concerns over this shift in power between the Secretary of State and the Office of Rail and Road. We want to see the publication of decisions and any evidence that has supported decisions, as well as real engagement with passengers and representative bodies as timetables are developed and services are changed. Of course, freight comes in here too. Freight will be critical to help move lorries off our roads and grow our regional economies, so freight access is equally important. We need transparency and openness between Great British Railways and the other parties in this space in terms of track charges and access. I hope that the Minister will provide the assurance that industry would like to hear on this important change in legislation.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank the noble Lord, Lord Moylan, for Amendment 16 and for this short debate. In the groupings for Committee, there are some very substantial numbers of amendments about access in groups 26 to 31, so I will answer these amendments very briefly because I am sure we will have very detailed debate subsequently. Indeed, I will leave some of the points that noble Lords have made this evening in order to come back to them when we get to groups 26 and 31.

I want to be very clear that the existing access framework is, in our view, not fit for purpose. It is built on 30 years of complex legislation, regulations, contracts and codes. It requires Network Rail and the ORR to take decisions using inconsistent criteria, based on differing duties and objectives, with no common vision. Fundamentally, no single party is responsible for planning the best overall use of the network and ensuring that access decisions deliver that plan. The current system has too often been characterised by fragmentation and delay, and it is clear that nobody is in overall charge. That has led to inefficient use of capacity and decisions that serve neither passengers nor freight well.

There are clear examples of the consequences. The May 2018 timetable failure—the original catalyst for rail reform—saw punctuality and reliability plummet across large parts of the network. Keith Williams’ review highlighted how this was the result of a complex, fragmented system with no single person in charge. Timetables are often built by trying to piece together layers of past decisions and contractual rights. On the east coast main line, the current system resulted in years of decision-making paralysis, with neither Network Rail, the ORR or operators able to agree a timetable. Service improvements that were supposed to result from £4 billion-worth of taxpayers’ investment were delayed by several years. The only way this could be resolved in the end was by me, as Rail Minister, stepping in to make the decision that no one else wanted to, which is clearly not an acceptable outcome at all.

Noble Lords will recall last December, when the ORR ruled that the 0700 from Manchester Piccadilly to Euston would have to run fully staffed but with no passengers on it, against the wishes of both the operator and the network provider, which agreed that it should run. The ORR itself acknowledged that it did not have all the facts when it took that decision.

The current system has failed to unlock meaningful freight growth. Too often, the needs of freight operators and their customers have been put to the back of the queue. Paths labelled as “strategic freight” are not strategically planned at all and may not even join up, as they are often just a mixed bag of surrendered paths and leftovers.

In the current system there is no overarching strategy—no overall plan for how to make best use of the network—and where no single body has end-to-end authority, critical information can be missed, escalation is unclear and blurred accountability leads to capacity being used in ways that increase disruption, letting down both passengers and freight customers.

An integrated railway under GBR’s leadership is the only way to fix this. As the single directing mind for the railway, GBR will proactively plan how to make best use of the network. It will be empowered to ensure that access decisions take proper account of that plan, implementing an achievable and reliable timetable that makes the very best use of the limited capacity available. Better co-ordination of the timetable will minimise delays, improve reliability and reduce costs—and may well open space for new routes and services. For freight operators, the new system will provide much greater certainty about the capacity available for them to grow their services, with GBR enabled and empowered to protect that capacity. The truth is that, if we leave it as it is, the system will never change.

I will deal with the crucial distinction between Clause 60 and 63 when we get to the detailed debates, but in the meantime I do not accept Amendment 16, which would fundamentally undermine the purpose of these reforms. It is unacceptable and I urge the noble Lord to withdraw it.

Amendment 221 would require the access and use policy to set out not only a process for dealing with disputes but a right of appeal. Of course I agree that GBR’s strong leadership under the new system must be accompanied by strong accountability. That is why the ORR will act as a robust and independent appeals body for access, capacity allocation and charging decisions made by GBR on its network. The ORR’s appeals function will provide a clear, credible and accessible route to challenge those decisions.

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My final point is on Amendments 294 and 295. I strongly agree with my noble friend Lord Moylan. While it is probably possible, with the number of economics analysts in the Department for Transport, that the department and therefore GBR would be perfectly capable of doing economic analysis that would produce the impact of changes to rail services on both the Welsh and the Scottish economies, that is not really the question. The question is a judgment call about what you do as a result of that economic analysis and, frankly, that decision should properly be taken by democratically elected Ministers who are accountable to the Scottish Parliament and the Welsh Senedd rather than by GBR. If the decision was going to be taken by anyone other than Welsh and Scottish Ministers, it should be taken by the UK Minister. That decision should be taken by a Minister, not by GBR. My noble friend’s amendment raises a very good point and, if the Minister is not able to give a clear answer today, I think it is worth him taking that away and having a think, particularly in light of the fact that the new Prime Minister has set out that an increased focus on devolution is one of the key objectives of his Government.

[Baroness Pidgeon (LD)]

My Lords, these amendments rightly question the impact of this legislation on Scotland and Wales and the role of Scottish and Welsh Ministers in decisions, including cross-border ones. The discussion we have had is about what devolution really means in this context and the democratic accountability. I look forward to hearing what the Minister has to say on these important points raised by noble Lords.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, the first thing I should say about this group is that the Scottish and Welsh Governments have been intensely involved in drafting the Bill, and both Governments are very supportive of it.

I turn to Amendment 21. Clause 4 enables Scottish and Welsh Ministers to make arrangements for their functions to be exercised by GBR, a GBR subsidiary or a company jointly owned. The noble Lord, Lord Lansley, spotted that correctly; he is absolutely right. It is an enabling power designed to support integration where that is considered beneficial. It does not prevent devolved Ministers from continuing to exercise their functions themselves, nor is it intended to provide a general power to delegate functions to any body corporate.

Indeed, under Clause 27, Welsh Ministers will continue to designate Wales-only services and Welsh components of cross-border services. Under Clause 31, Welsh Ministers may either provide those services themselves or secure their provision through the award of public service contracts. Similar powers exist for Scottish Ministers under Clauses 26 and 31. Of course, Scottish Ministers can decide to run their services through GBR or through their own operator. The Government therefore believe that the Bill strikes an appropriate balance between preserving devolved responsibilities and enabling closer integration with GBR, where that is desired by Scottish or Welsh Ministers.

Amendment 22 in the name of the noble Lord, Lord Lansley, would require the ORR to be consulted. Clause 4 already requires consultation with both the Secretary of State and GBR before such arrangements are made, varied or revoked. That is because GBR is the body that may be responsible for carrying out the function, while the Secretary of State has an interest in the wider operation and integration of the railway system, and because GBR will be operating devolved functions alongside reserved ones. They are therefore the parties best placed to provide input on these arrangements. Although the ORR plays an important role as the railway’s independent regulator, these arrangements concern the exercise of devolved functions and national versus devolved governance, rather than regulatory matters. We therefore do not consider an additional statutory consultation requirement to be necessary.

On Amendments 145 and 146, the Government fully support transparency and effective parliamentary scrutiny. That is precisely why we have already published the agreed memorandum of understanding with Welsh Ministers and a framework for the memorandum of understanding with Scottish Ministers. That has enabled Parliament to consider the proposed arrangements alongside the Bill. The memoranda of understanding are intended to provide a basis for joint working between UK Ministers and Scottish and Welsh Ministers on matters relating to rail services and funding. They are not legislative instruments but practical agreements to support effective intergovernmental working.

The amendments would require the MoUs to be published at the same time as the rail strategy and would impose a two-month period before they could come into force. However, the rail strategy and the MoUs serve distinct and seperate purposes. The rail strategy sets out long-term priorities and objectives for the railway, while the MoU supports collaborative working between the UK and Welsh or Scottish Governments. Requiring the two documents to be published at the same time would create unnecessary friction and delay. Similarly, requiring a two-month waiting period before an MoU could take effect would add process without materially improving oversight or outcomes.