Wales Bill

Baroness Randerson Excerpts

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

[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.

[Lord Hain (Lab)]

My Lords, in supporting my noble friend Lady Morgan’s excellent speech, I make one brief point. The Welsh Government are not seeking to have their civil servants run the rail franchise—I do not believe anybody thinks that that would be a good idea—but to configure the right package for Wales. We can take the example of Welsh Water. To be precise on this and, I hope, not pedantic, Welsh Water is a not-for-dividend company. It is not a not-for-profit company. It has to make profits to invest. Any entity taking over the Wales rail franchise would have to do the same. But Welsh Water is run much more efficiently than privatised water companies in England because it can raise its capital at a far cheaper rate on the market than private companies—noble Lords can look at the figures—because it does not have to satisfy the shareholders’ speculative roundabouts. The amendment would give the Welsh Government the opportunity to invite bids of that kind.

Finally, if the Minister is serious about his support for devolution to Wales, why does he not respond to the Welsh Government’s specific request to have this amendment carried into statute?