Passenger Railway Services (Public Ownership) Bill

Caroline Nokes Excerpts

2nd reading
Monday 29th July 2024 Commons Chamber

[Helen Whately]

I was perfectly clear at the beginning of my speech that we agree that reform is needed. That is why we commissioned a review and set out ambitious plans for reform, including the Great British Railways. I welcome that the new Government intend to introduce that.

I am not here to make an ideological argument. To respond to the point made by the hon. Member for Runcorn and Helsby (Mike Amesbury), sometimes, like with our plan for Great British Railways, the public sector is the right vehicle to solve a problem. At other times, a competitive, private model will lead to better results. The point is, if the Government are going to change things in the first piece of legislation they bring before this House, they need some pretty clear evidence as to why, so I have some questions for the Secretary of State and the Under-Secretary of State for Transport, the hon. Member for Wakefield and Rothwell (Simon Lightwood), who will be summing up.

How exactly will bringing train operating companies into public ownership benefit passengers? Unfortunately, the Government’s impact assessment does not tell us, for sure. What improvements can passengers expect? Who is the Secretary of State going to get to run these companies? Where are all these different, better train operating experts going to come from? If they are out there, twiddling their thumbs in the hope that this day would arrive, would the Department for Transport not have brought them on board already to help with the running of Northern Trains or Southeastern?

It is the same question across the network. Will she be sacking everyone currently working for the train operating companies and replacing them with a horde of superior, yet currently out-of-work, staff? Or, as I suspect, will passengers simply encounter the same group of people in a different colour shirt? What we need to hear is what tangible difference this going to make for passengers, because if the answer is nil, then there are lots of other things she could be doing with her time, such as prioritising the railways Bill.

The railways Bill is the legislation that will actually make a difference to how passengers experience our railways, with simpler tickets, joined-up decision making and efficiency savings that can be passed on to passengers. She could be modernising working practices, instead of bending over backwards to the unions, as reports suggest she has already done. How does she think that creating a single employer and, in the process, uplifting every rail worker’s terms and conditions to the least favourable for passengers, will benefit the network?

She could start by saving the train manufacturer, Hitachi—something that, when in Opposition, she said she could do with the stroke of a pen. I notice that it has been three weeks and that pen is yet to materialise. Perhaps she no longer takes for granted the work her predecessor did saving the Alstom factory in Derby. Or she could prioritise investment in the network, like the £100 billion we spent improving the railways since 2010.

On that point, I feel for her because I know what it is like to argue with a Chancellor for investment in something and not win that argument. It is clear from the Chancellor’s statement earlier that the Secretary of State for Transport lost the argument pretty catastrophically. Rather than setting out to reform welfare or control public spending, the Chancellor opted to slash a host of transport infrastructure projects. She will now review all transport infrastructure plans, putting the entire transport pipeline into chaos, letting down communities across the country and letting down a fair few of her new colleagues, too. Those new colleagues will be dismayed to find that they campaigned on false promises to the electorate, and that their pledges to invest in economic growth and not to raise taxes were not even worth the glossy paper on which their leaflets were written.

Although I know what it is like to lose an argument with the Chancellor, I do not share the experience that the Secretary of State and many of her colleagues will now be going through: of changing their tune just three weeks after they were given a mandate by the electorate and less than two weeks after their party leader had said that trust was the new battleground of politics. It seems as if he has given up on that battle already.

All the same, I welcome the right hon. Lady to her post, and I do genuinely wish her well. I will gladly offer my support to anything that she does to make our railways more reliable and more affordable. This Bill will not do that. It is a rushed piece of left-wing ideology. The evidence, both here in the UK and across Europe, shows that an effective public/private model, where the incentives are properly aligned, delivers more choice, more passengers and greater efficiency.

Over the next few weeks of recess, the Secretary of State and her team will have some time to reflect and reconsider. I hope that they will return in the autumn with a Bill that jettisons the baggage of ideology and takes up the mantle of evidence—a Bill that will have more prospect of improving the rail service for passengers, because, as I said, I have no interest in opposing for opposition’s sake, but this Bill as it stands will not be receiving the support of His Majesty’s Loyal Opposition.

[Madam Deputy Speaker (Caroline Nokes)]

I call Andy McDonald.

--- Later in debate ---

[Madam Deputy Speaker (Caroline Nokes)]

I call Vera Hobhouse.

[Wera Hobhouse (Bath) (LD)]

Thank you for calling me to speak, Madam Deputy Speaker. I do not think that I have yet had the opportunity to express my pleasure in seeing you in your new role. May I also congratulate the right hon. Lady on securing her new role as Secretary of State?

Our railways are in dire need of improvement. Under the last Conservative Government, passengers were repeatedly failed. Services are poor and the ticketing system is in shambles. All the while the public keep paying more and more, year on year. Rail fares in the UK are already some of the highest in Europe and are set to rise again. I am sure that all Members of this House have heard about, or experienced, cancellations, delays and a ticketing system not fit for purpose. People are crying out for a functioning rail network that they can rely on.

Too often, my Bath constituents would rather travel by train, but take the car instead because a train ticket is far too expensive. If we are serious about meeting our net zero target and reducing emissions, rail must be not just a green option, but an affordable one. Since privatisation, passenger journeys have more than doubled to 1.71 billion per year. However, satisfaction is at its lowest level in over 10 years. We agree with the Government that competition is not working as intended. Fewer and fewer companies are bidding for new franchises as the costs have ballooned. Meanwhile, Government subsidies have increased and intervention is desperately needed.

The UK needs a world-class rail network to support growth and reach net zero. For too many years, it has been held back by under-investment and lack of ambition, particularly in the north and south-west. However, may I ask what will happen to investment after nationalisation, when Great British Rail will have to compete for funding with the NHS and schools? I am sure this Government will agree with us that they must guarantee that funding for a nationalised rail network will not come at the expense of other public services.

We Liberal Democrats want the fairest deal for passengers. Anything that brings down fares is welcome and I look forward to the Government setting out how services will improve when in public hands. Nationalisation is an interesting idea, but Liberal Democrats want an approach that benefits passengers right away. We would freeze fares immediately and then get on with reforms to the broken system. Passengers might not be that interested in who is running the trains, but they are interested in whether they are running on time and at a fair price.

There is inconsistency within the proposed policy: just as private companies do now, Great British Rail will continue to lease rolling stock. Rolling stock leasing companies benefit from a monopoly out of the 1994 privatisation and make excess profits. One quarter of operators’ costs go to those companies and I hope the Government will urgently look into that.

The Liberal Democrat approach is pragmatic. We will scrutinise the legislation according to what is best for passengers. We want one nationwide body with proper powers to put investment in the right place and hold train companies to account. Our proposal is for a railway agency to act as a guiding mind for the railways, putting commuters first, holding train companies to account and bringing in wholesale reform of the broken fare system.

It is currently unclear what the financial impact of nationalisation will be. There are potential savings due to management and performance fees no longer being payable. However, subsidies might increase after nationalisation. Private operators are already subsidised to run unprofitable services, and public sector companies would similarly need financial support, which might increase over time. We are putting down these concerns to make sure that we are properly holding the Government to account on their proposals. Can the Government really ensure that funding will be adequate without fares increasing further?

There is no reason for nationalising companies purely based on their contract expiry date; the Government should start by focusing attention on operators that are demonstrably failing passengers. GBR could then focus on turning those services around to deliver tangible improvement for the public. The Government should at least look at that, and operators that are performing well should be deprioritised. That would be better for travellers and reduce the cost to taxpayers.

There are other questions that we need clarity on. When the contract is up, will train operating companies go straight to Great British Rail or to the operator of last resort? If it is to the operator of last resort, what incentives will there be for operators to grow rail revenues, which are still at 70% of pre-pandemic levels? A larger OLR team will be necessary to manage the increased number of rail journeys while GBR is being set up. The explanatory notes to the Bill do not consider that increased cost.

All that must be part of a wider, long-term rail strategy. Instead of fixating on the issue of ownership, our railways need a rapid and significant change to put passengers first with a focus on the quality of service. We are interested in looking at what benefits nationalisation will bring, but we urge the Government to be pragmatic.

[Madam Deputy Speaker (Caroline Nokes)]

I call Josh Dean to make his maiden speech.