Railways Bill (Twelfth sitting)

Edward Morello Excerpts

Thursday 5th February 2026 Public Bill Committees

Division 79

Question accordingly negatived.

Ayes: 3

Noes: 8

[Edward Morello (West Dorset) (LD)]

I beg to move amendment 254, in clause 64, page 36, line 14, at end insert

“and the higher amount does not hinder progress against the Rail freight target set out in section 17.”

[The Chair]

With this it will be convenient to discuss amendment 255, in clause 64, page 36, line 34, at end insert—

“(8A) Following an appeal made under subsection (8), the ORR may, if it decides that GBR has not dealt fairly with the appellant, direct GBR to revise a scheme.”

This amendment requires that any charge levied by GBR under its charging scheme does not have a detrimental impact on the freight growth target.

[Edward Morello]

It is a pleasure to serve under your chairship, Mrs Hobhouse. It will escape no one that, in the absence of my hon. Friend the Member for Didcot and Wantage, I have been left with my hand on the wheel. I do not think trains have a wheel, but I am not entirely sure how they work—[Interruption.] They have a stick, yes. However, given that both amendments are in his name and relate to the freight target, I can only assume that they are eminently sensible and that the Government should accept them. If not, we would apparently like to press them to a Division.

[Keir Mather]

It is, once again, a pleasure to serve under your chairship, Mrs Hobhouse. Amendment 254 would require GBR, when charging above the cost directly incurred—in other words, when charging mark-ups—to consider its target to increase the use of freight. I can reassure the hon. Member for West Dorset immediately that GBR will not be able to raise charges in a way that is not compatible with its statutory duties or targets.

In practice, that means that when developing its own test of affordability, GBR is expected to establish bespoke criteria for divergent market segments operating on the railway, including freight, as Network Rail set out in its discussion document on charging. That allows GBR to design a test that can support its duties, including those under clause 18, and the targets to increase freight under clause 17.

We intend that the provision will operate in a way similar to the “market can bear” test today. GBR will develop its own test of affordability in consultation with the sector, including the Office of Rail and Road, before publishing it. However, as we move away from European law, in which the “market can bear” test is established, and to the Bill, which carries over the same principles, we must ensure that the language in the drafting is fit for purpose for UK statute. That is why the Bill stipulates that GBR will be able to levy mark-ups only if it is affordable to efficient operators. The Bill preserves that fundamental safeguard for operators, but in a form that can be applied more clearly in the UK context.

The test will be published with clear routes of appeal, as a further layer of protection for any operators, including freight, that are subject to charges when using GBR infrastructure. When hearing appeals, the ORR will consider the extent to which GBR has appropriately considered all factors before levying a mark-up. I hope I have reassured the hon. Member for West Dorset that amendment 254 is unnecessary, as the Bill already achieves its intended effect.

Amendment 255 would give the ORR an explicit power, following an appeal against the content of a charging scheme, to direct Great British Railways to revise the scheme in cases where it considers GBR has not dealt fairly with the appellant. However, the amendment is not necessary to achieve that aim. The Bill already provides clear and robust rights of appeal to the ORR in relation to the content of a charging scheme. Those rights are supported by strong and effective remedies where an appeal against GBR is successful, as set out in clause 68.

In the system set out in the Bill, where the ORR upholds an appeal on the content of a charging scheme, it has the power to remit all or part of the provision appealed against to GBR for reconsideration. That means that the ORR can require GBR to make changes to the charging scheme if it was identified during the appeal process that GBR had acted in a discriminatory manner, inconsistently with its statutory duties or in a way deemed procedurally unfair.

The ORR can also give legally binding directions to GBR, which could include setting out what it failed to take account of in the original decision and what it must do to ensure that those matters are properly assessed when reconsidering it. The amendment would therefore introduce powers that are already provided for in clause 68. For those reasons, I urge the hon. Member not to press amendments 254 and 255 to a vote.

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[Edward Morello]

I heard what the Minister and the Opposition spokesperson said but, because of my long-standing and passionate support for freight targets in the context of charging regimes, I will divide the Committee on the amendment.

Question put, That the amendment be made.

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Division 88

Question accordingly negatived.

Ayes: 4

Noes: 7

[Edward Morello]

I beg to move amendment 203, in clause 68, page 38, line 35, leave out subsections (6) and (7).

This amendment, along with Amendments 204 and 205, strengthens the role of the ORR, and reduces the role of the Secretary of State, in considering appeals against GBR access decisions.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 204, in clause 68, page 39, line 10, leave out from “Chapter” to end of line 11.

See explanatory statement for Amendment 203.

Amendment 205, in clause 68, page 39, line 15, leave out paragraphs (b) to (d).

See explanatory statement for Amendment 203.

[Edward Morello]

Amendments 203 to 205 were tabled by my hon. Friend the Member for Didcot and Wantage. The clause gives the Secretary of State extensive powers to intervene and, ultimately, overrule access decisions made by GBR. As I said in our previous sitting, we must remember that those powers are not just for the current Government, but for all future Governments. The Bill concentrates too much authority in the hands of the Secretary of State, with too little accountability and independent oversight. The amendments would reduce ministerial micromanagement and strengthen the role of the ORR in determining appeals on access decisions. The ORR should be an independent regulator whose job it is to make fair, evidence-based judgments. Access decisions should be governed by transparent regulation, not by political discretion. The amendments would strengthen the role of the ORR, protect the independence of GBR and prevent excessive control by the Secretary of State, especially without any accompanying accountability—something the Government have continued to refuse when the Opposition parties have tabled amendments. However, I hope we will have a sudden volte-face on amendments 203 to 205.

[Rebecca Smith]

I shall be brief. The amendments would strengthen the role of the ORR and reduce the role of the Secretary of State in considering appeals against GBR access decisions. Without further ado, I will say that we will support all three, should the Liberal Democrats press them to a vote.

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[Edward Morello]

I listened to the Minister’s points. I think that the Liberal Democrats have been adamant throughout scrutiny of the Bill that we want to establish clear lines between the ORR, GBR and the Secretary of State in order to limit meddling under any future Government and to protect what this Government are trying to achieve. The Bill needs clear red lines on where Secretary of State power should be, so I will push the amendments to Divisions.

Question put, That the amendment be made.

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[Keir Mather]

Amendments 175 to 183 and 186 will ensure that GBR can enter into connection contracts with adjacent infrastructure managers and facility owners. A connection contract is a formal agreement that focuses on the physical interface and upkeep of the connection between two rail networks. Connection contracts are important in enabling the smooth passage of trains from GBR’s network to others, such as the Core Valley Lines in Wales. They also allow GBR’s network to be connected to privately owned depots or ports, which will be of importance to freight operators. These technical amendments retain the existing arrangements, enabling GBR and other parties to enter into connection contracts. I therefore urge the Committee to support them.

[Edward Morello]

I wish to speak in support of amendment 146 tabled by my hon. Friend the Member for Didcot and Wantage. Clause 71 gives the Secretary of State the power to make regulations allowing for the early termination of access agreements. We believe that this creates unnecessary uncertainty for train operators and passengers. Access agreements are detailed, regulated contracts that set out service patterns, responsibilities and costs. They are overseen by the ORR and published on its public register. Amendment 146 would remove ministerial powers to terminate those agreements early, limiting the ability of the Secretary of State to micro- manage GBR.

While I risk sounding like a broken record, as I have said before, these are powers that apply to both the current Government and future one. While I understand the desire for the Secretary of State to have the power to terminate agreements, those powers sit better with the ORR and GBR. If we want stability, investment and reliable services, we need to signal to the market that there will not be political intervention that undermines long-term planning. I hope that the Government will see the sense of this amendment.

[Rebecca Smith]

Clause 69 amends the Railways Act 1993 to except GBR or a subsidiary of GBR from the sections outlining the ORR’s powers on access and its corresponding duties. That change would prevent the ORR from making access decisions on infrastructure operated by GBR. The clause removes GBR from the normal ORR supervised access regime, giving it a special exemption that no other operator has. Since GBR is both operator and infrastructure manager, we believe that this creates an uneven playing field and risks unfair treatment of competing operators. If the Government insist on the current drafting, they must come clean and admit that their intention is to treat competitors unfairly in comparison, and that they are not in favour of competition and reject private investment as a driver of innovation and improvement on the railway.

Given the destruction of the current independently managed fair and level playing field, it is no surprise that the industry has major concerns. Eurostar’s written evidence to the Transport Committee explains:

“The Railways Bill consolidates strategic and operational authority in Great British Railways. While centralising network management offers efficiency gains, it is essential that ORR’s independent regulatory function is preserved, especially for open access and international services. In future Government will have the overarching interest in the Infrastructure Concession (let to LSPH), the Maintainer Operator (Network Rail) and the largest operator on the route (SET). There needs to be an independent referee to balance these interests with those of open access operators.

ORR provides impartial oversight of track access, station allocation, depot facilities, charging, and timetabling. Its independence provides transparent decision-making and safeguards competition, while giving investors confidence in the long-term stability of services.

Decisions such as the allocation of depot access at Temple Mills demonstrate the importance of ORR in balancing competing demands for constrained resources. Without statutory protection, GBR could constrain competition and impede international service growth. In addition, it could reduce transparency in access allocation.

Eurostar recommends that the Bill explicitly preserves the ORR’s independent role in regulating access, charges, and depot allocation for international services. This statutory protection is essential to provide fair treatment for operators and give certainty for the future of UK international rail services.

In international rail terms, the ORR’s role is more important than ever before, given the recent ruling enabling a new entrant to the market to access Temple Mills depot. The regulator will need to perform a strong, independent and objective role in ruling on cost sharing, compatibility and rolling stock issues.

The ORR can also play a role in track access charges – costs for accessing the London-to-Calais stretch of rail are nine times higher per kilometre than the cost of accessing equivalent infrastructure in Belgium, France or the Netherlands.”

Written evidence to the Transport Committee from Lumo and Hull Trains outlines their concerns:

“The ORR plays an essential role in maintaining a fair, transparent, and competitive rail network. Its independence supports confidence among passengers, freight operators, and private investors. Lumo and Hull Trains believe the Railways Bill should preserve this role to help GBR succeed.

To maintain balance across the system, the ORR must retain meaningful regulatory powers to ensure decisions made by GBR on access and charging are fair, evidence-based, and consistent with the Government’s growth objectives. The current drafting of the Bill, however, limits the ORR’s capacity to intervene proactively, restricting its powers primarily to appeals after decisions have been made.

Enhancing the ORR’s decision-making and enforcement capability would help ensure that GBR’s commercial and operational decisions remain aligned with the wider interests of passengers and the market. This approach would reinforce the Government’s ambition for a collaborative, competitive, and accountable rail system. A strong regulator also provides stability for investors, ensuring that GBR operates within a framework that fosters long-term confidence and fair treatment for all market participants.

While the Government desires to create a ‘directing mind’ in GBR, coordinating rail with a whole network view, for private operators to have confidence in the system there must be appropriate protections guaranteeing fair access and charging. The ORR is well-positioned to perform that role as an essential backstop, but the correct framework must be built around it to enable it to operate as such.”

Finally, Angel Trains also provided written evidence to the Transport Committee:

“Angel Trains believes that the new access framework must provide equitable access to all parts of the railway, whether operators are GBR-led, Open Access, or freight. As a lessor of rolling stock to both GBR-led and Open Access operators we believe parity among operators is crucial and would welcome greater clarity from the Government on how access and charging decisions will be made and prioritised. As an independent regulator, the Office of Rail and Road (ORR) should be responsible for ensuring a level playing field by intervening if concerns are raised that GBR could have taken a discriminatory decision, for example, around preferential access rights and charging for GBR operators over Open Access competitors.

Beyond access arrangements, we would welcome further detail from the Government about how GBR will be held to account. In its current form, GBR possesses a high concentration of power in its role in setting both strategy and delivery. In order to provide adequate scrutiny and accountability, there must be sufficient checks and balances to ensure that financial, economic, and safety objectives are met.

Angel Trains believes that there should be clear divisions between different parts of the rail system to ensure adequate accountability…As outlined above, it is vital that there is a fully independent regulator to hold GBR to account, for which the ORR could be best-placed. Beyond acting as an arbiter on access and charging decisions, the ORR should be empowered to report on GBR’s performance and issue performance improvements notices to GBR, in addition to other regulatory duties. The ORR must maintain a regulatory function to provide fairness and stability for the rail industry, which encourages investment and ensures financial sustainability by creating a level playing field across the sector and eliminating subjectivity from decision-making.”

We therefore seek to leave out clause 69 and will vote against it. This would keep GBR under the normal access regime supervised by the ORR and ensure a fair system. We have no objections to Government amendments 175 to 183 but, as mentioned, we are less happy with clause 69 as a whole.

Clause 70 amends the 2016 regulations to exempt GBR from the provisions of those regulations that would otherwise apply to its infrastructure. The 2016 regulations will continue to apply to other infrastructure managers. We do not object to the clause.

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Regulations about non-GBR infrastructure, facilities and services

[Edward Morello]

I beg to move amendment 256, in clause 72, page 41, line 38, at end insert—

“(3A) The regulations must not make provision for the Secretary of State to direct operational matters of customer and facility-owner freight sidings and terminals.”

This amendment ensures that the Secretary of State does not exercise powers over operational matters of customer and facility-owner freight sidings and terminals.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 221, in clause 72, page 42, line 2, leave out from “consult” to end of line and insert

“the Office of Rail and Road and affected facility owners”.

This amendment would require the Secretary of State to consult the ORR and affected facility owners before making regulations under this section.

Amendment 231, in clause 72, page 42, line 4, at end insert—

“(7) Infrastructure, facilities and services not managed by Great British Railways which are used exclusively for the carriage of goods by rail are excluded from the provisions of this section.”

This amendment clarifies that privately funded, freight-only facilities are excluded from regulation under this section.

Clause stand part.

Clause 73 stand part.

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[Edward Morello]

I speak in support of amendment 256, tabled by my hon. Friend the Member for Didcot and Wantage. Clause 72 allows regulations that could give the Secretary of State powers over operational matters in freight sidings and terminals. Amendment 256 makes clear that those operational decisions must not be subject to ministerial direction. The amendment comes directly from the freight industry and reflects clear concerns about unnecessary political interference.

Freight sidings and terminals are operational commercial assets, and their day-to-day management should sit with operators, not with Ministers. As we said in previous sittings, the powers would apply to not just the current but future Governments. At the risk of sounding like a broken record, I should say that the Bill already gives the Secretary of State too much control and too many opportunities for micromanagement with too little accountability over too many areas. Amendment 256 draws a sensible boundary, protects freight operators from meddling, and supports a stable and efficient freight network.

[Rebecca Smith]

I will speak to clauses 72 and 73, and the grouped amendments. Clause 72 is another controversial clause. It sets out that the Secretary of State may make regulations about the management and operation of non-GBR infrastructure, which means any network, station or track not operated by or on behalf of GBR; about the rights to operate trains that use non-GBR infrastructure; and about competition in the market for the provision and supply of such operations.

Subsection (2)(c) allows the Secretary of State to set access terms and charges for non-GBR infrastructure, overriding commercial negotiation and bypassing the ORR. That cuts directly against the stated principle that the publicly owned operator must not regulate its competitors. It is an extraordinary clause that cuts up contract law and throws it out of the window.

The Rail Freight Group is concerned. It states:

“Clause 72 enables the Secretary of State by regulation to intervene in privately owned rail freight terminals, setting conditions of access and charges amongst other matters. Again, we understand that this is not the intention of the clause (which exists to enable GBR to take over other infrastructure such as HS1, Heathrow Branch or the Core Valley Lines) but nonetheless it is an extant risk to rail freight as presently worded, and we believe freight terminals should be explicitly out of scope for this clause.”

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[Keir Mather]

I thank the hon. Member for that intervention. I am not arguing that stakeholders are not valid in raising concerns about the issues: they are. I am seeking to ameliorate their concerns by outlining what provisions are in the legislation to offer sufficient scrutiny and ensure that the way in which the process happens offers robust safeguards.

Constraints are built into clause 72 to ensure sufficient oversight, with the Secretary of State consulting persons considered appropriate and making changes in secondary legislation that is subject to the affirmative procedure. That means that legislation will be subject to full public consultation and subsequently debated in both Houses, which reflects the importance of the regulations in providing certainty for business.

I have already said that the Secretary of State will consult all interested parties to ensure that there is full transparency and industry comment. Amendments 256, 221 and 231 would all narrow that power in some way. Amendment 256 would prevent the power from being used to direct operational matters of customer and facility owner freight sidings, and amendment 231 would exclude freight-only facilities. I have already spoken on why some of the principles that lie behind those amendments are unnecessary.

Let us take my example of GBR changing the date when its new working timetable is to take effect. On the basis of the amendments, other infrastructure managers would forever be misaligned with that new timetable change date, even if they wished to align. The Government do not intend to use the power to direct the owners or operators of private freight facilities on operational matters.

I am happy to reassure the Committee that the power cannot be used to bring other infrastructure managers or operators of privately funded facilities into public ownership, as I know how exercised Opposition Committee members have been about that principle. In the consultation, industry broadly supported the ability to make necessary amendments, although it is of course right to raise concerns when they arise. Most sector bodies agree that it will be important to ensure that there are no regulatory barriers to passenger and freight operators crossing between different networks, and that is what the clause seeks to achieve.

Amendment 221 would make the ORR and affected facility owners statutory consultees to the power. That is unnecessary as before exercising the power to make regulations, the Secretary of State is already required to consult all persons they consider appropriate, which would include the ORR and any affected facility owners. If the Secretary of State did not consult such persons, there would be strong grounds to challenge the regulations.

Clause 73 will ensure clarity in how key terms are applied throughout the access chapter of the Bill. It defines “GBR infrastructure”, “GBR passenger service” and “working timetable”—fundamental terms to the operation of GBR. The definition of GBR infrastructure ensures that the new access arrangements developed by GBR apply only where intended. The clause also includes a power to amend the definition, which is necessary to ensure that, as GBR’s network evolves over time, it remains clear to GBR and other infrastructure managers which parts of infrastructure are GBR’s responsibility. The clause is therefore critical to provide clarity and transparency.

Given what I have set out, I hope that hon. Members will not press their amendments. I commend clauses 72 and 73 to the Committee.

[Edward Morello]

I have nothing further to add, but we would like to press amendment 256 to a Division.

Question put, That the amendment be made.