Railways Bill

Jerome Mayhew Excerpts

2nd reading
Tuesday 9th December 2025 Commons Chamber

[Jerome Mayhew (Broadland and Fakenham) (Con)]

This has been a very popular debate with a lot of contributions; I congratulate all those who managed to make their points in just three minutes. I will do my best to summarise the debate, starting by noting the excellent contributions from Opposition Members.

My hon. Friend the Member for Isle of Wight East (Joe Robertson) brilliantly managed to discuss a Railways Bill by referring to ferries, but he did make the serious point that we want pragmatism, not ideology, to reform the railways. My hon. Friend the Member for Brigg and Immingham (Martin Vickers) made the good point that, through nationalisation, the taxpayer now has to replace private investment.

My right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) made three important points: that the reforms simply advance the sprawling centralisation of powers; that, again, they involve practicality giving way to ideology; and that their drafting puts open access concessions at risk.

My hon. Friend the Member for South West Devon (Rebecca Smith), who is a member of the Transport Committee, was concerned that this was ideological time travel that takes us back to the 1970s. My hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) said that, post nationalisation, cancellations of South Western trains had increased on his Chertsey-Addlestone loop.

There were also many thoughtful contributions from the Liberal Democrats. It is telling that the Government’s insistence on nationalisation as the only answer has united the Liberal Democrats and the Conservatives. It is worth noting that we have heard nothing from Members of the fag packet party, who, I think, still support nationalisation. Then again, however, they would not recognise a transport policy if it slapped them in the face.

Then there was Labour, with speech after speech welcoming the nationalisation of the railways—[Hon. Members: “Hear, hear!”] Bring it on. In speech after speech, they showed deep suspicion of the profit motive. The tone was set by the Transport Secretary, who said that the current system benefits companies over passenger services—as though the two things are mutually exclusive—and taken up by the hon. Members for Wrexham (Andrew Ranger), for Stockport (Navendu Mishra) and for Salford (Rebecca Long Bailey), with claims of profit prioritised over customer experience, large-scale profiteering on the railways and dividends prioritised over people. I could go on.

This is the authentic voice of Labour: the private sector is not good—not good in the way that the state is good. The private sector invests to make a return, not to create unionised jobs. It innovates to make a return, not to satisfy a Government productivity goal. It innovates to beat the competition and make a return, not to satisfy a ministerial target. However, it does invest, it does innovate and it does improve to compete. Nevertheless, Labour clings on to its ideological faith in the efficiency of the state, despite all the evidence to the contrary—and there is evidence. After all, we have tried this experiment before.

[Laurence Turner]

When the hon. Member for Orpington (Gareth Bacon) was the shadow Transport Secretary, he was recorded saying that his party would likely not reverse nationalisation because the public would be unlikely to think it was a good idea. If this Bill passes, will it be the policy of the hon. Member for Broadland and Fakenham (Jerome Mayhew) to privatise the railways all over again?

[Jerome Mayhew]

Let us wait to see if Labour actually nationalises it first; but the Conservatives are here to lead, not to follow.

There is plenty of evidence because we have tried the nationalisation experiment before. The railways were nationalised in 1948. [Interruption.] If Labour Members listen, they might learn something. When the railways were nationalised in 1948, there were a billion passenger journeys a year. Thereafter, the impact of nationalisation was immediate: year after year, fewer customers chose to use the trains; year after year, they voted with their feet because the service did not give them what they wanted and was not focused on them and their needs. There was low investment because the railways were competing with schools and hospitals, followed by poor industrial relations with an organisation more focused on itself than its customers—[Interruption.] The Under-Secretary of State for Transport, the hon. Member for Nottingham South (Lilian Greenwood), says from a sedentary position that it was because there were more cars—let us just hold that in our minds.

By the 1990s, just 735 million passenger journeys were taking place a year, instead of a billion. In 1993, the system was privatised by the Conservative Government. The unions hated it, and Labour therefore hated it, too. However, every year, more and more passengers were attracted to use the trains—not just a few more, but vastly more. By 2019, 1.75 billion people were using the railways each year—and there were many more cars. Labour cannot explain it; it should not have happened, but it did.

If the purpose of the railway is to carry passengers, any rational observer must conclude that privatisation beat nationalisation hands down. Why? Profit is made only by attracting customers. Train operating companies focused on new and more trains, more services, innovative ticketing and customer service, and people voted with their feet.

The railways are a complex system where capacity is limited and costs are high. It is absolutely crucial to drive efficiency, maximise the scarce resources of track access and drive value for money with dynamic management. Can hon. Members think of a nationalised organisation that is a byword for management dynamism and efficiency anywhere, in any country at any time? I cannot either. If poor railway management is the problem, nationalisation cannot be the solution. Why is it that socialists and the fag packet party are such bad learners?

[Graham Stuart]

The Minister responding to this debate represents Selby. One of the great successes of the open system has been Hull Trains, which provides a fantastic service from Hull, through Selby, down to London, and then back again. Does my hon. Friend worry, as I do, that open services such as Hull Trains will be crushed by Great British Railways and the Minister, despite whatever he may say?

[Jerome Mayhew]

My right hon. Friend is right. If Members read the Bill properly, they will see that it spells the death knell for open access.

It is true that the last few years have exposed serious weaknesses in the train franchise model. The separation of track and train created perverse incentives—I accept that. Too often a lack of effective competitive tension allowed there to be poor services. Changes to the DFT contract meant that franchises were encouraged to overbid, leaving them financially vulnerable to any downturn. This Bill was the golden opportunity to address those issues, but the Government have messed it up. Instead of keeping the best and fixing the rest, we have a damaging return to 1970s state control, with 1970s industrial action likely to follow.

The Government are already finding out that money does not grow on trees, that merely saying that they are in favour of growth does not make it happen, and that funds from hard-pressed taxpayers are not limitless. Their plan replaces private investment with taxpayers’ money, drawn away from schools and hospitals and Labour’s ever-growing welfare bill. Their plan replaces railway management teams with civil servants, increasingly micromanaging operations, who will have powers to direct GBR across all its functions.

Then there is that trademark socialist arrogance: gone is the independent economic regulator, for the gentleman from Whitehall knows best. GBR will mark its own homework, save for a toothless passenger council that has no enforcement powers. It will not just mark its own homework but decide whether to allow any competition against itself. It will decide how much to charge its competitors, limited only by how much it thinks they will be able to pay. GBR, on the other hand, will pay no charge at all. The right of appeal is not to be allowed on the merits of a decision, only on the grounds of procedural irregularity.

The Bill marks the end of competition on the GBR rail network, and it is such a shame. This could have been transformational. It could have solved the tensions between the operation of track and train. It could have refined concession and franchised contracts, removing the micromanagement of DFT officials. It could have solved the stop-start funding approach by National Rail and its dysfunctional control periods. It could have focused relentlessly on benefits to passengers and the taxpayer.

Instead, we are seeing a Government floundering at 14% in the polls, whose Back Benchers are in open revolt against their own leader, and whose union paymaster, Unite, is discussing disaffiliation in the press. This is a Government desperate to shore up their fading support. They are sacrificing the future of our railways on the altar of left-wing ideology. We heard speech after speech from Labour Members demonising profit as a motive for economic activity. Do they have any idea how the productive economy works? Ideology before practicality, state direction before dynamic management, and union demands before passenger demand—no, no, no.

I ask colleagues to support the reasoned amendment in my name and help put this bad Bill in the bin.

Railways Bill (First sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 20th January 2026 Public Bill Committees

[The Chair]

Q We will now hear oral evidence from Network Rail, the Office of Rail and Road, and DfT Operator. We must stick to the timings in the programme order that the Committee has agreed. For this session, we have until 10.10 am. Will the witnesses please briefly introduce themselves for the record?

Jeremy Westlake: I am Jeremy Westlake, chief executive of Network Rail.

Alex Hynes: Good morning. I am Alex Hynes, chief executive of DfT Operator Ltd.

John Larkinson: I am John Larkinson, chief executive of the Office of Rail and Road.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Q Thank you for coming. Broadly speaking, we are talking about governance and accountability in this session. I am going to dive straight in, Mr Larkinson. On the appeals process as envisaged by the new ORR, we can see from clause 68 that there is to be no appeal on the merits of economic considerations; it is only to be approached on the basis of judicial review in the High Court, which means only an appeal on a matter of law and procedural issues, and a time limit for applications of just three months. First, will you confirm that that is your understanding of the constraints of this particular appeal process?

John Larkinson: May I add one thing to that? When an appeal comes to us, there are various things that we can do. For any appeal, we can in effect send the decision back to Great British Railways and ask it to reconsider. In doing that, we could also in effect direct it to look at particular issues. That is the first thing that we could do. On our ability—I think this is probably what you are coming to—to substitute a decision, or in effect to require a different decision, that is extremely narrow indeed. That comes back to the judicial review principles.

In my mind, that is because the bar is set very high. It comes back to the broad intent of the Bill, which is to make GBR a directing mind and to give considerable power to GBR. Alongside that, the intent of the Bill is in effect to empower GBR to learn from its mistakes: things are put back to it and it gets a chance to reconsider. What the Bill does not want, however, is for someone else like us to say, “No, the decision should have been this.” It comes from the intent of the Bill, I think.

[Jerome Mayhew]

Q That answer was about the powers you have once an appeal comes to you, but my question was on what kinds of appeal can get in front of you in the first place. Going back to the original question, am I right in saying that, under the Bill, there is no right for an appeal on the merits, and that you cannot have a second look at the decision-making process?

John Larkinson: A second look? We can look at whether GBR has followed its processes.

[Jerome Mayhew]

Q I do not mean to confuse you; I seek to clarify whether an appeal on judicial review principles means that someone who is unhappy with a decision cannot have that decision reconsidered—so there is no appeal on the merits.

John Larkinson: Judicial review principles are things like irrationality and illegality—it is very, very narrow.

[Jerome Mayhew]

Q You agree that it is very, very narrow.

John Larkinson: Absolutely, yes.

[Jerome Mayhew]

Q If someone goes through the appeals process on that very, very narrow front and is successful in their appeal, the ORR can order only two things to happen. The first is that the decision is sent back to GBR to have a think again, and the second is to substitute a decision, where the failure has been an error of law and there is only one possible alternative in the circumstances. It is in those very, very narrow circumstances that you can substitute your answer, because there is no other answer.

John Larkinson: They are very narrow, yes.

[Jerome Mayhew]

Q Given those enormous constraints, can you sit before the Committee and say that this is a strong appeals process?

John Larkinson: Using words like “strong” is quite difficult in the context of it being an appeals process that is designed to fit with the underlying model, which is a directing mind for GBR. Therefore, as you correctly say, our ability to override a GBR decision is very narrow indeed. I agree with your description—it is a very narrow role.

[Jerome Mayhew]

Q You say that it fits with the description of what the Government want GBR to do, but from the drafting of the Bill we can conclude that the Government want GBR to be the final arbiter. There is no appellate course from a decision by GBR, except in an area of law. It is the judge and jury in this.

John Larkinson: That fits again with the idea that things go back to GBR to reconsider; it is all put back in GBR’s court. That is the fundamental design, as I understand it.

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

Q Thank you very much for being here this morning. Building on the topic of access and charging, which the Opposition spokesperson raised, can you go into a bit more detail on clauses 60 and 63, particularly on best use of the railway and GBR having to have regard for a range of services in deciding best use? Only after that point does the capacity duty in clause 63 come into effect, to make sure that GBR delivers the services needed to run the railway effectively. Alex or Jeremy, perhaps, can you dig into the concerns that have been outlined that this could result in GBR taking more than what it is entitled to within the railway, and the reality of how the clauses ensure that that does not take place?

Jeremy Westlake: I will kick off by bringing us back to the duty that GBR, along with the Secretary of State and the ORR, will have to make best use of the network. Network capacity is constrained, so we have published an access and use consultation document setting out how this would work in practice. First, capacity allocation must be set out so that the market can see what capacity exists and what it might be used for, and to reserve capacity for those uses. Clause 63 then deals with how GBR will prioritise its services. The first duty is to allocate capacity for best use. Clause 63 kicks in later to define how GBR will actually do that. You define best use first.

--- Later in debate ---

[The Chair]

Q I remind Members that we must stick to the timings in the programme motion, which the Committee has agreed to. We have until 10.35 am for this session. Please could the witnesses briefly introduce themselves?

Richard Brown: My name is Richard Brown. I have 43 years’ experience in the industry, nearly half of which—19 years—was with British Rail before privatisation. I was a director of the InterCity business unit before privatisation. I set up and ran one of the train companies’ privatisation and National Express’s trains division, which had five franchises. I moved on to Eurostar as chief executive and then chairman. I have also been the Government’s special director on the board of Network Rail, and a member of the board of the Department for Transport itself. In 2012, I carried out a review of franchising for the Department.

Keith Williams: My name is Keith Williams. In September 2018, I was appointed independent chair of the Williams rail review. I was appointed largely because of the failure of the system in May 2018. As independent chair, I led the rail review from 2018 to 2023, effectively. It was then the Williams-Shapps review, which came out in 2023.

[Jerome Mayhew]

Q I thank both the witnesses for coming. There is a lot to get through and we are short of time. I will start with Mr Williams. You have written a report on the future of railway. You proposed the creation of GBR, but to operate through private concessions as opposed to nationalisation. The Government have now taken a very different view. Please can you set out briefly the pros and cons of nationalisation over what you proposed.

Keith Williams: When we did the review, the real focus was on passengers, to be honest. I was asked a number of times: “Is it nationalisation or is it privatisation?” I left that to one side because from my perspective, it was the better running of the railway, which is the structure that is now in place. To some degree, during the course of the review, franchising had been seen to be failing, and that was one of the premises of the review at the beginning.

Of course, what happened in the intervening period was that covid came along, and that changed everything, so everything was de facto put back into public ownership. To a large degree, we were agnostic on that. However, if you look at the railway even today, parts of it are run in the private sector and parts of it are run in the public sector. As I see it, public ownership was accelerated through covid and through the end of the franchising, which in my period was due to end in 2029, so it was a long way off. Obviously, that was brought forward because of covid.

[Jerome Mayhew]

Q I turn now to the Bill, rather than the broader situation. There are huge powers in the Bill for the Secretary of State or the Department for Transport, in relation to setting out the long-term strategy, intervening in fares and their structure, and giving guidance and direction. Those are the key areas, but there are a number of others. Are you a bit concerned that there is going to be some backseat driving going on?

Keith Williams: From the Government?

[Jerome Mayhew]

Yes, from Government rather than GBR being the director.

Keith Williams: No, the way I see it is that, actually, there is a good segregation of functions within the system now that were not there previously. Again, if you look back to 2018, the failure of the system was in part brought because every decision went back to Government. The Secretary of State finished up having total responsibility for the timetable fiasco that happened in 2018. That is when we came to the review. One of the clear things we wanted to do was to get a segregation of functions, which I think the Bill successfully does. It holds good to the review in that respect.

Government are responsible for strategy—and hopefully longer-term strategy than we have seen in the past—then they hand the operation down to the people who can run it in the interests of passengers and customers, with strong regulation, safety and a public ability to react when things go wrong. I think that system is very good. I come from a business background and in some ways it echoes what I see in business: a board sets the strategy and then passes the management down to the CEO and the people who run the business. I am not concerned about backseat driving to that degree.

[Jerome Mayhew]

Q Mr Brown, there are very few references in the Bill to value for money driving competition. In fact, the competition remit of the ORR is specifically excluded for large sections of the operation of GBR, and the Secretary of State has no ability to grant provision of service contracts to private companies—it has to be to a GBR or a subsidiary of GBR. How can operations of GBR be challenged on value for money for taxpayers? Do you think they have the balance right here?

Richard Brown: Do I think what, sorry?

[Jerome Mayhew]

Do you think they have the balance right here? How do we drive value for money for taxpayers given those very significant constraints on competition?

Richard Brown: Yes, I do. I think the balance is right. Putting everything together into GBR makes it the single directing mind. It will be up to GBR and its integrated business leaders to strike the balance and deliver better value for money. There is a lot of duplication and friction in the current system, which I think is one of the things that Keith Williams was highlighting in his review.

The accountabilities are very strong with this Bill. GBR is accountable to the Secretary of State, but is also regulated and overseen by the ORR and the passengers’ council, and has a responsibility to mayoral authorities. First and foremost—I think this featured in the previous discussion—the integrated business units and their CEOs, or whatever they are called, will be accountable to their local towns, communities and passengers. There are strong pressures and forces created with this Bill to actually deliver value for money for taxpayers, as well as for passengers.

Keith Williams: Can I add one thing, there? Even in my time on the review, one of the things that started was bringing track and train together again. That allowed cost simplification, but it also enabled GBR to get a full picture of the revenue and costs of running the railway, which previously did not exist. It was surprising to me, on the review, that getting the costs together was an enormous exercise and a bit of guesswork, because the costs were in so many different areas.

[Keir Mather]

Q  I am conscious of time, so I just have one broader question about the devolution settlement, which is devolving services and how the railway works, which is mentioned in the Williams review, and I also want to go to Mr Brown’s point about integrated business units. Mr Williams, could you expand a little bit on what the operational reality of a more decentralised railway working in closer partnerships could look like under GBR? The Bill specifically focuses on mayoral strategic authorities as an appropriate unit to engage with to act as a catalyst for economic growth, house building and those things which are really conjoined with rail growth. Can you give us a glimpse of how you feel that the system might work in practice under the Bill’s framework?

Keith Williams: It is a great question, because that, to me, was fundamental to the better running of an integrated transport system. I was listening to the earlier questions, and the advantages of bringing in the mayors and local authorities are twofold. First, there is deciding what the appropriate mechanism for running transport is in their area. I visited Manchester, where you have light rail, heavy rail and buses, so you need to make a decision as to which you are going to promote. In my opinion, that was better done at a mayoral level than a central level. That is one aspect.

The second aspect is integration. We looked at systems overseas and—guess what?—you find that the bus comes to the station, the train starts and then stops. That did not exist in the UK, and bringing the mayors and local authorities into that decision making was hugely important for running an integrated system.

--- Later in debate ---

[The Chair]

Thank you very much. I call the shadow Minister.

[Jerome Mayhew]

Q Thank you all for coming in person or, Emma, for joining online. I am going to focus on clause 18 of the Bill, which is on the general duties of Ministers, GBR and the ORR. In particular, I will jump straight to clause 18(2), which sets out the functions and how they should operate those functions. Paragraph (c) states that one such function is

“to promote high standards of railway service performance”,

itself defined in clause 18(3):

“‘railway service performance’ includes, in particular, performance in securing each of the following in relation to railway services—

(a) reliability…and

(b) the avoidance or mitigation of passenger overcrowding.”

My question about that definition of service performance, which is very narrow, is for everyone, but I will start with you, Emma. Are you concerned that the focus is primarily on reliability and overcrowding? What about comfort, heating, wi-fi, food, frequency, cost and all the other good stuff—and disability access?

Emma Vogelmann: I completely agree that accessibility really needs to be explicit in the requirements set out in the Bill. This is a once-in-a-generation opportunity to make sure that we are not making the same mistakes of the past in having accessibility not explicitly enforceable and not having it in the Bill as much as possible. Disabled passengers already experience accessibility being deprioritised in the name of efficiency and other considerations. We absolutely agree that it needs to be considered.

Ben Plowden: I certainly echo that point from Emma about accessibility. The broader point is that in the absence of any duty on GBR to grow passenger demand over time, which we might come back to, one can imagine a scenario in which, in meeting those two specific duties on passenger service standards, GBR might be incentivised to improve reliability on a route by reducing service frequency and then to deal with the crowding duty by pricing people off the network.

[Jerome Mayhew]

That would be rational.

Ben Plowden: It would be perfectly rational, and I understand from media reports that that may indeed be what is happening on the west coast main line. It seems to us that you either need to broaden the number of things that GBR must take into account in terms of passenger service standards and/or introduce a growth duty, which would help deal with some of the other issues.

Michael Roberts: I believe that the impulse should be to try to improve the passenger experience in the round, including all the things that you mentioned, such as accessibility, as Emma said. My personal view is that the place for that to be expressed in detail, potentially through targetry, is through a combination of the long-term rail strategy and the business plans over five years.

[Jerome Mayhew]

Neither of which we have seen.

Michael Roberts: Correct, and I think the Committee would want the reassurance of understanding what content covering this aspect will be in those documents, as it considers whether the Bill is appropriately written.

Alex Robertson: I agree with a lot of what has been said, particularly the point that accessibility must be a top priority of the railway in the future. How you achieve that is the question we are looking at now. As Michael said, the business plan, the long-term rail strategy and GBR’s duty to consult us and others on those, and to do so transparently, are where you will make sure that the railway focuses on the things that are most important to passengers.

[Jerome Mayhew]

Q The second issue I wish to draw out is the fair treatment of other fare providers. At the moment, a number of independent retailers have very good tech that facilitates passengers using the railway. In the new environment, Great British Railways will be the holder of the data—the holder of the ring—but it is also intending, perfectly reasonably, to be part of the game as well: it will have a retail operation, so it will be directly competing in that retail market. This issue has been considered in other state-owned organisations, such as SNCF, where it was recognised that there was a structural conflict of interest; as a result, the retail side of SNCF is a stand-alone, independent organisation. The Government have chosen not to do that. Do you not think that that is surprising? Would it be beneficial to have GBR retail carved off as a stand-alone?

Ben Plowden: The Government’s own documentation acknowledges the benefit that independent ticket retailers have brought to customers in terms of competition, ease of buying tickets and so on. The Government intend managerially to separate GBR’s ticketing and retail operation from its commercial and operational arm. It seems to us that if the Government are not willing to set up a stand-alone ticketing operation, as SNCF has done, it is important to hold GBR to the same standards as the independent operators in terms of how it does fares and ticketing. It will be required to comply with ORR guidance on ticket retailing, but that is simply about how it engages with the other retailers. Clearly, it should operate on the same terms as the independent retailers, and there should be independent regulatory oversight to make sure that GBR does not use its position as the core ticketing provider essentially to crowd out the other suppliers.

[Jerome Mayhew]

Q What if the Government refuse to carve it off, as has been done in other international examples? The Bill does not require a level playing field. Would you support improving the Bill by expressly stating that GBR must provide a level playing field on data and access for all retailers?

Ben Plowden: We would. In particular, it should be subject to the code of practice on retailing that the ORR issues, rather than simply guidance on how it deals with its relationships with the other retailers.

[Jerome Mayhew]

Does anyone else on the panel disagree with that assertion?

Michael Roberts indicated dissent.

[Lilian Greenwood]

Q I am proud of the passengers and accessibility duty and pleased that it was welcomed by accessibility groups. Am I right in saying that there is no comparable statutory duty that applies to Network Rail or the TOCs—in other words, that this would be an entirely new requirement?

Alex Robertson: You are right that we are introducing a new duty and that that is extremely important in terms of accessibility. The general point I would make is that it is important that Parliament and the Government set out their intent in the legislation. How that is enacted and delivered will depend on a lot of things that are not in the legislation, such as the culture of the railway and how disabled passengers are engaged in the co-creation and delivery of it. As the passenger watchdog, we are very conscious that we have a duty to make sure that we do that as well. It is a definite step forward, but whether it delivers on the ground for disabled passengers in the way that is intended depends on a lot of things that are yet to come.

Emma Vogelmann: An important consideration is the Transport Committee’s finding that the reason accessibility standards are failing and disabled people are having really negative transport experiences is that there are no statutory obligations. I completely agree that the Bill is a big step forward, but the duties themselves are very vague and do not necessarily at this point look at enforceable rights and corporate actions.

Ben Plowden: It is welcome that there is a duty to promote the interests of passengers and disabled people in the Bill. We think there is a case for strengthening that duty so that it aligns with the duty in relation to freight, which is to promote the use of the network for passengers and disabled passengers. There should also be an equivalent duty on the Secretary of State to set a passenger growth target, as she is required to do in relation to freight, so that, as we picked up on a minute ago, GBR does not end up being incentivised not to grow the network in order to meet its crowding and reliability duties, for example. It seems to us that giving it a statutory incentive to increase passenger use over time would be very helpful to build on the existing duty in the Bill.

Railways Bill (Second sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 20th January 2026 Public Bill Committees

[The Chair]

We are now sitting in public, and the proceedings are being broadcast. Does anybody have anything to declare? No. We will now hear oral evidence from First Rail, Rail Freight Group and ALLRAIL. We have until 2.40 pm for this panel. Will the witnesses please introduce themselves for the record?

John Thomas: I am John Thomas, policy director of ALLRAIL.

Maggie Simpson: I am Maggie Simpson, director general of Rail Freight Group.

Steve Montgomery: I am Steve Montgomery, managing director of FirstGroup’s rail division.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Q67 Thank you for attending to give oral evidence. Maggie Simpson, we heard from the chief executive of the Office of Rail and Road this morning that the appeals process is very tightly constrained. Is it worth the paper it is written on?

Maggie Simpson: We are really concerned about the scope and definition of the appeals function as proposed in the Bill. We know that Great British Railways wishes rail freight to succeed. There are positive provisions for rail freight at the beginning of the Bill, but GBR will be a vertically integrated, incredibly powerful monopoly that, quite rightly, will be very focused on its own trains. This legislation will last for a long time, and the behaviours and actions of people today may not be mirrored in future Administrations or at future times.

Our members—businesses across the country that rely on the railways for their supply chains—are really concerned about ensuring that, if things go wrong, they have an effective right of appeal. The provisions in the Bill set an incredibly high threshold—judicial review standards—for bringing an appeal. Even if it is met, the actions that can be taken are such a high bar that it is very unlikely that a decision would ever be overturned, and future Secretaries of State can by regulation, through the negative procedure, set out even more steps and fees. We are really concerned that that is weak. It is a backstop provision; we would only need to use it if things went wrong, but if it is not any use, it will deter people from investing.

[Jerome Mayhew]

Q Moving on to access decisions and charging, on your reading of the Bill, does the ORR have enough power to hold GBR to account? If your answer, as I suspect it might be, is that it does not, what changes need to be made to improve the Bill?

Maggie Simpson: On capacity allocation in particular, as well as the points I have just made about the appeals function, we have a conflict between two clauses in the Bill. The capacity duty in clause 63 sets an incredibly powerful requirement in law for GBR to keep capacity for its own trains and any trains it wants to run in the future. We have sought assurance from the Department for Transport on how that duty and clause 60, on the infrastructure capacity plan, work together. The Department has told us that its intention is for the capacity duty to be subservient to the infrastructure capacity plan, where an assessment is made of the best use of the network, but that is not what the law says. We would like to see it clarified that the value-based assessment of what is the right use of capacity on the network is done first, and that GBR is then able to assure the capacity afterwards.

[Jerome Mayhew]

Q Thank you. Mr Thomas, in your view, under the Bill, will the railways be regulated in a fair and non-discriminatory manner? I am talking about the relationship between open access—the non-nationalised parts of the railway—and GBR. If not, why do you say that, and how would you suggest it is fixed?

John Thomas: First, I will say that the policy intent is quite clear. One of the DFT’s supporting documents to the Bill is quite clear that one of the definitions of a duty on GBR is for it to be fair and non-discriminatory in its decision making. Network Rail’s recent access and use policy document also made it clear that GBR would have to be fair and non-discriminatory in its decision making. However, there is nothing on the face of the Bill to suggest that.

It is really important that there is something on the face of the Bill to say that GBR needs to be fair, transparent and non-discriminatory in its decision making. I think that would be in the best interests of customers and communities, and it would give our members confidence to continue to invest, rather than just relying on the taxpayer to make investments.

The reason I say no is that there is no such provision on the face of the Bill. Going back to Maggie’s point about appeals, I think it would really help the appeals process if there were provision for GBR to be non-discriminatory in making decisions; otherwise, what are appeals going to be based on? They will be based on GBR’s own policies, and if it can discriminate against other services, what is there to appeal against?

In addition, the ORR will lose its ability to hear appeals on the basis of taking into account the benefits of competition for users. We think that is wrong. We think that an open access appeal could never be successful if that provision were taken away, so we advocate adding it back in. The ORR should have a duty to take account of the benefits of competition. Clearly, it has to take into account other matters, as it does currently, including the funds available to the Secretary of State, but if it does not have the ability to take account of the benefits of competition, how is an open access operator ever going to be successful in any appeal?

[Jerome Mayhew]

Q Mr Montgomery, will you say whether you agree with that position, as well as answering this final question? In areas of capacity and access, the Bill anticipates the Secretary of State being granted power to change capacity decisions and access agreements without notice. If that is the case, what impact will that have on the ability of open access operators to build a business case for investment in the future? What impact will it have on future investment?

Steve Montgomery: I agree with everything John and Maggie said. The challenge we see as a private sector operator is how you get anybody to invest in the industry with the lack of clarity in the Bill. As John alluded to, there is reference by the DFT in the memorandum of understanding on the Bill, but nothing in the Bill itself. That makes it very difficult to go to a board and say, “Look, we want to invest in these things.” What certainty do you have for the future?

An awful lot has been made of open access as we have gone through this process. It would take up 1% of overall capacity, but it is held out there, in the commentary, as one of the major plays in the Bill. We think that open access brings the opportunity for competition, which we seem to have lost with some of the wording in the Bill. How do we make sure that there are better services for customers? That is what we all want and what GBR is setting out to do, but how do we make sure that we all have a fair chance when bidding? We have talked about the access situation. GBR can decide not to give access, and the ORR has very limited powers to hear an appeal, so where is the confidence for the private sector investment that the industry continues to cry out for?

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

Q Thank you all for appearing before the Committee. I will start by asking you a macro question about the provisions in the Bill. There are two fundamental protections for freight within the Bill: the freight target and the freight duty, and not just GBR but the Secretary of State and the ORR will be accountable for them. The consultation response published alongside the Bill mentions freight 100 times. There will be a freight rep on GBR’s board and a specific freight team within the organisation. I understand that you met the Rail Minister and had the opportunity to discuss some of the concerns. In the overall context of the provisions in the Bill, do you think that GBR, as it will be set up through the Bill, will have due consideration of the needs of freight and an interest in promoting it?

Maggie Simpson: We have been very clear that we welcome those provisions. We are grateful to the Rail Minister and his team at the DFT, and to your own team, for their commitment to freight. That is really good but, with respect, I have been around a long time and I have seen circumstances in which Secretaries of State and Rail Ministers have not been as keen on freight, or perhaps have been more keen on road freight and less keen on rail freight. We have seen situations arise through different political times and economic circumstances.

When I am looking at the Bill, I am looking at whether it works today, with a Government who are supportive of and promoting freight, and at whether it would it work in the future, with a Government, of whatever colour, who have a different view. We have to look at it through that lens because we legislate for the long term. It is really difficult, because you are saying to people who are trying to help you, “Actually, I don’t like this.” That is an emotional tension—of course it is.

The duties and provisions in the Bill are great— I would not want to be going into GBR without them, and I think they will be powerful—but they are doing a lot of heavy lifting. We are going into a very different cultural environment. GBR will think about its own trains first; it has to for it to succeed—that is kind of the core. We are going into a very different access arrangement and a very different set of parameters, and it is entirely possible that they could go wrong and that we would need the recourse of the appeal function. They might not, but we need to know that it will work if they do. Having a strong appeal function will help it to work, because GBR will know that if things do go wrong we have that recourse in law.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Trainline and Independent Rail Retailers. We have until 3.05 pm for this panel. Could the witnesses please briefly introduce themselves for the record?

Catriona Meehan: Good afternoon. My name is Catriona Meehan. I am the director of public affairs at Omio, here today representing Independent Rail Retailers.

John Davies: My name is John Davies, I am vice president of industry relations at Trainline. I appreciate the opportunity to speak to you today.

[Jerome Mayhew]

Q Thank you both for attending to give oral evidence. This section is about independent rail retailers. I am going to start with what the Competition and Markets Authority said about this. I am quoting it. It is saying that it is

“important to give the right signals from the outset that TPRs will be competing on a level playing field with GBR—to encourage that competition and investment which will benefit passengers directly”.

That is what the CMA says. Mr Davies, do you agree with the position that the CMA has taken? If you do, do you think the Bill as currently drafted gives a level playing field between GBR and independent retailers? If not, why not, and what would you do to fix it?

John Davies: Yes, we agree with the view that the CMA has expressed on giving the right signals from the outset for how the reformed rail industry should work as far as retail is concerned. They also highlighted the risk of this structure giving rise to the actual or perceived risk that GBR will self-preference its own retail operation. There is relatively little about the structure of the reformed rail industry in the Bill, but I think the relevant point is that the creation of GBR will bring together online retailing in a single website and app. This creates a conflict of interest, because GBR will define and operate the future retail market, it will set its economic terms and it will also compete in it.

It is not just the CMA that has recognised these challenges and risks. The Government’s own Railways Bill impact assessment registered this point in terms of the competitiveness of the ticket retailing market—it could be questioned by potential investors who might be concerned that GBR will use its unique position to take actions that put its retail competitors at a disadvantage. However, I should also note that we are encouraged by some of the words of Lord Peter Hendy, who said in a December interview with Simon Calder that there ought to be a level playing field. We look forward to understanding more about how that will be provided, because we have not seen any of the detail on that just yet.

[Jerome Mayhew]

Q Other witnesses have strongly argued for an express duty on the face of the Bill that GBR should be fair and non-discriminatory in its approach. Would you agree that that would be helpful in this circumstance as well?

John Davies: I think it can only be helpful. There is a need to be certain that the retail part of GBR will compete in the market in the same way as everybody else, that it will do so on equality of terms, and that there will be equality of market access on things like fares, features, products, data services and system access, as well as economic parity, so that there is certainty that GBR’s online retail activity will not be loss-making or cross-subsidised, and that there will be transparency of costs and revenues, so that the ORR can hold it to account.

[Jerome Mayhew]

Q In other similar organisations, such as SNCF in France, the decision was taken to recognise the structural conflict of interest, and set up the retail arm of SNCF as a standalone organisation, presumably to prevent or reassure investors that there would be no cross-subsidising. First, do you think that would be a better solution in the United Kingdom? Secondly, if we got that through, could you explain or provide more details to the Committee on what impact it would have in real life?

I have in mind, for example, LNER currently being able to offer a full refund with one click on its website, and that service and facility not being made available to independent retailers even under the current system. Can you elaborate on quite how important that is for the independent sector? I would then like Catriona Meehan to come in with her views, too.

John Davies: When we talk about the need for the right kinds of protections for retailers, we are pointing at something that is not theoretical—these are risks that are with us today. You point at the example of delay repay, where independent retailers are prevented from supporting customers who have purchased their tickets through them by submitting their claims directly. It also occurs with things such as loyalty schemes, retailer inability to offer customers pay-as-you-go fares, and our ability to offer assisted travel. Independent retailers are not permitted to have access to a very significant amount of propositions around rail travel that are a very meaningful part of the market.

Catriona Meehan: I completely echo all of John’s points. For us, it is a concern that there would not be proper separation, which could lead to a degree of self-preferencing. You mentioned SNCF and the separation there, which is an example that we think works well. It is not perfect, of course; there are things that could be improved, but a colleague on the previous panel from ALLRAIL mentioned that EU markets are moving the other way: they are liberalising rather than nationalising.

It is interesting to look at why it has happened and why there is a need for it. FRAND principles were mentioned. We are also seeing that in other markets. Omio operates across 46 markets globally, so we have a lot of experience in other markets. Obviously, the UK is very important through our partnership with Uber trains, but we should also talk about the wider sector of independent rail retailers. Unless we have proper safeguards and assurances in place, we are not sure exactly how GBR will not self-preference. That is not exactly clear to us right now.

[Keir Mather]

Q Thank you both very much for taking the time to come and speak to us today. I suppose the existing system is that retailers rely on what is often quite a complicated web of contracts with the Rail Delivery Group operators and Network Rail to get access to the data and the systems that they need to operate. When things go wrong at the moment, your backstop is litigation, which can be incredibly costly and time-intensive for your organisations. In that context, would having a straightforward code of practice backed up by the ORR with an enforcement power be a simpler, more streamlined and predictable and less costly way to do business than the existing system?

John Davies: Yes, it would represent a streamlining of the system, but that is only true in so far as the GBR online retail function itself is subject to that code of practice equally. It is not clear to us that that is what is intended yet. That is something that we are working through with the Department and the ORR to set out exactly what that means. To the point that was made earlier about the parts of the customer proposition in the rail market that are not available to independent retailers currently, the surety of a code of practice would provide for what we characterise as parity of market access, which is not just fares— “Can we all sell the same fares?”—but features such as delay repay, services such as passenger assistance, and products such as loyalty. We should be able to have all those things on an equal basis across the industry: if they are good for one retailer to offer in support of rail travel, they should be good for everybody. In the work that we are contemplating on the code of practice, we aim to get to a place where no independent retailer or customer of an independent retailer is ever at a disadvantage in comparison with buying a ticket through what will be the future GBR online retail function.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Transport Scotland and the Welsh Government. We have until 3.30 pm for this panel. Will the witnesses please briefly introduce themselves for the record?

Bill Reeve: Good afternoon. I am Bill Reeve, director of rail reform for Transport Scotland and the Scottish Government.

Peter McDonald: Good afternoon. My name is Peter McDonald. I am director of transport for the Welsh Government.

[Jerome Mayhew]

Q Thank you both for coming to give evidence. I will be fairly brief—I always say that, but never am. Mr Reeve, I will start with clause 8, which is on the potential powers for Ministers in Scotland to give directions to GBR. On the face of it, that all looks good: they have to consult the Secretary of State, and she or he has the power to overrule the Scottish Minister. Do you think that the Bill has the balance of responsibilities and powers right there?

Bill Reeve: There has to be a balance, because we are trying to secure the ability of our Ministers to have a proper accountability mechanism and proper direction for implementation of our strategies and of our very substantial funding of the infrastructure. Equally, our network is not an island; clearly, if a direction in Scotland were to have a material impact on matters south of the border, which would not be the intention, that provision is there; I can understand that. There were constructive discussions between our Ministers and officials about how we strike that balance so, broadly, we are content with the arrangements, noting that an MOU is also required by the Bill to flesh out a little more how that will work in practice.

[Jerome Mayhew]

Q A recurring theme of this evidence today is the saga of the missing memorandum of understanding and/or draft licences. We have not seen 19 and counting documents that will form a crucial part of the governance of GBR in the future. Have you any idea about those? Have you seen a draft of the MOU? Do you know what is going to be in it?

Bill Reeve: We are working with colleagues in DFT on the heads of terms for that and on what the principles will be. Since the Bill submission last year, that has clearly been a key priority for us. Again, we have had good constructive discussions, working through in detail, as we should. Thus far, we are pleased with those discussions.

[Jerome Mayhew]

Q Okay, but nothing yet. Let us move on to clause 10, which gives the Scottish Ministers power of guidance over GBR. Some people have expressed concern that there could be so much political control over future GBR that it will be hard to work out whether the guiding mind is Ministers or GBR. What is your take on that?

Bill Reeve: I do not imagine that the guidance will be used then. Ordinarily, I would imagine that we would start with the use of our strategies, our statement of objectives and our normal means of engagement. It is important to remember that, whereas currently we spend £1 billion a year on Network Rail in Scotland, and it is for the ORR to enforce its delivery obligations under the delivery plan to the current funding arrangement, that role is being removed from the ORR.

What you see reflected in the Bill is something to address what would otherwise be a complete accountability gap. We would welcome the fact that we will have stronger accountability mechanisms under these provisions than we have had hitherto, given the very substantial amount of funding that we fund the railway infrastructure in Scotland with.

[Jerome Mayhew]

Q It is interesting that you indicate that the guidance is a last resort, not a first resort. It does not say that on the face of the Bill. Do you think it should?

Bill Reeve: I think that would be a matter of convention and expectation. It is not the sort of thing you would rush to do when there are other ordinary means of engagement to be used first.

[Jerome Mayhew]

Q I turn to Mr McDonald. It is very different in Wales. The vast majority of the Welsh railway crosses the border with England, as opposed to Scotland, where there is more of a discrete railway—if I can put it like that. I think only the core valley railway is wholly within the gift of Welsh Ministers. Bearing that in mind, and that there will then have to be consultation with the Secretary of State on the vast majority of railways that affect Wales, do you think the Bill has the right line between consultation and decision making for Welsh Ministers, since it affects so much of their railway?

Peter McDonald: Yes I do, in terms of the legislation. However, I do not think we can come to a full judgment on this. This may also pre-judge your second question, because we do not have the full memorandum of understanding in front of us. It is only when we see that full package that we can make a judgment about whether the degree of consultation and partnership is sufficient for Wales.

[Jerome Mayhew]

Q Would you accept that the Committee is flying blind substantially on a lot of this, because we do not have the MOUs or a lot of the information that is core to the successful running and governance of GBR at the moment?

Peter McDonald: In the case of Wales, the heads of terms for the MOU were published in December. We are now working closely with Department for Transport officials on the detail. We are optimistic that we can jointly publish a full draft in early March. It is important for us to do that, because, similar to the Scottish Government, we have a pre-election period ahead of the devolved elections, and we would not want that to lose momentum in this important process.

[Jerome Mayhew]

That is quite a significant risk, isn’t it?

[Keir Mather]

Q Thank you both so much for coming to give evidence. Mr Reeve, would you be able to speak to the overall level of working that has taken place between DFT, yourself and the Scottish Government? The most unlikely of advocates for the way in which this process has been developed is the SNP Member of Parliament, the hon. Member for Angus and Perthshire Glens (Dave Doogan), who said that

“the way that the Bill has been discussed with Scottish Government partners is the exemplar that other Government Departments in Whitehall may wish to follow”.—[Official Report, 9 December 2025; Vol. 777, c. 210.]

That is impressive, isn’t it? Do you have any reflections on how this process has been worked out in consultation with yourself and the Scottish Government and whether it might provide instructive lessons for how GBR might seek to engage on a four-nations basis once it is established?

Bill Reeve: It would be churlish of me to disagree with that quote, frankly. In all seriousness, the level of engagement both between officials, and between our Cabinet Secretary, the Secretary of State and the Rail Minister, has been, in my experience, the best I have ever known when it comes to inter-Government exchange. It has been a constructive discussion and a sometimes forthright debate, which is reflected in where we have come to agreement now.

You will be aware that it is the Scottish Government’s position to support the Bill as it goes through the legislative consent motion process in the Scottish Parliament—pending any amendments that might change that; I do not want to fetter the will of our parliamentarians. We have been encouraged by the level of constructive engagement.

--- Later in debate ---

[The Chair]

Q We will now hear oral evidence from Angel Trains, the Railway Industry Association and Siemens. We have until 4.10 pm for this panel. Could the witnesses please briefly introduce themselves?

Malcolm Brown: I am Malcolm Brown, the CEO of Angel Trains.

Rob Morris: Good afternoon. I am Rob Morris, the joint CEO of Siemens Mobility, a manufacturer of trains and the supplier of rail systems here in the UK, for the UK.

Darren Caplan: I am Darren Caplan, chief executive of the Railway Industry Association, a trade association representing rail suppliers throughout the UK.

[Jerome Mayhew]

Q Thank you, all three of you, for agreeing to give oral evidence today. I will start with Mr Brown, who represents Angel Trains: first of all, can you say a little bit about Angel Trains?

Malcolm Brown: Yes, by all means. Angel Trains is a ROSCO—a rolling stock operating company. We own circa 4,000 passenger vehicles in the UK, and we provide the bridge between private sector finance and the actual rail industry. In the last 10 years, we have invested about £1.9 billion in new rolling stock in the UK, and we invest about £80 million a year in refurbishing and maintaining trains across the network.

[Jerome Mayhew]

Q That is an awful lot of money, and that comes down to the meat of it: this Bill changes the relationship between GBR and the supply chain—between GBR and ROSCOs, in your case. Does it provide your company, and companies like yours, with the long-term view needed for the supply chain and, by extension, investors? If not, what is needed to fix the gaps?

Malcolm Brown: As has been covered in other panel sessions, the Bill as it stands does not provide a long-term view. It relies on the building blocks that it refers to—we talked about this in other panel sessions—where you have a long-term rail strategy and there is also a promise of a long-term rolling stock and infrastructure strategy. It is those documents that we would look to to provide a long-term view on what is coming up in the industry.

Our assets last circa 30 to 35 years, as does the infrastructure, and it is that long-term view that we require, not necessarily to give us certainty, but to give us a clear look-through that allows us to decide whether to invest and the level of investment we will make. In answer to your direct question, we will be looking to the railway strategy, which we presume will come first, and then to the long-term rolling stock and infrastructure strategy.

[Jerome Mayhew]

Q There is reference, obviously, to a long-term strategy for rail in the Bill, but how long that is is not defined. Let us give the Minister a helping hand: for the ROSCOs and for the supply chain, what do you mean by “long-term”? What is helpful, and what is just too far in the future?

Malcolm Brown: As a general rule, a 10-year horizon is something that we can work with. With the nature of infrastructure—not just rail, actually, but other infrastructures too—for this type of asset, that, while it is not whole life, gives a clear look forward. When you extend that, clearly the level of accuracy, if not certainty, gets less. That is perfectly okay; we are used to dealing with that. That is how infrastructure actually works. We do not need to have 100% knowledge of something that is going to happen in 35 or 40 years, but what you want to have for look-through is, “Okay, we know what is going to happen in 10 years, and therefore, on a probability basis, this is what we will assume to do in 30, 35 or 40 years.”

[Jerome Mayhew]

Q So if you have a degree of certainty for the next 10 years and a forward look for, say, the next five after that—the Minister is right here, so shall we say 15 years for a long-term strategy? Is that what you are suggesting?

Malcolm Brown: No, I am not. I am suggesting that the strategy should give various date points—10 years, 15 years, 30 years. I do not think we should exclude it saying, “Here is a vision for what we wish our rail industry to look like in 30 years,” while accepting that that will actually change. It has to change; it has to morph and adapt to the market.

[Jerome Mayhew]

Q What is missing from the Bill, from your perspective?

Malcolm Brown: I think the references to the building blocks of the long-term rail strategy and the rolling stock and infrastructure strategy are key components that will actually help give greater colour to the Bill. At this point, a number of us are looking at this and trusting in the fact that they will come, and will come in a timely manner, and that that will allow us to get on and invest. This is not just investing for investing’s sake; this is taking Rob’s plant in Goole and actually pouring work in there that will employ people in the local area. It is that type of thing that will break the log jam that we have just now, and let us get on with things.

[Jerome Mayhew]

Q Mr Morris, you have just been referred to. At the moment, you have a control period of five years where the funding is locked down and there is a degree of forward certainty. Under the Bill, that certainty will be removed. It is not giving you more certainty for the future; it is giving you less. How important to the supply chain is certainty about the control period?

Rob Morris: Certainty is very important. We have invested something like £340 million, and we are currently investing in a new Goole facility for rail and train manufacture and a train command and control systems R&D and manufacturing facility at Chippenham. To continue with investment not just in facilities, but in skills and rolling stock for the future, we need certainty about the financing or funding over the control periods. It is not just about renewals, which are currently included, and which are there to stop the infrastructure from falling over; it must also be about enhancements and rolling stock and the maintenance of that.

From our perspective, we would echo what Malcolm said about the 30-year long-term strategy. For all those elements I have talked about, we must recognise that strategies have to be reviewed. I would suggest that that be done every five years for all of those and that funding is made available on a five-year basis, so that the supply chain has absolute clarity on where it can invest and how it can support GBR. GBR spend will be 50%-plus, we expect, within the supply chain, so what it does not want is for the supply chain and the investors to fall over.

[Jerome Mayhew]

Q You make an important point that enhancements should be included in this, not just maintenance. Coming back to the question, the Bill introduces for the first time an ability for the Secretary of State to change the funding settlement within a five-year period and without notice. You would agree that that is a backward step in certainty for the supply chain?

Rob Morris: Absolutely. Although we are based in the UK, we are a global company. If there is uncertainty here in the UK, we will cut off investments because we are in competition with a global market.

[Jerome Mayhew]

Q Thank you for that. Mr Caplan, you represent RIA. Please explain to the Committee what RIA is and how important your organisation is.

Darren Caplan: We represent rail suppliers in the UK—all around the country, large and small. They can be companies like Siemens and Angel, and they can be SMEs—60% of the supply chain are SMEs and they are our members. There are about 640,000 jobs in the UK rail industry, and about half of those work in the supply chain, so it is quite a lot of jobs.

Around £40 billion of GVA is rail, and half of that is from the supply sector. Around £14 billion of Treasury revenue comes in from our sector, and half of that is from the supply sector, so it is a really important sector, covering building, maintaining, reviewing, infrastructure, rolling stock, signalling and so on—it is the full gamut of the rail industry.

The point you picked up on, Mr Mayhew, is really important, and I am happy to expand on that. I have in front of me the Bill’s clauses and provisions. Schedule 2 is the one we are concerned about, and it is really significant. It says:

“The Secretary of State must provide the ORR and Great British Railways with a statement, in relation to a funding period, indicating the amount of financial assistance that the Secretary of State reasonably considers may be made available to Great British Railways by the Secretary of State…for the purpose of funding the activities of Great British Railways during the funding period.”

That period is five years. It says, “must provide”. Then, three pages later, on page 64, it says:

“If the Secretary of State proposes to vary the financial assistance to be provided…the Secretary of State must notify Great British Railways of the proposed variation…The Secretary of State must notify the ORR if…the Secretary of State considers that the proposed postponement, withdrawal or reduction is likely to have a material impact on the ability of Great British Railways to carry on the activities specified”.

That is “provide” versus “notified”. It says they must “provide” the budget for a five-year period, but later it says they just have to “notify” if they want to change what they do. That is hugely significant, because it means that you can set up a five-year budget and decide that you want to change it once in that control period, or every month if you want to. That is highly political, because a future Secretary of State can decide what they want to do coming into a new control period. The future is less certain under the Bill than it is currently. We have had control periods for the last 30 to 35 years— we are now in CP7. Under the Bill, the future version of funding assistance for rail will be less certain than it is now.

The Bill also only talks about postponing, withdrawing or reducing, and not increasing. At no point does it talk about funding going up; it is all about reducing it. For my fellow witnesses, when they are looking at where they are going to invest, they will say that there might be £45 billion invested over five years, but that could come down—if you do not know for certain, why should you do it?

My final point is that rail is a very certain industry: you know what you need to spend in five years—you know the renewals you need to do, and you know the rolling stock you need to get, maintain or refurbish—so why can you not commit to a five-year spending envelope? It is very simple.

[Jerome Mayhew]

Q You are saying that schedule 2— I think you referred directly to paragraph 7(4)—increases risk and uncertainty for the supply chain, and that, as with any business, you price risk. That draft might be a Treasury draft, and I do not want to blame DFT—it may have been imposed, and who can possibly lift up the secrets of the boudoir in government—but do you agree that the outcome of that draft is that it increases risk and uncertainty, and that gets priced into the contract, so either investors will withdraw because they have no certainty, or if they remain, the cost to GBR and therefore to the taxpayer inevitably increases? It reduces, rather than increases, value for money; do you agree with that statement?

Darren Caplan: Yes, absolutely—

[Jerome Mayhew]

Q I am going to cut you short. You say absolutely. What about the other two?

Rob Morris: That is absolutely correct.

Malcolm Brown: It is fundamental economics.

[Jerome Mayhew]

Thank you. I rest my case.

[Keir Mather]

Q Thank you all very much for giving evidence today. Mr Morris, I will begin with you for the Siemens perspective. I have had the opportunity to visit your fantastic production plant in Goole, and your local skills work is also commendable. I take the point about the need for long-term certainty in the rail industry, not only on rolling stock, but on those infrastructure improvements. On what Mr Brown referred to as the “building blocks” that sit throughout the legislation, the long-term rail strategy will provide a vision over 30 years—longer than 10 or 15 years—about the direction of the railways, and the rolling stock strategy is being developed in tandem with the Bill’s progress through Parliament, on which I believe stakeholders will be thoroughly consulted.

Duties for GBR also exist in the Bill. One of those duties is

“to enable persons providing railway services to plan the future of their business with a reasonable degree of assurance”.

In a five-year business plan you may have fluctuations in spending to reflect fiscal reality, but would you say that through those building blocks, long-term certainty is offered to the industry, and GBR has to reflect industry needs and build a railway that is coherent in serving their interests over the long term?

Rob Morris: The short answer to that is yes, absolutely. The other elements that we have just discussed—on enhancements, and on rolling stock and the maintenance and funding thereof—are absolutely fundamental to that. I also think that the ambitions for the railway need to be included in that. Witnesses on previous panels have talked about freight and the target there. What we seem to be missing in the Bill at the moment is the ambition for passenger growth, how that will improve the railway and the levels of investment that need to go with it.

A good example of that is last week’s announcement on Northern Powerhouse Rail, where rail and investment in it will create opportunity for increased productivity— I think £40 billion per annum was mentioned. It seems to me that there needs to be a connection in the Bill between what the Bill seeks to achieve, and generating that ambition, not just for freight growth, but for passenger growth.

--- Later in debate ---

[The Chair]

Order. Sorry, Mr Caplan, but props are not allowed.

Darren Caplan: My apologies. The charts show how uncertain the current situation is, and these measures would make it less certain. If we can have the positives for GBR going forward, and get these issues addressed, that will be better for the supply chain.

[Jerome Mayhew]

Q I am grateful that we got a little more time to explore that. At the moment, we are in control period 7, so that takes us—

Darren Caplan: To 2029.

[Jerome Mayhew]

Q Yes. That is the last 30 to 35 years or so. A control period is a five-year investment cycle. The period is agreed at the start of the CP, or shortly before the start of it, and that funds the maintenance or improvement works.

Darren Caplan: Operations, maintenance and renewals.

[Jerome Mayhew]

Q What you have shown us in your smuggled-in prop—

[The Chair]

Contraband.

Darren Caplan: Apologies, Chair. I was not aware of the rules.

[Jerome Mayhew]

I am going to put words into your mouth, but please correct me if I am being unfair. In each control period, you get a bell curve of activity. You start with a low level of activity, because people did not know that there was certainty of funding, and then in years 2 and 3 it gears up and you get peak activity in year 2.5, roughly. Then, as you get towards the end of the control period where the medium term funding dries up or is uncertain, you get a drawdown of activity. That is the point that you were trying to make—is that correct?

Darren Caplan: It can happen between control periods as well, but the basic point is that over those five years, that money is the same. It can vary a bit between years—you can carry some over—but in that time you spend that money. Our concern about schedule 2 is that you can reduce the amount of money in that period.

[Jerome Mayhew]

Q Would it be a better system if you had control periods that had a greater certainty looking forward at any one time between the decision when money was tied down—if indeed it is tied down under the terms of the Bill—and the date at which the activity would then take place? For example, for the current control period of five years, if you take the decision on funding for the next control period, let us say two years out, would that be effective in increasing certainty, reducing the need for a bell curve of activity, and thereby reducing costs for the supply sector and, by extension, for the Government and taxpayers?

Darren Caplan: Absolutely. If you do the work that you need to do on rail when you need to do it, it is much cheaper than doing it at a later date. It is 30% cheaper to do a renewal when you are supposed to be doing it than at a later date. That is better for the taxpayer, because you can aggregate it. It is also better in terms of passenger experience, because the asset is being maintained when it needs to be.

[Jerome Mayhew]

Q I am just going to interrupt you. That is a different point from the one that I am asking about. I am talking about the cost of planning and implementing renewals and about having a degree of certainty looking forward regarding when that money will be spent. If you always have a minimum of, let us say, 24 months for planning and commitment to funding, does that make it easier for the supply chain to commit resources, and therefore cheaper?

Darren Caplan: These guys can talk to that specifically, but I assume so, because you are planning out your workforces, your investment in partner machinery, your overall business plan, the apprentices you are going to take on and innovation—all these things can be planned in advance. If you know, you will get a better cost.

[Jerome Mayhew]

Q Can you illustrate that with electrification, for example?

Rob Morris: Yes—electrification and signalling are both part of the renewals process. The five-year cycle that we currently have—which is often referred to as the boom-and-bust cycle, because that is what it is like for us—adds, let us call it, a subjective cost increase of about 30%, as Darren mentioned.

[Jerome Mayhew]

Q What sort of sums of money are we talking about in the control period?

Rob Morris: The overall figure is normally about £40 billion, in terms of renewals and operations maintenance.

[Jerome Mayhew]

Q So 30% of £40 billion is an increased cost as a result of this process.

Rob Morris: Subjectively, yes. I think there will be more accurate figures around that, but it is an inefficient process.

[Jerome Mayhew]

That is amazing.

Rob Morris: One thing I would say to support the figures that Darren mentioned earlier is that we have had a particularly sluggish start to this control period, which is actually prolonging that and impacting on skills and capabilities in the industry, which might add additional costs to remobilise.

[Jerome Mayhew]

Q And your combined evidence—again, I am putting words into your mouth, but correct me—is that the Bill as drafted not only does not solve that problem of 30% of increased costs, of the £40 billion every five years, but actually exacerbates it, because it removes what little certainty there currently is.

Rob Morris: Your words are correct.

Darren Caplan: Yes.

Malcolm Brown: I am not in that space, so I could not comment.

[Jerome Mayhew]

Q So for the people in that space, yes.

I am going to move to Siemens now. Historically, during the period of privatisation, rolling stock improvements have been inextricably linked with franchise bids. As franchises have come up for renewal, different operating companies have been in a bidding process, through competition, to make the most attractive proposal to the Department for Transport. Some of that would be in cheques to the Treasury, but a lot of it has been in improving rolling stock infrastructure. My own operating company, Greater Anglia, entirely renewed its rolling stock right across its area as part of its franchise bid.

That impetus for improvement of rolling stock is being removed entirely and replaced by GBR, a nationalised bidder. It has various duties. I look at clause 18(3), which we discussed a little earlier, under which it has a duty to improve “railway service performance”, but that is defined as being, in the main, reliability and passenger overcrowding. There is no reference to improved customer experience, to quality of rolling stock and to improved services that would come with new rolling stock. For Siemens, are you concerned that moving to GBR will lead to a reduction in the pace of improvement in rolling stock?

Rob Morris: Again, it is about understanding what the ambition is specifically with rolling stock and the funding thereof. My belief is that there is a need for a passenger growth target, which would further fuel the need to make sure that there is a clear approach to modern, carbon-neutral, efficient rolling stock to match a similar infrastructure for the betterment of GBR.

[Jerome Mayhew]

Q At the moment, all of that is missing from the Bill, is it not?

Rob Morris: Yes.

Malcolm Brown: If I may, there is a natural life cycle. There is a beat rate to replacing, renewing and then retiring rolling stock. It is lumpy, because you do not replace trains one at a time; it tends to be in fleets. There is not a great deal we can do about that. What would concern me is if we reverted to everything being planned and done by a central organisation. We have tried that before. I refer the Committee to the 2014 National Audit Office report on the DFT procuring IEP. It did not go well, the National Audit Office says. There is a natural tension there just now—the commercial tension of trying to improve rolling stock and always trying to have the next best thing.

You talk about Greater Anglia. Apologies, but it is Alstom’s trains that we bought in there. They are a step change that was there before, but we cannot keep replacing every single train every time. We need to refurbish trains. We invested £125 million in the Pendolino fleet on the west coast. That created 100 jobs at Widnes and its own infrastructure there. That was completed on time and on budget. Nobody ever really talks about that, but we can do it. We have given the passenger an environment that is as new. That is a lot more cost-effective than simply going, “We must buy a new train every time we feel like it.”

[Jerome Mayhew]

Q Where is the incentive to carry on and accelerate that process in this Bill? Where is the incentive for GBR?

Malcolm Brown: I cannot comment. I presume it is going to be in one of the building blocks. My concern is that we have a group of people who are trying to design trains for a hobby, when we have manufacturers such as Siemens in the UK, which have global platforms for trains. Yes, we adapt and customise them for the UK, but we get all the benefits of the manufacturing experience of a global manufacturer with the economies of scale that that provides as well. We do not need bespoke custom-built trains in the UK.

[Keir Mather]

Q To conclude with a broad-brush question, if we set up GBR with the ability to have an integrated view of the entire rail network, especially on a passenger basis, as an organisation that has real buying power and long-term certainty about the requirements it needs, and that sits alongside a rolling stock strategy that has been developed in consultation with industry for the long term, specific duties on GBR to provide certainty to those who provide railway services and a duty to promote the needs of future passengers, which I believe inherently means having a rolling stock pipeline which improves that experience, does that not offer quite a positive departure from a franchising system that, to an extent, was the definition of boom and bust in its short-term thinking and the unforeseen consequences that could often arise in the system?

Malcolm Brown: To my mind, there is the potential there—there is no question of it—but without having visibility, at the risk of repeating my previous answers. You talk about consulting with the industry; there is a vast amount of experience in the UK rail industry. I am totally agnostic about whether that is in the private or public sector. I would compel GBR to use that experience to inform the decisions and the forward planning.

I have an organisation that is not as large as Siemens. It is about 170 people and I think about 60% of them are qualified engineers. We have more than 30 years’ experience of acquiring rolling stock and structuring it. I think we are reasonably good at it. I would say utilise the experience and expertise that is there. I am not saying private or public; I am saying use the experience that is there to, frankly, avoid reinventing the wheel.

--- Later in debate ---

[The Chair]

Q We will now hear evidence from the Urban Transport Group, Greater Manchester combined authority and West Yorkshire combined authority. Ms Brabin is on her way; she is in the building and will join us shortly. We have until 5 pm for this panel. Will the witnesses briefly introduce themselves, please?

Andy Burnham: Good afternoon, everybody. I am Andy Burnham. I have been the Mayor of Greater Manchester for coming up on nine years. I was previously the Member of Parliament for Leigh for 16 years.

Jason Prince: Good afternoon. My name is Jason Prince, and I am the director of the Urban Transport Group, which represents transport authorities and mayoral strategic authorities across the UK.

[Jerome Mayhew]

Q Thank you both, as ever, for coming to give oral evidence; it is very helpful. Mr Burnham, I am going to focus on you. It is difficult, isn’t it? You have a national rail network, where you have to have a degree of national organisation, but you have devolved areas as well, which rightly have ambitions for an increased level of control, as I believe you do for rail. There will inevitably be a degree of tension between them. Part of the Bill’s job is to do its best to get that balance right. Inevitably—I speak as the shadow Minister—it will be very hard to be perfect, but we need to do as much as we can to get the Bill as good as we can by design at this stage.

I will start with the Bee Network up in Greater Manchester, which you have organised on the basis of concessions let by you, the mayoralty. The benefit of that is that the fare box is kept locally and it is operated privately. It does not have to be; you could run those concessions through a wholly owned subsidiary. I accept that. That approach of keeping the fare box local does not work with GBR because the fare box stays with GBR. Even if you have a greater level of devolvement, it feels a bit like it is going to be GBR in Greater Manchester, just painted yellow. Is that what you wanted from the Bill, or did you have aspirations for a bit more control?

Andy Burnham: Thank you very much for the question. I agree with the way that you have presented it. There is a tension to be resolved, but I believe it can be resolved. It is really important that you have mentioned the Bee Network, because I am responsible for running the tram and bus systems, so the backbone of the public transport system is under our control. We have to move to a world where the railway emerges from its railway silo and sees the bigger picture—the integration of public transport across all modes. I would encourage the Committee to think about that, because that change is coming. You will know, Ms Barker, that Liverpool city region will also soon embark on putting buses under public control, and I think the model we are creating will become something of a norm around the country.

I think it is possible to go further, as you say, and my evidence for that is TfL Overground: an arrangement was reached between the Government, the railways and TfL on an integrated, fair offer. I believe that is entirely achievable in Greater Manchester, where the railways come into the capped system. Actually, the rest of the Bee Network adds value to the railway, because no longer will it be the case that you buy a ticket in somewhere like Buxton or Glossop and your travel runs out at Manchester Piccadilly; in a capped system, people can have their onward travel all included under that daily cap. That is what operates in London, and I see no reason why it cannot operate in Greater Manchester—indeed, we will insist that we get the same.

Isn’t it all about revenue sharing, hopefully in relation to passenger growth? We have a plan to bring eight rail lines into the Bee Network, starting with two this year, and it is a plan that has been agreed with the rail industry. This is potentially a win-win for everybody, because the arrival of the capped Bee Network system gives people more reason to use the railways, so we think that we can increase patronage on those rail lines.

It has to be a real partnership with the railway, which is why we are encouraging the Committee to go beyond the idea that we are just consultees who can be listened to or not. Meaningful partnership is what will build the right railway and the right public transport solution in our city. It is much more than painting the trains yellow, although I do want to see yellow trains all over Greater Manchester with bees on them.

[Jerome Mayhew]

Welcome to the Committee, Ms Brabin; I am sorry that we started before you managed to get in.

Tracy Brabin: My apologies for being late.

[Jerome Mayhew]

Q Is there not a bit of a problem then, Mr Burnham? That is not what is in the Bill. At the moment, the Bill has a duty to consult, but it does not give the level of power to mayoral combined authorities that you were just identifying. In your answer, you said that you will insist on getting more. Well, you will not get more powers under the Bill, as currently drafted—those powers are not given to you. What do you say about that, and how do you think it should be changed?

Andy Burnham: I do not think it can be justified any more that there is one transport arrangement for London, but that arrangement is not available to everywhere else—[Interruption.]

[The Chair]

Order. The sitting is now suspended, and we will resume in 15 minutes.

--- Later in debate ---

[The Chair]

Before I bring the shadow Minister back in, I make colleagues aware that the session will run until 5.15 pm.

[Jerome Mayhew]

Q First, I apologise for taking so long during the Division. I am also a Whip, so I had to stay in the voting Lobby. It is something to get used to again when you come back to the House. I am picking up fag ends, because it sounded as though the Minister was discussing very similar issues to those that I was discussing before we left.

It was rather frustrating, Mr Burnham —the Division bell went when you were about to deliver a hammer blow against the Government on your disappointment about what is not in the Bill and what should be in it. You used to say that you wanted more autonomy for the Bee Network. I have heard your answers—it is clear that your position on that has not changed. You want to have more autonomy, but the Bill does not provide it at the moment. You have a duty to consult, which is okay so far as it goes, from GBR, and then thereafter, once it has consulted with the mayoralties, it only has a duty to have regard to what it is that you have said or requested. In your combined evidence, what would be a better form of words more accurately to reflect the relationship that you think should exist between the national and the regional? Mr Burnham, because we were halfway through a conversation, perhaps we could start with you, then move on to Tracy.

Andy Burnham: Thank you. I do not know about coming back, but what I do know is that in my 16 years here, there were enough Tory MPs around that there was no double-jobbing, I do not think, from my memory. We will move on.

I think that it is about a meaningful role. I do not think autonomy is actually what we are asking for here today, any of us.

Tracy Brabin: No.

Andy Burnham: What we are saying is that we want a meaningful partnership, which is about more than just being consulted and then ignored—which, if we are honest, does happen to us as mayors with the rail industry. Even though I am chair of the Rail North Committee, we sometimes have to work very hard to make the railways listen to what democratically elected mayors and leaders say. It is a different relationship, and I would say that I strongly feel the railways need culture change. We need to get back to a railway that serves people and places, not a quite adversarial section of transactional arrangements that can be very complex. It feels to us sometimes that the railways have lost sight of that.

[Jerome Mayhew]

Q It has become very command-and-control, hasn’t it? It is top-down, but you are saying that it should be more bottom-up.

Andy Burnham: Yes, I think if you end up with a very top-down railway, it is a bit like the phrase I used to hear in the Department of Health: “You can hit the target and miss the point.” Is that not that the risk with the railways, if they become too much like monolithic structures? It has to be a bit of both. If you go back to the old British Rail days, I remember a thing called Regional Railways, which was very separate to InterCity, so that split has always been there in the railways.

What we are arguing for in front of the Committee today is to think of the railways in a more place-based context. Railways serve growth in local areas, and there are things that we can bring to the table to support the health and growth of the railways in the future. It points to a different partnership, but it is a partnership. We want the right to specify timetables, as it is legitimate for us to make those requests, and we want a stronger role over station access. Actually, we think there should be a presumption in favour of devolution. Rather than a right to request, the onus should be the other way around; there should be the right to refuse, which presumes that it should be devolved, if that is possible, but there is still a callback if it cannot be devolved.

There is a relevant recent example: the Access for All funding. The Rail North Committee has asked the Department to devolve the Access for All funding, so we do not get the situation that Tracy described a moment ago. Currently, that is not being supported by the Department. We submit lists of stations to the Department as part of our Access for All bid on a regular basis, but we have often had the experience that it comes back with a different prioritisation to the one we sent in. This is really granular, local stuff, and it is mind-boggling to us that you have an infrastructure programme for the railways, and then an Access for All programme at the highest level that is dealing with very local schemes at stations. It is a meaningful partnership, and we are calling for a devolved role, where there can be one.

Tracy Brabin: I totally agree with what Andy has said; it is about accountability. I do not think you could expect the Secretary of State to be accountable for the whole of the network. How on earth would they understand the challenges? At Denby Dale, all they need is a ramp, and those sorts of decisions should be made locally.

We are building three stations in the next year. Why are they so expensive? In Germany, I think it is £5 million a station, but here they are £50 million. In the ’80s, it was £500,000 a station in today’s money. Surely, if we are working together as a collective for the good of the nation, we could find a way that makes it easier—one where we are more agile in building stations, and where we are part of that conversation around services. Also, it is about where we get then get the revenue from, so that we have a circular pound—the one that goes into the washing machine and comes back out again on the other side—and can build more accessibility on more stations.

[Keir Mather]

Q I have a few more questions—and, Jason, these include you as well.

[Jerome Mayhew]

My apologies.

[Keir Mather]

No, mine did not either—it is important that we also get to hear your perspective, Jason. One of the things I want to hit on is accountability. One of the benefits of the Bill that Lord Hendy stressed in his evidence to the Transport Committee is that by having a unified, guiding mind for the railway, you will have hard-working people at GBR who will wake up every day and know that they are responsible for making sure that the railway runs in the interests of the British public, in partnership with people like yourselves. Could you take us through the current challenges in engaging with an array of different private sector operators and DFTO-managed train companies? What does it look like for the people you represent who are trying to navigate this bewildering system, and for you guys who are trying to drive high standards, passenger satisfaction and, ultimately, better economic opportunity for your local areas?

Tracy Brabin: It has been very difficult to navigate who is responsible for what. There is a lot of finger pointing with, “It’s them,” or “It’s them,” and trying to get a decision about who actually owns a project has been difficult. That is why I really welcome the leadership that Lord Hendy has shown in bringing together track and train and having that simplicity.

In West Yorkshire, the partnership piece of work was published last week. We have been seen as an exemplar in our strategic place partnership, where we brought together Network Rail, DFT, the TOCs, the shadow GBR, ourselves and all the partners to identify how we can cut through roadblocks. It has been incredibly effective. When the Mayor of South Yorkshire, the Mayor of York and North Yorkshire and I were working with David Blunkett on the White Rose rail plan, it was helpful to look together at how we could phase the delivery of the plan, how we could make it affordable and what was the structure of delivery. You can do that only when you are all in the room and all have skin in the game, and you are not blaming each other. I want to reflect on the relationship held locally by our organisations and myself. I think that is the way forward.

We also need resources, and I speak for other mayoral strategic authorities as well. I am blessed to have some very talented people—some of them are sat behind me—who help me with our rail plan, but not every MSA has that talent. Although people might be waking up to deliver better outcomes, they are not all sat in the regions. Having people with timetabling and infrastructure experience actually in the regions would also be a huge benefit.

Andy Burnham: The job of getting the railway to be more accountable has been the devil’s own job in my time as mayor. I am not talking so much about recent times, but certainly in the early days when we had the 2018 timetable collapse. It was only Transport for the North and the Rail North Committee that got underneath what was going on inside Northern and TransPennine. If we had not been there, I do not think the travelling public would have seen the change.

We were the ones who challenged Northern, when it was run by Arriva, to keep guards on the trains. We were the ones who fought to keep ticket offices open—the railway would have closed them if it had not heard our voice. We had to challenge Avanti West Coast when it was collapsing and cutting the timetable between Manchester and London—two major cities in this country—damaging our growth. It just took that decision without any reference to us. Recently, the Office of Rail and Road has done something relating to a ghost train. We constantly have to challenge these things. Without us, I do not think we would have a railway that has moved towards more public ownership and more accountability.

I think major culture change is needed. I come back to this point. My observation is that it is still not responsive enough to what local areas need. As people may know, I support Everton. I go to Everton’s new ground on a regular basis. So many more people are travelling there by train, but to the railways, it is like it has not happened. It is as though they are oblivious to it. They are not in the place with us, managing it and putting extra people on. The railway seems to be too dislocated from what happens on the ground. For example, Sunday services are not put on during the Manchester Christmas markets. That is the thing: you need a railway that is knitted in to supporting growth.

Finally, look at the evidence where we have more locally accountable railways. Transport for Wales is a strong operator, in my experience—it serves Greater Manchester as well. Merseyrail is accountable to the Mayor of Liverpool. It has higher levels of performance, I believe, although all railways have their issues. That is evidence that if you have more local accountability, you generally have a higher performing railway that is more responsive to what people are saying.

Tracy Brabin: Andy and the Rail North Committee have been holding operators’ feet to the fire not just for northern transport but also for the east coast main line where it goes through other mayoralties. So on accountability, I think coming from a mayoral strategic authority or a mayoral combined authority where all mayors across the country can hold rail to account—you are doing a brilliant job, Andy, but currently where else in the country is there that group that will hold operators to account? At the moment, it is only the Rail North Committee, but surely that has to be across the whole country.

--- Later in debate ---

[The Chair]

Q We will now hear oral evidence from Richard Bowker CBE. We have until 5.35 pm for this panel. Will the witness briefly introduce himself, please?

Richard Bowker: I am Richard Bowker. I am the former chair of the Strategic Rail Authority. I now co-present a podcast about the railways called “Green Signals”.

[Jerome Mayhew]

Q It is a very good podcast; I listen to it a lot. Thank you very much for giving oral evidence. I now realise how you get a CBE in this country—you just have to be involved in the railways and they come along. You are certainly the third—probably the fourth—that we have had before us today.

I am going to focus on a couple of things. On access and capacity, we have heard a lot of evidence today; I do not know how much you have heard, but it has replicated, in essence, what was put before the Transport Committee a few weeks ago. There is a huge amount of concern in the sector about whether the Bill provides a level playing field between GBR and open access, freight and the like, coupled with a very weak—those are my words—appeals process, which is so narrowly constrained that it only deals with errors of law as opposed to disagreements on the merits. Is it right that there is a real problem with the future of competition in our railways? If you agree with that broad statement, perhaps you could expand on your reasons why.

Richard Bowker: I will probably say more about certainty and confidence for investors than competition per se. If I think about my experience at the Strategic Rail Authority, it was a significant frustration that elements of planning in terms of timetable and service were split apart in the way that they were. I think the Government are right to want to create a directing mind—I say directing mind rather than guiding mind. We have a capacity-constrained railway. In places, that is very severe, and someone needs to say, “Right. This is how we think we should allocate capacity.”

Having said that, there is a possibility that the pendulum has swung a little far. Probably the biggest issue with that would be rail freight. If you are a rail freight operator, at the moment you have certainty; if you are unhappy with the way that you are treated, you can go to the ORR. As an independent regulator, the ORR can make the final access decision.

What is contemplated is a perfectly logical process, starting with an access and use policy, capacity plans and capacity decisions. The problem is that railway timetables are not really like that; they are more dynamic. These things change. We looked at doing exactly this at the SRA, and it is very difficult to do. It changes constantly, so it has to be very agile. Under the Bill as drafted, while the process could work perfectly adequately, the capacity duty in clause 63—and potentially clause 18(4)—seems to say, to me at least, “Yes, GBR has all these duties, but they are subject to the capacity duty.” I can see why that causes tension and concern among freight operators, for example. I am not saying that it cannot work, but until we actually see it work, there is a risk that third-party operators will be concerned.

[Jerome Mayhew]

Q You looked at it when you were with the SRA, back in the day, and you rejected it, presumably. What were the reasons for your rejection of that approach?

Richard Bowker: The ’93 Act was not set up that way; it was set up so that the Strategic Rail Authority was responsible for setting an overall strategic plan for the railways and for managing the award and management of franchises, but Railtrack plc, and then Network Rail, was under the regulation of an independent economic regulator. The two worlds were apart. Whereas the regulator had to have regard to our strategies, it did not have to comply with them, so we always had that tension. It was not really for me to change it. That is why I think that, overall, this is a good approach.

[Jerome Mayhew]

Q We heard evidence earlier today from Maggie Simpson of the Rail Freight Group, and she was very concerned. She said that her members are very concerned, and that that has fed into the ability to take investment decisions, which require a degree of certainty. She was very concerned about clause 63 and its relationship with clause 60. She was also concerned about the ability of the Secretary of State to take unilateral decisions about non-GBR infrastructure without notice and without consultation. We heard that those approaches, together with an effective inability to appeal, meant that investment for rail freight, but also for open access—other rail users—was put in doubt. Do you think she is overreacting?

Richard Bowker: It is not for me to say whether she is overreacting, but I absolutely understand the concern, because rail freight in particular involves a lot of private capital. You have to have a degree of confidence and assurance that if you have access rights, you will be able to maintain them, so I understand that. I think the Government are right to create a directing mind. We have seen too many examples of timetabling processes that have gone wrong for precisely that reason—it is about balance.

[Jerome Mayhew]

Q It is not really the directing mind I am focusing on; it is having a level playing field where, for the first time, we are going to have GBR being the directing mind but also an operator. There is a direct structural conflict of interest in the design of GBR as set out in the Bill—that has been the evidence of many people to the Committee today—combined with essentially no right of appeal other than on matters of law. First of all, do you recognise that as a proper concern? Secondly, if so, do you think a partial solution would be to have a mechanism for appeal on the merits to an independent regulator—let us call it something like the ORR?

Richard Bowker: On the first point, yes, I recognise the concern. Secondly, personally I would look at clause 18(4) and ask whether we really need to have the capacity duty able to override other duties. As far as the appeals process is concerned, I can see why being able to look at a case on the merits rather than on a strictly legal basis would help enormously. If GBR believes that its access and use policy, its capacity planning and its final decisions constitute a good process, it should not fear that.

[Keir Mather]

Q Thank you, Mr Bowker, for coming to give evidence. Just the other day, a group of DFT civil servants were recommending your podcast to me, so you will be pleased to know that you have friends on the inside, at the heart of Government.

I was pleased to hear that you agree with the concept of a guiding mind for the railway—a unified body able to direct services in the interests of passengers. I want to point to the specific provisions in the Bill that relate specifically to passenger experience. One of GBR’s duties is to promote the interests of users and potential users of the railway, including those with disabilities, and clause 18(3) talks about having reliable services, and the avoidance and mitigation of passenger overcrowding. Does what is contained within the legally binding duties on GBR reflect the overall aspiration to have a unified railway with the passenger at its heart?

Richard Bowker: Yes, I think it does. There is a danger in being overly prescriptive about how you do those things, but the duties are fairly widely drafted, and they probably do do that. Much of this will depend not so much on what the Bill says GBR’s duties are; they are pretty clear and comprehensive. It is about how it is then structured to go on and do these things. Previous panel members talked about culture and behaviour, and those are really important. So, yes, I think the duties are broadly fine.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from the Department for Transport. We have until 5.55 pm for this panel. Ministers, you have both participated in today’s sitting, but could you please briefly introduce yourselves for the record?

Keir Mather: My name is Keir Mather. I am the Minister for Maritime, Aviation and Decarbonisation at the Department for Transport and the lead Minister for the Bill.

Lilian Greenwood: My name is Lillian Greenwood. I am the Minister for Local Transport, and I am assisting as a Minister on the Bill.

[Jerome Mayhew]

Q Right. Actually, I am slightly surprised, because this is an unusual process; it was a Tony Blair innovation that we got rid of. We did not think it had much purpose, but we will find out in the next few minutes, won’t we?

We have heard lots of evidence, and some clear, consistent themes have risen out of it. If you have read the Transport Committee’s report on this issue from a few weeks ago, as I am sure you have, you will know that the sector is giving the Government a few messages very loud and clear. We will discuss those a little bit, but the secret question is: So what? What are you going to do about it? That is what I hope you will come back to.

A level playing field is fair and without discrimination. There is a structural conflict of interest between GBR as the holder of the ring and GBR as an operator—for example, in the relationship with open access, with freight and with independent retailers. Each one of those—they are sectors, not individual organisations—has profound concerns about a structural conflict of interest that has been deliberately built into the Bill.

Combined with that, there is an appeals process that is not worthy of the name. We can say that it is robust, but we all know that it is not. It is very, very tightly defined. It relates only to areas of law; there is no appeal on the merits at all. GBR is judge, jury and gamekeeper, as well as participant—that is a slightly mixed metaphor, but you get the point.

With the defenestration of the Office of Rail and Road as an economic regulator, the independent arbiter of the relationship with GBR is now gone. You have heard the evidence. What are you going to do about it?

Keir Mather: It is a very good question, Mr Mayhew. It goes to the core of the differing ideological perspectives that underlie the debate we have had today on the Bill. Although you see the state seeking to take too much control and giving itself an unfair advantage, our perspective on why this legislation is so important is that passengers—who are ultimately both people who pay for services on the railway and taxpayers who end up funding those services more often than not under this broken rail system, and will do once GBR is established—deserve a good service. We believe that having a unified service with a single guiding mind to bring track and train, passenger services and infrastructure together under one roof, with one point of accountability, is the best way to achieve those aims.

You asked me what we are going to do about the concerns raised today. It is my obligation as a Government Minister to address them, to explore ways in which we can allay them further and to progress the work the Department is already taking on through its stakeholder engagement, whether that be on the freight target or the rolling stock and infrastructure strategy, to make sure that stakeholder concerns are heard.

On the principle of fairness and transparency as it relates to ticketing and third-party access, it is worth making the point that GBR is, by public law principles, obligated to have regard to fair and transparent processes as part of how the system works. On access and appeals, that is a real point of contention, which we will explore throughout Committee, but I heard the concerns raised by freight stakeholders and others.

I want to take this opportunity to be really clear that the Department’s very firm view is that clauses 60 and 63 are not in contention with each other and that Great British Rail has the ability to decide what constitutes best use of the railway, in a way that not only meets its duties, but balances opportunities for GBR services, rail freight and open access alongside one another. The clauses provide an opportunity to appeal on the basis of whether that has been followed, through the ORR, but also a robust process, once that allocation has been determined, to figure out whether GBR has been compliant with the law, as of course we always expect it will be.

Overall, this is a point of ideological difference that exists between our two parties. Labour believes fundamentally that you need one point of accountability and that the Government need to take a more proactive role in fixing this broken rail system. I am really pleased that this piece of legislation seeks to achieve what I think are very noble aspirations.

[Jerome Mayhew]

Q The question I asked had absolutely nothing to do with ideology or the unification of track and train; it is a fundamental question of fairness. The Government have decided that this is the route they want to go down. I may disagree with that, but that was not my question. Having decided to go down this route, it must be the Government’s intention to be fair and to treat participants in the rail sector that are not being nationalised—that is 60%, by the way; correct me if you have secret plans to nationalise the rest of it as well, because so far you have not told me or anyone else—fairly.

The Bill has designed in a structural conflict of interest, as we have heard many times from all sorts of different people. Given that the Government have taken that decision, my question has nothing to do with ideology—it is practicality. What are the Government planning to do to reassure that 60% that they will not be steamrollered by a GBR that says, “We are the masters now. We can do what we like and there’s no effective right of appeal, so suck it up.”?

Keir Mather: I would point to the extremely robust suite of accountability measures that sit within the Bill as it stands. If you look at the legally binding duties GBR has in how it undertakes its work, one of those, which came out in our discussion with the ROSCOs, is to ensure that those who provide railway services can plan the future of their business with a reasonable degree of assurance. GBR is bound to meet a freight target set by the Secretary of State; it is legally bound to meet its duty to promote the interests of freight and, in clause 60, through the design of the best use of the railway as GBR sees it, it must give equal regard to users of the railway. Open access operators and freight are included as part of that mix.

However, we also need to think about what this legislation does in the future and how that contrasts with the situation now. The ORR had to turn down a number of open access applications on the west coast because we had insufficient capacity in our rail network. I do not understand how that constitutes fairness or competitive advantage for open access operators—it means that they are locked out of providing services and turning a profit by a rail system that is failing.

GBR having the capacity to manage, within one centralised function, capacity on the railway overall allows us to unlock those benefits, in partnership with mayoral combined authorities, but with a robust set of accountability measures to ensure that it is compliant with the law, compliant with its duties, and compliant with the aspirations of the Secretary of State, irrespective of their ideological predilections. Hopefully, that is an adequate answer to your question.

[Jerome Mayhew]

Q Do the Government want private investment in the railway to continue?

Keir Mather: Absolutely. It is fundamental that that investment continues, both on the—[Interruption.] Sorry— I will just say this very briefly and then let you come back. On the rail freight point, where we have a target in place allowing us to boost the amount of goods moved by train, it might create more capacity for open access to work on the network, but the infrastructure delivery and the long-term rolling stock strategy that accompany this legislative piece of work also offer the private sector a real opportunity to play in the future of our railway, as I see it.

[Jerome Mayhew]

Q They do not agree, do they? We have heard stark evidence today that the lack of a level playing field and the lack of advanced sight of where this legislation is going are making investment in the railways less likely, not more likely. That is the evidence of the sector that you have heard today. You can put your fingers in your ears and say something different, but that is the evidence that we have heard.

Whether it is the access in use concerns, the failure of the appeals process to be anything worthy of the name, or the fact that the proposed powers for the Secretary of State to change without notice access in use, taken in combination, the evidence from multiple witnesses today was that the Bill does not make it easier. Are you going to listen to them, or are the Government going to pursue their dogged insistence that everyone else is wrong and they are right?

Keir Mather: If you take something like the rolling stock and infrastructure strategy, the consultations are undertaken in close partnership with the private sector. If you are asking me whether it is going to be easier in the long term, with GBR created, for private sector operators to engage with a level playing field, I think that it will be. I think that it creates a very clear structure of accountability measures, clear metrics by which decisions are taken and robust accountability, if GBR does not meet its obligations under the access regime, to make sure that it does things correctly, especially on the matter of access.

I think it is important that we dig into this further, because it came out consistently with the freight operators. GBR has to decide how it meets its capacity duty once it has decided what best use of the railway constitutes. That is a really important safeguard that is built into the Bill. The Secretary of State gives GBR its funding envelope through the business plan, and needs to ensure that GBR will deliver the services that it has said it will. It is therefore very important to have that capacity duty in place, but that is after GBR has made a determination, while balancing its existing duties and its need to promote freight and service providers on the railway, on whether or not those services stack up.

I think that the accountability process and appeals process are very clear, and give private operators multiple points to raise concerns, and robust enforcement measures for the ORR to substitute decisions and ask GBR to think again. The point about thinking again is very important, because we want GBR to improve as an organisation, and to become more agile and more responsive to the needs of the private sector, and the appeals process facilitates that.

[Olly Glover]

Q You have both been very clear, and so has Lord Hendy, that a key intention of the Bill and the creation of GBR is to better integrate infrastructure and train operation. If that is the case, why has funding for passenger services been excluded from the periodic review process of GBR’s infrastructure costs? Does separating those funding streams undermine the goal of a truly integrated railway?

Keir Mather: That is a really important point. I hope that you feel that the human side of the equation, in terms of furthering the interests of passengers through the duties, is embedded in clause 18, but I take your point about the funding envelope, and the way that passenger services are funded via the spending review period set by the Secretary of State, as opposed to infrastructure more broadly. The reason for that in the immediate term is that the procurement and delivery of passenger services is a far more complex and changeable process to work through than the delivery of long-term infrastructure, or other functions that sit under GBR.

In the future, we can certainly get into a debate about whether passenger services should be funded in a similar way to other aspects of GBR’s operation, but for the moment, and after GBR is stood up, which let us remember is in quite short order after the passage of the Bill, in around 12 months’ time, the Secretary of State needs to be able to determine that passenger services offer value for money. It is therefore right that she retains more control over the funding envelope for those services at that stage. We can certainly take the debate on how that should change in the future forward as part of this Committee. I would be very keen to explore it further.

Railways Bill (Third sitting)

Jerome Mayhew Excerpts

Committee stage
Thursday 22nd January 2026 Public Bill Committees

[Laurence Turner]

It is a pleasure to serve under your chairship, Mrs Hobhouse. At the outset, I wish to declare that I am a member of Unite.

It is a privilege to speak at the start of these proceedings. I do so as a believer in public ownership of the railways not as an end, but as the best means of realising greater economies for taxpayers and improvements for all those who rely on the railways for livelihood and leisure. I am conscious that the Committee has much work ahead of it, so I will keep my explanation of the amendment brief.

Public ownership is the ballast of the Bill, but its clauses make only limited reference to ownership, although the drafting logic for that may be good—the Bill must, after all, be read alongside the previous enabling legislation passed by Parliament, the Passenger Railway Services (Public Ownership) Act 2024 and the now much amended Railways Act 1993. In 2024, Parliament’s decision and intent were clear: passenger services are to come under public ownership as franchises expire. I must admit, however, that I start our proceedings under the shadow of a doubt. On my reading, there is a risk that the requirements of public ownership that sit outside this Bill may be time-bound, designed for the specific circumstances of transition, and dependent on definitions in statutory instruments that are themselves at risk of amendment or repeal without full parliamentary scrutiny.

I freely acknowledge that some members of the Committee may take a different view of the merits of the ownership question, and I am sure that we will have good and respectful debate on the Bill’s provisions in the weeks ahead, but surely we can all agree on one point: such an important decision as public or private ownership should be taken only through primary legislation. To put it another way, were a future Government to seek to return to a privatised model, they should be obliged to seek majority consent in the full House. That is what the amendment seeks to achieve.

The amendment would require Great British Railways to be a wholly and nationally owned public sector entity. Indeed, it would cease to be GBR if it were sold in whole or in part. The amendment would also, I think, prevent a future Secretary of State from taking the extremely perverse step of removing GBR’s designation as a public sector body and transferring it to a private or semi-private entity.

If the wording of the amendment seems familiar to hon. Members, it will be because they have been paying close attention to other legislation. Clause 1 of the Bill is effectively identical to section 1(1) of the Great British Energy Act 2025. The amendment is a near carbon copy—I am sorry to all members of the Committee, but we are only at the start of our descent; I cannot promise that the puns will improve as we go on—of the subsections that follow in section 1 of that Act. I note that in the equivalent Committee debate for that Act, the sponsoring Minister, the hon. Member for Rutherglen (Michael Shanks), said:

“The clause protects the principle of public ownership by making explicit that the company would terminate if it ceased to be wholly owned by the Crown.”––[Official Report, Great British Energy Public Bill Committee, 10 October 2024; c. 91.]

I accept that we are seeking to build on a complex body of legislation; the railways are the accumulation of two centuries of history, and so are the laws that govern them. If—I emphasise that word—a drafting issue has been identified, we also need to identify the right solution for this specific legislation. I am grateful to the Minister in the Commons and to the Minister of State, the noble Lord Hendy, for their thoughtful conversations on this matter. I am also grateful to the officials who have worked hard to prepare this commendable Bill. My motivation in tabling the amendment is to establish beyond doubt that the Bill will achieve its aim: that Great British Railways will be run by and for the nation. If we can assure ourselves of that, I believe that this legislation will set out a permanent way for reform. I will listen carefully when the Minister responds.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

It is very nice to have you in the Chair, Mrs Hobhouse. I think this a conversation among Labour Members, and I do not want to get in the way of a private dispute. I might just sit down and listen to what the Minister has to say.

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I want to speak in favour of new clause 24, which I will press to a vote when the time comes, because, as I have said in other forums where the Minister has been present, one of the Liberal Democrats’ big concerns is the Secretary of State’s power over GBR as specified in the Bill. I have given many examples previously of past poor state-led decisions, and fear I will do so again during the Committee’s discussions. Of course, there are lots of problems with private sector railways, but there have also been lots of public sector problems, too, whether with fares, rolling stock or infrastructure.

Our proposal would increase the transparency and accountability of the Secretary of State’s decisions. It would not prevent any of those decisions, but it would create a vehicle for them to be properly discussed. We propose creating a Great British Railways board. If the Secretary of State went against the advice of that board, the reasons for that would need to be communicated. The people serving on the board would represent GBR, but also other key stakeholders in the running of the railway: open access passenger operators, freight operators, the Office of Rail and Road, the passengers’ council and organisations that represent passengers with accessibility requirements. The board would comprise at least six members. To make sure that there is a voice for the other stakeholders that GBR needs to work with and serve, no more than half the board’s membership would be employed by, or otherwise represent, GBR.

It would be for GBR to determine the frequency of board meetings in any year. Any decision or direction from the Secretary of State concerning GBR would be notified to the board prior to being made, and should be made only if a majority of the GBR board approved it. The board would need to publish any decision or direction it considered, and whether it had approved any such decision or direction. If the board did not agree with the Secretary of State, the Secretary of State would be free to go ahead with whatever they decided to do against the views of the GBR board, which we hope would be made up of experts from both GBR and elsewhere, but would need to publish a statement setting out their reasons for that.

That is a summary of our proposal. I look forward to hearing the Minister’s comments.

[The Chair]

I call the shadow Minister, who wishes to speak to new clause 38.

[Jerome Mayhew]

I do. I apologise to the Committee; I erroneously thought that we were dealing with amendment 257 in isolation.

There is huge interest in this Bill, which will directly affect lots of people. It will affect the employees, of course, as well as Network Rail, the train operating companies, the remaining franchisees and those already in the public sector, freight and open access operators, the mayoral combined authorities, Transport for London, High Speed 1, the huge supply sector, the trade unions and many others—and that is before we even start to consider passengers. This is a generational change in the organisation of the railways, and it is crucial that the Government do not mess it up.

One of the key themes that will run through a lot of our conversations over the coming four weeks is accountability, and new clause 38 would address just one small part of that issue by requiring a ministerial statement, once a quarter, on the progress of the setting up of GBR and its becoming fully operational. There is huge public interest in the Bill, which must be successful, so it would be sensible for the Minister to come to the House and make a statement. That would increase transparency, maintain focus and prevent drift.

Mrs Hobhouse, can you give me some guidance? Are we going to talk about the clause more widely later, or should I deal with that now?

[The Chair]

That is for now, but the vote on the new clause will be much later.

[Jerome Mayhew]

Thank you.

We have this generational change in the organisation of the railways; the Government, with their majority, have taken a political decision to nationalise the sector. We know that nationalisation of the railways has been tried before. They were nationalised in 1950 or 1951—

[Laurence Turner]

It was 1948.

[Jerome Mayhew]

The hon. Gentleman is quite right. From 1950, we had the high point of post-war passenger numbers on the railways—about 1 billion passengers. From that period of nationalisation, the number of passengers choosing—I use that word advisedly—to use the railways started a long and seemingly unstoppable decline. It went from 1 billion in the early 1950s all the way down to about 735 million in the period of privatisation—1993. It seemed like that was due to the public changing the way in which they chose to live their lives. The Under-Secretary of State for Transport, the hon. Member for Nottingham South, suggested from her seat on Second Reading that it was obvious that people did not want to use the train so much, even during a period of increasing population, because they were increasingly affluent and they bought more cars. That is a possible explanation.

But then something very odd happened. In 1993, the then Conservative Government legislated to privatise the railways. Now, we can debate—and I am sure we will multiple times over the coming days—whether that was a good or a bad thing in principle and whether the way the privatisation was done, through the Railways Act 1993, and subsequently amended was perfect or whether it could have been improved upon, but if we consider that the primary objective of a railway—leaving freight to one side for a moment—is to carry passengers, the data shows that the privatisation of the railways in the United Kingdom was an unqualified success. The seemingly inevitable decline in passenger numbers changed direction immediately. It was not just a slow bottoming out; that long-term decline immediately turned in the other direction, and then continued to grow until covid meant that all bets were off from 2019. Those numbers did not just grow to recover all the lost work of the previous 40 years—they did not go back up to 1 billion customers; they increased to 1.75 billion. That was a period of increased affluence, when the number of cars available to passengers increased enormously. The only explanation for the absolute reversal in passenger numbers is the decisions taken through privatisation—the profit motive and the incentive to focus on passengers rather than on the organisation.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. May I begin by saying how much I look forward to working with all members of the Committee as we advance the priorities in the Bill and hopefully have a robust debate as we do so?

First, I turn to amendment 257 tabled by my hon. Friend the Member for Birmingham Northfield. I also want to reciprocate his warm words about the conversations he has been able to have with me and the Rail Minister Lord Hendy on this provision. Let me reassure him that public ownership of our railways is what the Government are delivering, as set out in our manifesto, and that we are steadfast in our commitment to it. We are already seeing the benefits of bringing train operators into public ownership, with passengers being put back at the heart of the rail network. Passengers can now use their tickets on another public sector operator at no extra cost during disruption.

Through working with Network Rail, Southeastern increased capacity to popular seaside spots in the summer months. Since moving into public ownership, South Western Railway has more than quadrupled the number of new Arterio trains in service, directly benefiting passengers. Public ownership sits at the heart of the Bill, as my hon. Friend notes is the case in other legislation passed by this Government, to ensure that we gradually take our railways back into public ownership in the interests of passengers. However, I take his point that it is important to safeguard the legacy of these essential reforms for generations to come. I will take that thought away. In the meantime I encourage him to withdraw his amendment.

New clause 24 would require the Secretary of State to appoint a Great British Railways board to advise the Secretary of State on decisions taken in respect of Great British Railways, with representation from various industry groups. I feel that is unnecessary and would distort the clear accountability framework established in the Bill. To be clear, a highly skilled board that can hold to account the executive of Great British Railways will be crucial to delivering an improved railway. The GBR board will be made up of experienced people with diverse backgrounds who can be the voice of railway users. Where the Secretary of State is concerned about the performance of GBR, she will be able to raise these matters with the chair of the board. The chair will be able to advise both the Secretary of State and GBR’s chief executive officer on options for resolution and will be expected to ensure they are acted on, all without the need for a direction.

[Jerome Mayhew]

I am grateful to the Minister for giving way. I recognise that improvements are needed for the drafting of the board were it to go ahead. He makes reference, however, to the board of GBR and that it will have a number of directors on it. In normal circumstances that would include a number of non-executive directors outside the main organisation. Will the Minister confirm that that is the intention for this board? If it is the case that external non-executive directors are anticipated for that board, could he go down the list in new clause 24(2)(a) to (f) and describe whether those are the kinds of organisations that might be represented in a non-executive capacity on the GBR board?

[Keir Mather]

It is my understanding that the process of appointing non-executive directors on GBR’s board will be followed in the normal way. I expect departmental processes to find a range of candidates with experience of both the private sector and public institutions, to ensure that GBR is an agile organisation that provides value for money for those who fund the railway and, most importantly, accountability through the Secretary of State, as well as having a mind to furthering the interests of both open access operators and the freight sector within the operation of GBR.

--- Later in debate ---

[Keir Mather]

Amendment 164 will enable the Secretary of State to appoint GBR as an agent to undertake certain activities on her behalf—for example, to manage outstanding contractual arrangements associated with the winding down of the franchising regime while the industry transitions to the new arrangements. It may be appropriate for GBR to do that if transfers of staff from the Department into GBR have already happened, for example. It would also ensure that GBR can effectively co-ordinate the winding down of franchises alongside its new management of services. This is a technical measure that supports a seamless transition of work and resources into GBR.

The amendment also clarifies that Scottish Ministers and Welsh Ministers can delegate their functions to GBR under clause 4, or enter into agency agreements with GBR if desired. That is already the Bill’s intention, but the amendment ensures that the Bill is clear and readable.

Clause 2 sets out GBR’s relationship to the Crown and the civil service, establishing it as an independent body. It will not be part of the Crown or act as the Crown’s agent or servant and its employees will not be civil servants. Additionally, the clause confirms that the Secretary of State, Scottish Ministers and Welsh Ministers will not be considered shadow directors for the purposes of the Companies Acts.

The clause is essential in setting up GBR and laying out how it will operate. I urge the Committee to support the amendment and the clause.

[Jerome Mayhew]

I enjoyed listening to the Minister read out the explanatory notes; we are all under no illusion as to what clause 2 stands for. The Opposition think it is eminently sensible—in fact, it lifted directly from the structure proposed by the previous Conservative Government for the draft Rail Reform Bill. Government amendment 164 appears to be a clarifying amendment to help with the dotting of i’s and crossing of t’s and we have no objection.

[Keir Mather]

I thank the hon. Member for his constructive engagement on the amendment and the clause.

Amendment 164 agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Clause 3

Functions

[Jerome Mayhew]

I beg to move amendment 2, in clause 3, page 2, line 15, after “sale” insert—

“by promoting a thriving competitive market in the retail ticketing market”.

This amendment makes Great British Railways’ duty to promote a competitive retail market explicit and aligns the Bill with the Government’s stated aim of delivering a system where competition drives better outcomes for passengers.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 131, in clause 3, page 2, line 27, at end insert—

“(2A) Great British Railways’ function under subsection (1)(d) must be exercised in accordance with the findings of the report published under section [Report on Great British Railways’ ticketing function].”

This amendment is related to NC9 and requires that GBR exercises its ticketing function in accordance with the findings of the report detailed in that new clause.

Amendment 117, in schedule 1, page 58, line 6, at end insert—

“including requirements to promote a fair and competitive retail market that treats all market participants, including Great British Railway’s retailing function, on a fair and equal basis.”

This would ensure the Code of Practice to explicitly include a duty for GBR to safeguard a level playing field for third-party retailers and confirms that GBR Retail must itself comply with the Code.

New clause 9—Report on Great British Railways’ ticketing function—

“(1) Great British Railways must prepare and publish a report on how it will exercise its function under section 3(1)(d) of this Act (the ‘ticketing function’).

(2) A report under this section must include plans for Great British Railways to —

(a) introduce a cap on fare increases not exceeding the rate of inflation, applicable to and reviewed as part of each 5-year funding settlement for the railway,

(b) extend, and where not currently provided for provide, a 50% discount on all train fares for passengers aged under 18 years,

(c) establish a tap-in tap-out method of ticketing across England, Wales and Scotland,

(d) guarantee that any fare offered to passengers for purchase via any means is the best value fare, and that there is no inequality in fare for the same ticket when purchased via different means,

(e) introducing a National Railcard across England, Wales and Scotland,

(f) enable open-source access to Great British Railways’ ticketing systems and rates databases for third-party retailers,

(g) collaborate with local and regional transport authorities to enable multimodal ticketing between railway passenger services and local bus, light rail and other public transport networks, and

(h) take all reasonable steps to simplify fares and remove barriers to travel where a single journey undertaken by a passenger involves travel on—

(i) multiple rail services, or

(ii) at least one rail service and at least one additional form of public transport.

(3) For the purposes of this section the rate of inflation is calculated in accordance with any increase in the Retail Price Index.”

This new clause would require GBR to report on how it will undertake its ticketing function. It requires GBR to set out how it would cap fare increases; extend children’s discounts; provide that a single best price is available across ticketing mediums; and provide access to systems for third-party retailers.

New clause 3—Great British Railways retail requirements—

“(1) Great British Railways Retail is subject to the same conditions, standards and transparency requirements as all other accredited retailers.

(2) Conditions, standards and transparency requirements as set out in subsection (1) include equal access to—

(a) fares,

(b) products,

(c) technical systems, and

(d) data feeds.”

This new clause clarifies that Great British Railways Retail is subject to the same conditions, standards and transparency requirements as all other accredited retailers, including equal access to fares, products, technical systems and data feeds.

Amendment 132, in clause 92, page 54, line 5, at end insert—

“, except that section 3(1)(d) may not be commenced until any report under section [Report on Great British Railways’ ticketing function] has been published.”

This amendment is related to NC9 and requires that ticketing functions for GBR may not be commenced until a report under that new clause has been published.

[Jerome Mayhew]

This is where things liven up a bit. We have had the preliminaries; now we are going to get into the meat of the debate.

Clause 3 is where the Government set out the proposed functions of GBR—the list of activities that GBR will be expected to undertake to fulfil its purpose. I use the word “purpose” with some hesitation, because of course no purpose for the organisation is set out in the Bill. The Opposition will seek to address that in a new clause. What is contained within those functions, as well as what is not there, tells us a lot about the Government’s priorities. This is going to be quite illuminating.

--- Later in debate ---

[The Chair]

Order. We will debate clause 3 later. We are currently considering amendments 131 and 117, tabled in the name of the Liberal Democrat spokesperson. Will the hon. Member direct his remarks to those amendments, please?

[Jerome Mayhew]

I am grateful for that direction, Mrs Hobhouse, but it is quite hard to talk about amendments if we have not considered what is in the clause. I fully accept and follow your guidance that the decision and debate on clause 3 as a whole comes later, but to address amendments to a clause I have to discuss the clause as a whole.

[The Chair]

I can only advise the hon. Gentleman on how we are going to take the debate forward, but I hear what he says. It would be helpful if he could allude to the amendments we are discussing.

[The Chair]

We are.

[Jerome Mayhew]

In which case, I will speak first to amendment 2, as that is first in the grouping, and then proceed to the others.

Amendment 2 would make explicit the duty of Great British Railways to promote a thriving, competitive retail market, and align the Bill with the Government’s stated aim of delivering a system in which competition drives better outcomes for passengers. The retail market in the UK is currently one of thriving competition, as we can all recognise, and shows UK tech at its best. Trainline is—I think I am right in saying—a FTSE 250 company, and a tech growth story for the United Kingdom, being Europe’s leading train and coach app. The amendment is therefore key to ensuring that the landscape continues to thrive and that we do not drive Trainline and its competitors out of the country.

Members will remember that in written evidence to the Transport Committee, Trainline asked that Committee

“to recommend that the Bill be amended to require structural separation of GBR online retail from the rest of the GBR organisation and to publish information that enables the ORR, CMA and other regulators to assess compliance with competition law, subsidy control rules and non-discrimination duties. This should not be left to the Code of Practice alone”—

and, by the way, we have not seen the code of practice.

Trainline also said:

“We ask that the Committee recommend that the Bill include a statutory duty that all retail market participants—including GBR online retail—are treated fairly, equally and non-discriminatorily, and that GBR online retail be subject to the same Code of Practice as all other retailers…We ask the Committee to recommend that these economic parity safeguards, including structural separation of GBR’s online retail business, be written into the legislation and the forthcoming Code of Practice…We therefore ask that the Committee recommends…An explicit ORR power to impose binding orders or financial sanctions if GBR breaches its licence or the Code. ORR’s competition duty should explicitly apply in respect of these functions and GBR’s licence…Provision for an appeal body (for example the CMA or the Competition Appeal Tribunal) to hear merits of disputes…The Code development process must be led by ORR, independent of DfT and GBR. It must ensure full stakeholder consultation, clear timetable, transparent publication of decisions and mechanisms for future amendment.”

Members may say, “Well, they’ve got skin in the game, haven’t they? They’re a commercial organisation trying to compete with the future GBR, so it will be in their interest to try to fix the corporate structure in a way that gives them an unfair advantage.” But if we look at what Trainline is asking for, we see it is not seeking to gain an unfair advantage. It is merely asking GBR to create a level playing field. Trainline is not the only organisation making that argument; it is joined by others.

[Laurence Turner]

The hon. Gentleman said a few moments ago that Trainline and other online retailers are not seeking to make ill use of their market position, but the Advertising Standards Authority has ordered Trainline to amend its adverts, and the ORR ordered it to amend its practice of not showing booking fees at the start of the booking process. In oral evidence to the Transport Committee, Trainline accepted that its market share was significantly above the 25% test that the Competition and Markets Authority applies for a potential monopoly position. Does that concern the hon. Gentleman at all?

[Jerome Mayhew]

That demonstrates that the current system is working to hold Trainline to account, and that where there are abuses—if what the hon. Gentleman outlined amounted to abuses—effective systems are in position and they have been corrected.

The hon. Gentleman’s intervention did not speak to the overriding point: what do the Government want when they are applying this new structure to retail? Do they want a level playing field? Is that their intention, or do they want a systemically biased system in which GBR retail is given an unfair advantage over independent competition? Both answers are credible—it is possible for the Government to form one decision—but they should not pay lip service to a level playing field but, in design, achieve the opposite, which appears to be the case at the moment.

In oral evidence to the Transport Committee, Ben Plowden, the chief executive of the Campaign for Better Transport, essentially agreed with Trainline’s position. He said:

“We think that because the independent retail market has produced significant benefits for customers in the time that it has been in existence. It is heavily used by rail passengers. The critical question in relation to the Bill, and the other mechanisms that will be in place once the Bill has been passed, is how we ensure that there is genuine fair and open competition between GBR ticket retailing and the independent retailers currently or potentially in the market.”

This is a key point: the Government need to stop and think about what their intention is. If it is to have a fair market, the evidence, and all the feedback they are getting from the sector, is that they have not yet achieved that objective. They need to put their money where their mouth is and decide what their objective is. I hope the Minister will be clear in his response as to the Government’s thinking on that.

A second concern is that the sector is nervous about the apparent lack of hierarchy and detail in the functions. GBR is assigned multiple duties under the clause, but with no hierarchy, so it paves the way for potential confusion—or, worse, it gives GBR the ability to pick and choose which function it thinks is important in relation to any decision. It can quietly demote the importance of others so that it can serve itself and thereby reduce the power of the clause.

Nick Brooks from ALLRAIL said in oral evidence to the Transport Committee:

“To lead from your further question: with the very broad powers for the Secretary of State and a certain lack of specificity on what will happen, what we are looking for is more key performance indicators, like in business. I realise it is a governmental entity, but the quantitative KPIs are not really there.”

I would go further than that: they are not there at all.

As well as amendment 2, which I have spoken to, we have also tabled new clause 3, which sets out GBR retail requirements. As I have said previously, this is a critical issue given the evidence that the Select Committee received, and the oral evidence that we heard on Tuesday, that the Government have built a structural conflict of interest into the Bill as currently drafted.

We also heard on Tuesday about international examples where a similar concern has been addressed in a different manner. SNCF is a state-owned railway in France that has unification of track and train. It also has a retail function, through which is competes with the wider market. SNCF, or, I presume, the French Government—I do not want to claim greater in-depth knowledge that I actually possess—have taken the decision to have a structural separation between SNCF retail and SNCF operations, the equivalent to GBR. The very obvious reason why they did that was for fairness and to have a level playing field. We are not talking about SNCF, but an improvement on the current position, which I fully accept is not perfect.

--- Later in debate ---

[Olly Glover]

I stand to speak in favour of amendment 131 and new clause 9, and we will push new clause 9 to a vote if you are willing, Mrs Hobhouse. The amendments are intended to encourage GBR to think deeply and creatively about fares and ticketing, reflecting the fact that until recently—more on which anon—rail fares have been subject to above-inflation increases for much of the past 20 to 30 years.

Many passengers feel that they are not getting good value for money and that the current fares and ticketing system requires a PhD in British railways ticketing systems, even for a nerd like me. I recently got caught out because GWR’s peak hour restrictions are utterly baffling and incomprehensible. I do not wish to speak too highly of myself—it is not my style—but if I, someone with the generally not particularly character-enhancing reputation in this place of being a railway nerd, got caught out, it does suggest that the system is too hard to process and needs to change. Given that the car is the default mode of transport for so many people, an overly complicated ticketing system creates a further barrier for people using it. That is why we have tabled amendment 131 and new clause 9.

Our amendments would require Great British Railways to prepare and publish a report on how it will exercise its ticketing functions under section 3 of the Act. Our measures set out various proposals that we would like GBR to consider and which we feel would significantly improve the value for money of the fares system and its accessibility and comprehensibility to everyone using the railway, and help it to draw on best practice from elsewhere—both domestically and in other countries—to improve the current situation.

The report that we are asking for would need to include the following information. To give credit to the Government, they recently embraced a long-standing Lib Dem campaign for a rail fares freeze, for which we are grateful and praise them, but it should not just be a one-off that Department for Transport Ministers somehow managed to achieve the miracle of persuading the Treasury to do it. It is something that we need to think about for the future. On this side of the House we are not so fiscally irresponsible—

[Jerome Mayhew]

I do not wish to interrupt the hon. Member’s flow, but there is a wider point there. The hon. Member is right to mention that the Government have frozen fares, but they have not reduced the cost of providing railway services. All they have done is frozen fares on the one hand and increased taxation on the other—and the taxpayer is having to pick up the difference. Does he agree that what the Government have done is put money into one pocket, but taken it out of the pocket of passengers who are, presumably, taxpayers?

[Olly Glover]

Of course, taxpayers pay for a wide range of services, public or otherwise. Too often, the railway has been viewed almost uniquely, with the high expectation that it covers its own costs. The key challenge with a rail fares freeze is that it needs to be fiscally responsible. While the one-off gesture is welcome, and relieves some of the pressure that has built up over the last few years during the cost of living crisis, our measure for the future is, we believe, more fiscally responsible. A cap on fare increases that does not exceed the rate of inflation should become the default, and should be reviewed as part of each five-year funding settlement.

We also advocate for extending, where not currently provided for, a 50% discount on all train fares for passengers aged under 18 to address the anomaly of fare rates for young people aged 16 to 18. We want a tap-in, tap-out method of ticketing that is consistent across the countries of England, Wales and Scotland.

--- Later in debate ---

[Keir Mather]

Of course, those independent retailers can continue to operate. GBR also has, as part of its duties—the things that it is required to follow by law—an interest in promoting the efficient use of public funds. We also think that there are significant economic benefits that can be realised through consolidation when it comes to aspects of ticketing.

As has been so ably pointed out, taxpayers and railway passengers are the same people. To that extent, people being taken in different directions by a vast variety of ticketing apps, not being able to realise the potential savings that are in place, does them a disservice economically. We believe that consolidation can offer them a smoother experience of ticketing and, hopefully, access to benefits that otherwise they might not be able to realise.

To return to the code of practice, it will be fully consulted on before its introduction, so it would not be appropriate for the Bill to pre-empt the specific provisions that it will contain. However, I can confirm to the Committee that the principles I have set out today, which I believe are consistent with some of the concerns that amendments 2 and 117 and new clause 3 seek to address, will very much guide ongoing work in this area.

On that point, I turn back to one of the comments made by the Opposition spokesperson about his concern regarding the setting of fares. I would like to make clear to him that it is not for the Secretary of State to interfere in day-to-day fare decisions. The Secretary of State will be limited to setting high-level strategic parameters to ensure that fares remain affordable for passengers and sustainable for taxpayers. GBR will make all of the operational decisions within those parameters and changes to those parameters would occur only to reflect GBR’s financial settlement, or in exceptional circumstances. That is, in my view, a necessary and proportionate safeguard to protect passengers, taxpayers and Government money. Therefore, as we are already taking significant and sufficient steps to deliver what the amendment envisages, so I urge the hon. Member to withdraw it.

I turn now to new clause 9 an amendments 131 and 132, which are dependent on it. New clause 9 would mandate the publication of a report covering various elements of GBR’s fares, ticketing and retail functions. Many of the items that this report would be required to cover relate to affordable and accessible rail travel—causes to which the Government are steadfastly committed. Affordability for passengers will be a key consideration when the Secretary of State sets strategic parameters and guardrails for GBR to follow on fares. As the Committee is by now aware, the Bill ensures continued statutory protection for concessionary discounts for young, older and disabled passengers.

Elsewhere, new clause 9 covers matters such as tap-in, tap-out payment and integrated ticketing, as well as third-party retailers’ access to systems and products. On integrated ticketing, we are already working with local authorities to integrate rail with local transport modes—and to trial or expand pay-as-you-go travel where appropriate. We are also progressing evaluations of how different pay-as-you-go schemes impact passengers, and the final reports will be published in due course. This work, which has not required additional legislation, is consistent with the ambition set out in various parts of new clause 9.

In summary, a legislative requirement to publish the envisaged report is not needed to deliver the outcomes that we want to see going forward. With that reassurance, I hope that the hon. Member for Didcot and Wantage will agree not to press new clause 9 to a vote. Amendments 131 and 132 are dependent on new clause 9 and, for the reasons set out, the Government do not believe the report that new clause 9 would require is necessary, so I hope that the hon. Member will also agree not to press these amendments.

[Jerome Mayhew]

I have great respect for the Minister and I hear with interest what he said, but I am not convinced that the sector will receive sufficient reassurance from that, so I intend to push the amendment to a vote. Perhaps others, subsequently, as well, but we will deal with those later.

Question put, That the amendment be made.

Railways Bill (Fourth sitting)

Jerome Mayhew Excerpts

Committee stage
Thursday 22nd January 2026 Public Bill Committees

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I beg to move amendment 241, in clause 3, page 2, line 17, after “including,” insert

“acting in a fair and non-discriminatory manner”.

This amendment would require equal treatment between GBR and non-GBR services.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 3, in clause 3, page 2, line 20, after “services” insert

“managed by Great British Railways”.

These amendments would clarify that the research, advice and standards being published by Great British Railways are related to aspects to part of the railway and railway services which are managed by Great British Railways.

Amendment 4, in clause 3, page 2, line 22, after “services” insert

“managed by Great British Railways”.

See explanatory statement for Amendment 3.

Amendment 5, in clause 3, page 2, line 23, leave out subsection (2) and insert—

“(2) Great British Railways’ function under subsection (1)(a) includes making strategic plans as to the future provision of railways infrastructure in Great Britain and implementing those plans.

(2A) Decisions about access to, and use of, railway infrastructure for the operation of trains will be made by the Office for Rail and Road.”

This amendment aims to ensure that the Office for Rail and Road continues to make decisions about access.

Amendment 6, in clause 3, page 2, line 28, leave out subsection (3).

New clause 15—Great British Railways electrification programme—

“(1) Great British Railways has a duty to publish and adhere to a programme of rail electrification.

(2) The programme must seek to—

(a) reduce cost, and

(b) improve timely delivery of

construction and delivery of infrastructure associated with rail electrification.

(3) The programme must cover a period of five financial years, beginning with the financial year following the financial year in which the programme is first published.

(4) The programme must be published each financial year thereafter, covering the period of the following five financial years.”

This new clause would require Great British Railways to commit to a rolling programme of line electrification.

New clause 20—Great British Railways: environmental targets—

“In the exercise of any of its functions, Great British Railways must take all reasonable steps to contribute to—

(a) the achievement of targets in sections 1 to 3 of the Environment Act 2021,

(b) the achievement of targets set under Part 1 of the Climate Change Act 2008,

(c) the programme for adaptation to climate change under section 58 of the Climate Change Act 2008, and

(d) the achievement of targets set under the Air Quality Standards Regulations 2010.”

This new clause requires Great British Railways to takes steps to contribute to meeting targets set out in existing legislation on climate change.

[Jerome Mayhew]

It is a pleasure to see you in your place, Sir Alec. Amendment 241, in my name, is important, as so many of these amendments are. We heard in both oral and written evidence that lots of people are concerned about the need for this amendment, which addresses the concerns of many in the non-Great British Railways sector, whether Trainline, open access operators, freight operators or the whole supply chain.

The amendment seeks to require GBR expressly to act in a fair and non-discriminatory manner. We had some discussion about that before lunch, but I reiterate the argument that I made. I will seek to press the amendment to a Division if the occasion demands it, but it would send a terrible message to investors in the independent sector if the Government voted down an amendment that merely asks GBR to operate in a fair and non-discriminatory manner.

Amendments 3 and 4 clarify that the research, advice and standards published by Great British Railways are related to aspects of the parts of the railway and railway services that are managed by Great British Railways. Many independent entities, such as freight, open access and the supply chain, as well as other networks, are not managed by or part of GBR. Those entities need to be free to publish their own standards and manage their own innovation and research. The current drafting of the clause is a clear overreach. I suspect that that may be unintentional, so I ask the Minister or his officials to have a think about that.

Additionally, other cross-sector and national standards, such as those managed by the Rail Safety and Standards Board or the British Standards Institution, may be directly legally applicable to GBR itself under, for example, the Railways (Interoperability) Regulations 2011 and the Railways and Other Guided Transport Systems (Safety) Regulations 2006. To avoid conflicts of interest, those cannot be published or managed by GBR itself, so the Minister needs to explain how clause 3 does not involve a conflict of interest. Has he—or, it is probably gentler and kinder to ask, his team—researched those apparent contradictions? If he or they have, perhaps he could set out how those conflicts are addressed in the current wording.

Amendment 5 would leave out clause 3(2) and insert in its place:

“(2) Great British Railways’ function under subsection (1)(a) includes making strategic plans as to the future provision of railways infrastructure in Great Britain and implementing those plans.

(2A) Decisions about access to, and use of, railway infrastructure for the operation of trains will be made by the Office for Rail and Road.”

This would be quite a big change, because it would address head on the structural conflict of interest that has been identified by very many commentators. The role of the Office of Rail and Road is a key concern for the non-GBR part of the industry, which is, after all, 60% of it. By “the role of the ORR”, I do not mean its safety role, which remains almost entirely unchanged; I mean its economic regulator role.

This is not an issue of ideology. Some play has been made about base views on whether nationalisation or privatisation are better or worse than one other, but let us leave that to one side—we have had our fun for the moment. This is a fundamental issue of fairness of procedure, which is necessary irrespective of the ownership structure of the organisation. We all know that Great British Railways will be the dominant operator. That position brings it structural advantages in any event, but it will now be the referee on access as well. That is a direct and obvious conflict of interest, and it is a very odd approach because it is so clearly unfair.

The alternative is to use an independent structure. We would use the ORR because it already exists and does not have to be created, it already has a reputation for independence, and its remit and direction are set by the Secretary of State, so it cannot be a loose cannon.

I accept in part the arguments put forward by the Minister in response to questioning on Tuesday. I recognise that the Government own the infrastructure and the taxpayer has invested many billions of pounds in the railway over time, and I accept that they should decide how those funds are best used. The issue is how the Government look after taxpayers’ money. Is it via a player-referee—GBR—or is it via the Office of Rail and Road, which is itself a governmental organisation, has its remit set by the Secretary of State and is given direction? It is not as though we would be handing the keys to a stranger; we would just be demonstrating the application of a fair and non-discriminatory process by an overtly independent organisation that is itself an arm of the state.

Amendment 5 aims to ensure that the Office of Rail and Road continues to make decisions about access. It is a common theme of the Opposition amendments throughout that we want to ensure that the Bill does not create a GBR with that structural conflict of interest that acts as referee and player. I intend to press the amendment to a Division, should the opportunity arise.

Finally, I turn to amendment 6, which would leave out clause 3(3). Subsection (3) is a very broad regulation-making power for the Secretary of State to confer further functions on GBR. It is unrestricted. It reads:

“The Secretary of State may by regulations confer on Great British Railways such other functions relating to railways or railway services as the Secretary of State considers appropriate.”

Could it be any more widely framed? I do not think so. As long as it is something to do with railways, it takes power away from primary legislation and gives it to the Secretary of State to do as he or she will. It is a blank cheque for the Government and, by extension, for GBR. There are no details given as to why it is needed, and no reason why the powers have not already been considered.

We know that the Government have gone off half-cocked with this legislation. By Tuesday’s count, 19 serious documents relating to how GBR will work in practice have yet to emerge. I would be interested to hear the Minister’s justification for subsection (3). Why are the Government so keen to give such overarching powers to the Secretary of State?

Sir Alec, are we also going to deal with new clauses 15 and 20 tabled by the Liberal Democrats?

[The Chair]

Yes.

[Jerome Mayhew]

That is just as well, because I am going to leave those to the Liberal Democrat spokesman, but I will be happy to support new clause 15 should he be minded to press it to a vote.

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairmanship, Sir Alec. I wish to speak to new clause 15. In doing so, I must ask the Minister for his assistance with either a medical or a political problem—I am not entirely sure which it is, because I cannot get a GP appointment in Didcot as we do not have a GP surgery on Great Western Park, but that is an issue for another time. In the absence of a GP appointment, I really hope that the Minister will be able to save me from sullying my reputation. In speaking to this new clause, I find myself at risk of having to say something positive about the Thatcher Government, which is obviously somewhat politically embarrassing.

New clause 15 proposes adding a rolling programme of electrification to the Bill. The reason that I may need to say something nice about the Thatcher Government is that according to figures that I have looked at, nearly 3,000 km of railway was electrified under that Government during the 1980s, to which the just 170 km electrified under the 1997 to 2010 Labour Government compares very unfavourably. That perhaps comes as quite a surprise, given that there was significant economic growth during that later period, at least compared with today—[Interruption.]

--- Later in debate ---

[Jerome Mayhew]

Correct me if I am wrong, but my recollection of Sir Andrew Haines’s oral evidence is that he gave an example of the experience not just on continental Europe, but in Scotland, where a steady-state period of electrification resulted in significant reduction of the cost per mile when compared with the stop-start approach in England. Does the hon. Gentleman agree?

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

It is a pleasure to serve under your chairship, Sir Alec. I thank hon. Members for the amendments and new clauses in the group. Before I turn to amendments 3 and 4, however, I will pick up on a point made by the hon. Member for South West Devon earlier about people across the country having an understanding of GBR and its functions, and knowing how it will impact the railway and their lives. The shadow Minister, the hon. Member for Broadland and Fakenham, has consistently given the statistic that 60% of functions on the railway will still be done by the private sector, once GBR is established—

[Jerome Mayhew]

To clarify, that figure is about not just the private sector, but rail services in Scotland and Wales not being part of GBR. It is the non-GBR parts of the greater rail world: about 60% are nothing to do with GBR.

[Keir Mather]

I thank the shadow Minister for that clarification. I want only to add, as a further clarification, that in the future GBR will account for about two thirds of passenger services in Britain, and GBR infrastructure will make up 90% of station stops. It is quite important to give that level of context, so that people can better understand the impact that these changes in the railway will have on their lives.

Amendments 3 and 4 would limit GBR’s research, advice and standards development functions to only the railway and services managed by GBR. I reassure the shadow Minister that the vast majority of research and innovation carried out by GBR will relate specifically to the services that it provides and the operation and maintenance of its network.

However, research, development and innovation tend to be general in nature and application. It is critical that GBR’s research, development and innovation should be able to support the wider rail network, not just the elements that GBR manages itself. Collaboration between the independent parts of the sector on learning and innovation is, we argue, crucial for the rail network to operate as an integrated whole, and limiting this function could arbitrarily restrain wider adoption of best practice. Various organisations, including Network Rail and train operating companies, currently publish standards adopted on the railway, so this is not a unique or abnormal practice. However, these amendments could arbitrarily constrain it and might even hinder GBR from supporting research that might bring benefits to parts of the network, or services, not managed by GBR.

Amendment 5 seeks to return responsibility for taking access decisions to the ORR. That is one of the fundamental questions sitting at the heart of our debates on the Bill. The amendment is contrary to the Government’s manifesto commitment to establish GBR as the directing mind for the railways. It would reintroduce the fragmentation and conflicting accountabilities that exist in today’s system. At present, there is no single body in charge of taking a whole-system approach to making access work. That leads to conflicting opinions about what services can fit where and when. Differences in view between Network Rail and the ORR cause delays in producing the timetable, hindering efforts to tackle congestion, disruption, cancellations and overcrowding. The current system is not fit for purpose: it lets passengers down every day, and taxpayers are not getting value for money.

In the current system, the absence of a single directing mind, with a single set of objectives, leaves us with ridiculous situations such as the recent 7 am Manchester service that was set to travel with no passengers on it. I do not understand how hon. Members can think that continuing the current system benefits anyone, least of all passengers.

The Government have been clear that for GBR to have the space and authority to take access decisions consistent with the best use of the network, the ORR’s current role must change. GBR must be the decision maker on access; it must have authority and full accountability for what happens on the tracks. The ORR will play a key role as a robust appeals body that ensures that GBR’s decisions are fair. Without one body in charge of taking access decisions, we cannot deliver the performance improvements that we have promised passengers and the public.

Amendment 6 would remove the delegated power for the Secretary of State to confer further statutory functions on GBR in the future. Although clause 3 has been drafted to cover the breadth of activities that we expect GBR to undertake, it is responsible to legislate with proportionate flexibility. For example, in the future there may be new technologies or other responsibilities relating to the railways that GBR would need to take on. We heard in oral evidence on Tuesday that the advent of artificial intelligence and wi-fi are two examples of that type of change, and that witnesses understood the need for this type of flexibility for GBR.

There is precedent for this type of power in legislation. For example, the National Health Service Act 2006 includes a power to add functions to special health authorities specified in regulations. That power is already limited to adding new functions that relate to the railways; any regulations conferring new functions would be subject to the affirmative procedure, which would ensure suitable transparency and parliamentary scrutiny.

Amendment 241 seeks to require GBR to act

“in a fair and non-discriminatory manner”

when carrying out its statutory function in clause 3 —specifically, when GBR is providing back-of-house functions to facilitate railway services run by operators other than GBR, such as a journey planner. The amendment is not needed, because the duties set out in the Bill will govern GBR’s behaviours when carrying out its statutory functions. I assure the hon. Member for Broadland and Fakenham that the duties will require GBR to act in the interests of the public, taxpayers and passengers. GBR will act fairly and in accordance with its duties, not only when exercising this function but across the full range of its statutory functions.

In addition, competition law will apply in full to GBR. This requires GBR to act in a manner that is fair, non-discriminatory and not anti-competitive. Both the ORR and the Competition and Markets Authority will regulate GBR’s behaviour against its competition law obligations, so I hope that hon. Members will be assured that GBR must always treat all private operators with fairness and in a non-discriminatory manner. Given those safeguards, the addition proposed would be duplicative.

I turn to new clause 15, which seeks to implement a statutory electrification programme. Living near Selby station, I know better than most that rail electrification is important, including to realise the Government’s wider goals of decarbonisation. The hon. Member for Didcot and Wantage ably set out the fact that decarbonisation is not the sole efficiency and aspiration that can be realised through electrification. We fully realise the need to reduce the cost of electrification and accelerate the delivery of committed schemes in comparison with past experiences.

We are currently developing a long-term strategy for rolling stock and associated infrastructure. That will be published in the summer and will consider the future approach to electrification. That being said, a legislative duty to carry out an electrification programme is not the right way to deliver these important upgrades. In the effort towards net zero, electrification may not always be the right solution—although the hon. Member for Didcot and Wantage made a well-reasoned case as to how, in many cases, it is. Other opportunities, such as trains powered by batteries, may be more appropriate. It is also hard to predict the pace at which battery technology and other alternative technologies will progress over the next 20 or 30 years, and what that means for the extent of electrification that will be needed as we move towards net zero.

[Keir Mather]

The right hon. Member makes an important point about resilience on the railway; it complements the points made by the hon. Member for West Dorset about the fact that we live in a changing climate. That creates pressing resilience challenges across the breadth of the railway. The right hon. Member makes a good point about not being over-reliant on one technological mode. That being said, I hope that, through an overall transition towards decarbonised rail transport, alongside the other decarbonisation measures that the DFT is taking across the piece, we will be sufficiently resourced, capable and in pursuit of innovative solutions to make sure that electrification can play a prominent part in the future of the railway.

We believe that the way to achieve that is to have something more flexible to future direction and opportunities, such as GBR’s business plan, which is already provided for in the Bill. Of course, the rolling stock and infrastructure strategy might be more appropriate as a way to set out GBR’s plans for electrification rather than their being in the Bill.

We move to new clause 20, which would require GBR to work towards climate change targets. I assure the Committee that the environment will form an important part of GBR’s considerations through various mechanisms already included in the Bill. One of the strategic objectives for the long-term rail strategy will be environmental sustainability. GBR will have a duty to have regard to the Secretary of State’s long-term rail strategy and a general duty to make decisions in the public interest, which includes environmental considerations, when developing its business plan. Finally, it is important to point out that Network Rail is not currently directly obligated to deliver on those targets, but has still published “The Greener Railway Strategy”, which includes targets on net zero, climate adaptation, air quality, biodiversity and other environmental areas.

To conclude, we remain committed to addressing the environmental challenges faced not only by rail, which is already a comparatively green way to travel, but across all transport modes, and GBR will be an important partner in that work. I hope that hon. Members have been reassured and will consider withdrawing their amendments.

[Jerome Mayhew]

It is always a pleasure to hear the Minister explain the Government’s positions, but I remain unconvinced in relation to amendment 241, which I believe is the only one that can be put to a Division at this stage. I would like to press it to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Edward Morello]

Thank you, Sir Alec, for the clarification, and I thank the hon. Member for his question. I understand the premise of the point: whichever number we put in, there is a risk that someone could come up with such an example. I think the point is that, for journeys over 30 minutes, for older passengers, for example, the guarantee of a seat may be an issue of whether they want to travel or not, so we must find a line to draw in the sand; I hope that able-bodied Members would stand up for the elderly, but it is not always the case. I would like us to move to a system where we do not have to stand on trains and where there is an expectation of seating—not least so that the drinks trolley can get through and get a cup of tea to me when I need one.

The charter would also set targets for reliability and a clear timetable for improving passenger accommodation, including seat design, reliable wi-fi and mobile signals, power outlets—I honestly cannot believe we are still questioning whether or not we should have power outlets on trains—luggage and bicycle storage, clean and accessible toilets, and onboard catering for journeys of more than two hours. We must focus much of our innovation on the passenger experience and not just the journey time, whether that is wi-fi for commuting workers or accessible toilets for everyone. Crucially, it would also extend delay repay principles to cover failures in onboard amenities and move towards automatic digital compensation that does not place the burden on passengers to fight for refunds—hopefully that speaks to the teeth that the right hon. Member for Melton and Syston mentioned.

Those are not luxuries. Almost every rail user has stood despite booking a seat, lost their signal mid-journey, missed a connection because of a delay, struggled to find a clean toilet—or a working one—or found nowhere to store a bag, yet too often there is no meaningful redress for those inconveniences. That undermines confidence in the railway.

The data is stark. Only 32% of passengers believe that the rail network meets their needs, and just 59% are satisfied with value for money or onboard internet. Last year, there were more than 62,000 complaints about punctuality, nearly 40,000 about overcrowding, and more than 24,000 about onboard facilities. All those things act as a drag. They are why people do not want to travel on the trains and why they are choosing car journeys instead. If we want people to choose rail for economic, environmental and social reasons, we have to deal with these frustrations as well. New clause 8 puts passengers back at the heart of the system, where they belong.

[Jerome Mayhew]

I am very supportive of the intent behind this new clause. Where the Government have taken the political decision to put all their eggs in the nationalisation basket, it becomes even more important that we add as many clauses to the Bill as possible to force them to focus on the passenger experience.

Nationalisation has been tried before, not just in the railways but in a number of other organisations, and not a single one of them is a byword for individual customer choice, so if experience is anything to go by—and if we are, as seems likely, going to be forced to have a nationalised approach to the railways—the legislation needs to bend over backwards to keep reinforcing the point that the passenger experience is the central element that the organisation should be aiming for.

At the moment, the Government are woefully unambitious in their definition of railway services. If you look at clause 18(3)—which I am sure you have already, Sir Alec—you will see that the definition for railway service performance

“includes, in particular, performance in securing each of the following in relation to railway services”.

I was expecting a long list of all the good things that customers travelling on the railway should expect, but what do we get? We get “reliability, (including punctuality),” and

“the avoidance…of passenger overcrowding”,

and that is it. What poverty of aspiration. It really is very striking.

It may be that the wording of new clause 8 could be improved—I am sure that the Government have the drafting firepower to do exactly that—but what is listed in subsection (2)(c)(i) to (vi) is a good starting point, and certainly much better than what the Government managed to come up with in clause 18. I support it.

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[Keir Mather]

That is a very important point. I thank the right hon. Member for his contribution. The passenger watchdog will have the ability to make sure that GBR is compliant with minimum consumer standards on accessibility and information—this will be an independent power to directly monitor the passenger experience—as well as investigation powers, including to demand information by a deadline. It will be fully established within 12 months of Royal Assent of the Bill, so it will be stood up quickly to provide the oversight that it needs to provide.

The Secretary of State will also have the opportunity to prioritise the needs of future passengers through the long-term rail strategy, as well as her statement of objectives, which must be addressed by GBR in its business plan, which itself must be signed off by the Secretary of State under the new funding process. It would therefore be inefficient and duplicative to create yet another document to achieve the same aims.

Let me turn briefly to delay repay. The passenger watchdog can set standards that relate to delay repay. It is namechecked as an example in clause 46, and delay repay will still be available under GBR. The Opposition spokesperson—

[Jerome Mayhew]

Shadow Minister.

[Keir Mather]

Forgive me. The shadow Minister points to the fact that we have, in his view, a dearth of ambition when it comes to what we have set out in clause 18. I would actually argue the inverse—the standards set out in clause 18 relating to reliability of services, avoiding overcrowding and promoting the passenger experience are fundamental to creating the turn-up-and-go railway with a single directing mind that GBR seeks to achieve.

At the heart of it, these are the fundamental building blocks of the passenger experience. Layer on top of that the ways in which GBR will be nimble and dynamic enough under this legislation to lay out the passenger offer over time, and that creates a suite of measures that allow us to enhance, in the whole, the passenger experience. On that basis, I urge the hon. Member for Didcot and Wantage to withdraw the amendment.

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[Olly Glover]

The length and complexity of this amendment mean that hopefully I will be able to relieve hon. Members by making a very concise speech. The Liberal Democrats welcome the Government’s commitment to a freight growth target as part of GBR. It is good that we have greater ambitions for the carriage of rail freight on our rail network, which tends to lag behind most European competitors in modal share. However, we think that the Bill has missed an opportunity by not including a comparable target for passenger growth. I have heard the argument made in front of the Select Committee and other forums that that could compromise or undermine the freight growth. I disagree with that premise. As so often in life, it is not either/or; it is both/and. Railways are useful for both passengers and freight.

Freight is arguably neglected on our network and the economic and environmental benefits are absolutely enormous, especially if electrically hauled. One freight train is able to convey many containers or aggregate wagons and take dozens of lorries off the road. We therefore very much support the freight growth target, but feel that there should also be a passenger growth target. Many of our roads are plagued by congestion and many people opt to take the car who, in other circumstances, would like to take the train, but have either had negative experience of overcrowding or fear that they could be subject to overcrowding and a bad experience. Amendment 133 would require GBR to set a target for increasing passenger traffic and publish progress in relation to how it will achieve that. I think that I have said more than enough and am very interested to hear the Minister’s comments.

[Jerome Mayhew]

The official Opposition, strongly support this amendment because it seeks to increase passenger traffic on the railways, in addition to the welcomed inclusion of an objective to increase freight. We agree with it so strongly because it is almost identical to our amendment 35, which I shall also speak to. Amendment 35 would add a specific requirement to subsection (2) paragraph (b) of clause 18—the duties clause—for GBR Ministers and the Office of Rail and Road,

“to increase the number of passenger journeys”.

This directly addresses the concern raised by the Campaign for Better Transport in the evidence received by the Committee. It is an essential amendment to ensure that GBR has a key focus and aim to increase passenger numbers—something that is essential for a railway. It would ensure that the dominant culture of GBR is not one where passengers are seen as creators of damage to infrastructure.

That is not a loose accusation that I have made; I have been listening to the industry for over a year now. The core structure of GBR is Network Rail. I know that I am bound to be corrected if I get this even a couple out, but I believe that Network Rail has about 41,000 members of staff. Network Rail is the central body to which train operating companies have been added at a rate of about one every six weeks or two months over the last period. An oft-repeated criticism of the culture of Network Rail has been that it sees passengers as a necessary irritation in the correct functioning of the railway. Sir Alec, if your organisation is engineer focused, the condition of the infrastructure is what is most important to you. Passengers demand lots and lots of trains, but lots and lots of trains damage the infrastructure. There is a concern in the wider sector— I am merely passing it on—that the culture of Network Rail has historically been one in which it wants to limit the number of trains to what it considers to be acceptable, so that it has a nice steady state of repair of the infrastructure. If that is the dominant culture that pervades GBR, now that it is bringing everything together, that will be a disaster for passenger services, because there would not be an automatic incentive to focus on an increase in passenger journeys, which is why amendments 133 and 35 are so important.

New clause 42—to go into the detail a little—would require the Secretary of State to set, publish and keep under review a passenger growth target. It would also require GBR to have regard to that target when exercising its statutory functions. In oral evidence to this Committee, Ben Plowden, chief executive of the Campaign for Better Transport, said:

“It is welcome that there is a duty to promote the interests of passengers and disabled people in the Bill. We think there is a case for strengthening that duty so that it aligns with the duty in relation to freight, which is to promote the use of the network for passengers and disabled passengers. There should also be an equivalent duty on the Secretary of State to set a passenger growth target, as she is required to do in relation to freight, so that, as we picked up on a minute ago, GBR does not end up being incentivised not to grow the network in order to meet its crowding and reliability duties, for example. It seems to us that giving it a statutory incentive to increase passenger use over time would be very helpful to build on the existing duty in the Bill.”––[Official Report, Railways Public Bill Committee, 20 January 2026; c. 24, Q49.]

That organisation was not alone, because John Thomas from ALLRAIL said:

“I think a passenger growth target is really important. At the moment, the duties for GBR only include improving performance. You can improve performance, as we saw during covid, by cutting the number of services, but that is not necessarily in the best interest of customers. We think a balance between a performance target and a passenger growth target is really important.”––[Official Report, Railways Public Bill Committee, 20 January 2026; c. 47, Q78.]

Finally, we heard from Rob Morris of Siemens. He said:

“What we seem to be missing in the Bill at the moment is the ambition for passenger growth, how that will improve the railway and the levels of investment that need to go with it.”––[Official Report, Railways Public Bill Committee, 20 January 2026; c. 64, Q122.]

It is unclear to me why, if the Bill can require a target to increase use of the railway network for freight, the same obligation is not applied to passenger services. The inconsistency suggests a deliberate choice not to mandate passenger growth. And why would GBR care about passenger growth? After all, if it will be dominated by Network Rail, there is at least a risk that its culture will be one of avoiding damage to infrastructure, in excess of looking after growing the number of passengers.

In written evidence to the Transport Committee, Rail Forum said:

“From Rail Forum’s perspective there is nothing specific in the Bill that will guarantee improved travel for passengers. Improvement is predicated on the goodwill of GBR and others driving things in the ‘right direction’. In our view the key to improvement is culture change within those organisations coming together to form GBR. Creating GBR from Network Rail Infrastructure Ltd…will not signal the need for change and creates a risk that the current Network Rail culture will be seen as the norm and hence the status quo will prevail.”

These are not arguments made up by a cunning Opposition to wrongfoot the Government. This is the Opposition doing our job properly and reflecting the concerns of the wider sector—not just from one organisation but from multiple organisations, right across the sector. They identify the drafting as a problem and the culture as potentially a problem unless the legislation makes it clear that it is a duty of GBR to increase passenger numbers.

[Laurence Turner]

As in this morning’s sitting, I draw attention to the fact that I am a member of Unite. I did not intend to speak in this particular debate, but I wish to respond briefly to some of the things that have been said and to mount a perhaps limited defence of Network Rail and the importance of engineering in such organisations. The comparator, of course, was Railtrack, which outsourced its engineering functions, had only a single engineer on its board of directors and had only one non-executive director from an engineering background, with deadly consequences, which are well understood and do not need repeating. If there is sometimes caution in the organisation, I suggest that the long shadow cast by the events of the late 1990s and early 2000s is why.

There is good and sound logic behind not running too many trains across congested track. The real reason why we do not run as many trains as is theoretically possible is that lack of capacity on the network. Birmingham New Street, for example, will be exhausted once the Camp Hill services start in the spring—any more services simply cannot be safely got in or out on the network. When path allocators have to make decisions on which services to prioritise, freight tends to be squeezed out. That is a long-standing problem.

[Jerome Mayhew]

The hon. Gentleman makes a good point. It is right partially to defend Network Rail. It is an issue of balance and of the culture going forward. He also talked about capacity—this is not a party political point—but that is determined by not just the number of trains, but the length of trains, which makes an enormous difference. Just increasing carriage numbers—in particular on the Northern rail network where the majority of trains are just two carriages—by a couple of extra carriages does not require significantly increased capacity on the line, but it does increase capacity enormously for passengers. That would allow a target for increased passenger numbers to be fulfilled, without an increase in line capacity.

[Laurence Turner]

I thank the shadow Minister for the constructive spirit of his intervention. Indeed, in the days of cross-party consensus on High Speed 2, I worked with members of his party exactly to address some of the capacity challenges on the network. I just say to him that the two are linked. As he was alluding to, the length of the trains is related to the signalling blocks and the safe distance between trains, so that they can be run together. If he is right, we should be looking to put on more carriages. When waiting for a CrossCountry train, I can certainly remember the collective groan on the platform when another short formation appeared. There is a hard limit, however, to what can be applied without providing more caps on the network. That is where the passenger versus freight dilemma comes in, because sometimes hard choices just have to be made. I take the hon. Gentleman’s point that this is not always either/or, but sometimes it is. Sometimes one has to be prioritised over the other, and freight has historically been the loser.

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[Keir Mather]

I will first address clause 3, and then listen to Members’ comments on the new clauses before responding to them in full.

Clause 3 is fundamental to establishing Great British Railways as the integrated rail body that this country needs. It sets out GBR’s statutory functions, which provide a list of things that GBR is here to do, fulfilling ministerial commitments to set out GBR’s purpose in the Bill. This is not just a technical provision; it is the foundation for a simpler, more accountable railway system.

Currently, responsibilities for managing infrastructure, operating services, setting fares and driving innovation are fragmented across the sector. That fragmentation has led to inefficiencies, duplication, and a lack of clear accountability. The clause addresses that by providing GBR with the statutory basis for bringing those functions together under one roof. It empowers GBR to act as the directing mind for the railway.

GBR will look after railway infrastructure, which includes maintaining it, operating it and making decisions on who can access it. It will provide railway passenger services, set and manage fares, sell tickets or secure that tickets are available for sale. It will provide services that help to run the railway and make it easier for customers to use, even when those railway services are provided by other operators. It will carry out research and development, support innovation, and publish advice and standards to improve the railways. Those functions do not limit GBR, however. The clause also clarifies that GBR can exercise company powers under existing law, so that it can act as a fully commercial organisation, and it provides GBR with appropriate operational flexibility by enabling the statutory functions to be exercised by its subsidiaries.

In short, the clause sets the statutory foundation for a railway that works as one system and is simpler, more efficient and more accountable. Without the clause, it would not be clear to GBR, or to anyone else, what GBR is here to do. I commend the clause to the Committee.

[Jerome Mayhew]

I do not propose to divide the Committee on clause 3. If the Bill is going to progress, then some version of the clause needs to be in it. We are doing our best to improve it; we have not been successful so far, but I have not given up hope—there is more to come.

New clause 1 is a purpose clause. One of the very obvious gaps in the Bill is that there is no clause setting out its purpose. It is based on a number of objectives, which are set out in subsection (1)(a) to (m)—13 paragraphs. Paragraph (a) sets out the mission that the priority in decision making should be the needs of GBR passengers. That builds nicely on the discussion we have just had.

With a nationalised organisation, we need to go the extra mile to clarify exactly what its focus should be, because it is, by design, a top-down command structure of the state. In a functioning—I stress “functioning”—competitive market, the market will force operators to focus on their passengers, because the passengers are also their customers and that is how they grow their profits. When we take the deliberate decision to move away from market competition, something has to replace it, and the only thing that can replace it is the legislative process. That is why the new clause is so necessary. The priority in decision making needs to be GBR passengers; although we can infer this from statements by the Government, enshrining the mission statement would ensure that it remained a beacon for the organisation to follow.

Paragraph (b) states the objective of

“delivering reliable, safe and accessible railway passenger services”.

I do not think that that is controversial for any of us. Paragraph (c) sets the aim of

“providing value for money for passengers and taxpayers, including consideration of the affordability of fare prices”.

With a state service, the public expect value for money to be the driver, to ensure continued investment and reinvestment in our rail network. At the moment, fares remain a key concern of passengers and taxpayers. The affordability of fares must be one of the primary objectives.

Paragraph (d) points to increasing passenger numbers and growing usage of the network. We do not want to see what happened during the nationalisation era, when service quality fell and people consequently turned to other modes of transport when reliability decreased. Keeping people adopting the railways, as we have seen explode under privatisation, is very important. That links nicely with paragraph (e), which would ensure that the network is continually expanded and improved, with constant analysis of service and connectivity improvements as well as restoring and adding routes.

[Rebecca Smith (South West Devon) (Con)]

Does my hon. Friend agree that paragraph (e) and some of the other provisions will support what I am particularly keen to see: the growth of the entire railway, not just the areas that happen to have a mayor or are part of Scotland or Wales?

[Jerome Mayhew]

My hon. Friend makes a very interesting point. One of the stand-out moments from Tuesday’s oral evidence was that given by the mayors, Andy Burnham and Tracy Brabin. What it highlighted, apart from their articulate defence of their regions’ interests, was how different things will be, under the current proposals, in mayoral combined authorities: there will be the right to ask or be consulted on the devolution of aspects of rail to those authorities. That is great as far as it goes—they said that it did not go far enough, but it goes some distance in that direction.

However, what if an area is not a mayoral combined authority? I believe that is the point that my hon. Friend is making: without the direct relationship that the Government are anticipating for mayoral combined authorities, at the expense of other parts of the country, the “purpose” clause becomes more important. That is another reason why paragraphs (e) and (f) and others are helpful.

Many Members and constituents across the country were enthused by the restoring your railway fund and the new stations fund, which have unfortunately now been scrapped by this Government. They were set up in the last Parliament and led to a renaissance of interest in local railway investment and a focus on modernising working practices and innovating to improve productivity, efficiency and passenger experience.

Working practices are not really spoken about in the Bill as it is currently drafted. This is not a new start-up—we have to be quite clear about that: it is building a new organisation out of some very old organisations, including Network Rail. The aim of modernisation is to do more for less. That is a good thing because it means that there is more money left over for further investment in improving infrastructure and improving or increasing passenger services and more left in the kitty to reduce subsidies—the taxpayer support—and by extension reduce the tax burden on our hard-pressed constituents. Doing more for less by modernising working practices and innovating to improve productivity efficiency is an unalloyed good. It should be very important and at the heart of any organisation—yet the Bill is silent on it.

Although I can hear the subtext, but the new clause is not intended to be a union-bashing measure. It is intended to make a dynamic organisation that has its passengers—its users—at the heart of its interests and that there is a focus on ensuring that GBR continues to have growth as part of its objectives. That aligns with the Government’s decision to put growth at the heart of their mission.

[Laurence Turner]

The hon. Member particularly mentioned workforce productivity.

[Jerome Mayhew]

Not only.

[Laurence Turner]

Okay, perhaps we will come back to that. However, the hon. Member also mentioned the restoring the your railway fund, which he talked about as a success. When the last Conservative Rail Minister, Huw Merriman, appeared before the Transport Committee he said, of that programme, that

“The challenge was that a lot of people had their expectations dashed. A lot of business cases were, “Let’s move it to this stage so we can keep the dream alive.” That just wastes money and expertise because you know that scheme is not going to get a return. I have mixed feelings on it as a result.”

Does the hon. Gentleman share some sympathy with that perspective?

[Jerome Mayhew]

Yes, I do, but then democracy is really messy, isn’t it? If we listen to passengers and our constituents, we hear all sorts of desires that may not be sufficiently persuasive to obtain Government funding, but the process of asking people for their views should not be shied away from. It sounds as though, in the experience of our former colleague Huw Merriman, some rather weak political decisions—or decisions of expediency—were taken. That does not mean that we should move away from the democratic process; we should listen to people. I do not say that the restoring your railway fund was a failure, because we listened and we heard.

I will pick up on the other point because I was sitting down when I barracked the hon. Member for Birmingham Northfield: modernisation is not just about working practice. I want to make that really clear: modernising is about productivity enhancement of at-times-sclerotic organisations. I am a former entrepreneur. I ran a business for well over a decade on a much smaller scale than this. At the end, I employed about 1,000 people; I took it from start-up to about that stage.

Even a fast-growth, highly entrepreneurial and—in the views of other people—highly dynamic business such as the one that I was lucky enough to lead had all sorts of internal inconsistencies and inefficiencies, and needed to focus relentlessly on improving working processes and practices. That was right at the sharp end of the private sector. If it was true for my organisation then, think how true it is for a very large organisation such as Network Rail, which has 40,000-plus staff, and will be much bigger still when it becomes Great British Railways.

Paragraph (h) of new clause 1 states the need to improve and consider

“the experience of disabled and vulnerable passengers”.

Key terminus stations have good systems in place but that could be expanded with investment such as in the cross-party Access for All fund, which did huge work to improve disabled access in stations.

Paragraphs (i) and (j) are on a key theme that we have explored throughout our consideration of the Bill: open access and freight. They would ensure

“fair and transparent treatment of open access, freight and devolved operators”

At times it feels like we speak too much about open access in relation to this Bill. If we look at the capacity—the number of passengers covered by open access operators—we see that in percentage terms it is very small.

[Laurence Turner]

Two per cent.

[Jerome Mayhew]

I was going to say 1.5%, but maybe it is 2%. Let us call it approximately 2%; I leave rail freight in a separate category. But open access operators have a disproportionate impact on driving competitive challenge.

One of the very significant concerns of the sector, which I share, is that if the very dominant GBR is created and the operator and open access operators are not supported, even though they represent just 2% of passenger transit what will be lost is the competitive comparator for what good operating processes and customer-focused activities for train operations look like. It is disproportionately important that GBR should be held to account practically by the operations of open access operators, so such operators must receive fair and transparent treatment. That is what paragraphs (i) and (j) set out. They would ensure that the system is transparent where we believe that the legislation as drafted is currently vague.

Paragraph (j) enshrines the growth freight targets that we all agree on and that the Government have outlined. Paragraph (k) states the need to strengthen

“the financial sustainability of the railways”

to reduce reliance on subsidy. That should be an objective, and a purpose, of GBR. The taxpayer has lots of things that his or her money needs to be spent on. If we can reduce, over time, the need for subsidy on the railways, that money is freed up either for tax cuts, which make everyone richer, or to be spent on other important priorities of Government.

Meanwhile, paragraphs (l) and (m) speak to another key aim—integration, both of track and train, and of the mayors, with their local transport integration beyond rail, which are important to have. The lack of explicit inclusion in the Bill feels like an oversight that we are more than happy to shed light on for the Government.

Sir Alec, you will be pleased to know that that is it as far as new clause 1 is concerned, but I do have new clause 2 to entertain you with, which is about key performance indicators. The Government have been asked multiple times over the last few months to provide, even in draft, the KPIs that they intend Great British Rail to operate under. This clause is a first attempt to fill the gap that the Government have left by refusing time and again even to discuss what the KPIs will be, other than to say, using their go-to phrase, that they will be “robust”. What does that mean? We do not know.

The new clause would set a statutory key performance indicator framework, which must include targets for a number of areas, such as reliability, safety, cleanliness, affordability, passenger growth, financial efficiency, freight and others. It is necessary because of the failure of the Government. I would be delighted to withdraw it if the Minister were to stand up and say, “These are the KPIs that the Government have in mind—let’s debate them.”

At the moment, we have draft legislation in front of us—we are a scrutinising Committee and we are here for a month to go line-by-line through the Bill to improve it and understand how GBR will be operated—and yet we have no idea what the Government are even thinking on KPIs, which are a central set of objectives. This new clause seeks not to bind GBR or the Secretary of State to rigid targets, but instead to provide an overall remit for where the Secretary of State and GBR must report within.

Accountability is at the core of public trust in nationally run services, and setting targets in statute ensures there is a positive feedback loop for officials—very importantly—and GBR agents to work against. It helps frame discussions and engagement between the Departments and GBR, and allows a number of different datasets and parameters to be considered. The new clause would also require the Secretary of State to publish these indicators and lay them before Parliament.

The KPIs work as a strong starting position by which GBR can judge itself, and how it in turn can be judged by passengers and the public. Again, the Opposition are having to do the Government’s work for them. We should not be in that position. The Government should have brought forward this Bill with the accompanying documentation, which, as we have heard, is missing— 19 important documents and counting.

Finally, I turn to new clause 5. You will be pleased to hear that it is much shorter, Sir Alec. The new clause would give reporting requirements to GBR, continuing the theme of accountability, which new clauses 1 and 2 also have at their core. The layout of the new clause is self-explanatory. Subsections (2) and (3) link to new clause 2 on key performance indicators, and the clause would enhance accountability further, not just by having targets in place, but by having a clear reporting criterion.

In the same way that a Secretary of State is expected to appear in front of Parliament on a rotating basis in urgent questions, in Committees and through written ministerial questions, it is reasonable to expect that GBR should publish an annual report in which it reports on the targets set by the Secretary of State. Given the eminently sensible and logical outcome of the new clauses, I urge the Government to consider seriously on what basis it would not want to create greater transparency.

[Rebecca Smith]

I will briefly make a few comments about each of the new clauses, though obviously I have already intervened on my hon. Friend. I support wholeheartedly what we have proposed in new clause 1, which is no surprise given that I am sitting next to my hon. Friend the shadow Minister. I want to pick up on what he said about the restoring your railway fund as an additional way of explaining why the lack of regional devolution, apart from mayors, is going to be so important for a lot of our constituents.

I represent a constituency in the south-west that had some really great promises made under the restoring your railway fund, and was going to be able to make progress on a new station and railway line between Tavistock and Plymouth. That is really important if the Government want to see economic growth in the south-west, which they do, because they are investing enormous amounts of money in defence. But if we do not build in at this early stage the ability to see growth for regions that do not have a mayor, and are not likely to have a mayor for some considerable time, I remain unconvinced that the Bill is reassuring enough to say, “Don’t worry, these far-flung parts of the country will get a look-in.”

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[Keir Mather]

Let me first pick up on the points made by the hon. Lady as they relate to devolution, which is incredibly important. We will cover it in more extensive detail later, but it has a material impact on the new clauses we are considering. She is right to point to the fact that mayoral strategic authorities are the lens through which GBR intends to play out its devolution work under statute. That is because we believe that mayoral strategic authorities provide the right lens through which to use the transport network—the rail network in particular—as a catalyst for economic and housing growth. That is due to the powers that devolved mayors have in that space.

I also wish to reassure the hon. Lady that GBR’s ability to engage with local authorities will go far beyond just mayoral strategic authorities. That plays into an important consideration about the structure of GBR as an organisation, which we want to be a lot more flat and a lot more concentrated on ensuring that it can make an important regional difference in every part of the United Kingdom. Through the business units of GBR, we will be able to facilitate that work.

What we do not want to do, however—given any future Government aspiration for more places to have mayors—is to freeze a patchwork programme of devolution into legislation in a way that does not allow us to work closely with a range of devolved areas in future. GBR will be able to engage in that work comprehensively with local authorities, irrespective of whether they have a mayor.

On new clause 1, which seeks to add a purpose to the Bill, I am pleased to say that it largely mirrors provisions that already exist. I confirm that the Bill already makes that clear through the combination of GBR’s statutory functions, which set out what we expect GBR to do, and the shared general duties in clause 18, which set out what we expect it to consider and achieve. Taken together, the functions and duties already set out GBR’s fundamental purpose.

In addition, the duties in clause 18 can already cover the breadth of the outcomes that the proposed new clause is driving at. For example, sector bodies including GBR, and the Secretary of State, will be required to make decisions in the public interest, which includes social and economic benefits. The duties in the Bill are those that will endure and should be at the core of any railway. Instead of setting out a clear purpose, new clause 1 would duplicate many of the provisions already in the Bill and actually make GBR’s purpose significantly less clear.

New clauses 2 and 5 would set key performance indicators for GBR and introduce a requirement for GBR to publish an annual report on them. I can certainly support the intention of the hon. Member for Broadland and Fakenham that GBR should have a comprehensive set of performance objectives against which it is robustly held to account. I disagree with him, however, on where and how those indicators should be implemented. The right place for GBR’s KPIs is in its integrated business plan, alongside the detail of what activity GBR will be carrying out over the five-year funding period.

There are three main reasons for that, and I also point to the fact that the arrangement is mirrored in other public organisations, such as National Highways, set up by the previous Conservative Government in 2015—its KPIs are not included in primary legislation. First, the indicators should be realistic and measurable, meaning they also need to be grounded in GBR’s specific proposals for delivery. Therefore, it is appropriate that the indicators are developed as part of the business plan, rather than in legislation.

Secondly, key performance indicators need to be able to evolve over time as the railway network and customer needs change. The way an indicator is set out can influence how an organisation behaves, and we should be able to refine the indicators over the course of several funding periods to get GBR to deliver in the way it needs to. Therefore, a more flexible process, such as that used for developing the business plan, works much better than fixing the indicators in legislation.

Finally, it is important that the ORR, in its role of scrutinising GBR’s proposed plans and monitoring GBR’s delivery, is able to assess whether commitments made by GBR are ambitious but also realistic. As the independent expert adviser to the Secretary of State, the ORR should have a clear route to influence the formulation of GBR’s key performance indicators. By keeping them within the business plan, the ORR’s involvement is ensured by legislation. Unlike legislation, the integrated business plan will also be updated, likely on an annual basis, and it can only be updated following scrutiny from the ORR and the new passenger watchdog, which in my view provides additional flexibility and accountability.

I hope that the hon. Member for Broadland and Fakenham can agree that GBR’s business plan is the right place to develop and set GBR’s performance indicators. Given my explanation, I encourage him not to press his new clauses to a vote.

[Jerome Mayhew]

I am grateful to the Minister for setting out his defence of the Bill. The problem with his argument is that, because the Government have gone off half-cocked, the Committee is not in a position to assess whether he is right or wrong on the nature of the KPIs, or even on where they should be, because we have not been furnished with any draft copies of the documents to which he refers. In those circumstances, I feel obliged to press the two new clauses to a vote.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

[The Chair]

It may help Members to know that we debate new clauses where convenient in the Bill. We will vote on whether to agree to the new clauses when we get to the end of the Bill.

Clause 4

Exercise of functions of Scottish and Welsh Ministers

Question proposed, That the clause stand part of the Bill.

[Keir Mather]

Clause 4 enables Scottish and Welsh Ministers to delegate their railway functions to Great British Railways, a subsidiary of Great British Railways, or a company jointly owned by Scottish or Welsh Ministers and Great British Railways. That means that, if they wish, those Ministers will be able to take advantage of the benefits of GBR’s joined-up approach of bringing track and train together.

Scottish and Welsh Ministers must consult GBR and the Secretary of State before entering into any delegation arrangement with GBR, and transparently publish the terms of the arrangement. The clause confirms that when GBR delivers functions for Scottish or Welsh Ministers, it continues to comply with its own obligations under the Bill, such as its duties.

The clause provides flexibility and choice for Scottish and Welsh Ministers in how rail services are delivered in Scotland and Wales. It allows for innovative options, such as vertically integrated joint ventures, which can deliver the full cost efficiencies and performance improvements that track and train integration will bring to England, with opportunity for those benefits to extend to Scotland and Wales as well. This approach is in line with our manifesto commitment to deliver the benefits of rail reform to the whole of Great Britain and has the full support of the Scottish and Welsh Ministers. I commend the clause to the Committee.

[Jerome Mayhew]

I thank the Minister for his brief explanation of the clause. Under clause 3, the Committee was able to discuss the principles of the future structure of GBR, but clause 4 is the first instance of one of the open wounds that the Bill might create.

The devolutionary functions of the Bill seemingly reopen aspects of the West Lothian question by failing to provide clear lines of power between the devolved nations, regions and Whitehall. The elephant in the room is the future surrounding England and Wales projects. We know from the evidence we heard that the Welsh railway is very different from, for example, the Scottish railway; 80% of all rail travel in Wales is cross-border, so it includes elements of English travel, as we can tell by Labour’s recent announcement that East West Rail and the Hull to Liverpool lines are being classified as England and Wales projects. Some members of the Minister’s party in Wales might think that is a bit of a stretch at the very least.

The Government’s position has consistently been based on the fact that infrastructure is not subsequent to Barnett consequentials in Wales, and therefore should not be allocated to Cardiff Bay. However, the Minister’s own Labour party colleague in the Senedd, Cabinet Secretary for Economy Rebecca Evans MS, said:

“Wales will have missed out...as a result of the incorrect classification of HS2 as an England-and-Wales project.”

That was Labour’s position when it sat on the Opposition Benches, and it is seemingly still the position of the Labour Government in Cardiff. Is it still the position of the Minister and of Labour?

Clause 4 allows the Scottish and Welsh Governments to maintain their nationalised railway structures within ScotRail and Transport for Wales. It is prudent that the Government maintain their and GBR’s final say in these matters, as set out in subsection (2). However, much of the relationship is predicated on the memorandum of understanding, which is missing in action and is not explicitly established in the clause. It is important to ensure that the Government are thinking clearly about the nature of the relationship they wish to maintain with the devolved nations, as this framework will exist within the future memorandum of understanding—which none of us has seen. That will be particularly important should the Wales Act 2017 be amended at some stage, given that Welsh devolved powers are a live political issue. Will the Minister explain Government’s approach to future transport devolution in Wales, given his party’s comments on rail funding?

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[Keir Mather]

My hon. Friend echoes a theme that we have heard throughout this debate: that those who live closest to the railway and the service it provides know best about its operation, and that includes on a devolved basis. He also rightly points to a number of themes that were brought to light during oral evidence by the representative from Wales, who pointed out that developing operational understandings, as we are with the Scottish and Welsh Governments through the MOU, is an iterative process done on an operational level, and freezing it in aspic is therefore not to be advised. The heads of terms already exist for Members to scrutinise.

The Bill already enhances joint working, improves accountability and safeguards the benefits of an integrated cross border railway. The approach in the Bill will be supported by the memorandum of understanding between UK and Welsh Ministers, which will set out arrangements for co-operation on matters such as cross border services and infrastructure interfaces. This provides a clear and structured basis for engagement with Welsh Ministers without requiring the statutory transfer of reserved rail functions or creating additional legislative complexity and uncertainty.

The new clause would require a separate statement on funding for the Welsh consolidated fund. That is not necessary, as information on funding for Wales is already published through established mechanisms, such as His Majesty’s Treasury’s fiscal documents on spending reviews and block grant transparency publications, which provide clear and routine transparency without creating a rail specific statutory process.

The new clause risks undermining the integrated approach set out in the Bill by requiring changes to reserved matters that could weaken the coherence of the rail network. The Bill as drafted has the full support of the Welsh Government and preserves the existing devolution settlement. I therefore urge hon. Members not to move the new clause and commend clause 4 to the Committee.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Co-operation with relevant local government bodies

[Jerome Mayhew]

I beg to move amendment 232, in clause 5, page 3, line 37, at end insert—

“(2A) Where no arrangement between Great British Railways and a relevant local authority exists, the relevant local authority may appeal a decision made by Great British Railways affecting passenger rail services within its boundary under section 67.”

This amendment is designed to give Mayors the right to appeal GBR decisions to alter passenger services in their area to the ORR in the event of no partnership existing.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 214, in clause 5, page 4, line 11, at end insert—

“(d) a county council, district council or unitary authority with statutory transport responsibilities.”

This amendment ensures that non-mayoral local authorities are included in GBR’s duties to share information and coordinate rail and transport planning.

Clause stand part.

[Jerome Mayhew]

Thank you very much, Sir Alec. We are making progress—it may not feel like it, but we are. Courage! We’re getting there.

Clause 5 deals with co-operation with relevant local government bodies. It is not going to be a bestseller, but it is important, just like every clause in the Bill. It delves further into the devolution of powers. It is hard to quantify the clause while the Government’s devolution Bill continues its progress through the House, which creates an awkward chicken and egg scenario. The challenge with the clause, about the nature of the devolution of powers across local government, really ends up bleeding into clause 6. I am concerned that the Government and, by extension, GBR will end up picking and choosing who they wish to accept consultation decisions from.

Clause 5(1) specifically uses the word “may” when referring to arrangements between GBR and local government. It states:

“Great British Railways may enter into arrangements with a relevant local government body about the exercise by Great British Railways of its statutory functions in relation to railways and railway services in the body’s area.”

There is no clear obligation to provide any functions to mayoral combined authorities, mayoral combined county authorities, passenger transport executives or integrated transport areas. Can the Minister help me and the Committee by clarifying what functions he has in mind in relation to this clause? How would it work in practice? Will there be guidance on it, and when will we have it? Has that work been done yet? If it has, why has it not been shared with the Committee, with its obvious corollaries? If it has not been done, why not?

That leads me to amendment 232 in my name, which would create a new subsection (2A) of clause 5 as follows:

“Where no arrangement between Great British Railways and a relevant local authority exists, the relevant local authority may appeal a decision made by Great British Railways affecting passenger rail services within its boundary under section 67.”

To bring the amendment to life, we need to refer back to the evidence from Mayors Brabin and Burnham on Tuesday. The amendment would give mayors and other regional leaders the right to appeal GBR decisions to alter passenger services in their area. They would be able to appeal to the ORR, because it would be an independent appeals process, in the event that there was no partnership in existence. In their evidence, Mayors Burnham and Brabin were clear that they expected—in fact, I think Mayor Burnham said he would insist on—greater powers to influence rail in their regions. The amendment would help to achieve that through a continued role for the trusted and impartial Office of Rail and Road.

At this stage, I should make it clear that while the power to appeal is set out in clause 67, the governance—what that appeal can look like—is set out in clause 68. I think I am right in saying that it was described as not being worth the paper it is written on as it is drafted, because it limits appeals to judicial review proceedings in the High Court where there is an error of law. There is strong evidence before the Committee to suggest that that clause should be amended to allow an appeal on the merits, and amendment 232 needs to be taken in conjunction with future amendments that we will put before the Committee to do exactly that. It is intended to include in the Bill the provision for an appeal on the merits to the independent ORR, in order to give succour to mayors and other leaders of regional transport authorities where GBR chooses to run roughshod over their local plans.

[Olly Glover]

The Lib Dems think that clause 5 is along the right lines, and it is good that the Government are proposing to enshrine the principle of local consultation and dialogue into the Bill, because that is important for getting our railways and transport on a better footing. With the greatest respect to all Members present, too much in our country is dictated from Whitehall. We need more devolution; we need to listen more to local voices, and that applies as much to railways and transport as it does to anything else. I do, however, see merit in Conservative amendment 232, which is intended to strengthen some of the provisions of clause 5.

I will briefly say a little about Liberal Democrat amendment 214, which we see as a very simple and uncontroversial amendment. If the Minister does not intend to support it, I would genuinely be interested in why. It is simply based on the principle that clause 5 focuses on mayoral strategic authorities, but, because of the ongoing state of flux that local government reorganisation is in—I will not use any stronger words than that—we do not yet know exactly what the final structure will be; we do not know whether everyone is going to get a mayoral strategic authority. I am not an expert on the south-west of England—the hon. Member for South West Devon, sat next to me, is—but I keep hearing, for example, that Cornwall may not be part of a mayoral authority. Surely, it is not the intention of clause 5 to say that GBR would not have to engage with whatever local or regional authority there ends up being in Cornwall, if not a mayoral strategic authority.

[Jerome Mayhew]

This Committee has been a good example of the hon. Gentleman’s party and mine working collaboratively to improve the Bill. While he knows that I agree with the direction of travel that his amendment has in mind, I question its extension to an organisation as small as a district council. Given that district councils are a feature of two-tier local government—there will be a county council above them—can he explain why he thinks it is sensible to include them in the amendment?

[Olly Glover]

I encourage the hon. Gentleman not to get too carried away by the points on which we have agreed so far, because there will be plenty on which that is not the case. I also encourage Government Members not to get too excited, because I have agreed with them on plenty of things as well. Hopefully that shows that our politics can be more serious and less juvenile and we can all find things on which we agree. Before I make myself feel even more sick, I shall carry on.

I understand what the hon. Member for Broadland and Fakenham was saying. The intention of the amendment is not to suggest that GBR should be engaging with district-level authorities by default. Once local government reorganisation is complete and coherent, there will not be any district councils, so that bit will be rendered null and void. The aim is simply to cover all our bases, because we do not know where local government reorganisation will take us. Until we get there, it is important that whatever the voices are in a given part of the country, they are heard.

Local government is so complicated. It is different in so many bits of the country—even places right next to each other. My constituency covers South Oxfordshire and Vale of White Horse, which have district and county, and then next door in West Berkshire it is unitary. Even there, even in parts of the country that used to be part of the same county—I hope the Campaign for Historic Counties is listening; I do sometimes engage with its Facebook comments—

--- Later in debate ---

[Keir Mather]

The hon. Lady’s comments speak to the advantage of an integrated railway with a single point of accountability—whether that be at the local level, or through an integrated business unit or GBR’s HQ functions in Derby. The reason for having integration is that accountability is not diffuse, as one single point of contact at the local level can radiate through the system to ensure that local residents get what they need. Beyond that, there are the duties that underpin GBR’s need to promote the interests of passengers as being both a national consideration and something that local businesses should have regard to.

Clause 5 also enables GBR to co-operate with relevant local government bodies, such as MCAs, by entering into formal partnership arrangements with them or by sharing information. The clause does not detail what the co-operation arrangements should be, as every local area is different, but arrangements could include local authorities funding GBR for additional services or enhancements beyond the national baseline. The information-sharing provisions can also allow for more integrated transport planning, for example, so that new bus stations can be located alongside new train stations. This provision enables GBR to co-operate with local authorities, allowing local areas the opportunity to genuinely shape the railway and have greater influence over services.

I have heard from many mayors and MPs that this is how the railway should work, and I know that a lot of members of the Committee have local priorities that the clause can help to deliver. In the future, GBR will be accountable for every part of the railway, and it should be able to do sensible business with every Member of Parliament to get the right outcomes for everyone. I commend clause 5 to the Committee.

[Jerome Mayhew]

I listened carefully to the Minister’s explanation as to why, in his view, amendment 232 should be withdrawn. He said that GBR will agree to co-operation with mayoral combined authorities. He also said that other parts of the Bill contain a duty to consult and a requirement to receive advice from mayors, but there is no requirement to listen to that advice. As a result, the decision-making power remains with GBR, not the regional area that is most affected by the decisions, which the Minister, on a number of occasions today, has already said is best placed to decide the needs for its local community. That is fine—if the Minister wishes to keep the word “may”, it is, of course, his right to do so. However, if the less powerful of the two people in the relationship disagrees with GBR’s decisions, they need to have some form of recourse to an appeal. For that reason, I believe that the appeal process set out in amendment 232 remains important and that the amendment should be put to a vote.

Question put, That the amendment be made.

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Co-operation with Transport for London

[Jerome Mayhew]

I beg to move amendment 7, in clause 6, page 4, line 15, after “with” insert “Secretary of State and”.

This amendment maintains the Secretary of State’s statutory co-operation duty with Transport for London to keep the position in line with other mayoralties.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 8, in clause 6, page 4, line 17, after “Railways” insert

“and the Secretary of State”.

See explanatory statement for Amendment 7.

Amendment 9, in clause 6, page 4, line 19, after “Railways” insert

“and the Secretary of State”.

See explanatory statement for Amendment 7.

Amendment 10, in clause 6, page 4, line 21, after “Railways” insert

“and the Secretary of State”.

See explanatory statement for Amendment 7.

[Jerome Mayhew]

Clause 6 deals with co-operation between GBR and Transport for London. The clause seems to exist in direct juxtaposition to clause 5, and, interestingly, to the general spirit of the Bill expressed in other clauses. While many aspects of the Bill bring powers back to the Department for Transport, GBR and the Secretary of State’s office, the clause is unusual in being one of few examples where those on the Treasury Bench do not seem to want to be involved. That is out of character. Through the clause, the Government seek to remove the Secretary of State’s position in the Greater London Authority Act 1999 and replace that responsibility with a similar one for Great British Railways. That is not based on enhancing accountability or strengthening value for the taxpayer, which should be core principles of the Bill.

The clause presents special status for Transport for London that is not enjoyed by other mayoral combined authorities; that relates to a point that Committee members will recall Andy Burnham making during our oral evidence session on Tuesday. He expressly referenced the difference in how the Greater Manchester mayoral combined authority is treated on transport matters compared with how TfL is treated. We need to ask why that is. Mayor Burnham’s evidence highlighted that difference, yet the Government have given no effective answer about the rationale behind treating large, regional mayoral combined authorities differently from Transport for London.

The amendments in this group seek to correct that, proposing that, until such a time when the other mayoralties require their own special dispensation, which clause 5 of the Bill actively prohibits, clause 6 should be amended to maintain reference to the Secretary of State, and include the Secretary of State and GBR side by side, so that the relevant subsections of section 175 of the Greater London Authority Act 1999 refer to both “the Secretary of State” and “Great British Railways”. That would ensure that the Secretary of State continues to have a duty of co-operation with TfL, alongside GBR.

[Daniel Francis]

It is a pleasure to serve under your chairship, Sir Alec. As a Member of Parliament for a London constituency, and as a former member of the London TravelWatch board who understands some of the passenger watchdog issues in London, it is incumbent on me to speak to some of the clauses.

Of course, the GLA Act 1999 originally gave the liaison power to the Strategic Rail Authority, not the Secretary of State, and it was the Railways Act 2005 that amended the words “Strategic Rail Authority” to “Secretary of State”. Clause 6 will in fact put back the relationship that was there in the original 1999 Act, so that the actual rail operator, rather than the Secretary of State, has that liaison right with Transport for London.

Look at how the passenger interacts with some of those services. Some people living in the very northern part of my constituency—I have a very small part of Abbey Wood in my Bexleyheath and Crayford constituency—use Abbey Wood station, where rail usage has trebled since before the pandemic. During that time, we have seen the introduction of the Elizabeth line and the nationalisation of Southeastern, and the station has been transferred from Southeastern’s operation to Transport for London’s. Yet there are three different railway services serving that station: the nationalised Southeastern, the privatised Thameslink and the Elizabeth line, which is operated by Transport for London. There therefore absolutely has to be liaison by the operator, not the Secretary of State. Under this arrangement, Southeastern and Thameslink would come under one ownership, under Great British Railways, and with Transport for London.

Also, if my constituents catch the Bexleyheath or Barnehurst service to London Victoria, or to Denmark Hill, if they are using King’s College hospital, they will use a service that is currently operated by Thameslink but on a line that also has Southern and Southeastern services on it, as well as TFL services on the Windrush line. The liaison power should therefore be with the operators, not the Secretary of State. If we went down the Opposition’s route, we would be saying that that liaison should be between the Secretary of State and the Mayor of London. However, it should rightly be between the rail operators, given that stations such as Denmark Hill or Abbey Wood have Transport for London services, and there will be some stations operated by Transport for London, but some stations, such as Denmark Hill, will be operated by Great British Railways. That is where the liaison powers should lie, and as I say, that will bring us back to the original arrangement under the 1999 Act. For those reasons, I oppose the amendments and support clause 6.

[Keir Mather]

Let me begin by addressing the point made by the shadow Minister about the discrepancies in the system in Greater Manchester as it applies to London. It is not wholly correct to say that we are treating these two things inherently differently. The co-operation clause, which applies to all MCAs including Manchester, is new, but for TfL it is also set out in the GLA Act. To make this work for TfL, we have therefore to tweak the legislative system.

I thank the shadow Minister for his amendments 7 to 10, which together propose including the Secretary of State, alongside Great British Railways, in the clause requiring co-operation with TfL. Clause 6 requires that GBR and TfL co-operate on railway matters. That includes co-ordinating TfL and GBR passenger services and sharing relevant information. It will also enable GBR to work collaboratively with Transport for London to strengthen its local influence over the railways and support integration with other transport modes.

The railway responsibilities included in the clause, such as the co-ordination of passenger services, will be GBR’s, not the Secretary of State’s. Including the Secretary of State here would risk undermining the principle that GBR is the railway’s directing mind, and would widen the scope of the Secretary of State’s role under the new regime.

The shadow Minister will have heard the Government make clear commitments that this will not be a railway run by politicians. Clearly, the Secretary of State does not need to be involved in GBR’s relationship with Transport for London or in its passenger service responsibilities. Those relationships are operational ones and do not need political interference. I therefore urge him not to press his amendments to a vote.

[Jerome Mayhew]

I am grateful to the Minister for his explanation, and to the hon. Member for Bexleyheath and Crayford for giving his lived experience of the TfL area. I am partially convinced. I will not press this amendment to a Division, so I think we can move on.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Jerome Mayhew]

I agree with the Minister’s characterisation that these are largely technical or tidy-up amendments. It is right to include freight in the duty to cooperate with TfL. I am glad that the Government have tabled these three amendments and we have no objection to them.

Amendment 165 agreed to.

Amendments made: 156, in clause 6, page 4, line 26, after “passenger” insert “and goods”.

This amendment and amendment 157 add GBR’s statutory functions in relation to freight services to the functions in relation to which GBR must co-operate with Transport for London.

Amendment 157, in clause 6, page 4, line 26, at end insert—

“(7) In subsection (3A)—

(a) after ‘passenger’ insert ‘or goods’, and

(b) after ‘passengers’, in both places it occurs, insert ‘or goods’.”—(Keir Mather.)

See the explanatory statement for amendment 156.

Question proposed, That the clause, as amended, stand part of the Bill.

[Keir Mather]

Clause 6 amends the Greater London Authority Act 1999 by updating section 175. This will update the current statutory basis for TfL’s co-operation on railway matters by replacing references to “the Secretary of State” with references to “Great British Railways”. This includes co-ordination regarding TfL and GBR services, and requirements to share relevant information. It also enables GBR to work collaboratively with TfL to strengthen its local influence over the railways and support integration with other transport modes.

These arrangements may include financial contributions from TfL to GBR for additional services or enhancements beyond the national baseline. For example, TfL could commission GBR to increase train frequencies on suburban routes, or to improve station facilities to align with the Mayor of London’s transport strategy. Information-sharing will also enable integrated planning, improving co-ordination between GBR services and TfL’s multi-modal network.

That approach reflects the Government’s commitment to empowering local leaders through statutory roles and supporting integrated transport solutions. This collaborative working will help to deliver better outcomes for passengers and communities by aligning rail services with London’s priorities. I commend the clause to the Committee.

[Jerome Mayhew]

The Minister has set out his views on this clause clearly. We have already explored the difference of opinion about whether or not it should be the Secretary of State and GBR that collaborate with TfL. However, the direction of the clause is an eminently sensible one and we do not wish to stand in its way.

Question put and agreed to.

Clause 6, as amended, accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned.—(Nesil Caliskan.)

Railways Bill (Fifth sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 27th January 2026 Public Bill Committees

[The Chair]

We are now sitting in public and the proceedings are being broadcast. Before we begin, I remind Members to switch electronic devices to silent, and that tea and coffee are not allowed during sittings. The selection and grouping list shows the way in which amendments and new clauses have been arranged for debate. Any Divisions on amendments or new clauses will take place in the order in which they appear on the amendment paper—I remind Members, after Thursday afternoon’s confusion, that new clauses will be voted on at the end of proceedings.

Clause 7

Directions by Secretary of State

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I beg to move amendment 12, in clause 7, page 4, line 30, after “functions” insert—

“where the Office for Rail and Road, in carrying out its functions under section 69A of the Railways Act 1993 (as inserted by section 74 of this Act), has deemed Great British Railways to be in breach of its statutory functions.”

This amendment would restrict the Secretary of State’s ability to give directions to Great British Railways to circumstances where the Office for Rail and Road has deemed Great British Railways in breach of its statutory functions.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 11, in clause 7, page 4, line 30, at end insert—

“(1A) A direction under this section may only be given as a last resort, and only if the executive head of Great British Railways has had to be removed because Great British Railways is failing to comply with its key performance indicators as set out in section [Great British Railways: Key Performance Indicators].”

This amendment limits the Secretary of State’s power to give directions to Great British Railways to a last resort.

Amendment 13, in clause 7, page 4, line 31, leave out subsection (2).

This amendment would remove the Secretary of State’s ability to say that Great British Railways can only exercise unspecified functions after consulting the Secretary of State or with the Secretary of State’s consent.

Amendment 14, in clause 7, page 5, line 9, after “publish” insert “and lay before Parliament”.

This amendment would require the Secretary of State to lay any directions given to Great British Railways before Parliament.

Amendment 16, in clause 7, page 5, line 11, at end insert—

“(5A) If the Secretary of State uses the powers in this section to give a direction to Great British Railways about the general level and structure of fares for travel on railway passengers services designated under section 25 or 26, then the Secretary of State must publish the assumptions, criteria, and objectives underpinning any direction.”

This amendment puts a duty on the Secretary of State to publish the assumptions, criteria and objectives used when giving any direction about the level or structure of fares, so decisions can be assessed against passenger growth and affordability.

Amendment 15, in clause 7, page 5, line 12, leave out subsection (6).

This amendment would prevent the Secretary of State enforcing failure to comply with a direction through civil proceedings.

Amendment 17, in clause 8, page 5, line 35, leave out subsection (2).

This amendment would remove Scottish Ministers’ ability to say that Great British Railways can only exercise unspecified functions after consulting them or with their consent.

Amendment 18, in clause 8, page 6, line 4, leave out subsection (6).

This amendment would prevent Scottish Ministers enforcing failure to comply with a direction through civil proceedings.

Amendment 24, in clause 15, page 8, line 21, at end insert—

“(1A) The document set out in subsection (1) must ensure that Great British Railways is focussed on meeting the key performance indicators set out in section [Great British Railways: Key Performance Indicators].”

This amendment would require the rail strategy to be geared to enabling Great British Railways to meet its key performance indicators.

New clause 4—Secretary of State: power to dismiss the executive head of Great British Railways—

“(1) The Secretary of State may dismiss the executive head of Great British Railways.

(2) The Secretary of State shall only exercise the power in subsection (1) if—

(a) Great British Railways is not meeting a key performance indicator set out in this Act,

(b) Great British Railways has failed to act on guidance given by the Secretary of State under section 9 of this Act.”

This new clause gives the Secretary of State the power to dismiss the executive head of Great British Railways if the organisation is failing to perform against its statutory duties.

[Jerome Mayhew]

It is just as pleasurable to have you in the Chair today as it was last week, Sir Alec.

I remind hon. Members that clause 7 gives the Secretary of State the power to issue and publish directions to Great British Railways relating to its railway activities. It also outlines how the Secretary of State must obtain consent from Welsh and Scottish Ministers before giving directions relating to their devolved services, except where powers are used in relation to the access regime. The clause further outlines how GBR will be required to comply with directions, which are mandatory and binding, and intended to be used as a so-called

“responsive tool for necessary course correction, rather than as a proactive tool to set requirements on GBR,”

or, as further clarified in the explanatory notes, as “a last resort”.

Interestingly, although the explanatory notes state that a direction by the Secretary of State is a mechanism of last resort, the clause itself gives no indication to substantiate that. Instead, it suggests that the Secretary of State can act independently of their Welsh and Scottish counterparts’ views, especially as there is a reliance on non-legislative measures. My first question to the Minister is, therefore: why is this supposed last-resort requirement not on the face of the Bill?

When dealing with matters relating in particular to the interpretation of devolution, the risk is that any decision taken by the Secretary of State may be disputed by the devolved nations and end up as a political football, which only increases lawyers’ profits. Would it not therefore be prudent to set out in the legislation exactly what is meant? Without a clear breakdown of the procedures and directions, surely we run the risk of granting the Secretary of State a large degree of power with very limited oversight.

The clause gives the Secretary of State unrestricted power, other than for operations in Scotland and Wales, to intervene in the running of GBR. That is a step too far. While it is justifiable for the democratically elected Government of the day to set and agree GBR’s strategic objectives, key performance indicators and business plans, after those are set out, the Government’s role should be to hold GBR to account for the delivery of the targets, objectives and strategies, and not to tell it how to do so on a day-to-day basis.

A question arises on clause 8(4), and I would be grateful if the Minister could provide clarity on the oversight system outlined in clauses 7 and 8. Subsection (4) states:

“Before giving, varying or revoking a direction under this section the Scottish Ministers must consult the Secretary of State.”

Presently, GBR must decide whether a decision directly affects devolved services, but the Bill provides no statutory test, which leaves a delivery body making politically sensitive judgments, further increasing the risk of challenge by devolved nations. Clarity for Members, especially those from the devolved nations, will be extremely helpful, so I would be grateful if the Minister would address that directly.

Under subsection (5) of both clauses 7 and 8, directions must be published, but there is no requirement for them to be laid before and scrutinised by Parliament—the old trap of creating transparency without consequence. A reporting or laying requirement, perhaps through the Select Committee, would turn publication into genuine accountability. However, I am interested to hear what rationale the Minister has not to allow greater scrutiny of GBR in Parliament. Again, perhaps he will address that directly in his response. That is the rationale behind our suggested amendments to require the Secretary of State to lay directions before Parliament, in order to allow us to scrutinise the decisions in greater detail.

There is a fundamental question about leadership and who is the key decision maker. We are told repeatedly by the Minister and others that GBR is the directing mind, but will that really be the case if the clause goes through unamended? If GBR really is the directing mind, what is the necessity for the clause? It is a recipe for decision paralysis, with GBR, given the decision-making structures, undermined by guidance—we will come on to that when we discuss clause 9—and by directions from the Department for Transport in the name of the Secretary of State.

Clause 7 really does risk creating the worst of both worlds. We will have the cost of GBR and its oversight structures—we are told in the recently published job application for the part-time chair that GBR will have more than 100,000 employees; it will be an enormous organisation, with its own senior management team—and then we will have the same again, with an overactive Department for Transport second-guessing GBR’s day-to-day working and being able to give guidance and directions as a result of clauses 7 and 8.

[Joe Robertson (Isle of Wight East) (Con)]

As my hon. Friend describes the growing size of the Department for Transport and Great British Railways, I am slightly reminded of the Department of Health and Social Care, and NHS England. The Government talk of doubling up and so are winding back by abolishing NHS England, but here they are doubling up in the Department for Transport over Great British Railways. I wonder whether he has any reflections on that analogy.

[Jerome Mayhew]

It is not a perfect analogy, because GBR is at least intended to be more akin to a business—a nationalised business—but my hon. Friend is entirely right that where we have two organisations in competition, each one thinking that it runs the railways, that is a recipe for confusion at the least, and disaster at the worst.

This is not an idle concern, because it has happened before. We all remember the Virgin West Coast franchise debacle in 2012, when the slightly arm’s length process of franchising did not go well, causing a communal panic in the Department for Transport. The phrase, “Something must be done to prevent this from ever happening again,” was no doubt repeated many times. The result was that more and more micromanaging took place by the Department for Transport in the setting of franchises. The Department no longer talked only about outcomes that needed to be achieved, leaving how companies went about that entirely up to them, which is the appropriate way to draft a franchise agreement. Instead, that devolved into mechanisms of how a franchise should be operated.

We had that mission creep, and I fear that under the Bill we might get exactly the same approach with GBR. It will be set up with the best of intentions, and perhaps in the first two or three years all will run smoothly and the directing mind in practice might well be GBR, but then something will happen, because something always does happen in the real world, with lots of people doing their best but sometimes making mistakes, and there will be a collective gasp from the Department of Transport, because it will feel like it is on the hook, so “Something must be done to ensure that this doesn’t happen again.” We have designed into this mechanism a structure that allows the removal of GBR’s operational independence, and it does so without any reference to actions of last resort by the Government—the Bill is silent on that.

We talk about the Secretary of State, but we all know that officials in the Department for Transport will be advising the Secretary of State on what he or she should be doing in a particular circumstance, and there will be a power grab. Without amendment, the clause will absolutely allow for that. We should be alive to the real-world experience that we all have and take this opportunity to strengthen its wording in order to design out that issue and ensure that there is proper accountability—with GBR accountable to the Secretary of State and, through the Secretary of State, to Parliament—and that operational independence stays with what will be a nationalised business, rather than creating a railway version of NHS England, as my hon. Friend the Member for Isle of Wight East mentioned a moment ago.

I have tabled two amendments to address this issue. Amendment 12 would limit directions to circumstances in which the Office of Rail and Road assesses GBR to be in breach of its statutory functions. It could be argued that the Secretary of State should have an emergency lever; that is fair enough, because bad things happen. One of our great complaints before the election, although I am beginning to hear it from Labour Ministers as well, was, “We pull the levers but they’re not attached to anything—we have no power.” When we form the Government after the next election, we will want to have levers that are attached to something, and I accept that it is necessary to have an emergency lever to pull should a significant unforeseen event occur—another pandemic, perhaps—and an intervention be required.

However, amendment 12 would still allow the Secretary of State to intervene in emergency scenarios, as the ORR would deem that such events make it impossible for GBR to conform to its business plan targets. Clause 74 sets out the ORR’s power to monitor GBR’s performance. Elsewhere in the Bill, we shall argue that the ORR needs more teeth to hold GBR to account, and this provision limiting the potential for the Secretary of State to intervene until such time that an independent regulatory body has recognised that GBR has not been able to fulfil its functions will be an important safeguard.

Amendment 11 would put the words “last resort” on the face of the Bill, and would provide that a direction may be made only after the removal of GBR’s chief executive officer. The intention behind the amendment is to treat GBR as a business, which I think we all agree is what it is intended to be—albeit a nationalised one. Where there is a board of non-executive directors, they can question the executive team, and they can challenge decisions and require the chief executive to explain and defend the direction of the company. However, when push comes to shove, and the decision is made that the organisation is moving in the wrong direction, the weapon available to the chairman is the removal of the chief executive officer.

If GBR is operating on a day-to-day basis with oversight from the Department for Transport—the Secretary of State—and concerns arise as to its direction or performance, the sequence of severity of the response should not start with guidance from the Secretary of State and then mandatory directions. They might be the final requirement, because we all need those levers, but surely they should come only after the chief executive has been challenged and then removed, just as in the private sector with an arm’s length majority investment.

[Olly Glover (Didcot and Wantage) (LD)]

I certainly see what the hon. Member is trying to do with these amendments, and the Liberal Democrats share some of his concerns about the balance between holding GBR to account and GBR’s autonomy. However, does he not feel that amendment 11 may go a little too far? Laudable though the KPIs that he has set out are, I am not sure that any railway in this country has ever achieved them all at once, and if the amendment were made we may very well go through a revolving door of chief executives before the Secretary of State can give any direction.

[Jerome Mayhew]

That is a perfectly fair challenge, but amendment 11 would not require the CEO’s removal by the Secretary of State if those KPIs are not met; it would be a necessary first step to demonstrate that the KPIs are not being met, and then there would be a discretion. I suppose the hon. Member is really arguing that my safeguard is not quite as strong as it could be. Nevertheless, it would be a step in the right direction, and it would not require the removal of the chief executive.

New clause 4 would give the Secretary of State the power to dismiss the CEO of GBR on the grounds that a KPI has not been met and—this is an important bit, which the hon. Member for Didcot and Wantage might recognise gives the new clause some weight—GBR has failed to act on guidance that has been issued by the Secretary of State under clause 9. It is sequential. First, the chief executive is given guidance from the Secretary of State. Most chief executives worth their salt would take notice of official guidance given by their 100% shareholder, but if for some reason they fail to act on the guidance and they are still missing their KPI, then the power to dismiss would be exercisable. In my submission, that is a good approach.

Clause 7(2)—the “interference clause”—anticipates minor direction changes, which is exactly the kind of direction that should not be issued and is contrary to the explanatory notes. We are told that the powers in the clause will be used only as a last resort, but subsection (2) states:

“A direction under this section may provide, in particular, that a function is only to be exercised—

(a) after consulting the Secretary of State, or

(b) with the Secretary of State’s consent.”

The clause is not an emergency lever. It is quite clear from the drafting that the circumstances in subsection (2) cannot apply to a last-resort emergency lever. It is saying, “You can carry on doing things, but we need to have oversight in the nitty-gritty.” It is truly an interference clause.

Is it the Government’s intention that directions issued under clause 7 will be, as described in the explanatory notes, used as a “last resort” emergency brake, or do they intend—this is the case as the Bill is drafted—that the Secretary of State will give himself or herself the power to intervene in day-to-day management, even down to the level that individual decisions will not be taken until there has been consultation with the Secretary of State or the Secretary of State has consented to them?

Clause 7(5) needs improvement. It requires publication by the Secretary of State, but anticipates no role for Parliament in that oversight. The organisation Rail Forum said:

“We agree that this is desirable to ensure GBR remains arm’s length and is allowed to manage its own affairs.”

That is important. The industry itself is saying that GBR needs to be operationally independent and to manage its own affairs. Amendment 14 would correct that issue. It would require the Secretary of State to lay any decision before Parliament—the right place for primary scrutiny. Rail Forum supports the amendment. It says:

“This is essential to ensure that normal Parliamentary process is not bypassed.”

Amendment 16 would mean that decisions on fares imposed on GBR by the Secretary of State can be assessed against passenger growth and affordability. Such a direction would have a huge impact on the financial position of GBR, because decisions on fares and passenger growth and affordability are central to revenue. It is crucial that decisions are made on proper evidence and in line with the objects of GBR.

--- Later in debate ---

[Rebecca Smith (South West Devon) (Con)]

I do not want to stop my hon. Friend’s flow, as I believe he is probably coming to the end of his remarks. On listening to his eloquent speech, it strikes me that these amendments point directly to the fact that if Parliament had more of a role under the Bill, we would not even get to such places. Ultimately, if there is scrutiny throughout the process and an ability for Parliament, once GBR exists, to hold the Secretary of State and GBR to account, we should avoid the need for a civil proceeding, because a lot of the issues could be nipped in the bud before getting to that stage.

[Jerome Mayhew]

My hon. Friend is entirely right. That will be a theme of our comments on and challenges to the Bill throughout the progress of our scrutiny: accountability without responsibility is no accountability at all. Time and again, we see an unwillingness from those who drafted the Bill to trust the role of parliamentarians as scrutineers.

As a former businessman, I know—I have not made this one up; it is not unique thinking—that, in any organisation, you get what you measure. That will have been the case in any organisation that hon. and right hon. Members may have worked in in the private or public sector: the NHS has targets because it gets what it measures. At the moment, the Bill measures very little on GBR’s performance, and where it does, that disappears off to the Department for Transport and is reported to other civil servants.

As parliamentarians, we know our value in holding not only GBR to account but the Government of the day, which will not always be a Labour one. That is our important role, which is done through the Select Committee process and more widely. As parliamentarians, we should seek to improve the Bill. I recognise that we will have a number of Divisions during this process and I am unlikely to win a single one, but I urge the Government to listen—perhaps to the private comments of its own Committee members; they do not have to tell me about it—because these are genuine areas of improvement that we as parliamentarians should be encouraging the Government to add to the Bill. On that note, I will stop.

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

It is a pleasure to see you back in the Chair, Sir Alec. I thank the shadow Minister, the hon. Member for Broadland and Fakenham, for this group of amendments, which are primarily about the direction powers in the Bill.

Amendments 11 and 12 would each limit the use of the Secretary of State’s direction power, requiring that the power can be used only as a last resort, after dismissing the head of GBR and if GBR has breached its functions. I understand the intention here, which is to ensure that these direction powers are used proportionately. I assure the hon. Member that the Government agree with that aim—we absolutely must empower GBR to be the directing mind of the railway—and I agree that the railway will not work if Ministers are forced to keep meddling in it in the way that they do today. That said, this power is not the problem that he thinks it is.

The new direction power is common in relationships between the Secretary of State and arm’s length bodies. Other examples in the transport sector that are not limited to last resort use include the power in the Infrastructure Act 2015 for the Transport Secretary to direct National Highways. Hon. Members will note that these types of powers are not frequently used. These amendments would create restrictions that undermine the principle that the Secretary of State should retain the ability to respond to persistent, urgent or unforeseen issues where rapid intervention is required.

[Jerome Mayhew]

Where is the reference to persistent, urgent and unforeseen incidents in the Bill?

[Keir Mather]

The Government have made it clear what the provisions within these clauses are designed to implement. I ask the shadow Minister to look at legislation passed under his own Government that contain direction powers that are remarkably consistent with those found in the Bill, and at the directions provided in other pieces of legislation. Does he feel that they represent mission creep when it comes to Secretary of State responsibilities? He will note that these type of powers are not used frequently. We believe that these amendments would create restrictions that undermine the principle that the Secretary of State should retain the ability to respond as required.

Critically, a direction should come before there has been a serious impact. The removal of an executive or the ORR deeming GBR to be in breach of its statutory functions would suggest that a serious failure has already occurred. In the latter case, it is unclear in what situation the hon. Member would consider a breach of a statutory function to have occurred, which would introduce ambiguity into the system.

Restricting the direction powers by limiting their use to only the most serious of instances would mean that any directions were more likely to be more prescriptive and severe. I am sure that the shadow Minister would not wish to see the public or industry seriously impacted before the Secretary of State acted. The new powers also recognise the GBR board as the railway’s directing mind while enabling Ministers to intervene to support GBR to deliver or correct course.

Amendments 13 and 17 would remove the ability for the Secretary of State and Scottish Ministers, respectively, to say that GBR can exercise unspecified functions only after consultation or with their consent. I do not think that these amendments are helpful. They would effectively remove the clarity on the directions power, but would not restrict the legal scope of it. They would simply lessen the legal transparency around the use of the direction.

There are circumstances where requiring GBR to consult the Secretary of State or Scottish Ministers before taking a specific action would be entirely reasonable, and maybe even desirable for GBR. For example, where GBR needs to address a specific risk or situation as part of a wider national co-ordination or cross-industry response, the Secretary of State may need to ensure that actions are in line with national responses. The ability to revoke a direction allows Ministers to ensure that they operate in a proportionate and rational way in response to time-sensitive issues.

Amendments 15 and 18 would prevent the Secretary of State and Scottish Ministers, respectively, from enforcing GBR’s failure to comply with a direction through the civil courts. The Government need to retain the right to independent enforcement with fixed remedies that compel GBR to act across a range of mechanisms, to ensure a pathway to protecting taxpayers’ money and the delivery of the Government’s objectives. I hope the hon. Member would agree that it is completely undesirable to remove any ability for Ministers to hold the executive to account.

I also politely say that the hon. Member cannot have it both ways: either GBR is an organisation that could exercise mission creep and is too independent of scrutiny, whether from Parliament or anywhere else, or the powers in the Bill place too many strictures on it from the perspective of Government. That point of clarity is required in the Opposition’s overall perspective on the Bill.

[Jerome Mayhew]

As I have set out in my series of amendments, the appropriate oversight and control is to remove the chief executive. The Minister must accept that, if the Secretary of State thinks that the organisation is going in the wrong direction, is not listening to guidance or has gone rogue in some way, they have the unfettered power to remove the chief executive officer at any stage. If he does not think that is the case, he should say so now, because if the Secretary of State has the power to remove the chief executive officer and put in place someone who will do his bidding, then none of this is needed, is it?

[Keir Mather]

I will turn in a moment to the specific points that the shadow Minister raises around the chief executive, but I think I share his views on the importance of GBR’s compliance with its fundamental functions and with the law. That is why amendments 15 and 18 are peculiar—they do not recognise GBR needing to be able to have enforcement through that particular route.

Amendments 14 and 16 both relate to the transparency of directions. Amendment 14 would require directions to be laid before Parliament, but we believe that is unnecessary as provisions in the Bill already require directions issued under this power to be published, and Parliament has the power to call the Secretary of State to account should it take the view that more information is required.

--- Later in debate ---

[Keir Mather]

I agree with my hon. Friend’s sentiment that it is unwise to hypothesise about what potential eventualities could befall GBR in specific instances, as the shadow Minister encourages me to do. What is important—my hon. Friend made an important point around consistency, both in our legislative work and the work of the Government more broadly—is to ensure that the bedrock upon which GBR sits is legally sound, and that all eventualities that may arise are catered for through provisions within the legislation that offer sufficient breadth. That is why amendments 15 and 18 do not serve the legal accountability purposes that the shadow Minister seems to want to stress.

[Jerome Mayhew]

rose—

[Keir Mather]

I will give way one final time and then I want to make some progress.

[Jerome Mayhew]

I am grateful that the Minister is being very generous. In my opening remarks, I asked him to give me some real-world examples of when injunctive relief might be required. Could he not forget to provide those?

[Keir Mather]

I had not forgotten the shadow Minister’s request for me to provide specific examples. In a sense, though, I do not believe that it would be wise to do so. I do not think that the purpose of this Committee is to speculate about what GBR may or may not do in future; it is important that we develop a suite of measures that create the accountability that is required.

--- Later in debate ---

[Keir Mather]

It puzzles me that with all the other transport bodies that have been set up—National Highways is an interesting example—I do not recall a series of concerns having been outlined that one of the most robust systems of parliamentary democracy in the world was in some way, shape or form incapable of—

[Jerome Mayhew]

Will the Minister give way?

[Keir Mather]

I will, but very briefly, and this is the final time.

[Jerome Mayhew]

I am grateful to the Minister, though I remind him that we do have 14 sessions; we are not cantering to the last fence. He prays in aid National Highways. We are all constituency MPs. We all know how frustrating it is trying to deal with National Highways. I do not want to make a headline unnecessarily, but my personal view, as a constituency MP, is that trying to deal with National Highways in the interests of my constituents is almost impossible. Why would he choose that as the example to follow when designing accountability for GBR?

[Keir Mather]

In a spirit of cross-party contrition, I agree with the shadow Minister’s point; it is a fair one, and perhaps that was a poor example.

In the setting out of the long-term rail strategy, through the Secretary of State, there are myriad means of Parliamentary accountability to ensure that process is done in a way that reflects the long-term interests of the railway and of passengers. There are robust means of scrutiny through this House and other means of which Parliamentarians can avail themselves of, and of which the hon. Member for South West Devon has availed herself multiple times through the passage of this Bill.

I would like to conclude on this grouping and so I want to speak to new clause 4. As the hon. Member for Broadland and Fakenham will be aware, with bodies of this nature the Government’s long-standing policy is that the Secretary of State of the sponsoring Department has responsibility for appointing the non-executive chair of the board. The executive team is then accountable in the first instance to the organisation’s non-executive board, and it is right that trust is given to the expertise and experience of the executive and that there is appropriate distance between the Secretary of States and those tasked with the day-to-day operational management of the organisation. That is one of the benefits of the GBR model.

Legislating to dictate a process whereby the chief executive is dismissed directly by the Secretary of State for failure to meet a single KPI is not appropriate and it cuts across all guidance and understanding of effective partnership between Government Departments and their arm’s length bodies. For those reasons, I cannot accept these amendments and urge the hon. Members to withdraw them.

[Jerome Mayhew]

I am wholly unconvinced by the explanation the Minister has given. On many of the clauses and amendments I have put forward, and those put forward in the names of other Members, one can see both sides of the argument; on this one, I think the Government are entirely wrong. They are setting up a structure using another arm’s length non-governmental body, National Highways, that is a byword among us constituency MPs for a lack of accountability and for being a frustrating body to deal with. That is not the right direction for the Government to be going in and I will push the amendments to a Division.

Question put, That the amendment be made.

--- Later in debate ---

[Jerome Mayhew]

The Committee will be pleased to hear that I am not going to reheat my arguments on clause 7, but we have not yet discussed clause 8. The arguments inevitably mirror each other to a degree, because clause 8 in the main seeks to extend the provisions of clause 7 to Scottish Ministers.

Clause 8 will grant Ministers in Scotland the power to issue and publish directions to GBR—so far, so similar—and GBR will be required to comply with those directions. However, the Secretary of State has ensured that they will have the ability to remove a direction of Scottish Ministers where it is inconsistent with her directions. The clause requires the Secretary of State to consult Ministers in Scotland before revoking and must publish any revocations.

The clause suffers from the same issues as clause 7, as I have already intimated: granting the Secretary of State, and then by extension Scottish Ministers, the ability to direct GBR, which is meant to be operationally independent. That is the first confusion. I will not rehash the arguments, but hon. Members should take it as read that I repeat them here.

As the Minister just mentioned, clause 8(7) will allow the Secretary of State to revoke a direction given by Scottish Ministers under that clause. That is confusion No. 2. We anticipate circumstances in which GBR has a direction of travel—that is not meant to be a rail pun—with which the Scottish Minister disagrees; the Scottish Minister issues a direction for GBR to go in a different direction, and then the Secretary of State disagrees with that direction and issues a revocation. What a recipe for confusion, delay and poor governance that creates!

Who is really in charge of the railways in Britain? It is certainly does not sound as though it is GBR, which is being second-guessed on the one hand by the Scottish Ministers and on the other by the Secretary of State. It does not sound as though Scottish Ministers are in charge even in Scotland, because they can suffer a revocation from the Secretary of State. Yet the consultation document tells us, as the Government have told us time and again, that

“GBR will be operationally independent, staffed by experts and professionals from the rail sector…who will be empowered to deliver for passengers and freight customers without government interference in day-to-day decision-making.”

When did that change? Perhaps the Minister can let us in to the secret. Clause 8 not only prevents GBR from being independent—as clause 7 does—but prevents devolved Ministers from acting within their own devolved settlements without being second-guessed by the Secretary of State.

I accept that the Scottish Cabinet Secretary for Transport, Fiona Hyslop MSP, when speaking about clause 8 during the Transport Committee evidence session, seemed not to oppose that oversight, as she recognised that certain aspects, such as access and freight, remain reserved. It seems that Scottish Ministers are content to accept the clause as drafted because a further memorandum of understanding will create firebreaks between non-devolved powers, in which the Secretary of State may intervene, and devolved powers. That could be okay, but we as a Committee do not know, because we have not seen the memorandum of understanding, even in draft.

We are going to come back to this issue again and again. There are a plethora of documents designed to support the operation of GBR—to support this skeleton Bill—and yet we have not seen them. How can this Committee do our job of scrutinising this Bill line by line, seeking to improve it and to ensure that it achieves the objectives that the Government say it does, when 19 documents and counting—documents that are crucial to the actual running of the railway both in Scotland and in the United Kingdom as a whole—are absent, even in draft?

Bill Reeve, the director of rail reform for Transport Scotland, when invited to add further to the remarks from the Cabinet Secretary, said:

“An awful lot will rely on the memorandum of understanding to flesh that out and give examples.”

There is a question for the Minister surrounding this memorandum of understanding for Scottish and Welsh Ministers. A lot of the powers in the Bill seemingly rely on a document that is not part of the Bill. Will the Minister provide details of the memorandum of understanding prior to the passage of this Bill? If not, why does he refuse to let us know what the memorandum of understanding is likely to stay? Why does he believe that Parliament should approve a working arrangement between the devolved Governments on which no consultation has been undertaken?

I will speak further in detail on the memorandum of understanding when we reach clauses 23 and 24, but it is important that Ministers note that the current framework of the Bill relies on a document that has little oversight or clearly defined objectives, and which we have not seen.

[Keir Mather]

On memorandums of understanding, I point the shadow Minister to the fact that the heads of terms for the memorandum of understanding with the Welsh Government have already been published. On the overall principle on the development of memorandums of understanding, the stakeholders who gave evidence to the Committee were very clear that the process is being carried out in close consultation with devolved Governments and that it is very common for such operational documents to be developed in consultation in this way.

We are creating an operational framework by which GBR can function as an organisation. It is very important that that platform exists before the devolved settlements that will dictate the operational reality of how the railway works are layered on top.

On the shadow Minister’s point about direction powers, these are the same direction powers that exist, almost like for like, with Great British Energy, Great British Nuclear and the North Sea Transition Authority. They are there to respond to urgent and pressing matters. His points on overreach should have applied to the creation of those organisations as much as to the creation of GBR.

The factual reality of how the direction power has been used in the case of oil is that only one direction has been issued in 10 years. It is the Government’s intent—we have been very clear in saying so—that this direction power must operate in a similar way and only respond to urgent, pressing and persistent matters.

On the issue of direction from Scottish Ministers, the Secretary of State cannot revoke a direction if it pertains purely to a devolved matter, but Scottish Ministers did agree that revocation powers are necessary when there are conflicts in directions. Speaking from my perspective on how this Bill puts the devolved settlement at the centre of how the railway functions, there are sufficient methods to create accountability, mutual working and shared recognition of priorities and ambitions across devolved Governments, the UK Government and GBR, so that I do not envisage a revocation of a direction being used regularly. It is only there to ensure the smooth function of the railway.

Amendment 166 agreed to.

Amendment made: 167, in clause 7, page 5, line 8, leave out

“operation of a GBR-provided Welsh service”

and insert—

“exercise by Great British Railways of functions—

(i) on behalf of the Welsh Ministers in accordance with arrangements made under section 4, or

(ii) under a contract awarded under section 31(4)(b).”.—(Keir Mather.)

This amendment broadens the circumstances in which the Secretary of State must obtain the consent of the Welsh Ministers, where giving directions to GBR.

Amendment proposed: 14, in clause 7, page 5, line 9, after “publish” insert “and lay before Parliament”.—(Jerome Mayhew.)

This amendment would require the Secretary of State to lay any directions given to Great British Railways before Parliament.

Question put, That the amendment be made.

--- Later in debate ---

I commend amendment 143 to the Committee and look forward to the Minister’s comments.

[Jerome Mayhew]

I will deal briefly with amendment 143 and develop some arguments on the other amendments. I congratulate the hon. Member for Didcot and Wantage on tabling amendment 143, which pushes in exactly the same direction that I have been pushing today, and also last Thursday, in developing the concern about increasing micromanagement by Department for Transport officials in the name of the Secretary of State, which will undermine the independence of GBR as a tactical organisation.

The culture is already there: the Department has been micromanaging the railways to an increasing extent since 2012 at the latest. This Bill needs to change culture. It is not a steady-state Bill; it is a once in a generation opportunity to change the culture not just of GBR, moving it away from Network Rail, but of the Department for Transport, which is as necessary as the other cultural change. If this Bill is to achieve what it is meant to, the Department’s relationship with the railways should properly be changing. Amendment 143 is a modest but important proposal that would go some way to facilitating that.

Dealing with the group as a whole, and continuing the theme of the exercise of functions and guidance by the Department, the Opposition once again note the contrast between the supposed independence of GBR and the various mechanisms that the Department and the Secretary of State have managed to wheedle into the Bill to grant themselves extra powers, whether as a last resort or, as I fear, to create a micromanaging charter, and where that last resort, as it has been described, has no qualifying criteria—although as we have heard from the Minister, that is seemingly of little consequence.

The clause enables the Secretary of State to “issue and publish guidance”, with notable devolved exceptions, which will allow the Secretary of State to

“clarify policy intentions to GBR.”

The explanatory notes acknowledge that

“in most cases requiring course correction, guidance would be used before directions,”

although I note that it is not required. The Government anticipate that they could move straight to directions if they wish to. However, subsections (1) and (2) are very clear:

“The Secretary of State may give guidance…or revoke guidance”

without any qualifying criteria at all.

What is guidance? It is a steer short of direction, and an application for an injunction against GBR—which we have just voted in favour of—destroys the myth of GBR operational independence. It will be taking orders from the Department for Transport, because that is the status quo ante. Without strengthening this clause and some others, we will confine the relationship between the Department for Transport and the newly created GBR to “more of the same”. That is the fear that we should collectively be fighting against.

The guidance will be not just on the strategic direction or the business case, but on delivery decisions, at the whim of the Department. We can say, “Well, it’s the Secretary of State. This will be done under advisement,” but we all know that in practice it will mean officials micromanaging GBR in the name of the Secretary of State, who will provide the rubber stamp. I fully expect the Minister to reassure me that that would never happen, and that the provision is only for course corrections. Now, if I was in the passenger seat of a vehicle and kept telling someone how to drive, I suppose I would call that a course correction, but they might call it backseat driving. That is the problem: the Bill is designed for backseat driving by the Department for Transport. Will the Minister explain how the clause is nothing short of backseat driving?

I obviously wish GBR the best of luck, and I hope the Minister’s enthusiasm and optimism is fully justified, but I fear that the disastrous consequence of forcing it to walk on eggshells will be constant second-guessing. I have been involved in an organisation in which there was second-guessing—no one was sure who had the decision-making power—and it was a disaster. If there is second-guessing, the organisation as a whole does not know when a decision has been taken. Does the power lie with the board? Does the board have to get clearance from a second board in a wholly different organisation, which might have a different view? Should people in GBR wait for the nod from the Department for Transport before taking action within the organisation, particularly if it is a decision with which its sub-department may not agree?

[Rebecca Smith]

My hon. Friend’s argument highlights the challenge that a lot of the independent retailers, open access users and, potentially, freight users will face if the Bill remains as drafted. Ultimately, they are the people outside the walls of the castle who will struggle to understand who is making what decision and which decision is final. It is a bit like a child going to one parent, getting an answer they do not like, and going to the other parent to get a different answer. Should there be more clarity in the Bill specifically for that reason?

[Jerome Mayhew]

I completely agree with my hon. Friend. When one’s children come and ask for something, the wise answer is always to ask first, “What did your mother say?” If we were able to apply that common sense to this situation, I would not be so concerned. What we have instead is stakeholder management culture seeping into the core aspects of GBR functions.

[Laurence Turner]

Will the hon. Gentleman acknowledge that progress has been made on the cultural issues and the micro-management that he describes? I note in passing that he dates that culture from 2012 onwards, which was, of course, entirely under the Government of which he was part. In the Transport Committee, we heard that until the election, Network Rail had to seek Treasury permission to do as much as put up a passenger footbridge. Is it not welcome that that has now come to an end?

[Jerome Mayhew]

It is certainly welcome, but we are still in the position in which an improvement to a line—something as small as the Haughley junction improvement, which costs roughly £15 million to £20 million—still needs ministerial sign-off from the Treasury before it can be authorised. The Government have some way to go to improve the situation.

This will leave us with a stakeholder management culture. My hon. Friend the Member for South West Devon is entirely right that many organisations in the 60% of the railway that is not being nationalised as part of GBR will be intimately and hugely impacted by GBR’s decisions—or will they? Will they, too, have to wait for the all clear from the Department for Transport? If GBR gets on the wrong side of Ministers or the Department, its course is going to be corrected to all manner of different ports.

The combination of clauses 7 and 9 removes almost any semblance of operational independence from GBR. Clause 9(5) states that GBR

“must have regard to guidance given under this section.”

That sounds soft, but in practice it creates a standing expectation of compliance and makes it impossible for GBR to make dynamic tactical decisions that are free from day-to-day second guessing by departmental and ministerial intervention.

That brings me to amendments 19 and 21, which would help defend the operational independence of GBR. If the Secretary of State is concerned about an aspect of GBR’s performance, they may instead issue guidance to inform GBR of its failure to meet the key performance indicators. Additionally, under clause 10, the Secretary of State may give guidance only if

“Scottish Ministers have drawn to Great British Railways’ attention that Great British Railways is not meeting a key performance indicator…and…Great British Railways has not taken action to remedy this failing within the period of two months.”

As a result, the amendments would apply to GBR in both England and Scotland.

Finally, amendment 20 repeats the argument made about directions or guidance given by the Secretary of State on the general level and structure of fares, and it would introduce new subsection (5A), which states:

“If the Secretary of State uses the powers in this section to give guidance to Great British Railways about the general level and structure of fares for travel on railway passengers services designated under section 25 or 26, then the Secretary of State must publish the assumptions, criteria, and objectives underpinning any guidance.”

That is self-evidently sensible, and I look forward to the Minister agreeing with me.

[Keir Mather]

May I begin by addressing the point about backseat driving? Following the shadow Minister’s remarks, I identified that this is something that we want to avoid not only in future but because it is the existing scenario that we inherited. Right now, under the old system, the Secretary of State is the only person who is really accountable for driving the system forward, and private operators spent more time employing people to decide who was to blame for failures on the railway than ensuring that the railway actually ran in the interest of passengers.

Interference in access and timetabling is another issue that has been raised. The reason why we have diffuse responsibility and muddled accountability in that space is because Network Rail and the ORR, which are two separate organisations, both have responsibility there but they cannot do it in a unified way, and therefore they cannot serve the interests of passengers. That is exactly what the creation of GBR as a directing mind for the railway seeks to avoid, and guidance within that system plays a very important role in removing one of the shadow Minister’s key concerns: an overbearing Secretary of State issuing direction to GBR. Guidance has been designed to create an iterative process by which GBR can enter into a dialogue with the Secretary of State to talk through and deal with common challenges.

The amendments seek to limit the ability of the Secretary of State and Scottish Ministers to issue guidance to GBR under clauses 9 and 10. I am clear that the new system established by the Bill does not intend to involve the Secretary of State or Scottish Ministers in ongoing or individual operational decisions. That is for GBR’s board and the thousands of employees working on the railway. Instead, the guidance power provides a mechanism through which Ministers can respond to overarching issues that might emerge. For example, if the ORR identified persistent failures in GBR’s performance against its business plan, it may suggest guidance from the Secretary of State that could help to support GBR to course correct, and to clarify the desired outcome without requiring more stringent action, such as a direction.

Further, it is not all one-directional guidance. Guidance will be a flexible tool designed to support Great British Railways. For example, there may be instances where guidance is requested by GBR and is issued in a collaborative manner to provide clarity on the policy direction or shared objectives. I also remind members of the Committee that GBR must have regard to the guidance—in other words, it must consider the guidance and weigh it against its other duties and obligations. It is not required to blindly follow the guidance in all cases.

Let me turn to the specifics of each amendment. Amendment 143 would limit the issuing of guidance to solely financial or strategic matters. In seeking to establish a hard line between types of decision making, the amendment would create a false dichotomy. Strategic and financial decisions are likely to have operational implications. The amendment could therefore inadvertently prevent the Secretary of State from being able to issue guidance where there is any operational impact at all, which is clearly disproportionate, given the potentially collaborative and helpful nature of the guidance.

Similarly, amendments 19 and 21 seek to prevent the Secretary of State and Scottish Ministers from issuing guidance unless GBR is not meeting a key performance indicator under the Opposition’s proposed new clause 2. I have already explained why that proposed new clause is nonsensical. I reiterate that KPIs would be better designed and included as part of GBR’s business plan.

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I am happy to reassure Members that we will publish our assumptions, objectives and criteria relating to fares, if doing so will support GBR and the industry to understand the Government’s policy goals. However, that is just good Government; it does not need to be in legislation. With all that in mind, I urge the hon. Member for Didcot and Wantage to withdraw the amendment and the hon. Member for Broadland and Fakenham not to move the others in the group.

[Jerome Mayhew]

You are kind to call me to speak again, Sir Alec; I realise that I did not speak to clause 10 earlier. Briefly, I recognise that clause 10 mirrors clause 9, which we have debated substantially, but it is important to note that Scottish Ministers are given a guidance function, whereas Welsh Ministers are not. That reflects the devolution settlement, whereby Scotland funds and controls its rail system in its entirety, whereas Welsh responsibilities are substantially limited to the core valley lines. I repeat our previous arguments about the express need for operational independence for GBR, without constant second-guessing by Department for Transport officials, which my amendment 21 addresses, and about fares, which I discussed in relation to amendment 20. I will press a selection of the amendments to a Division.

Question put, That the amendment be made.

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[Jerome Mayhew]

We have debated these two clauses. We have made clear our concerns about the current drafting and have tried our best to improve the Bill through a number of very sensible amendments, the majority of which were supported by the Liberal Democrats. We in our turn have supported some sensible amendments proposed by the hon. Member for Didcot and Wantage. I recognise that to vote against the clauses would potentially put a difficult hole in the armoury of the Secretary of State for GBR, so it is with a heavy heart that I do not oppose these two clauses.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10 ordered to stand part of the Bill.

Clause 11

Licensing

Question proposed, That the clause stand part of the Bill.

[Keir Mather]

On a point of order, Sir Alec. Before turning to the clause, I would like to correct the record. My Department’s commitment has always been to publish the draft GBR licence during the Bill’s passage, rather than before the Bill leaves the Commons, as I had said in oral evidence on 20 January. Before publication in draft, my Department will undertake engagement with stakeholders to inform the draft. That engagement will start before the Bill leaves the Commons, and I will ensure that hon. Members are involved in it if they would find that beneficial.––[Official Report, Railways Public Bill Committee, 20 January 2026; c. 97, Q180.]

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[Joe Robertson]

It is a pleasure to serve with you in the Chair, Sir Alec. My right hon. and hon. Friends have already spoken at length and I agree with them, but I will add just a couple of short points to place my disappointment on the record that not even a draft of the licence has been presented.

It is good that the Minister has clarified that it will be coming forward sooner than he suggested previously, but the reality is that it is already too late, as we heard from stakeholders last week during evidence. I urge him not to delay any further. Even an outline draft of the licence as soon as possible, rather than a more detailed one, would be clearly better than nothing. He should also bring forward the other 19 documents identified by my hon. Friend the Member for South West Devon—again, in draft form as appropriate—as soon as possible. As I say, it is already too late for this Committee today, as we debate this very clause and schedule. I wish to place that on the record.

[Jerome Mayhew]

I echo all the comments made by my right hon. and hon. Friends. I also thank the Minister for facing up to it with a point of order. It was obvious last week that a point of order was on its way. None of us on the Opposition Benches will hold him to his initial, rather quick, response—no doubt I will do something similar during the passage of the Bill—but that does not let the Government off the hook.

This is not business as usual for a Department bringing through a Bill of this nature. My right hon. Friend the Member for Melton and Syston, an experienced former Minister, gave two examples of primary legislation that also relied on secondary documentation. In those circumstances, the departmental teams did provide skeleton outlines for Parliament, which is what we are, to consider and do our job properly. I do not want the Minister to rush out a quick affirmative like last week, so I ask him to take time to consider, perhaps discuss with his officials, and reply later today on whether he and his officials are able to commit to some form of briefing—some skeleton outline—on the nature of the licence, at a time when we can collectively discuss and debate it, and see whether it points in the right direction.

Clause 11 simply enables GBR’s licensing to be set out in schedule 1, which we will come on to in a moment. That schedule amends part 1 of the Railways Act 1993 and sets out the detailed process by which the GBR licence will be issued and maintained. Both the Secretary of State and the Office of Rail and Road will retain the ability to grant licences to railway bodies other than GBR—for example, open access operators, freight operators and other infrastructure managers such as the core valley lines in Wales. I know we will discuss the contents of schedule 1 and the detail of the licence extensively.

[Keir Mather]

Although we have had an opportunity to discuss some of the provisions regarding the creation of the licence—it being enforced by the ORR with powers that include giving GBR directions to escalate issues to its board, requiring GBR to create and publish improvement plans and issuing enforcement orders— I have heard Opposition Members’ points that they would like an opportunity to discuss those matters more closely and in further detail.

We believe that developing the licence in this way will ensure that what is published for statutory consultation is informed by the development of a stable legislative framework in which to scrutinise the licence—as we are doing now—and can be meaningfully refined and enhanced by a wide range of views. However, I take the point that the shadow Minister and other right hon. and hon. Members have made, and I am sure that we can have further discussions today. I commend the clause to the Committee.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Schedule 1

Licensing of Great British Railways

[Jerome Mayhew]

I beg to move amendment 109, in schedule 1, page 55, line 10, leave out from “may,” to “grant” and insert—

“at the recommendation of the Office of the Rail and Road in relation to matters related to safety and standards and, after consultation with the Passengers’ Council,”.

This amendment would require the Secretary of State to get a formal recommendation from the Office of the Rail and Road that the GBR licence adequately ensures that licence obligations related to safety and standards are not compromised or undermined.

Schedule 1 contains the meat of what we have been talking about. It amends part 1 of the Railways Act 1993 to set out how GBR will be licensed. Paragraph 2 confirms that GBR should never be exempt from holding a licence, and paragraph 3 inserts new section 7B, which will enable the Secretary of State, following consultation, to grant GBR a written licence to operate specified railway assets. The licence must be in writing and will remain in force unless revoked or surrendered. Surrendering the licence will require the Secretary of State’s consent.

Paragraph 3 also sets out the process for granting licences to persons other than GBR. The Secretary of State and the Office of Rail and Road will continue to be able to grant licences to persons other than GBR to operate railway assets. The ORR may grant such licences only with the Secretary of State’s consent or under a general authority issued by the Secretary of State. Licences must be in writing and will remain in force unless revoked or surrendered. Surrendering the licence will require the ORR’s consent, much in the same way as it previously required the Secretary of State’s consent.

Proposed new section 8A sets out the requirements for the granting of licences by the Secretary of State or the ORR. It provides that a notice must be published outlining the intention to grant a licence, the reasons for doing so, and allowing at least 28 days from the date of publication for interested parties to make representations or objections. There is a duty to consider representations or objections made within the period specified in the notice.

Proposed new section 8B gives the Secretary of State the power to set rules for how licence applications must be made. Among other things, that includes the format of the application, the fee payable—different fees may apply—and the requirements for publishing the application. Before making any regulations, the Secretary of State must consult the ORR. Any fees collected by either the Secretary of State or the ORR in connection with licence applications must be paid to the consolidated fund.

Paragraph 4 clarifies that a licence granted to GBR may specify when the authorisation it provides takes effect. It allows the licence to include a start date or a mechanism for determining it. Paragraph 5 provides that the licence granted to GBR may include a condition requiring it to comply with the provisions set out in separate document that is prepared by the ORR and approved by the Secretary of State. It might be something such as a code of practice—one of these operating documents that we have been talking about so much—and it may relate to the sale of tickets by GBR or third parties, or to services that GBR provides to the rail industry to facilitate railway operations that are of particular interest to the independent retail sector. The paragraph makes it clear that an approved document may be used to regulate GBR’s behaviour in relation to the sale of tickets by parties other than GBR, in the independent retail sector.

Paragraph 6 provides that, before making modifications to a GBR licence, the Secretary of State must publish a notice explaining the proposed modifications and the reasons for them, and must allow the usual period of 28 days for interested parties to make representations. There is a duty on the Secretary of State to consider representations or objections to the notice made within the period specified.

Paragraph 7 clarifies that the ORR must consult the passengers’ council before making any amendments to passenger or station licences that relate to functions of the council. The ORR must also send a copy of the modifications to the council as soon as practicable. Paragraph 9 clarifies that any licence under section 8 of the Railways Act 1993 that was in force immediately before the changes made by the schedule come into force will remain so, per the conditions and periods set out in the licence, unless it is revoked or surrendered.

Here is the mystery of the missing licence: where is it? We have explored this at some length, and the Minister is going to go away and see what he can rustle up in the Department’s cupboard to point us in the right direction, or at least to give us the direction of travel of the missing licence. In oral evidence to the Transport Committee, Ben Plowden, chief executive officer of the Campaign for Better Transport, said:

“I think the licence will be critical. There are various references in the documents that the Government published to a ‘streamlined licence’, so I would be quite interested to see what that means relative to the current licence that applies to Network Rail. I think the Government are going to consult on the draft licence, so we will all have a chance to look at it.

The other point I would make is one I made earlier, which is that the licence will be one of many documents the Government will produce in the next year to 18 months. There is the long-term rail strategy and GBR will produce its business plan. There will be the access and use policy; the new periodic review process; and MOUs with Ministers in Scotland and Wales. There will be guidance on partnerships with mayoral combined authorities, and guidance on the right to request full rail devolution. There is a huge amount still to come.

Understanding how the licence intersects with those other documents and processes is going to be critical, because between them they will add up to the set of arrangements that determine whether GBR is successful or not for passengers. We have to see the licence in the context of all the other things that will be guiding, directing and shaping what GBR does, how it invests, and what it does operationally.”

That is the experts in the industry repeating what the Opposition have been arguing repeatedly today and last week. More accurately, it is the other way around: we have been listening to the industry in a way that the Government have not, and have been expressing the deep concerns in the sector that the current proposals are half cocked. Huge chunks of the direction, guidance and memorandums are simply missing, including the licence that the schedule is designed to address.

[Rebecca Smith]

The Minister spoke earlier about the consultation. It is worth restating that it is not the final draft but a consultation on the draft that is going to happen. We will have sight of the final version of the licence way down the road of the Bill’s progress, and ultimately the final licence may not be ready before scrutiny of the Bill is complete. Does my hon. Friend agree with me that that is something that we need to address? Hopefully the Minister will reassure us.

[Jerome Mayhew]

My hon. Friend is absolutely right. We have made that point as forcefully as we can. I trust the Minister when he says that he will take it away and do his best with his ministerial and departmental colleagues, but it is not just a matter of saying, “We kind of understand that licences already exist. Licences have been issued by the Office of Rail and Road. It will not be some kind of copy and paste, but taken from what already exists and we are going to get something similar here.” As Ben Plowden said, there are various references in the documents that the Government have published to something very different: a streamlined licence. That begs all sorts of questions about what is anticipated to be removed from the licence. The Department for Transport has got as far as saying it is going to be smaller, perhaps significantly smaller because it is streamlined, but this is critical.

The licence of ORR is a mission-critical document that anyone who works in the industry would acknowledge, yet we are told it is streamlined, and therefore elements of what is traditionally considered to be a licence under the current system are anticipated to be removed. Is the Minister able to tell us what parts are likely to be removed? What is it? Because the Government documents refer to a streamlined licence, he can tell the Committee what that means. The Department says it is going to be streamlined, but what does it intend to remove to justify that description? It must be somewhere within the Department; otherwise those words would not have been used in the supporting documentation. There is no excuse for the Minister not to describe the definition of a streamlined licence and what is anticipated.

My hon. Friend the Member for South West Devon made the point that the Minister has corrected the record on when the draft licence will be provided during the passage of the Bill through both Houses, but in the next breath he said there will be consultation on that document, which has not yet started. How can that consultation be anything other than a paper exercise? The Minister seems confident that he can go through a consultation process that has not yet started, that the Department can then properly consider the contributions and come to a considered view and redraft the licence, taking into account all the comments, good, bad and ugly, that the consultation came up with, and then produce the draft licence in the two or three months that the Bill has to run through both Houses. That is an extraordinary position. It suggests either that the Minister will have to come and make a second point of order in a couple of months’ time, or that the consultation to which he refers is an absolute farce, because the Government have already decided what they want to do. They are going through the performance of a consultation, but they have already made up their mind. Perhaps the Minister will tell us which one it is.

Amendment 109 would constrain the Secretary of State’s ability to modify GBR’s licence without first seeking consent from the ORR and the passengers’ council. It is part of a series of amendments including amendments 110, 112 to 116 and 233, to which I will speak later. The Government strategy is that the Bill will be the legislative shell for the creation of GBR. Crucial matters of detail, such as the licence under which GBR will operate and important long-term strategies, business plans, targets and so on are separate and, at this stage, missing. Such details matter and deserve proper scrutiny.

We know that other plans and targets are unlikely to be set until after the Bill is enacted, so it is important to include strong checks and balances. That is the purpose of amendment 109. At present, the Bill merely requires the Secretary of State to consult the Office of Rail and Road. Legally, that is weak; after consultation, the Secretary of State may simply ignore whatever the ORR comes up with. The amendment and those linked to it would require the Secretary of State to obtain the Office of Rail and Road’s agreement for the licence to be issued. Subsequent amendments would require the Office of Rail and Road’s agreement for the licence to be modified.

Modification of the licence requires consent from the new passenger watchdog. If the passenger watchdog is to be as powerful in championing the interests of passengers as the Government claim they want it to be, it requires proper powers that go beyond an invitation to be consulted. For that reason, I propose that we put amendment 109 to the vote.

[The Chair]

I note that debate on amendment 109 has included discussion of schedule 1 more generally. In order to use the Committee’s time more efficiently and if the Committee is content, we could debate schedule 1 more broadly now. That would mean that group 20 is not debated; there would just be a formal decision on schedule 1 and debate on group 19 would be unchanged. As that is the will of the Committee, we will take that approach.

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[Keir Mather]

I thank the hon. Gentleman for the amendment, which is intended to prevent the Secretary of State from granting a licence to GBR unless the ORR gives a formal recommendation that licence obligations related to safety and standards are not compromised or undermined. The amendment does not specify what the ORR’s recommendations would need to contain or how it would operate in practice. The Government recognise the importance of effective regulation in the rail sector, particularly in relation to safety. The safety of our railways is a priority, and we will ensure that it is central to GBR, so that our railways continue to rank among the safest globally. The Bill makes no changes to the existing safety regime, which has proved to be exemplary.

In practice, amendment 109 would give an approval role to the ORR on matters relating to safety and standards ahead of the GBR licence being granted by the Secretary of State. It would confuse the clear accountabilities that the Bill establishes, which place responsibility for drafting, consulting on and granting the GBR licence with the Secretary of State, with the ORR then enforcing against its provisions. That aligns with the Government’s approach to regulation: Ministers set policy and strategy, and regulators provide validation and reassurance to the industry.

The Bill already requires a consultation on the contents of the GBR licence and specifies that the ORR and the passenger watchdog must be consulted as part of that. That will ensure that any concerns about safety and standards can be raised and considered appropriately ahead of the GBR licence being granted. The amendment would confuse accountabilities and add additional processes where they are not needed. I therefore urge the hon. Member to withdraw the amendment.

[Jerome Mayhew]

I am grateful for Minister’s explanation, but I am not persuaded by it and seek to put amendment 109 to a vote.

Question put, That the amendment be made.

Railways Bill (Sixth sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 27th January 2026 Public Bill Committees

[The Chair]

We are now sitting in public and our proceedings are being broadcast. Before we begin, I remind Members to switch any electronic devices off or to silent, please, and that tea and coffee are not allowed during the sittings—there should be ample water at your Benches. The selection and grouping document shows the way in which the amendments and new clauses have been arranged for debate. Any Divisions on amendments or new clauses take place in the order in which they appear in the amendment paper, of which you should all have a copy.

Schedule 1

Licensing of Great British Railways

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I beg to move amendment 233, in schedule 1, page 55, line 10, leave out “consultation” and insert “agreement”.

This amendment limits the Secretary of State’s powers to set GBR’s licence unilaterally.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 110, in schedule 1, page 55, line 25, leave out “consultation” and insert “agreement”.

This amendment, along with Amendments 111 and 112, would limit the Secretary of State’s ability to unilaterally set GBR’s licence and require instead agreement from the ORR and the Passenger’s Council.

Amendment 111, in schedule 1, page 55, line 30, leave out “consultation” and insert “agreement”.

See explanatory statement for Amendment 110.

Amendment 112, in schedule 1, page 55, line 34, leave out “consultation” and insert “agreement”.

See explanatory statement for Amendment 110.

Amendment 118, in schedule 1, page 56, leave out line 6.

This amendment would strengthen the ORR’s right to grant a license to a non-GBR operator.

Amendment 113, in schedule 1, page 57, line 20, leave out “consult” and insert “obtain the agreement of”.

This amendment, along with Amendments 114 to 116, would require the Secretary of State to gain the consent of the ORR for making regulations about GBR’s licence.

Amendment 114, in schedule 1, page 58, line 20, leave out “consultation” and insert “agreement”.

Amendment 115, in schedule 1, page 58, line 21, leave out “consultation” and insert “agreement”.

Amendment 116, in schedule 1, page 58, line 23, leave out “consultation” and insert “agreement”.

Amendment 126, in schedule 2, page 62, line 17, leave out “advice” and insert “agreement”.

This amendment would require the Secretary of State to obtain the ORR’s agreement for GBR’s business plan instead of seeking its advice.

[Jerome Mayhew]

Thank you, Mr Western, and for agreeing to be in the Chair this afternoon. We are part-way through consideration of the schedule, with a degree of overlap: amendment 109 was selected in a separate group to this one, although its wording is intricately linked to that of amendments 110 to 116. I shall try to minimise the degree of repetition for all concerned.

The amendments in this group seek to constrain the Secretary of State’s ability to modify the licence of Great British Railways without first seeking consent from the Office of Rail and Road and the passengers’ council. The Government’s strategy is for the Bill to be the legislative shell for the creation of GBR. Crucial matters of detail, such as the licence under which GBR will operate, together with important long-term strategies, business plans, targets and so on, which we have mentioned more than once in our deliberations so far, are separate from the Bill.

That detail matters and deserves proper scrutiny by this Committee and elsewhere in the Houses of Parliament. When the Rail Minister and his officials appeared before the Transport Committee on 7 January, Members took several attempts to secure an assurance that the draft licence would be published before Parliament completes scrutiny of the Bill, albeit without a specific date set. It is therefore important to include in the Bill stronger checks and balances than exist now, and that is the purpose of amendments 110 to 115.

At present, the Bill merely requires the Secretary of State to consult the ORR. Legally, that is of course very weak and, after such consultation, the Secretary of State may simply ignore whatever it is that the ORR comes up with. Amendments 110 to 112 therefore require the Secretary of State to obtain the Office of Rail and Road’s agreement for the licence to be issued, and amendments 113 to 115 require the Office of Rail and Road’s agreement for the licence to be modified.

In addition, modification of the licence requirements would need consent from the new passenger watchdog. If the passenger watchdog is to be as powerful in championing the interests of passengers as the Government claim they want it to be, it requires proper powers that go beyond an invitation to be consulted. That leads me to amendment 118, which would leave out line 6 on page 56 of the Bill and would strengthen the right of the ORR to grant a licence to a non-GBR operator.

The schedule contains important powers for the Office of Rail and Road to issue licences to operators other than GBR to operate services on the network. However, proposed new section 8(5)(a) in paragraph 3 of the schedule gives the trump card to the Secretary of State, who must consent to the granting of such a licence. Why is that power of veto required? Perhaps the Minister will explain when he responds.

If the Government wish to reduce their involvement in the day-to-day running of the railways and the Office of Rail and Road deems that an application from a non-GBR operator meets all the requirements and conditions set out in the Bill, why do the Government think it necessary to have that overriding power? It does not appear to make sense. Amendment 118 would remove that power of veto. The group of amendments, together, would require the Secretary of State to obtain a formal recommendation from the Office of Rail and Road, and would require that the GBR licence adequately ensures that licence obligations relating to safety and standards are not compromised or undermined. The amendments would ensure that, as GBR is granted new responsibilities by the licence, it continues to be subject to safety standards obligations that are in the licence issued by the Office of Rail and Road to the current infrastructure manager, Network Rail.

Such licence obligations go beyond obligations under the Railways and Other Guided Transport Systems (Safety) Regulations 2006—which are called ROGS for obvious reasons—and would require Great British Railways to participate in the industry’s collaborative structures around collective decision making, managed by the Rail Safety and Standards Board, and comply with safety and interoperability standards set collectively by the sector, including for freight and supply chain.

For those reasons, this group of amendments, taken as a whole, would provide important strengthening of the role of the ORR. I look forward to hearing the Minister’s response.

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

May I begin, Mr Western, by saying what a pleasure it is to serve under your chairship? I thank the hon. Member for Broadland and Fakenham for tabling this group of amendments. I shall discuss amendment 233 with amendments 110 to 112, which I believe all share the same intent. Provisions to require the agreement of the ORR and the passenger watchdog before the Secretary of State issues the GBR licence would add an additional and unnecessary level of bureaucracy. If the amendments intend to ensure that the ORR and the passenger watchdog can constructively input into the licence, I assure the hon. Member that the Bill already requires the Secretary of State to consult the ORR and the passenger watchdog, and to invite representations more widely, before the licence is issued. If the amendments were accepted, it would no longer be clear who had the right to determine the terms of the licence. It is only appropriate that, following full consultation, the Secretary of State, as the licensing authority, has the sole final sign-off of the licence. The ORR will then, of course, enforce that licence. That is consistent with the clear accountabilities that the Bill establishes. We therefore cannot support the amendments.

On amendments 113 to 116, GBR will not need to apply for a licence, therefore the amendments’ provisions would apply only in relation to non-GBR licences. In any case, the amendments would add unnecessary complexity to the process for making licence application regulations. The amendments also intend to give an approval role to the ORR and the passenger watchdog in relation to modifications of GBR’s licence. The Bill already requires those bodies to be consulted before the Secretary of State modifies GBR’s licence. Again, requiring approval rather than consultation would risk confusing the clear accountabilities that the Bill establishes.

Amendment 118 seeks to strengthen the ORR’s ability to grant non-GBR licences. Under the Railways Act 1993, all licences are granted by the ORR with the consent of the Secretary of State. In practice, that consent is normally given in advance through a general authority, avoiding the need for case-by-case approval. The Bill does not change that aspect of the licensing regime. Removing the provision for specific Secretary of State consent, as the amendment intends, would not meaningfully strengthen the ORR’s ability to grant non-GBR licences. Non-GBR licences could still only be granted within the scope of a general authority approved by the Secretary of State.

In fact, the amendment would remove a useful route that enables the ORR to issue a licence outside the scope of a general authority or in circumstances where amending a general authority would not be practical. Far from strengthening the ORR’s ability to issue non-GBR licences, the amendment would instead likely weaken it.

Finally, amendment 126 would require the ORR to agree to GBR’s business plan before it is approved. I agree that the ORR provides invaluable input as an expert, independent regulator and it must have a robust role in the determination of GBR’s business plans. That is why the Bill gives it an explicit role to run the funding process, provide advice on the business plan and validate the costs within it, and independently publish its advice, whether that advice is supportive or critical of GBR.

However, it is not appropriate for the ORR, an unelected body, to decide how public money is allocated to the railway. Public spending decisions at this level should sit with elected Ministers who are responsible for funding the railway. I hope the hon. Member for Broadland and Fakenham can see this Government’s commitment to a robust and independent role for the ORR, but it is clear that the ORR can fulfil its role assuring the business plan without needing to be a funding approver to do so.

Further, the ORR will have an expanded monitoring role though the powers in the Bill, being able to monitor all GBR’s activities against its business plan. If GBR does not deliver on its plans, the ORR will be able to publish its findings, as well as escalating the matter to the Secretary of State. The ORR will be a trusted expert adviser to the Secretary of State, combining the strengths of an expert regulator with the need for the Government to control taxpayer money.

I encourage the hon. Member for Broadland and Fakenham to withdraw the amendment, and not to press the others in this group to a vote.

[Jerome Mayhew]

I listened with interest to the explanation the Minister gave and his request that the amendment be withdrawn. I was particularly interested to hear him describe the role of the ORR as a “trusted expert adviser”. In my submission, when we have GBR as the player and referee in many of the areas it will be active in, with a designed-in conflict of interest, we need more than a trusted expert adviser to hold the Government and GBR to account; we need an independent regulator. That is exactly what the ORR currently is.

I intend to press amendment 233 to a vote and, dependent on the outcome, I will not proceed to press amendments 110, 111, 112, 118, 114 and 115 as they address similar wording in other parts of the Bill. However,but I will seek to press amendment 126 to a vote if we get the opportunity to do so this afternoon.

Question put, That the amendment be made.

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[Keir Mather]

Clause 12 establishes a new funding process for GBR that takes what we have learnt from the successes of the periodic review process today and applies them to the new GBR world. That new funding period review will not only provide GBR with five years of funding to carry out its job of operating and maintaining the railway network, but will create a structure through which GBR will develop and own integrated business plans, across track and train, that reflect its role as the directing mind for the railways. That five-year funding certainty will help to drive the best price for Government and the taxpayer, through lower risk and the benefits of economy of scale. It will also generate consistent, longer term work for private partners in the rail supply chain, keeping good, well-paying specialist jobs alive and thriving.

[Jerome Mayhew]

Clause 12 is an enabling clause. It is very short and merely refers to schedule 2, so I make no representations to change it and shall not seek to divide the Committee on it.

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[Edward Morello (West Dorset) (LD)]

I wish to speak briefly to new clause 26, which was tabled by my hon. Friend the Member for Didcot and Wantage. In simple terms, the new clause would ensure that Great British Railways’ funding is reviewed, published and scrutinised by Parliament halfway through each funding cycle, so that there is transparency and accountability on public money and it is spent effectively.

Any long-term rail strategy, particularly one that involves large sums of public money, must be open to proper scrutiny, regularly reviewed and accountable to Parliament. This is especially important as the Bill in its current form gives the Secretary of State a significant concentration of power over the future, shape, funding and direction of the railways. If Parliament is to be asked to confer that level of authority, accountability should increase alongside it. New clause 26 provides a sensible and proportionate mechanism to do exactly that without dragging Ministers or officials into day-to-day micromanagement.

As currently proposed, Great British Railways risks becoming the rail equivalent of NHS England—a fear raised previously in Committee—a large, centralised body distant from accountability and with blurred lines between ministerial direction and operational responsibility. Transparency is the safeguard to protect against ending up with another unaccountable arm’s length body.

The new clause would require a statutory funding review halfway through each five-year settlement. That review would set out, in clear figures, exactly how much funding GBR had been allocated, how much revenue had been raised from fares, and how much Government subsidy had been received. Crucially, it would also be sent directly to the Transport Committee, thereby ensuring proper parliamentary scrutiny. That matters because taxpayers are funding the railway twice: once through general taxation and again through ticket prices. Passengers and taxpayers alike deserve to know where their money is going, how it is balanced between subsidies and fares, and whether it is being spent evenly and effectively across the funding cycle, not just all at the start or at the end.

A mid-point review would also allow us to see what is working and what is not, particularly given that GBR will be a new organisation. It would give time to correct course when things are failing, and to continue or scale up when results are delivered. Above all, it is about hardwiring trust into the railway system, with clear information, published transparently and scrutinised by Parliament, with a focus on passengers. We believe new clause 26 would strengthen the Bill and hope the Government will give it due consideration.

[Jerome Mayhew]

Thank you, Mr Western, for allowing me a second bite at the cherry. I misdirected myself in dealing just with clause 12 in itself, rather than the new clauses in the group.

A forward view of funding certainty is key to stopping the stop-start approach to infrastructure funding. The Committee has received plenty of evidence from the industry—both in written evidence and in the oral evidence we heard on Tuesday last week—that this is a major concern. The date in schedule 2(1)(d) is therefore important, and needs to be a minimum of two years prior to the start of the next five-year funding period. That is because, given that we currently have five-year control periods, funding certainty decreases in the run-up to the end of one control period and the beginning of the other and, as a result, the amount of work undertaken and committed to by Network Rail decreases proportionately. We therefore get a wind-down of activity, with specialist staff being laid off by the supply industry, before it all grinds up a gear at the beginning of the next control period. We end up with a bell curve of activity.

We have heard strong evidence—I will read some out in a moment—about how that uncertainty disrupts the ability of the supply sector to service Network Rail and its infrastructure development plans efficiently. It does two pretty terrible things: first, it drives up costs for Network Rail and therefore for the taxpayer, and secondly, it means that less work gets done per pound. It is expensive and it takes longer.

In written evidence to the Transport Committee, the Rail Forum states:

“The Bill states in Schedule 2 Part 1 that the SoS can ‘vary the financial assistance’ previously agreed as part of the GBR five-yearly settlement during the five-year term. This flies in the face of providing the stability that the Transport Committee was seeking to address through the ‘Rail investment pipelines: ending boom and bust’ inquiry earlier this year. Re-opening of the settlement should only be allowed in very exceptional circumstances that should be explicit in the legislation.”

Why has the Minister moved away from the position that was previously articulated? Why is the sanctity of the funding settlement within a five-year control period—which has been, albeit imperfect, so valuable for the industry—actively removed by schedule 2? To put it another way, why is the Secretary of State being granted new powers to vary the financial settlement without notice?

The Rail Industry Association, which represents the supply sector for the railways, states:

“The railway, and rail supply businesses, need stable funding to be able to plan effectively and be efficient. Changes to the Control Period style five-year infrastructure funding settlement (Schedule 2) undermine this and amplify the uncertainty already faced by suppliers.

RIA and our members are very concerned the current Bill drafting allows the Secretary of State for Transport to remove railway funding mid-period, at no notice and with very limited transparency over the impact, for example, on safety, performance or efficiency.

We disagree with the principle that the Secretary of State should be able to remove funding mid-period. Stable multi-year funding settlements are a longstanding principle for infrastructure networks because short-notice funding changes reduce the efficiency of spending and make it harder for suppliers to plan ahead with any confidence.

Supply chain confidence in the UK rail market is already historically low with 64% believing the rail market will contract in 2026 and 62% freezing recruitment or reducing headcount (over one in three business leaders plan to lay off staff in 2026), according to a RIA-commissioned Savanta survey of rail business leaders.

There is…currently already a lack of full work visibility to the end of the current Control Period, which completes in March 2029, and companies are now repositioning themselves away from rail to target other industrial sectors in the UK and overseas rail markets—the ability for the Secretary of State to remove funding would clearly exacerbate this situation…Concerningly, even on its own terms Schedule 2 does not require transparency over the impacts on efficiency, performance and safety if there are changes within a funding period and longer-term.”

Mr Western, you cannot tell me you agree that that is a very troubling statement from the industry, but I am sure you do agree, or are likely to. The difficulties with the current system are only going to be exacerbated by the proposed changes under schedule 2.

The statement of funds will indicate what the Secretary of State

“reasonably considers may be…available”.

That gives no certainty of funding, which is a key concern of the sector. It would be a backward step from the status quo. Paragraph 4(3)(c) of schedule 2 contains no focus on minimising the cost for the taxpayer, but merely refers to

“how Great British Railways proposes to meet those costs.”

Paragraph 4(5)(b) refers only to “good value for money” and not to good value for money for the taxpayer.

Under paragraph 4(7)(a), regarding the business plan, Great British Railways could retain a huge amount of information from potential open access operators, thereby preventing a level playing field.

Finally, paragraph 7(3) removes the whole point of funding periods, which is to provide funding certainty for five years. On its own, that provision removes that funding certainty—which is obviously a backward step. The RIA has stated:

“The railway has benefited from 5-year funding settlements for infrastructure for over 30 years, but the legislation proposes that the Transport Secretary will be able to reopen these at any time without consultation. Any deviation from 5-year funding stability risks increased future costs for taxpayers and a deteriorating experience for passengers.”

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[Laurence Turner (Birmingham Northfield) (Lab)]

I appreciate what the hon. Gentleman is saying, but we have to consider the new clauses before us as drafted. Does he accept that almost no railways in the world run without subsidy on a net basis and that, where they do, there are unique geographical circumstances? The railways in Great Britain have operated with subsidies under all models since the early 1950s, and the effect of the hon. Gentleman’s new clauses, if they were to be implemented as written, would be Beeching on steroids.

[Jerome Mayhew]

I agreed with the hon. Gentleman until that last sentence, because new clause 40, which I will come to in a moment, would require not the removal of subsidy but looking towards it—it is aspirational. It would set GBR’s sights on minimising its costs to the taxpayer, not through penny pinching if that would be the wrong decision, but through growth in its revenue by becoming efficient and doing more for less. Those are all good incentives that a private business inevitably has because of the challenge of competition.

New clause 39 would require Great British Railways to focus on other opportunities for funding and on minimising operational costs, just like any other business. The areas of focus under subsection (7) are the revenue opportunities.

New clause 40, on non-reliance on taxpayer funding, would make the direction of travel for GBR clearer. It may be—in fact it is almost certain—that it will never achieve it, but it is a noble objective. It should be clear that GBR should aspire to reduce the need for the taxpayer to support the rail sector by making it as efficient and attractive to passengers as possible, thereby attracting more passengers and freight on to the railways. That would create a virtuous circle, rather than the opposite. We should start thinking about that, which is what new clause 40 is intended to achieve.

New clause 41, also tabled in my name, would require Great British Railways to publish an annual statement of its financial performance. The new clause builds on the theme, forcing Great British Railways to focus on its financial performance and reduce its reliance on the taxpayer. It may be the skimmed-milk version of new clause 40 that the hon. Member for Birmingham Northfield might find more palatable.

It is important that we do everything we can to design into a nationalised structure, where there is no competitive tension, incentives for GBR naturally to seek to achieve efficiency and productivity enhancements. There is a very real need for that, because the taxpayer’s pound can only be spent once, and funds are needed in many areas of Government. Apart from anything else, we need to reduce the tax burden, which this Government have raised to the highest on record, so anything we can do to build a structure that incentivises GBR to reduce its dependence on the taxpayer is a good thing. It also forces public accountability.

Finally, new clause 44 would require the Secretary of State to give GBR an annual savings target. Taking all the new clauses together, the intention is to allow GBR to focus on providing genuine value for money for the taxpayer, not just in abstract terms, and to cut away some of the existing inefficiencies in the infrastructure commissioning and decommissioning process, to provide a longer period of certainty for the supply chain so that it can pass on the resultant efficiencies to the taxpayer. That money can be either reinvested in accelerated infrastructure roll-out, rather like the ability of ScotRail electrification to do more for less, or—heaven forbid—used to produce tax cuts for the hard-pressed taxpayer. I hope the Minister will be bowled over by those suggestions, and look forward to hearing his response.

[Rebecca Smith (South West Devon) (Con)]

It is an honour to speak with you in the Chair, Mr Western. I will touch on three of the new clauses—one at greater length than the others—to follow up on the words of my hon. Friend.

For me, new clause 39 highlights something that is clearly missing from the Bill: what actually happens when these currently franchised, privately run rail services come into public ownership across the board. Over many years, unions have fought hard for terms and conditions for staff and railway companies, but these are not uniform across the board. There is a huge differential in the terms and conditions that staff are subject to.

I pay huge tribute to the men and women who work on the railway; they are a brilliant group of people. I am obviously on a train every week, coming up and down from my constituency. However, it is really important that we have this conversation about what the Bill will actually mean. As my hon. Friend pointed out, value for money is mentioned only once in the Bill. We are, in effect, writing a blank check for GBR to spend whatever it wants on bringing all these staff into its employment.

We were told very clearly when the Committee began that this is not a civil service; it is the public sector, so there is a difference there, but it is effectively a private body as well. I would be interested to hear the Minister’s comments about how staff are being brought across—obviously some franchises have been brought into Government control already—and about the Department’s plans going forward, because time and again, we see pay going up for public sector workers without that necessarily reflecting any changes in performance.

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[The Chair]

I remind Members that decisions on new clauses are usually taken after decisions on existing clauses and schedules, even though we may have just debated them—one for a future day.

Schedule 2

Funding Great British Railways

[Jerome Mayhew]

I beg to move amendment 119, in schedule 2, page 60, line 2, at end insert—

“(1A) The date specified in section 1(d) must be at least 24 months before the start of the funding period.”

This amendment would ensure the Secretary of State has to notify the ORR and GBR of the amount of financial assistance for the next funding period at least two years before that funding period is due to start.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 216, in schedule 2, page 60, line 39, leave out sub-paragraph (3) and insert—

“(3) The objectives set out under sub-paragraph (1)(a) must include objectives relating to passenger rail services.

(3A) The objectives set out under sub-paragraph (1)(a) may include, in particular, objectives relating to—

(a) the carriage of passengers or goods, save as already provided for under sub-paragraph (3);

(b) the railway network or railway assets (including objectives relating to the provision of the railway network or railway assets after the end of the funding period);

(c) fares;

(d) the accessibility of railway services to people with disabilities;

(e) the protection of persons from dangers arising from the operation of railways.”

This amendment would align funding of designated passenger train services with the five-year funding cycle for infrastructure.

Amendment 129, in schedule 2, page 63, line 26, at end insert—

“(6A) The Secretary of State may not, however, vary the financial assistance provided to Great British Railways”

This amendment would prevent the Secretary of State from varying the financial assistance provided to GBR.

Amendment 147, in schedule 2, page 64, line 1, leave out sub-paragraph (3) and insert—

“(3) The Secretary of State may not vary the financial assistance to be provided under paragraph 6 unless—

(a) the Secretary of State has consulted the Office of Rail and Road on the propsed variation, and

(b) the Office of Rail and Road provides written consent that the variation does not undermine the approved business plan required by paragraph 4.”

Amendment 215, in schedule 2, page 69, line 25, at end insert “including passenger services”.

This amendment, along with Amendment 216, would align funding of designated passenger train services with the five-year funding cycle for infrastructure.

[Jerome Mayhew]

Our amendments in this group develop the theme that I spoke about in the debate on the last group. We have tabled two small probing amendments to challenge the stop-start nature of funding under the current control period. Amendment 119 would insert the following new paragraph (1A) into schedule 2:

“The date specified in section 1(d)”—

which, to paraphrase, refers to the funding agreement for a control period—

“must be at least 24 months before the start of the funding period.”

Amendment 129 would insert the following new subparagraph (6A):

“The Secretary of State may not, however, vary the financial assistance provided to Great British Railways”.

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[Keir Mather]

I thank the hon. Member for Broadland and Fakenham for tabling amendment 119, which would require the Government to commit funding for a five-year funding period at least two years before the period starts. I can appreciate and identify with his desire to provide certainty to industry, and agree with the ambition that the amendment presents to generate a stable operating environment for the railway. However, as I said in response to new clause 34, I believe that the desire to require funding to be committed so far in advance is misplaced. There will inevitably be changes to economic circumstances and new projects will surface. If there is no practical discretion, a settlement agreed two years in advance may be redundant before it starts.

I can assure the hon. Member that the Bill already accounts for the need to provide the railway with certainty and ensures that the funding process completes before the start of the next five-year funding period.

[Jerome Mayhew]

I heard what the Minister said, but it flies in the face of the evidence that the industry itself gives him and all of us about the need for certainty towards the end of a control period. All that the amendment seeks is certainty for two years at the start of a control period. How is he going to address that particular issue?

[Keir Mather]

It is of course our obligation as the Government to meet the concerns of stakeholders, whether raised in the oral evidence session or elsewhere. It is also incumbent on me to point out that we want to abolish boom and bust in the rail system. On the fear about cliff edges, as was acknowledged by the ORR in its oral evidence, in reality there is not a cliff edge when funding always tends to run over the five-year period. Five years is the basis for the decision process by which funding allocations must take place. It is important to take the oral evidence in the round. It is also important to note that the ORR, which will be running the process, intends to set deadlines so that funding is committed with time for the industry to prepare. The amendment is therefore unnecessary.

Amendments 129 and 147 both seek to prevent or restrict the Secretary of State’s ability to vary the agreed funding settlement. I assure Members that the intention of providing a five-year funding commitment is that it lasts for five years. The Government are signed up to that principle. I also agree that certainty for GBR and industry is beneficial. More funding will mean we can get the best out of the railway and encourage investment, innovation and value for money.

Putting a hard restriction on all change, as amendment 129 suggests, would not be proportionate, as the shadow Minister acknowledged. As he noted, there may be unforeseen circumstances that require changes to funding, either to provide more or to reduce the amount. For example, GBR may outperform expectations and need less than is awarded, in which case Ministers will need to recoup the costs for the taxpayer, and can choose to do so in whatever way they see fit.

[Keir Mather]

Indeed! The operating environment may also change and GBR may need more funding than is committed. It is right that elected Ministers are able to make decisions on public spending and allocate resources as needed, balanced against the clear benefits of certainty.

Amendment 147 would restrict Ministers’ ability to vary funding by adding a requirement that the ORR must provide written consent. Although the Office of Rail and Road will have an important advisory role, it would not be appropriate for it to entirely determine changes to funding. Responsibility for decisions of public expenditure must remain with the Secretary of State, particularly where changes may be required due to wider fiscal circumstances. The amendment would also result in ORR consent being needed for increases in funding and immaterial changes.

The Bill provides assurances. If the Secretary of State considers that the impact of a funding reduction could be material, the Bill requires her to notify the ORR, giving it an opportunity to comment publicly on the likely effects on the railway. That balances the need for the Government to retain control over Government funding with the opportunity for independent evaluation and, if needed, public pressure, to protect certainty for the railway.

On amendments 215 and 216, I thank the hon. Member for Didcot and Wantage for so ably setting out, based on his practical experience, and far better than I ever could, the need for a single guiding mind for the railway. His explanation was buttressed by the right hon. Member for Melton and Syston. I thank the hon. Member for Didcot and Wantage for his amendments, which seek to align passenger service funding within the five-year infrastructure funding cycle. I support that intention. The Government agree that many benefits are derived from integrated funding streams. However, I do not agree that the amendments are necessary.

It is important to note that passenger services are already fully considered under GBR’s statutory duties and through the integrated business plan, in which GBR will plan all its activities on a five-year basis across track and train. The Bill requires GBR to deliver safe, reliable and efficient services, taking passenger needs into account.

[Jerome Mayhew]

GBR may plan on a five year basis, but it is not the same five years, is it?

[Keir Mather]

The shadow Minister is right to point out that allocation of funding for passenger services, as opposed to other GBR activities, initially takes place through the spending review funding process. I am about to address his point, but I should say that the Bill contains the ability for Ministers to extend the five-year funding process to passenger services once GBR is set up and prepared to manage that. It would not be responsible to do that from the outset when GBR is still in the transition and set-up phase. Ministers need to feel confident that GBR is financially mature enough before they can consider integrating funding further. I hope that addresses both the shadow Minister’s point and the contribution from the hon. Member for Didcot and Wantage.

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[Keir Mather]

Respectfully, I believe it is more sensible to be prudent and cautious regarding the funding of passenger services, rather than risk creating a situation that a newly created GBR might not be in an immediate position to sufficiently accommodate within its operating structure. Erring on the side of caution, I encourage Members to withdraw their amendments.

[Jerome Mayhew]

As I intimated earlier, amendments 119 and 129 are probing and I will not press them to a vote.

I was interested to hear the Minister’s apparent position that there is no boom and bust, that the current situation for infrastructure funding is fine and that the evidence from the industry appears not to be—

[Keir Mather]

For the record, I said that we shared the aspiration to abolish boom and bust as it exists within the rail system. That applies to our infrastructure as much as it does to any other part of the railway’s operation.

[Jerome Mayhew]

I am grateful for that clarification, but although the Minister may share that ambition, he is not choosing to do anything about it. Having said that, I said I was not going to press the amendments to a vote and I will not. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Jerome Mayhew]

I beg to move amendment 120, in schedule 2, page 60, line 36, leave out “may” and insert “must”.

This amendment would require the statement of objectives to contain standards to be achieved when carrying on activities in relation to railways and railway services.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 121, in schedule 2, page 60, line 39, leave out “may” and insert “must”.

This amendment would require the Secretary of State’s statement of objectives to include objectives relating to the list in sub-paragraph (3).

Amendment 122, in schedule 2, page 60, line 41, after “(a)” insert “increasing”.

This amendment would require the Secretary of State to set the objective for GBR of increasing passenger and freight journeys.

Amendment 123, in schedule 2, page 61, line 7, at end insert—

“(f) delivering improved productivity and efficiencies.”

This amendment would require the Secretary of State’s statement of objectives to include an objective of delivering improved productivity and efficiencies.

Amendment 206, in schedule 2, page 61, line 7, at end insert—

“(f) customer experience and satisfaction.”

This amendment expands the objectives the Secretary of State sets for railways funding settlements to include customer experience and satisfaction.

[Jerome Mayhew]

Amendments 120 to 123 aim to strengthen GBR’s value for money and wider performance duties. As drafted, paragraph 2(2) in schedule 2 only gives the Secretary of State the option of tying performance objectives to granting public funds. The performance objectives should be at the core of the granting of funds, so amendments 120 and 121 seek to change the wording of the current drafting by replacing “may” with “must”. In other words, they would make it clear that it is not an option but core to the application of the process, and should therefore be mandatory.

Amendment 122 would make it clear that Great British Railways should aim to increase passenger services. I do not know why this has become such a hot topic; I would have thought it would be obvious—I was about to use unparliamentary language for a moment there. Increasing passenger services should obviously form part of the functions and aspirations of GBR, and that should be included on the face of the Bill. It should be clear that GBR aims to increase passenger services, not just freight. In addition, the list of objectives in the schedule is missing a specific objective on productivities or efficiency, which amendment 123 would add.

This series of simple amendments seek to perfect the currently imperfect drafting, to put performance at the heart of the Bill and to recognise that the pursuit of increased passenger numbers should be a key objective of GBR, in addition to its focus on growing rail freight, which we all agree with.

[Edward Morello]

I wish to speak briefly to amendment 206, which was tabled by my hon. Friend the Member for Didcot and Wantage. The amendment goes to the heart of what we Liberal Democrats believe the Bill should be about: putting passengers first. It would expand the objectives that the Secretary of State sets for the rail funding settlement to include customer experience and satisfaction explicitly. In other words, it would ensure that when decisions are made about money, priorities and trade-offs, the people who actually use the railways are not an afterthought.

Making customer satisfaction central to GBR would help to rebuild trust in the railways, which many people currently feel have stopped working for them. If we are serious about encouraging people to shift away from the convenience of cars and toward more sustainable public transport, customer experience has to be central. People will not make the switch because they are told to; they will do so because trains are easier, more comfortable and more reliable.

The creation of customer satisfaction targets and objectives that are tied to rail funding settlements will create the incentives for change. It will make it more likely that investment decisions will focus on what actually improves journeys for passengers, rather than just on what is cheapest in the short term. It will find the balance between what is affordable and what is best for users.

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[Jerome Mayhew]

The Minister wants flexibility, and he says that is why amendments 123 and 206—tabled by myself and the hon. Member for Didcot and Wantage respectively—should not be agreed to. Will the Minister set out the circumstances in which he thinks it would not be appropriate for the organisation to focus on

“delivering improved productivity and efficiencies”

or on

“customer experience and satisfaction”?

Why does he need flexibility to ignore those objectives?

[Keir Mather]

No, I am not willing to say that those objectives, in principle, should not be pursued as a result of this legislation. The question is where within the Bill these things reside. If we are talking about short-term objectives relating to GBR’s operational efficiency as an organisation through, say, a key performance indicator, that is best placed within the business plan. If we want legal duties to ensure that we improve passenger experience or the reliability of train services, they are best placed as legal duties. There is a question about where we apportion the responsibilities and accountability mechanisms within the Bill. I do not believe that schedule 2 is the right place to be as prescriptive as the shadow Minister intends with those specific requirements.

On amendment 123, there is already a mandatory requirement in the Bill for the Secretary of State to obtain advice from the ORR on whether the activities that GBR is to undertake represent value for money. Unlike the list of potential objectives, that is mandatory. I also direct the Member to the assurances that are already in the Bill: there is a duty on GBR to make efficient use of public funds when exercising its functions, and a clear role for the ORR to assess the value for money of GBR’s proposed plans and to publish that assessment.

[Keir Mather]

The purpose of issuing advice is so that we can enter into an era for the railways where these discussions happen in a way that is far more commonplace than the broken-down patterns of accountability that currently exist. I therefore envisage the sort of adversarial situation that the right hon. Member suggests occurring less than it does under the existing rail system.

The ORR and the Secretary of State are both required to consider value for money when they advise on and approve the business plan. I hope that the relevant measures will show the hon. Member for Broadland and Fakenham that we are serious about getting the best out of GBR and provide him with enough reassurances to seek to withdraw his amendment.

Amendment 122 would specify that the Secretary of State’s statement of objectives may include an objective on increasing passenger numbers and freight. It would narrow the wording of the objective in paragraph 2(3)(a) of schedule 2 from relating to passengers and freight to just increasing the numbers of those things. I do not think it would be wise to require ever-increasing passenger numbers as an objective in itself. Different objectives—such as increased reliability, improved passenger experience or references to spare freight paths—might contribute to that overall outcome while being more important in the moment. Again, that should be for the Government of the day, not inflexible legislation, to decide. I urge the hon. Member for Broadland and Fakenham to withdraw his amendment.

Finally, amendment 206 proposes to expand the list of potential topics that could be covered in the statement of objectives, with the hon. Member for Didcot and Wantage suggesting the inclusion of a section on customer experience and satisfaction. The current list in the Bill is purely illustrative, so Secretaries of State may in future add to the list of topics, and include just some of the topics or slightly different ones in their statement of objectives. I invite the Committee to note that the illustrative objectives already included in the Bill contain reference to the carriage of passengers or goods, as well as to fares and accessibility—all matters that are important to passenger experience—so it is unclear what more would be achieved through the amendment, which would simply add a further example to the list.

Furthermore, the Bill contains a duty for the Secretary of State and GBR to exercise the functions in the manner best calculated to promote the interests of the users and potential users of railway passenger services. Unlike the list of potential objectives, that duty is intended to be mandatory. I hope that demonstrates to the hon. Member for Didcot and Wantage that we consider passenger experience to be absolutely central to GBR’s objectives, and provides him with enough comfort not to press his amendment.

[Jerome Mayhew]

We have heard with interest what the Minister has to say, but I am wholly unpersuaded that he is adequately reflecting the needs of the industry, so I will seek to press amendment 120 to a Division.

Question put, That the amendment be made.

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[Jerome Mayhew]

I beg to move amendment 124, in schedule 2, page 62, line 9, at end insert—

“(d) measurable performance indicators for each statutory duty listed in Section 18.”

This amendment would require the business plan to include measurable performance indicators for GBR’s duties.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 125, in schedule 2, page 62, line 9, at end insert—

“(3A) The plan must set out how Great British Railways will ensure its activities minimise costs to the taxpayer.”

This amendment would require GBR to consider how to minimise costs to taxpayers.

Amendment 127, in schedule 2, page 62, line 22, at end insert—

“(c) whether carrying on those activities will be done in such a way as to minimise costs to the taxpayer.”

This amendment would require the ORR to provide an assessment of whether GBR will minimise taxpayer costs before the Secretary of State approves the business plan.

Amendment 128, in schedule 2, page 62, line 27, leave out from “publish” to the end of line 28 and insert—

“the approved business plan in full, apart from any sections which it considers to contain commercially sensitive information, and”.

This amendment would require GBR to publish its full business plan saving any sections which are commercially sensitive.

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[Jerome Mayhew]

We now turn to paragraph 4 of schedule 2, which deals with the business plan and approval by the Secretary of State.

To receive public funding under paragraph 4, GBR is required to include in its business plan an explanation of how it will meet the objectives set by the Secretary of State. Amendment 124 seeks to strengthen this obligation by requiring GBR to set meaningful KPIs against which its performance and meeting its statutory duties—as set out in clause 18, which we will come to in a bit—can be measured. We had the saga of the missing licence; now we have the saga of the missing KPIs—and 19 other documents. This is important, given the absence of any direction from the Government on KPIs, despite being repeatedly requested on the Floor of the House over a number of months. The only response from the Government as a result of that probing is that they will be “robust”, whatever that means, hence the need for amendment 124.

Amendments 125 to 128 would strengthen GBR’s focus on minimising the cost to the taxpayer and increasing the role of the Office of Rail and Road to make sure that that happens. Amendment 125 would require an express focus on how plans will minimise costs to the taxpayer, which is too often overlooked—the Bill makes hardly any reference to value for money. The taxpayer is ignored entirely. This amendment would make it a legal requirement to address that and would—under the maxim that “you get what you measure”—drive behaviour.

Amendment 127 would require the Office of Rail and Road to provide an assessment of whether GBR’s plans to minimise costs to the taxpayer are, in fact, likely to do so. That would be undertaken before the Office of Rail and Road approves the business plan. Again, this is about driving behaviour through focus and making sure that the taxpayer is not forgotten in the deliberations between nationalised Great British Railways and civil servants at the Department for Transport.

Finally, amendment 128 would require GBR to publish its full business plan, save for commercially sensitive sections, which they should of course have a carve-out from displaying to their potential competitors—although most of their competitors have been designed out under the wording of the Bill. Amendment 128 would welcome transparency, which—given the huge amount of public funding that the organisation currently requires and no doubt will continue to require—is necessary, so that the public can see how their money is being spent, and whether the organisation is focused on driving down the cost to the taxpayer and driving up value for money.

I commend all the amendments to the Minister.

[Keir Mather]

I thank the hon. Member for the amendments, which seek to add requirements to the production of GBR’s business plan and the ORR’s advice on that plan. However, on the subject of the publishing of advice, I briefly return to a question that was put to me by the right hon. Member for Melton and Syston. I feel that I was unnecessarily circumspect in the answer that I gave him, and it did not reflect the incisive nature of his question, which was about a mandatory requirement that exists in the Bill for the Secretary of State to obtain advice from the ORR on whether the activities of GBR represent value for money, and whether or not that advice can be published. I tell him that the ORR must publish a summary of that advice, and it can publish the advice in full. Although I do not wish to predict the future, I expect that it will likely to so, as part of its work in holding the Government to account. I hope that that is a full answer for the right hon. Member.

[Keir Mather]

Committees move in mysterious ways—that is all I will say.

I will take each amendment in the group in turn, starting with amendment 124, which would require GBR to develop key performance indicators for each of its statutory duties. I am sure the hon. Member for Broadland and Fakenham will agree that KPIs should be realistic and measurable, so they would also need to be grounded in the specific proposals for what GBR intends to deliver over the next five years. They also need to be allowed to evolve over time, to ensure that they are most relevant to GBR’s planned delivery and can be effectively used to track GBR’s progress.

The way an indicator is set out can influence how an organisation behaves, and we should be able to refine them over the course of several funding periods, to get GBR to deliver in the way that it needs to. Therefore, a more flexible process works better than fixing the nature of the indicators in legislation—and I give way to the hon. Member.

[Jerome Mayhew]

The Minister is a mind reader; I was just about to ask him to give way. He says he cannot agree to amendment 124 because we need flexibility in the future, but he will see that it refers to

“measurable performance indicators for each statutory duty listed in Section 18”,

so that flexibility would only run so far as any alteration to the statutory duties set out in his own clause 18, which GBR has no ability to change. The Government do not intend for there to be flexibility, so why does the Minister say he needs it?

[Keir Mather]

I respectfully disagree with the shadow Minister’s interpretation. This is about how GBR discharges those legally binding duties, and whether we should be overly prescriptive about the means by which it does so. It is important to have flexibility. Given the amount of technological change that we have seen in railway processes over recent decades, as well as socioeconomic factors and the need for GBR to balance those duties, we cannot be overly prescriptive about how we ask it to meet them—apart from the fact that it is legally required to do so.

I assure the hon. Member that GBR’s business plan will have not just a robust but a comprehensive set of KPIs against which it will be held to account. Progress against them will be tracked, and GBR will publish updates in line with the requirements in the Bill. The ORR will also monitor GBR and its business plan, and provide advice to the Secretary of State.

--- Later in debate ---

[Laurence Turner]

On amendments 125 and 127, I have full sympathy with the ambition of reducing costs to the taxpayer wherever possible. However, the word “minimise” is important here, because a natural reading would be to bring that cost to a minimum.

Each Government have recognised that there is a balance to be struck between the charges raised against the taxpayer, fare payers and other users of the railway. We heard evidence from Richard Bowker, the former chief executive of the Strategic Rail Authority, who has contributed what is sometimes known as Bowker’s law—there are only two sources of income to a railways: passengers and taxpayers.

I fear that if these amendments were incorporated into the Bill, the natural outcome would be that fares would rise, as indeed may charges levied upon freight users of the railway. For that reason, I hope they are not supported.

[Jerome Mayhew]

Mr Western, you get what you measure. We on this side of the Committee are very keen that we measure the level of involvement for the taxpayer and that we do our best to look after the taxpayer in the design of this structure, so I intend to press all the amendments.

--- Later in debate ---

[Keir Mather]

I thank the right hon. Member for Melton and Syston for his contribution. He is right to note that the five-year funding process has a different period from that of the spending review. It is tested in the sense that the funding process for Network Rail works similarly now. As was acknowledged in the oral evidence from the ORR, there is not in reality a cliff edge through the five-year funding settlement, as funding always tends to roll over the five-year boundary, but five years is the envelope through which those decisions take place.

That is my assessment of how the process works; if I have failed to answer any of the right hon. Gentleman’s questions, perhaps he will illuminate me on what they are and I can provide him with a more fulsome response later on.

Question put and agreed to.

Schedule 2 accordingly agreed to.

Clause 13

Charging and terms and conditions

[Jerome Mayhew]

I beg to move amendment 22, in clause 13, page 7, line 22, leave out “as it thinks fit” and insert “as are reasonable”.

This amendment would ensure Great British Railways only charges what is reasonable for provision of services in circumstances where it is a monopoly supplier.

[The Chair]

With this it will be convenient to discuss amendment 23, in clause 13, page 7, line 28, at end insert—

“(3) A person aggrieved by a charge, or terms and conditions issued under this section, may appeal to the Office for Rail and Road.”

This amendment allows appeals against the charges and terms and conditions issued by Great British Railways under section 13.

Clause stand part.

[Jerome Mayhew]

This afternoon is turning into a marathon session, and the only people who cannot take a comfort break are the shadow Minister and the Minister, so far as I can work out; I have my legs crossed.

Clause 13 allows GBR to charge people to whom it is providing a service relating to its functions—this is the important bit—“as it thinks fit”; there is no qualification there. The clause will allow GBR to charge for services that it provides that are currently chargeable under the existing rail regime, such as the back-of-house services currently provided by the Rail Delivery Group, from which all passenger operators, private and public, including open access operators, benefit.

There is a very significant problem with the wording of the clause, because the difference between now and then is that GBR will be a monopoly provider of those services. If we add the two factors together—first, the fact that it is a monopoly provider and secondly, that it is allowed to charge as it thinks fit, with no qualifying criteria—the result is at least the opportunity for GBR to abuse its position to inflate charges and kill competition. GBR will be in direct competition with competitors that can only buy those services from GBR. We know that that will cause a huge issue for open access operators because they have told us so, as GBR will once again be acting as a player and as the referee. That is a clear conflict of interest designed into the structure that the Bill creates. The clause needs to have much greater protections on the calculation of access charges.

The Government use the example of the back-of-house services currently provided by the RDG to explain what would be applicable under the clause. The Rail Delivery Group is a membership organisation consisting of train operating companies, owning groups and Network Rail. The key services they provide are journey information, reservation systems, railcards and working to improve performance, safety and accessibility.

The language in the clause as drafted gives Great British Railways carte blanche where no alternative provider of those key services is allowed—a conflict that will lead to abuse and is contrary to the direction of the Competition and Markets Authority, which expressly said that there needs to be a level playing field when dealing with matters of this kind. That is the Government’s Competition and Markets Authority, so who is right here—the CMA, or the Bill as drafted?

--- Later in debate ---

[Keir Mather]

I thank the shadow Minister for tabling amendments 22 and 23 and the hon. Member for South West Devon for speaking in their support. Amendment 22 seeks to require GBR to set reasonable charges for the delivery of its functions, and amendment 23 seeks to require the ORR to provide an appeals role for anyone who considers the charges set by GBR to be unfair.

On amendment 22, we clearly agree that GBR must act reasonably when setting charges and there is no suggestion that it will not do so. In fact, safeguards to ensure that GBR cannot levy unreasonable charges already exist in the Bill. Clause 18 requires GBR to act in the public interest and to ensure that railway service providers, such as devolved operators, freight operators and open access operators, can plan, invest and make decisions about their own businesses. When setting charges, GBR must therefore do so in a manner consistent with those duties, and it must not set charges that undermine operators’ ability to run viable and successful businesses.

[Jerome Mayhew]

The Minister refers to clause 18(2)(e), which states:

“They must exercise the functions… in the manner best calculated to be in the public interest”.

Can the Minister not see that GBR’s assessment of what is in the public interest could very well be what it considers to be in its own interest, because it is a public body? The provision would allow GBR to prioritise its own interests, such as the increased receipt of revenue from third-party operators, at the expense of the competition. That is not the safeguard that the Minister says it is, is it?

[Keir Mather]

I disagree with the shadow Minister’s interpretation of how the duties function in this regard. GBR cannot take a wholly self-interested, cynical interpretation of what constitutes “best use” under clause 60, which we will turn to in due course. GBR has to make a best-use decision that takes into account the needs of open access and freight. Also, under GBR’s duties, it must take account of promoting the interests of users and potential users of the railway, some of whom—even though open access constitutes a small proportion of the railway network usage overall—will be people using open access operators. Further, the duty in clause 18(2)(d) says,

“so as to enable persons providing railway services to plan the future of their businesses with a reasonable degree of assurance”.

Such persons would not be able to do so if they were being levied unreasonable charges.

There are supplementary safeguards that I will turn to. Existing competition legislation will also require GBR to ensure that the charges it sets are fair, non-discriminatory and not anti-competitive. The ORR will retain its enforcement role in consumer and competition law, concurrent with the Competition and Markets Authority, so it will be able to ensure that GBR is treating the private sector fairly. It is also important that, as a public body, GBR must be able to recover appropriate costs from those who benefit from the services that it provides. If it were prevented from doing so, the burden would ultimately fall on taxpayers and passengers. The Government’s ambition is to have a successful rail industry that attracts investment and can support its own costs, rather than unnecessarily relying on the taxpayer.

Amendment 23 would introduce an appeals role for the ORR on these charges. Again, we fully support the principles of fairness and transparency that underpin the amendment. For significant charges, such as charges for access and the use of infrastructure, the Bill already provides an appeals route to the ORR. However, an appeals route to the ORR for every possible charge that GBR may levy in relation to its statutory functions is clearly disproportionate. The amendment would require an appeals route to be provided even when those charges may be small, such as contributions to cover a railcard cost.

Clause 13, in its sum, simply ensures that GBR can recover the costs of managing and delivering services, such as back-office retailing services, by charging those who use GBR services, such as non-GBR operators or retailers. It is essential that GBR should have a clear statutory right to recover costs from users of its services. That supports the sustainability and efficiency of GBR’s operations, and ensures that taxpayers and GBR customers are not subsidising the operations of others. Importantly, it replicates how those cross-industry functions are paid for today. The Bill and existing competition law already provide adequate protections for third parties and a route of redress, should that be required. I urge the hon. Member for Broadland and Fakenham to withdraw his amendment and commend clause 13 to the Committee.

[Jerome Mayhew]

The Government’s defence is pretty extraordinary. What they are saying is that GBR should be free to charge unreasonable amounts—otherwise there would be no objection to the wording of the amendment, which simply seeks to put the word “reasonable” into the requirement. The Government say that even though this monopoly provider can charge as it thinks fit, there should be no specific right of appeal and that the other operators should rely on the CMA taking an interest or on wider competition law—in other words, after-the-event litigation.

We all know that in a business environment we can argue about the chaos at the end, but a business can already have been destroyed by a decision from a monopoly provider—on which there is no right of appeal and which could not be held back until an appeal has been heard. This is an absolute charter for GBR to run roughshod over independent retail operators, open access operators and even rail freight. It is with no hesitation at all that I seek to push for a vote on both the amendments.

Question put, That the amendment be made.

--- Later in debate ---

[Jerome Mayhew]

So here we are: this is the eminently sensible approach to providing funding for the ORR to continue its operations as a safety regulator. Clause 14 allows the Office of Rail and Road to require GBR to pay a levy to the ORR for performing its non-safety railway functions. That provides the ORR with a legally guaranteed funding source independent of the Secretary of State or Government. The provision aims to provide the ORR with a stable and predictable funding stream that will enable it to plan and carry out its activities. Those were remarkably similar words to the ones used by the Minister—I wonder why!

What I have described replaces the current system under which the ORR requires Network Rail to pay a fee for it to perform its non-safety functions via the process set out in the Network Rail licence. The ORR, as we all know, is an independent regulator, so decisions on its funding should be kept separate from organisations that have a vested interest in its decisions, which is why GBR, despite paying the levy, will not determine the amount. The amount is agreed between the ORR and the Treasury and then provided by GBR through this levy.

This is one of the few clauses through which the Bill is not actively diminishing the role of the ORR. Instead, it provides the ORR with a legally guaranteed funding source, independent of the Secretary of State or Government—save, obviously, for its negotiations with the Treasury. The aim of that is to provide the ORR with a stable and predictable funding stream that will allow it to plan and carry out its duties successfully. That duty already exists in the Network Rail obligation, as I have already mentioned.

I am glad to see from the Government’s explanatory notes on the clause that GBR will not determine the amount of the levy, which will be agreed between the Treasury and the ORR. It seems that the Government do understand the concept of partiality and bias, but are prepared to admit that only when it comes to certain clauses in the Bill.

[Keir Mather]

I thank the shadow Minister for his support—slightly barbed support, but support nevertheless. I have nothing further to add. I commend the clause to the Committee.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Clause 15

Rail strategy

--- Later in debate ---

I feel I have said more than enough. I have attempted to be concise, but we have tabled a large number of amendments. I am sure the Minister, in his polite but devastating way, will obliterate them all, but even if he does, I still want to welcome the thought that has gone into clause 15; we definitely need a long-term rail strategy, and it is good that the Bill provides for one. I look forward to his comments.

[Jerome Mayhew]

Clause 15 requires the Secretary of State to publish a document that sets out the long-term strategy for the railway, which we welcome, after consulting with Welsh Ministers and the passenger watchdog. The Secretary of State must keep the strategy under review and publish any revisions.

The clause does not provide any detail, which is part of the problem. The industry is in the dark now, and it will still be in the dark if the Bill ever becomes law. There is no draft prepared. There is no indication of the direction of travel. There is just subsection (4), which is very limited. All it says is:

“(4) The Secretary of State—

(a) must keep the rail strategy under review, and

(b) may revise or replace it.”

Well, with what and when? We are in trouble here, with no direct reference to even the development of rail freight, which we have seen in other parts of the Bill is apparently in the Government’s mind. Amendment 224 would serve to correct that by making specific reference to rail freight.

More widely, the Government have missed an opportunity to set clear targets for the strategy to achieve. Colleagues will know from the debate on clause 3 that we have already tried to amend the Bill to assist with that. Our purpose clause, new clause 1, would have set a clear direction, and new clause 2 would have set KPIs for what the strategy should achieve. That would have helped to inform our set of amendments to clause 15.

We are told that Great British Railways should be the guiding mind, so our approach is that GBR will implement the long-term strategy for rail, based on the Secretary of State’s long-term priorities for the railways. GBR is intended to be the stand-alone expert implementer of the development of the railway. The priorities are set out by the Secretary of State through the licence in schedule 1, access to funding in schedule 2 and the long-term rail strategy. All recognise that the political cycle and control periods are far too short for rail infrastructure projects. The industry really needs more predictable forward views. There is inevitably an uncomfortable fit between the needs of democracy and the political cycle—political views change with general elections and sometimes even between them—and the long-term investment certainty that large projects need. There is currently no indication of how long term the strategy will be, or even what it will seek to achieve.

Amendments 24 and 25, which we debated with clause 13 but would also affect clause 15—I do not seek to repeat the debate, but I wish to mention the impact that they would have—seek to address those failings by requiring the rail strategy to be geared towards enabling GBR to meet its key performance indicators. Without the amendments, the clause will set out a long-term strategy that includes no requirement to set clear growth targets for passenger numbers or freight use, meaning that there will be no measurable outcomes or performance metrics. I intend to seek to divide the Committee on those amendments when the time comes.

The Liberal Democrats’ amendment 134 would ensure that the rail strategy covers a 30-year period. That is logical given the infrastructure life cycle, and any timeframe is, by its nature, arbitrary, but I have to say that 30 years feels on the long side, given the political cycle of four or five years. I wish the hon. Member for Didcot and Wantage well and we should be having a stab at setting out what long term actually means, but that is why we have tabled an amendment that would set the period at 15 years. That would be long enough to show the direction of travel, as he has in mind, but short enough to have some sense of connection between the political cycle and the objectives of the strategy. We may have a difference of opinion, but we are pointing in the same direction.

[Olly Glover]

I understand the shadow Minister’s point, but I put it to him that the fact that our Parliaments tend to be four or five years long is precisely why the strategy needs to be very long term, so that we avoid subjecting our railway to the political cycle and the whims and whimsies of the Government of the day. But perhaps the key point is that the Government’s own guidance on the Bill, in the section entitled, “What is the Long-Term Rail Strategy?”, states:

“It will set out strategic objectives for the railway over a 30-year period.”

Would it not be coherent to put that on the face of the Bill?

[Jerome Mayhew]

From the Government’s perspective, yes, it would be, but we have recent experience—this is a slight tangent, but I hope the Committee will bear with me—of Governments passing key objectives to achieve long out in the distance. I am thinking of the Climate Change Act 2008 and its objective of achieving net zero by 2050. That all sounds good in 2008, but in my view it does not achieve the objective of balancing democratic accountability with a long-term direction. Look, we are slightly arguing about how many angels can dance on the head of a pin. Both parties agree that we want a long-term strategy, but should it be 15 years or 30 years? In a sense it does not really matter, but it needs to be significantly beyond the current five-year control period.

Amendment 137, also in the name of the hon. Member for Didcot and Wantage, would require the strategy to set out a long-term strategy for supporting rural communities in accessing rail travel and co-operating with transport authorities to integrate travel options. It is a worthy objective, although we would want to go further if extending clause 15(1) beyond the railway network and railway services—the catch-all descriptors. The amendment is slightly a halfway house, but it nevertheless points in the right direction, and in so far as it makes progress, we are happy to support it.

Amendment 207, again in the name of the Liberal Democrat spokesman, would introduce a requirement for the rail strategy to consider the rail network as a whole, and the relationship between integrated timetables and infrastructure enhancement to enable such integration. There is perhaps a better solution tabled in the name of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), who is engaged somewhere else as we speak—there may be a better way to achieve that outcome.

Amendment 224, which I tabled, would add paragraph (c) to clause 15(1). As drafted, the provision requires the Secretary of State to

“prepare and publish a document that sets out”

her

“long term strategy for…(a) the development and use of the railway network in Great Britain, and…(b) the railway services that the Secretary of State wishes to see provided in Great Britain.”

This important amendment would add a focus on “rail freight network usage”. Rail freight does, in a sense, come under “railway services”, but we need to give it particular focus, and the amendment offers a good opportunity to do so.

Amendment 25, which is also in my name, would require the rail strategy to remain in place

“for a minimum of three control periods”,

which would be 15 years. We have already debated whether it should be 15 or 30 years, but the provision would provide the industry with a genuine long-term strategy and mean that that strategy is less likely to be used as a political football when Governments come and go. The period of 15 years is short enough to have political weight, but long enough to give the certainty that the industry also seeks.

I will briefly mention amendment 260, which was tabled by my hon. Friend the Member for Runnymede and Weybridge. I know that the subject is close to my hon. Friend’s heart because he has told me so, multiple times.

[Edward Morello]

Repeatedly.

[Jerome Mayhew]

Yes, repeatedly, which is great, because my hon. Friend is absolutely fighting for his constituency and his constituents. He has told me of a repeated trouble that communities experience when a level crossing closes very frequently and for long periods with no regard to the economic impact of that on the town in which it is based. That can cause long periods of tailbacks, but there is no consideration of that when the usage of the piece of line is set, and the Bill, as drafted, makes no provision for GBR even to take that problem into account. Amendment 260 would insert clause 15(2A), which states that the

“rail strategy must include a strategy for level crossings (“the level crossings strategy”)”,

and clause 15(2B), which states:

“The level crossing strategy must set out an assessment of the impact of level crossings on the economy and community of the area in which the level crossing is situated, for the purpose of reducing disruption caused by level crossings.”

That is actually a very sensible point, because it recognises that the railway does not impact just trains. If a level crossing temporarily closes arterial routes, there is an impact on other modes of transport, so it would be sensible for a strategy to take into account the full impact of the changes that the Secretary of State has in mind.

Amendment 261, which my hon. Friend the Member for Runnymede and Weybridge also tabled, would insert an alternative subsection (2A) in clause 15, stating:

“The rail strategy must include an assessment”

of

“the ability of passengers to change between…main line rail services”

and from rail services to

“other modes of public transport.”

The amendment would also provide that the

“assessment under subsection (2A) must consider how to reduce delays and disruption to end-to-end journeys involving a change between rail services, or between rail services and other modes of public transport.”

This is, again, my hon. Friend the Member for Runnymede and Weybridge standing up for his constituents and the particular issues that they face with the co-ordination of services. Having heard the experience of Mayor Burnham with the Bee Network in Greater Manchester, the Committee could argue that the increased integration of all modes of transport should properly be a focus of GBR, and the amendment would apply that integration to areas that are not mayoral combined authorities. Later in Committee, we will consider an amendment that seeks to extend the same courtesies to local transport authorities as the Bill extends to mayoral combined authorities, and I know that my hon. Friend the Member for South West Devon will be keen to speak to that.

Liberal Democrat amendment 135, which was tabled by the hon. Member for Didcot and Wantage, would require the Secretary of State to make an international rail strategy part of the Government’s long-term rail strategy. That would specifically look to support new routes and operators, and increase channel tunnel and London St Pancras high-speed rail capacity.

Railways Bill (Seventh sitting)

Jerome Mayhew Excerpts

Committee stage
Thursday 29th January 2026 Public Bill Committees

[Rebecca Smith (South West Devon) (Con)]

It is a privilege to serve under your chairmanship, Mr Western. I will speak to a few of the amendments and new clauses, including those tabled by my hon. Friend the Member for Broadland and Fakenham, as well as some of those tabled by the Liberal Democrats, because some of their ideas are worth noting.

It is obvious why I would support amendment 224, which yet again seeks to include in the Bill more mention of rail freight. As someone who is keen on looking at how we can use rail, and even sea, for freight, I emphasise the necessity of ensuring that it is a central part of the Bill. The Government speak about wanting to tackle climate change and bring net zero into play, but that will be hampered if the rail freight network is not strongly represented in the Bill. I appreciate that the Minister will say that it does mention rail freight, but we do not feel it is explicit enough, and we want to ensure that we get it nailed into the Bill wherever we can.

Amendments 260 and 261 in the name of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) would require the rail strategy to consider local need, in particular in respect of level crossings and integrated transport. That is something that the Select Committee on Transport, which I am a member of, is also looking at. Indeed, we had our first hearing on integrated transport yesterday, and one thing that came across strongly to me was that we should really have been looking at an integrated transport strategy before this Bill was introduced, because how rail and buses—I have had the privilege of serving on Bill Committees on both subjects—slot into such a strategy is really important. Therefore, having something on the face of the Bill that pushes towards ensuring that we have regard for integrated transport is important.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

My hon. Friend is quite right that we need to look at modal interoperability. Does she agree with my hon. Friend the Member for Runnymede and Weybridge that a level crossing in a conurbation has a negative impact on road use and, in some instances, cuts one side of a town off from the other? Is he right, as I suggest he is, that that should be part of GBR’s consideration?

[Rebecca Smith]

Yes, absolutely. Indeed, amendment 260, tabled by my hon. Friend the Member for Runnymede and Weybridge, would require the forthcoming rail strategy to have specific regard to level crossings. Fortunately, I do not have anything like what my hon. Friend the Member for Broadland and Fakenham describes, where a level crossing splits an entire town in half, but I presume that the Government will not want to invest in bridges everywhere there is a level crossing, so having at least some regard for level crossings in the rail strategy, and ensuring that one thing does not negate the other, will be essential. I entirely agree with my hon. Friends.

Amendment 137, in the name of the hon. Member for Didcot and Wantage, relates specifically to rural communities, and no doubt it overlaps with amendment 260. Like my right hon. Friend the Member for Melton and Syston, he has highlighted the importance of good rail connectivity in our rural communities. Again, that came up in the Transport Committee’s oral evidence session yesterday: how do we make sure that we are not just weighting the system in favour of urban areas, and make sure that due and serious regard is given to rural communities? My rural community has only one station, and we are keen to see more stations that will serve rural communities, both in my constituency and others. But ultimately, if we really want to see that modal shift away from cars to the railway, we have to make sure that everybody stands a fair chance of accessing it.

I will turn to new clauses 28 and 29, again in the name of hon. Member for Didcot and Wantage. The first is about technology and the need for connectivity on the railway. As somebody who does the right thing and uses my mobile phone rather than Great Western Railway’s wi-fi to connect to the internet—because that is what the parliamentary security people tell me to do—I am entirely reliant on my 4G network to work on the train. I sit there for three and a half hours one way and three and a half hours back, if I am lucky—I have that to look forward to later on today—and I rely on that time to complete my work. I am sat in Bill Committees half of the week, so that time on the train, doing my constituency work and reading in preparation for this Committee, is essential. When there is no decent wi-fi or 4G connection, that is a problem.

I am sure the Minister is well aware of the very exciting pilot that GWR has been doing using Formula 1 technology, which is right up my street, as those who know me well will appreciate. It is excellent. Effectively, it uses that thing no one likes because it technically belongs to that American Musk guy—is it Skylink?

[Jerome Mayhew]

Starlink.

[Rebecca Smith]

That is it. It still works, though, and provides a very good internet signal.

I suppose that is a question for the Minister: what regard is he giving to such pilots? That might not be on the face of the Bill, but a large part of the population will want to know we have talked about how to ensure that connectivity on Great British Railways is up to date. Connectivity means getting from A to B, but also the ability to work using the internet. I completely agree with the hon. Member for Didcot and Wantage on that point.

I will just briefly speak to new clause 29, on Sunday working arrangements. I have mentioned this already, but those far-flung parts of the country that rely on a possibly hourly service into London that connects all the way through the south-west region need the guarantee of Sunday services. I have to leave at 6.55 am to get here. If I want to get here for an early start on a Monday, I have to leave the night before—if there was no train available, I would lose nearly a whole day just to get to London for a meeting on a Monday morning. It is a privilege to be able to do that, but I would rather not, and more frequent trains would help.

--- Later in debate ---

[Keir Mather]

I thank the hon. Lady for her intervention. My reading of the amendment is that it would remove the ability to amend the strategy within a 15-year period. Her broader point, about having flexibility to make determinations about the long-term rail strategy and cater for unforeseen events, technological innovations and global events that we cannot predict, strengthens the argument that we made about amendment 134, when we considered whether to set the period in stone and make it exactly 30 years. There has clearly been deliberation between the official Opposition and the Liberal Democrats about whether it should be 15 or 30 years, but we think that not being overly prescriptive is the best way to ensure that the rail strategy gives a long-term perspective and is sufficiently malleable to meet changing operational realities on the railway.

[Jerome Mayhew]

I just want to give the Minister some further clarity about what amendment 25 actually does. He is right that it says,

“The document issued under subsection (1) must be in force for a minimum of three control periods”,

but that should be read in the light of subsection (4), which gives the Secretary of State express power to

“keep the rail strategy under review”,

and paragraph (b), which says that they

“may revise or replace it.”

Does he accept that it is quite clear that the amendment, read in conjunction with subsection (4), does not prevent reacting to new events?

[Keir Mather]

On locking in a 15-year strategy that can be reopened only if the Secretary of State chooses to revise it, it has been said throughout our deliberations that we do not want politicians micromanaging the railway. I therefore presume that the Secretary of State would want to reopen the three control period review envelope only in extremis. Given our deliberations about whether it should be three control periods or 30 years, I think it is better overall to bake that flexibility into the Bill and allow those discussions to take place.

I have to make a lot more progress, and I do not want to detain the Committee for long. In the evidence sessions, several witnesses said that the ability to update and change the strategy in response to unexpected events is critical. No one can accurately predict things such as technological and environmental changes over the next 15 years. For that reason, the Bill has been drafted so that the strategy is not a once and done document, but can be revised when it needs to be.

The next theme in this group of amendments is to ensure that the long-term rail strategy includes specific content. Amendments 137, 207, 224, 135 and 136 all do that. The strategy will not go into specific operational requirements in the way sought by the amendments, which relate to topics such as rural railways, co-operation with local authorities, timetable integration, international rail and electrification. Those are all vital topics—of that there is no doubt—but they are all matters for Great British Railways to consider as it develops its strategic plan for the operation and optimisation of the rail network, informed by the long-term strategy.

Although I agree that co-operation with local authorities is critical to the success of this reform, I do not think that that objective needs to be captured in the long-term rail strategy. Rather, it is already captured in the Bill via GBR’s duty to co-operate with mayoral strategic authorities. That duty is provided for in legislation and will be enduring, so it does not also need to be in the strategy.

The suggestion that the long-term rail strategy should set out obligations relating to the timetable is in opposition to the views of the majority of stakeholders who responded to the Railways Bill consultation. They want Great British Railways to have the autonomy to manage the timetable without Government micromanagement, and I wholly agree with that.

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Network Rail already considers the level crossing impact on local communities of any changes to rail operations, and GBR will continue that work, with ORR oversight. GBR will manage level crossings in a way that maintains high levels of safety for all users, reflects local and national priorities, and is firmly grounded in evidence.

[Jerome Mayhew]

I am grateful to the Minister, who is doing his job in highlighting some of the practical challenges that the amendment might entail. The important bit is not so much the strategy; I think what my hon. Friend the Member for Runnymede and Weybridge is trying to get at is that, when Network Rail or GBR assesses the function of a level crossing, it also needs to take account of the impact on the society in which it is based: for instance, cutting a town in two or stopping vehicular access for multiple periods during a day. Does the Minister not agree that, if GBR did not consider that—it was not in the list of considerations that the Minister mentioned a moment ago—it would not be doing its full job?

[Keir Mather]

I thank the shadow Minister for his intervention. I very much identify with the sentiment identified by the hon. Member for Runnymede and Weybridge. This is something that impacts Selby town, much as it affects communities across the country. It is right that GBR has regard to managing the way in which level crossings impact road users as much as it does the way that railway infrastructure and passenger services do.

My question is whether that obligation is best placed in this part of the Bill. Network Rail already has a system for considering the impact of changes on local communities, and that will be mapped over into the way that GBR functions. I believe that the transfer of that process, in a way that is reactive and operationally agile, is probably the best way to ensure that those considerations remain integral to how GBR carries out that work.

On connectivity and multimodal journeys, I am happy to confirm that strategic objectives in the long-term strategy will already include supporting better connectivity between communities. This will provide direction on the long-term trends affecting the railway. However, as with others in this group, amendment 261 would make the strategy a document focused on short to medium-term assessments of passengers’ ability to change between rail services or different modes—things that could change frequently, and are therefore not appropriate for inclusion in a document that sets out long-term strategic aims.

However, the hon. Member for Broadland and Fakenham will be pleased to hear that we will soon be publishing our integrated national transport strategy, which will set out the Government’s vision for domestic transport across England. It will focus on a transport network that works well for people across the country, including improving integration across modes, but I will of course take the sage advice of the right hon. Member for Melton and Syston about my personal role as part of that process.

Amendments 225 and 213 both seek to make the strategy subject to additional procedural requirements. Amendment 225 requires consultation with operators during preparation of the strategy. I can reassure the hon. Member for Broadland and Fakenham that the Government have already committed to consultative engagement with key stakeholders, including freight and passenger train operating companies, which will be essential for gathering evidence and informing the strategy’s development. Therefore, in our view, this amendment is unnecessary.

Amendment 213, meanwhile, requires regular reporting from the Secretary of State to Parliament on delivery of the strategy. However, as GBR will be the principal organisation responsible for delivering the vision and outcomes that will be set out in the long-term rail strategy, it will be for GBR to report on its progress in delivering it. GBR already must have regard to the strategy, and will respond to it through its business plans, on which it will report regularly. Given that and other existing reporting mechanisms, the amendment would be duplicative.

The new clauses in this group all propose new strategies or reports—for example, on rolling stock, cyber-security and technology, Sunday working arrangements or signalling. Those all naturally cut across the long-term rail strategy and, if accepted, would, in my view, risk GBR being busier completing strategies than actually running the railway. However, I would like to take each new clause in turn to give them due regard.

On new clause 27, the Government absolutely agree with the principle of a long-term rolling stock strategy. In fact, we would go a step further and say that this strategy should cover not just rolling stock, but the related infrastructure as well, in a single integrated strategy. Such a strategy was sadly lacking during the last three decades of privatisation, with decisions about rolling stock and related infrastructure taken to meet short-term and route-specific needs of operators seeking to maximise their profits. It is this Bill, establishing GBR, that will put that right.

However, I do not agree that the Bill needs this as a duty on GBR. Rather than creating a duty for GBR to deliver at some time in the future, we are already working with relevant parties across the industry to develop a rolling stock and infrastructure strategy to be published this summer. GBR will inherit that strategy and act on it to deliver improvements for industry, taxpayers and passengers.

Likewise, there is no need for a reporting requirement relating to cyber-security and technology. Cyber-security remains a priority for my Department; we are committed, through both existing cyber legislation and policy, to ensuring that GBR operates safely and securely. While new clause 28 reflects priorities that the Government share, the measures it proposes, such as on artificial intelligence, digitalisation and innovation, are already being delivered without the need to include them in this Bill.

On new clause 29, relating to Sunday working arrangements, I would first like to say that I have no doubt that creating GBR to improve both the quality and dependability of train services on Sundays will drive up demand and allow more people to benefit from the railway. We want a railway that operates reliably and sustainably, seven days a week, on a lower net subsidy than today, with built-in resilience and a diverse workforce. However, this is not an overnight change, but a long-term one, and not a process that, in my view, needs to be set out in legislation. Rather, we will continue to work with staff, managers and unions across the future railway to deliver this change collaboratively.

[Jerome Mayhew]

The Minister is touching on a key issue that the railway will have to address if he is serious about achieving a reliable Sunday service, and that is operating a seven-day schedule with a six-day roster. Does the Minister intend finally to address the six-day roster issue and to move working practices on to a seven-day roster?

[Keir Mather]

We want GBR to be empowered to address and deal with all these questions relating to personnel and timetabling in a way that is consultative and in partnership with both unions and private sector operators. My point merely remains that it is not appropriate to freeze them in aspic as part of this Bill, in a way that might prevent GBR’s ability to work properly through those considerations with the workforce once it exists. Producing a separate report on the demand for Sunday travel would duplicate the work that GBR already has to undertake through its business plan, which will set out the outcomes and key deliverables for GBR, including train service levels, which will be agreed with the Government and published accordingly.

Finally, new clause 54 relates to a signalling strategy, and again there is no need to place such requirements in this Bill. Network Rail has released its approach to digital signalling for 2024 to 2029, setting out the routes that will be converted to digital signalling. GBR will take over that approach and would be expected to develop it in its future business plans.

To bring the focus of the discussion back to clause 15, the long-term rail strategy will ensure that the railway will always have long-term direction from this Government and future Governments. Such directions are vital for stability and confidence within the rail industry. The strategy will help to prevent the constant short-termism that has been called out by both the industry and its supply chain.

I hope that, following my response to these amendments, the hon. Members will feel able to withdraw them, and I commend clause 15 to the Committee.

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[The Chair]

We turn to amendment 25.

[Jerome Mayhew]

I have listened carefully to what the Minister has said on amendment 25, particularly his comments on the Secretary of State, so I will not press it to a Division.

Amendment proposed: 135, in clause 15, page 8, line 25, at end insert—

“(3A) The rail strategy must include an international rail strategy to—

(a) support the development of new international routes,

(b) support operators in introducing and operating any such new routes, and

(c) support new and existing operators in using the Channel Tunnel and London St Pancras High Speed.

(3B) In meeting the objectives under subsection (3A), the international rail strategy must—

(a) consider options to increase rail depot capacity at, and to supplement, Stratford Temple Mills;

(b) consider any enhancements that may be required to conventional rail network in the Southeast of England for the purpose of enabling international rail travel;

(c) consider options for electrification, changes to gauge clearance, and any other alterations to rail infrastructure as may be necessary to increase the potential for increased rail freight to travel via the Channel Tunnel.”—(Olly Glover.)

This amendment would require the Secretary of State to include an international rail strategy as part of the Government’s long-term rail strategy. The international rail strategy would specifically look to support new routes and operators, and increase Channel Tunnel and London St Pancras High Speed rail capacity.

Question put, That the amendment be made.

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Duty of Great British Railways and ORR to have regard to strategies etc

[Jerome Mayhew]

I beg to move amendment 26, in clause 16, page 9, line 11, leave out “have regard to” and insert “seek to achieve”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 218, in clause 16, page 9, line 20, after “and” insert

“each single strategic authority, and”.

This amendment would require GBR to have regard to the transport strategies of single strategic authorities when exercising its statutory functions.

Clause stand part.

New clause 33—Long-Term Rolling Stock Leasing Framework—

“(1) Within 12 months of the passing of this Act, the Secretary of State must publish a framework for the long-term leasing of rolling stock (‘the Framework’).

(2) The Framework must apply to all rolling stock agreements for use on infrastructure managed by Great British Railways.

(3) The Framework must include measures to—

(a) provide that rolling stock leases entered into, renewed or extended by Great British Railways or passenger operators for use on infrastructure managed by Great British Railways, have a minimum lease term of 15 years for new or renewed rolling stock, unless the Secretary of State determines that a shorter term is justified by exceptional operational or market circumstances;

(b) require Great British Railways to assess whole-life asset cost, maintenance, refurbishment and residual value when procuring or approving leases;

(c) provide Great British Railways with the power to specify obligations in long-term leases that support accessibility, improved energy efficiency, and interoperability across the network;

(d) ensure that long-term certainty supports—

(i) manufacturers of, and

(ii) persons who maintain

rolling stock by enabling investment in skills, supply chains and technological innovation;

(e) require that lease terms are consistent with Great British Railways’ long-term network strategy, its five-year funding settlements and its access and capacity allocation duties;

(f) require Great British Railways to publish an annual statement setting out—

(i) projected rolling stock needs for the 15 years following the publication of the statement;

(ii) any lease terms agreed within the year prior to the annual statement;

(iii) an assessment of the alignment of lease arrangements with the Framework’s objectives;

(iv) a value-for-money assessment of any new or renewed leases.

(4) Before issuing or revising the Framework, the Secretary of State must consult—

(a) Great British Railways,

(b) the Passenger Council,

(c) the Office of Rail and Road, and

(d) any other persons the Secretary of State thinks appropriate.

(5) Within 12 months of the passing of this Act and every subsequent 12 months, Great British Railways must lay an annual report before Parliament setting out its compliance with the Framework and the reasons for any departures from the minimum lease requirement.”

This new clause would require the Secretary of State to publish a Long-Term Rolling Stock Leasing Framework, and for Great British Railways to comply with this framework.

New clause 36—Rolling Stock Investment Framework—

“(1) Within 12 months of the passing of this Act, Great British Railways must publish a report containing a framework for rolling stock investment (‘the Framework’).

(2) The Framework must include an assessment of needs for rolling stock for the period of 15 years following its publication, including—

(a) procurement of new rolling stock,

(b) refurbishment of rolling stock that is already in use,

(c) digital signalling and onboard technology upgrades,

(d) decarbonisation, and

(e) accessibility improvements.

(3) The Framework must set out the routes through which private investors may finance—

(a) new trains,

(b) refurbishments to existing stock,

(c) upgrades to low-carbon traction,

(d) modernisation of interiors of trains,

(e) predictive maintenance, and

(f) digital systems.

(4) The Framework must promote private-sector investment in energy-efficient rolling stock and accessibility improvements.

(5) For the purposes of subsection (4), the meaning of ‘energy-efficient rolling stock’ includes hybrid, battery, or hydrogen technology.

(6) The Framework must set out how procurement undertaken by, or on behalf of, Great British Railways will—

(a) ensure competitive tendering,

(b) encourage innovation in design and maintenance,

(c) provide private investors with a stable commercial investment environment, and

(d) ensure a consistent pattern for the placement of orders.

(7) Great British Railways must align any plans for investment in the Framework with—

(a) its integrated business plan, and

(b) funding determinations for the relevant Control Period.

(8) Great British Railways must update the Framework at least once each year after it is first published, including in relation to—

(a) updating Great British Railways’ strategy for its fleet of rolling stock,

(b) opportunities for private capital investment in rolling stock,

(c) the reasons for any major changes to planned procurement,

(d) expected timelines and volumes for procurement, and

(e) how it will use private investment to—

(i) reduce whole-life cost of stock,

(ii) improve quality of stock, and

(iii) support jobs in the rail supply chain in the UK.”

This new clause would require GBR to publish a rolling stock investment framework.

New clause 37—Great British Railways Accountability—

(1) Great British Railways must publish a business plan each year.

(2) The business plan set out in subsection (1) must include—

(a) a summary of activities that Great British Railways intends to undertake during the following year,

(b) how these activities will support the delivery of the Rail Strategy,

(c) the outcomes Great British Railways expects to achieve, and

(d) how these outcomes reflect the funding settlement for the relevant Control Period.

(3) Great British Railways must publish a delivery report each year (‘the Report’).

(4) The Report must set out progress made against the outcomes in the Rail Strategy, including—

(a) passenger experience,

(b) freight growth,

(c) accessibility,

(d) passenger growth,

(e) integration with housing and local transport, and

(f) long-term infrastructure and service improvements.

(5) The Report must assess Great British Railways’ performance against its statutory duties as set out in this Act.

(6) The Report must include Great British Railways’ performance against its key performance indicators set by the Office of Rail and Road, including—

(a) areas of underperformance,

(b) risks to delivery,

(c) corrective actions taken, and

(d) financial performance related to its business plan.

(7) The Office of Rail and Road must assess Great British Railways’ performance against its business plan, key performance indicators set out in section [Great British Railways: Key Performance Indicators] and statutory duties, and publish an annual assessment of its performance.

(8) If the Office of Rail and Road makes any finding of material underperformance in the assessment set out in subsection (7), it must give notice to—

(a) the Secretary of State, and

(b) Great British Railways.

(9) The Secretary of State must publish a written response within 90 days of receiving a notice under subsection (7).

(10) Within 90 days of receiving a notice under subsection (8), Great British Railways must set out—

(a) how it will rectify any underperformance identified in an assessment under subsection (7), and

(b) and how it will measure progress against any areas of underperformance.

(11) The Secretary of State must lay before Parliament a copy of—

(a) each business plan under subsection (1),

(b) each delivery report under subsection (3), and

(c) each assessment made by the Office of Rail and Road under subsection (7).

(12) When the Secretary of State lays a copy of the delivery report in accordance with subsection (11)(b), a Minister of the Crown must make a statement to each House of Parliament about the contents of the report.

(13) For the purposes of this section, ‘Control Period’ has the meaning given in any final decision taken by the Office of Rail and Road which concludes each periodic review of access charges as described in Schedule 4A of the Railways Act 1993.”

This new clause sets out a reporting and accountability framework for GBR.

[Jerome Mayhew]

The usual procedure applies again. Clause 16 requires both GBR and the Office of Rail and Road to “have regard to” a number of different requirements, such as the long-term rail strategy, the statutory transport or rail strategies published by the Welsh and Scottish Governments respectively, the mayoral combined authorities and the Mayor of London. There is a key political question within this clause: why has the Minister chosen to apply a duty on GBR and the ORR to only “have regard” to those strategies? In practice, that means only that GBR and the ORR will consider transport plans, not that they must, or even should, follow or prioritise them.

That seems a slightly unusual position for the Government to take, given their keen approach to oversight of GBR in other clauses, such as 7 and 9, where it looks like they wish to maintain their role as key stakeholder over that of the devolved Governments and the mayoral combined authorities. The weak obligations are shared, whereas the strong obligations are kept primarily to themselves. It is a surprising approach, particularly given that clauses 7 and 9 effectively strip GBR of operational independence. I recognise that the Scottish Government and, to a lesser extent, the Government in Wales have their own clauses to guide and direct, but the mayoral combined authorities certainly do not. I wonder whether this clause is directed at overweening powers demanded by certain mayors, but I could not possibly look into the depths of the psychology of the Labour party as it struggles with its issues at the moment.

It is very noticeable, as Mayor Andy Burnham said to us last Tuesday in oral evidence, that there is a substantial difference between the Government’s proposed treatment under the Bill of mayoral combined authorities and that of Transport for London. There does not appear to be any rationale for that deliberate divergence—or at least not one that the Government have identified.

As other mayoral combined authorities come online, the Bill provides no formal mechanism for their wishes to be respected. Members of the Committee who were in the oral evidence session will remember that Andy Burnham said he would “insist” on greater authority in that area. The Bill as currently drafted does not provide that avenue for him or for others, so those looking for advancement in the future might like to consider their voting strategy on this clause. After all, page 33 of the Labour manifesto states:

“Mayors will have a role in designing the services in their areas.”

Can the Minister outline the mechanism for existing and future mayoralties to be put on a statutory footing, and for their local transport plans to be given greater consideration from GBR and the ORR?

There is one other question regarding this clause. It relates to subsection (3). What does GBR do if the strategy of a mayoral combined authority or Transport for London conflicts with that of the Secretary of State? How are potential conflicts between strategies resolved, and who will be the arbiter? Will it be the Secretary of State, or will there be an independent structure? With that in mind, the clause should be strengthened to ensure that GBR and the ORR respond more clearly and act under greater requirements.

That is where amendment 26 comes in. It would replace the very weak “must have regard to” with “must seek to achieve”. That change seems small on the face of it, but it would strengthen the requirement on GBR and the ORR to engage and work with mayoral combined authorities, the Welsh and Scottish Governments and the Mayor of London. Will the Minister support this modest proposal to strengthen that relationship?

The clause currently restricts the duty of mayoral combined authorities and the Mayor of London. It is silent on other strategic authorities, yet the same arguments apply to areas that are not yet or will never be mayoral combined authorities when identifying regional needs for current and future transport. We heard that concern eloquently expressed by my hon. Friend the Member for South West Devon. I hope that she will be able to expand some of her thinking on this in a moment. We have heard examples from the west country where local government reform is floundering, as it is around the country, including in Norfolk where I am a Member of Parliament. It is already delayed until 2028. That is perhaps just the first of further delays as well, as this Government lose steam. There is no idea where, when or even if it will go ahead.

There are also many areas that will never have a mayoral combined authority because of the structure of their local government settlement. We do have local transport authorities, though, which are the base level of local government that has responsibility for local transport co-ordination. It seems like a very significant omission that the Bill currently only relates to mayoral combined authorities. That is the lowest level of regional government to which it deigns to provide any form of requirement for co-operation with the ORR and GBR. Why is that? Where there is, for sound local reasons, no mayoral combined authority, why are the Government designing out the ability of local government representatives, the local democrats, to co-operate and co-ordinate with the ORR and—more importantly in this instance—GBR? What happens to their interest? There is simply no explanation as to why these large authorities, which will be the local transport authorities in their own right, have been excluded from consideration. That leads me neatly on to amendment 218, which adds them to the list.

New clause 33 requires the Government, or rather GBR, to set out a long-term rolling stock leasing framework. The clause would require the Secretary of State to publish a long-term rolling stock leasing framework, and require GBR to comply with that framework. It mandates a minimum 15-year lease, save in exceptional circumstances. That is because the longer the lease, the better the value for money for the taxpayer.

Longer leases lead to lower costs, which will lead to more UK investment, more trading and better value for taxpayers, as the industry and supply chain are able to plan ahead and produce effective business plans. There is a consequence to the leasing’s being done by the public sector, rather than the private sector: the Government will have to consider the impact of the cost of leasing on the national debt. That is, after all, the logical consequence of their political decision to nationalise the railways—the operating companies. There is a cost that comes with it, and that is moving from the private sector balance book on to that of the public sector. The Government need to own the financial consequences of their political and ideologically driven decision, and that is one of them.

[Rebecca Smith]

Does my hon. Friend agree that one of the positives of new clause 33 and its attempt to rectify things as they stand, is that it is not throwing private investment in our rolling stock out of the window? We have heard in evidence and throughout the Bill process, whether that is in Transport Committee evidence or the Bill Committee, that millions and millions of pounds have been accepted by this Government by the private sector for rolling stock investment. If we are not careful, we will completely dissuade them from being involved. We are already seeing them moving to Europe with that investment instead.

[Jerome Mayhew]

My hon. Friend is absolutely right. New clause 33(3)(a) to (d) is aimed at reducing short-term decisions and focusing more on long-term efficiency and savings. I am sure there are many former business people on the Labour Benches—or maybe not, actually—[Interruption.] I am glad to hear that there are. There are many former business people on these Benches, and all those who have run businesses will know that predictability of the future is one of the key drivers of economic success and of driving down costs. New clause 33 will help to achieve that for the taxpayer.

GBR will also be mandated to produce an annual public report that enables Parliament and the public to properly hold GBR to account. We have heard time and again how light the Bill is on the ability of the public and of Parliament to hold GBR to account; we are the representatives of the people and we are being denied, by design, the opportunity to do that adequately. Yet it will be spending £20 billion-plus each year, about 50% of which, at the current rate, is public money. Why are the Government running scared of public oversight of these operations?

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[Baggy Shanker (Derby South) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mr Western. I think this is an opportune moment to ask a question, as a Derby MP with Alstom in my constituency— the only place in the UK now where a train can be designed, engineered, manufactured and tested. Under the previous Government, Alstom had to make thousands of redundancies because there was just no certainty about work and there were delays on various projects. Can the hon. Member explain why the previous Government did not take any steps to come up with a rolling stock strategy?

[Jerome Mayhew]

I thank the hon. Member for his intervention, and for standing up for the jobs in his constituency, which is something we all need to do. I cannot speak for the actions of the Government before I was even elected as a Back-Bench MP, but we are certainly looking to improve. I would be the first person to say that the status quo ante was capable of improvement. Privatisation did bring many benefits to the railways, particularly in encouraging innovation and focus on the customer, leading to the increase in passenger numbers, which I have already spoken about in previous sittings, but was it perfect? Of course not.

As has been trailed by the Government, this is a once-in-a-generation opportunity to redesign and improve our approach to the railways, and I think that taking a long-term approach to rolling stock investment and creating this framework would be taking advantage of that opportunity to try to improve predictability for the supply sector—for Alstom, but also for Siemens and other manufacturers as well.

New clause 36 would require GBR to publish and keep under annual review a 15-year rolling stock investment framework that sets out future needs for new and existing trains. That includes—this is important—not just the replacement of trains but refurbishment, digital upgrades, decarbonisation and accessibility improvements. It would establish how private investors could finance rolling stock and related upgrades, promote energy-efficient technologies such as battery, hydrogen and hybrid traction, and set expectations for competitive, innovative and, importantly, predictable procurement. The framework must align with GBR’s business plan and control period funding, which are two very sensible requirements, and it must also provide transparency on procurement volumes and timelines, explain changes to plans and show how private investment will be used to reduce whole-life costs, improve train quality and support jobs in the UK rail supply chain.

The Government have thrown the sector into a period of uncertainty—that is inevitable with large-scale redesigns like the ones we are going through at the moment. My concern is that the way in which they have chosen to do this, through a process of drifting nationalisation before knowing the details of its replacement, has exacerbated that uncertainty and extended it over a prolonged period. As the hon. Member for Derby South has already noted, we are already seeing that uncertainty in the supply chain and the manufacturing base.

There is uncertainty—that is the problem. This is a shell Bill; it does not have the answers, and it does not give any confidence to industry that things will be better in the future. It relies on a whole raft of provisions in the 19 documents to which we have referred to time and again, but they do not exist. We do not know whether things will get better or worse, and neither does the industry. There is no supporting documentation on how GBR will function in practice. I am not sure the Government even know that yet, and they really ought to have done better than this. New clause 36 would point them in the right direction, and I certainly look forward to pressing it to a Division, should the opportunity arise.

New clause 37 would increase accountability by setting out a reporting and accountability framework for Great British Railways. The new clause states:

“Great British Railways must publish a business plan each year”,

which we have already considered, and it dictates:

“The business plan…must include…a summary of activities that Great British Railways intends to undertake during the following year”

and

“how these activities will support the delivery of the Rail Strategy”.

At the end of the year, GBR would be required to produce a second report setting out its progress against the business plan objectives, the first of which is passenger experience—we all know the Government substantially ignore passenger experience at the moment, apart from reliability in short trains, and have just brushed the other aspects under the carpet. The other objectives include

“freight growth…accessibility…passenger growth”,

which is also ignored by the Government in the Bill as drafted,

“integration with housing and local transport”

and

“the long-term infrastructure and service improvement.”

The ORR must assess GBR’s performance against the key performance indicators set out in new clause 2, which we have already debated but not yet voted on. If the ORR finds any material underperformance, it must give notice to the Secretary of State, who must publish a written response. This general approach is very business focused; it simply asks that GBR sets out what it is planning to do at the start of the year, and then having worked through the year, there is a process for GBR to mark its homework at the end of the year. Has GBR done what it said it would do? If it has not, the spotlight is on. It is also being assessed by the ORR, which retains its role as an independent expert adjudicator that is trusted by all parts of the rail sector.

Perhaps the best thing is that, in response to that, GBR must also set out what it will do to rectify any underperformance, and it must lay a report before Parliament and make a statement. The new clause would add critical levels of parliamentary and public scrutiny to GBR, allowing both to hold this new organisation to account, which we believe is paramount when such vast amounts of taxpayers’ money will be used. The current Bill is woefully short on accountability. It lacks strong incentives to encourage GBR to perform, to be held to account and to answer for its actions—or lack of action.

This all feels a little too comfortable. We have a nationalised industry reporting to officials from the Department for Transport, and it is not focusing on the experience of customers and passengers, passenger growth or all the other imperatives of rail in the future. The Minister will of course tell us that none of that is necessary. However, with the greatest respect, direct experience of running a business tells us that we need to design in strong incentives—this is crucial; it is not primarily a political point but a trying to improve this Bill point—so that GBR is inclined to focus on the right objectives, without having to respond to external direction. These new clauses would help to point GBR in the right direction. I look forward to the Minister’s support.

[Olly Glover]

I should have said earlier, Mr Western, that it is a pleasure to once again serve under your chairship as we debate another exciting group of amendments. I want to make some brief remarks on the Conservative amendments in this group. I eagerly await the Minister’s polite but withering put-down.

Amendment 26 is a matter of wording. Alas, unlike the shadow Minister, my only experience of the law is occasionally watching “Kavanagh QC”, a reference that no doubt reveals my age. I shall await the Minister’s comments on that amendment and shall reach a view in the no doubt incredibly nail-bitingly tight Division on it. On amendment 218, I agree with the shadow Minister that we need to get mayoral consultation right, and to have plenty of it.

New clause 33 seems sensible, given the Conservatives’ and Labour’s total obsession with rolling stock leasing rather than purchase, which I find utterly bizarre. Rolling stock leasing can make sense, particularly when gilt prices or the cost of capital is high, but it is quite expensive on a whole-life cost basis. Otherwise, why would rolling stock companies do it? There are some very nice people in them, but they are not charities. Rolling stock leasing happens elsewhere in Europe, but it is not as universal as it is here. However, that feels like either yesterday’s war or tomorrow’s—probably not today’s.

On new clause 36, I note that the shadow Minister has tabled amendments about the private sector to similar effect in group 36. I politely suggest to him that, in the same way that members of the governing party can sometimes be too ideologically committed to the idea that public sector is automatically better, the evidence does not necessarily support the view that private sector is automatically better in the rail context. It is context-dependent. ORR benchmarking from 2012 showed that our train driver and rolling stock maintenance costs, both of which have been in the private sector for some time, were generally significantly higher at that time than those of our European counterparts. I do not believe that those trends have changed significantly.

I would be interested to hear from the shadow Minister and from the Government the evidence that private sector is automatically better than public sector, or vice versa. I think it depends on the context. Perhaps more important is getting requirements and specifications for tenders right or deciding in each individual context the best way to get value on a whole-life cost basis. We definitely have a problem on the railway, and perhaps as a nation as a whole, with being obsessed with getting up-front capital costs down, but there is not quite the same level of attention for a decent appraisal of whole-life costs and deciding how to move forward on that basis.

On new clause 37, I understand the intention of an annual business plan, but my slight worry is that it could undermine the logic of the five-year funding review period. Perhaps the shadow Minister can address that when he sums up.

--- Later in debate ---

[Keir Mather]

The hon. Lady must have read my mind about that detail being forthcoming. If she will allow me to take away that specific point over the break that we are about to have, I might be able to come back to her when we resume the debate.

For the moment, I will quickly turn specifically to the amendments in the group. The lead amendment would require GBR and the ORR to “seek to achieve” the long-term rail strategy and devolved strategies, rather than to “have regard to” them. The existing wording deliberately reflects the nature of those strategies within the system. The LTRS will take a 30-year perspective and set strategic objectives, rather than define a narrow set of deliverables.

We of course want GBR and the ORR to have regard to the strategies in all decision making, but they must also have the flexibility to balance long-term objectives with the practical business planning processes that operate over fixed periods. To legislate that such a vision should be achieved would not be in line with that principle, or with the overall approach to the general duties that set the conditions for successful decision making, but do not dictate specific outcomes. As I have reminded hon. Members, GBR, not the Government, will be running the railway.

New clause 37 also relates to GBR’s delivery and looks to establish a statutory annual reporting framework. The Bill already provides robust reporting and accountability arrangements. GBR is required to produce an integrated business plan for each funding period, which must be published and kept up to date, and that will give Parliament and stakeholders a clear view of GBR’s objectives, activities and expected outcomes. A separate statutory annual delivery report would in essence duplicate that information. Furthermore, the ORR will have a role in monitoring GBR’s performance against its business plan and will provide independent advice to the Secretary of State. Such oversight ensures that GBR can be held to account without the need for an additional statutory reporting requirement.

New clauses 33 and 36 relate to GBR’s long-term approach to securing rolling stock. The former calls for the Secretary of State to publish a long-term rolling stock leasing framework and sets out a substantial amount of detail on what that should include. Within that detail, there are certainly points on which we can agree, including the benefits of longer leases and the proper consideration of whole-life asset costs, both of which have been made more challenging to achieve under the franchising model. However, I profoundly disagree that the Secretary of State should dictate the detailed approach that GBR should take to rolling stock leasing, and with the specific terms set out in the new clause. It is rightly for experienced industry professionals within GBR, guided by the Secretary of State’s long-term rail strategy, to secure the best value and achieve GBR’s other objectives through commercial arrangements with the rolling stock leasing market. It should not be for the Government to dictate the detail of those arrangements.

On new clause 36, I of course agree that GBR should have a long-term rolling stock and infrastructure strategy, which is why we are already working with parties across the industry to develop one. The strategy will be published this summer, and will remain a live document. GBR will inherit and implement it as soon as it is established. The new clause is therefore unnecessary, as by the time it would take effect, GBR will already be up and running with a long-term rolling stock strategy.

Amendment 218 would require GBR to have regard to the transport strategies of single strategic authorities. We are of course supportive of a more locally focused railway under GBR. The provisions in the Bill are pitched at mayoral strategic authority level, reflecting their growth across England, the vital role that mayors play in convening local partners and the scale and capability required to integrate rail into the wider public transport network. Nevertheless, all tiers of local government will benefit from empowered local GBR business units that are outward facing and actively engage local authorities on their priorities and local transport plans. That engagement will ensure there is sufficient opportunity for local authorities outside the mayoral strategic authority areas to collaborate with GBR on their priories and to consider proposals. I hope the hon. Member for Broadland and Fakenham therefore feels comfortable withdrawing the amendments.

Clause 16 places duties on GBR to have regard to the long-term rail strategy, devolved transport strategies and local transport plans. Overall, it seeks to ensure that strategic decisions on matters such as future services and infrastructure plans appropriately reflect national, devolved and local priorities. I commend the clause to the Committee.

[Jerome Mayhew]

This is now a common refrain in our deliberations. The Minister says, “Don’t worry. All these things will be taken care of at some future date in documents that have not been drafted and certainly haven’t been shared with the Committee.” With the greatest respect to him, I do not take it on trust that the Government are looking carefully and in sufficient detail at these matters, so I will press the amendments to a Division.

Question put, That the amendment be made.

Railways Bill (Ninth sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 3rd February 2026 Public Bill Committees

[The Chair]

Before we begin, I remind Members to switch their electronic devices to silent. Tea and coffee are not allowed during the sittings. I remind Members that the selection and grouping documents show the way in which amendment and new clauses have been arranged for debate. Any Divisions on amendments and new clauses will take place in the order in which they appear in the amendment paper.

Clause 25

Designation of services by Secretary of State

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I beg to move amendment 226, in clause 25, page 14, line 9, at end insert—

“(1A) When designating railway passenger services, the Secretary of State must—

(a) take account of—

(i) the Rail Freight Target under section 17, and

(ii) the Infrastructure Capacity Plan under section 60; and

(b) demonstrate that designations under this section cause no unreasonable detriment to rail freight capacity or growth.”

This amendment requires that passenger service decisions are made in the context of network capacity and freight increase priorities.

[The Chair]

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 227, in clause 26, page 14, line 33, at end insert—

“(1A) When designating railway passenger services, the Scottish Ministers must—

(a) take account of—

(i) the Rail Freight Target under section 17, and

(ii) the Infrastructure Capacity Plan under section 60; and

(b) demonstrate that designations under this section cause no unreasonable detriment to rail freight capacity or growth.”

See explanatory statement for Amendment 226.

Clause 26 stand part.

Amendment 228, in clause 27, page 15, line 20, at end insert—

“(1A) When designating railway passenger services, Welsh ministers must—

(a) take account of—

(i) the Rail Freight Target under section 17, and

(ii) the Infrastructure Capacity Plan under section 60; and

(b) demonstrate that designations under this section cause no unreasonable detriment to rail freight capacity or growth.”

See explanatory statement for Amendment 226.

Clause 27 stand part.

--- Later in debate ---

[Jerome Mayhew]

Thank you, Mrs Barker, for chairing the debate. It is great to see everyone back in the room.

Clause 25 requires the Secretary of State to designate the railway passenger services for which Great British Railways should be responsible. Designation is the mechanism for assigning responsibility for running passenger train services. The Secretary of State, Scottish Ministers and Welsh Ministers each have designation powers to set out services that GBR or others, including ScotRail, may run for them. Ministers can exempt services from these designations, thereby allowing them to be devolved to other authorities such as Transport for London. Designation also underpins the delineation of relevant powers and requirements in relation to those services, such as the discount fare schemes that we are going to discuss with clause 34.

The clause requires the Secretary of State to designate the railway passenger services for which GBR should be responsible. It excludes Scotland-only and Wales-only services, as well as services exempted under clause 28. Again, there is a reference to Transport for London, among others, being exempted from designation by the Secretary of State. It also clarifies that the Secretary of State is not required to designate services, even if parts of them are already designated by the Scottish or Welsh Ministers.

The explanatory notes state:

“The new Secretary of State designation is expected to be succinct and will not provide route nor timetable-level detail. This will ensure GBR has sufficient flexibility to act as a directing mind and plan best use of the network in the public interest and in accordance with its duties…All designations and changes must be published.”

The Government’s notes on the clause describe GBR as the “directing mind”, yet all its powers are able to be second-guessed by the Secretary of State, including the designation of services. That really prompts the question once again, who is the directing mind? Is it GBR or the Secretary of State?

The seeds of GBR’s failure as a directing mind are already being drafted into the text of the Bill. We have already seen all the Secretary of State’s rights to provide “guidance”, then to “direct” in clauses 7 and 9, as well as the long-term rail strategy in clause 15 and the decision on the provision of funding. This is Department for Transport management of the nationalised railways by the back door, confirming the suspicion that GBR will be, or is at risk of being—I hope it is not—the worst of both worlds. These are costs associated with a stand-alone organisation, coupled with the costs of a DFT shadow organisation that over time will grow again to second-guess GBR as catered for in this Bill. It is not just about the cost; it is about the delay, the obfuscation, the inability to decide whether a decision has actually been made and the second-guessing of decisions. That is death to dynamism in an organisation.

The railways obviously have two functions: passenger services and freight. Amendment 226 will make clear that any designation of passenger services will need to have taken account of freight and demonstrate that freight is not caused unreasonable detriment to capacity or future growth. The amendment is clearly in the interests of the common cause to make freight growth a target for GBR, which the Government agree with. It is impossible to deal with either passenger or freight without having regard to the other. That mutual regard is missing from the Bill, and this amendment supplies the necessary focus, so I shall seek to divide the Committee on it.

I move now to clause 26 and amendment 227. We recognise that, at present, Scotland funds and controls Scotland-only services. Scotland can and does designate cross-border services where it has an operational interest. Scotland must consult with the Secretary of State but, ultimately, has autonomy on Scotland-only designations. Clause 26 requires Scottish Ministers to designate Scotland-only railway passenger services and particular cross-border services—either those that they consider should be provided together with Scotland-only services or existing cross-border services designated to them before the Bill comes into force. It ties into clause 31, where Scottish Ministers can provide the designated services themselves or make direct awards under regulation 17 of the 2023 transport regulations.

In this instance, “Scotland-only services” refers to passenger services that start and end in Scotland and do not make a scheduled call in England or Wales. It provides flexibility for the designation to be made either for specific services or for services of a particular class or description. It also allows Scottish Ministers to designate cross-border services where they consider those services should be provided in conjunction with designated Scotland-only services. It is also worth noting that the clause excludes from designation any services exempt under regulations made under clauses 28 or 29, and requires consultation with the Secretary of State before designation, variation or revocation. It is my understanding that very limited designations are reserved to the UK Government. They lay primarily around open access and freight. Those two areas, I suspect, we will enter into discussions at length later in the Committee.

On cross-border services, it is eminently sensible that the UK and Scottish Governments co-ordinate strongly on this. A later amendment to another clause relates to the allocation of ticket sales on a proportionate basis, to ensure that UK and Scottish Governments—in the fullness of time, we will discuss the Welsh Government too—each get their fair share of funding. Amendment 227 would apply a duty to Scottish Ministers, similar to the one that amendment 226 would place on the Secretary of State, to take account of the rail freight target and the infrastructure capacity plan when considering passenger services. Depending on how the vote goes on amendment 226, I will take a view on whether it is worth proceeding to another Division on amendment 227.

Finally, I turn to clause 27 and amendment 228. It is a broadly similar approach, but applies to designation of services by Welsh Ministers. Hon. Members can read the explanatory notes if they wish, but I am just going to take that as read. On first reading the clause, it seemed sensible; after all, Welsh Ministers are responsible for services that start and end in Wales. The cited example in the explanatory notes is the Cambrian line, which typically goes from Aberystwyth and Pwllheli to Shrewsbury or Birmingham International. These services will, on occasion, terminate at Machynlleth. The Heart of Wales line goes between Swansea and Shrewsbury, and Holyhead services will typically end in England. The Welsh Government will have only a handful of services exclusively in Wales. That is a substantially different from Scotland. Those services are the Core Valley lines, the dedicated Swansea to Cardiff route and the Blaenau to Llandudno route—only three. All other services that start in Wales will generally run into England, which poses a significant challenge for the allocation of moneys from ticket sales.

The Minister may find it useful to outline the practical management of cross-border rail services, and how the Welsh Government’s operator can operate with a degree of confidence when it must report to both Governments, but exists under only one. That is a genuine tension, which I would be grateful if the Minister could explain the Government’s thoughts on.

Amendment 228 is similar to amendments 226 and 227. I will not repeat my arguments, but there is a qualitative difference between the situation in Scotland and that in Wales. It will have a significant impact on revenue sharing, where 97% of all routes for the Welsh Government contain an English element. I would be grateful if the Minister could consider that.

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

Good morning, Mrs Barker, and to everybody—another day in Committee. I thank the hon. Member for Broadland and Fakenham for these amendments, which seek to ensure that the designation of passenger services does not negatively impact rail freight or undermine GBR in network capacity planning activity.

I hope it is helpful if I clarify that clauses 25 to 27, which set out designation powers of the Secretary of State and devolved Ministers for passenger services, only describe a very high-level mechanism for assigning responsibility for passenger services. For example, the designation helps make clear who is responsible for the service. Further clarity is provided by exemption from designation to show where services have been devolved to other authorities, such as to mayoral strategic authorities or Transport for London. Designation is not a detailed service specification, nor does it determine network access or capacity allocation.

Last week, we published a draft of the Secretary of State’s designation letter to help clarify that, and copies are available in the room today. Ministers’ designation powers do not override or conflict with GBR’s role in determining network access. The access decision process requires GBR to balance passenger and freight needs. The safeguards in the Bill, including the statutory duty to promote rail freight or the ORR’s oversight and appeals body to protect fare freight access are also unaffected by designation. The amendment is therefore impractical and unnecessary and would not achieve its intended purpose in practice.

Protecting rail freight, which I fully endorse, is already enshrined within the Bill. For absolute clarity, I must emphasise that the access clauses in the Bill set out the stages through which network access is determined. It is not determined or affected by designation. The access clauses include producing the infrastructure capacity plan, which will set out GBR’s view of how best to use GBR’s infrastructure to accommodate freight, open access and publicly funded passenger services, as well as maintenance and improvement of the network. GBR will take into account its infrastructure capacity plan when allocating capacity. In comparison, designation is simply the method of determining whether a service should be devolved to, for example, a local authority, or maintained by the Secretary of State and run by GBR. I therefore request that the hon. Member withdraw the amendment.

Clause 25 requires the Secretary of State to designate railway passenger services for which GBR should be responsible. Designation is the mechanism by which responsibility for who should run passenger rail services is determined. Clauses 26 and 27 replicate this, but for Scottish and Welsh Ministers respectively. The Secretary of State, Scottish and Welsh Ministers each have designation powers to set out services which GBR or others—including Transport Scotland or Transport for Wales—may run for them. Designation powers will also assist in providing clarity about which Minister has responsibility to provide, or contract for, cross-border services. Ministers can also exempt services from these designations, which is the way that services can be devolved to mayoral strategic authorities. That was the mechanism used to allow Transport for London to run its devolved service. As I have mentioned, the new Secretary of State designation is expected to be succinct and will not include route level or timetable detail. Designation is therefore entirely separate from access or timetabling decisions.

[Jerome Mayhew]

As I intimated previously, I will put the first amendment to a Division and then we will take a view after that.

Question put, That the amendment be made.

--- Later in debate ---

[Keir Mather]

Clauses 28 and 29 enable the Secretary of State and Scottish and Welsh Ministers to exempt certain railway passenger services from designation. Exempting a service means that the Secretary of State or devolved Ministers will not be responsible for that service. Instead, responsibility can be devolved to someone else—for example, a mayoral strategic authority—for them to run or contract out the service. That mechanism preserves the existing approach for devolving services to mayoral strategic authorities and their transport agencies, such as Transport for London or Merseytravel, and for light rail networks such as in Greater Manchester. The Secretary of State cannot exempt Scotland-only or Wales-only services, because those fall under the devolved responsibilities of Scottish and Welsh Ministers. Clause 29 allows devolved Governments to determine which services fall outside designation, offering flexibility in managing their respective networks.

These clauses are necessary to ensure that there is still a way to devolve services, where that can bring benefits and is the best outcome for the network. Exemptions must be made by regulations, ensuring that the allocation of responsibility for passenger services is transparent. Clause 30 provides supplementary provisions for exemptions under clauses 28 and 29. It allows exemptions to apply to specific persons, classes of persons, services generally or parts of services. Exemptions may be conditional or time-limited, so that decisions to devolve services can be tailored to the specific circumstances on a case-by-case basis.

[Jerome Mayhew]

You will be surprised to hear that I am going to canter through this, Mrs Barker. Clause 28 concerns the method by which the operation of passenger train services has been devolved. A good example is services operated by Transport for London and Merseyrail. It is clearly a sensible approach. There is only one clarification that I seek from the Minister. Paragraph 103 of the explanatory notes states:

“All existing exemptions from designations…will be retained.”

That, however, is not in the Bill. I would be grateful for the Minister’s clarification on the difference between the explanatory notes and the Bill. I am not looking for an amendment to the Bill, but his assurance on the Government’s intention. Clause 29 is similar, but relates to Scottish and Welsh Ministers. I see no need to change it as drafted. It sits in line with clause 28 and seems not to act in contravention of the devolution settlement.

Clause 30 clarifies that exemptions made under clause 28 by the Secretary of State, or clause 29 by the Scottish or Welsh Ministers, may apply to specific persons, classes of persons or services generally. I have no objection to the clause, but out of interest, I would be grateful if the Minister could explain in what circumstances the clause would be useful.

[Keir Mather]

I can start by confirming that existing exemptions from designation will be retained. I hope that provides an assurance to the shadow Minister. The powers could be used to allow devolved Administrations to determine which services fall outside of designations, and therefore give them flexibility in meeting the needs of passengers relying on services that otherwise could fall through the cracks. I hope that, having provided the shadow Minister with that assurance, he can support these clauses.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.

Clauses 29 and 30 ordered to stand part of the Bill.

Clause 31

Provision of railway passenger services

[Jerome Mayhew]

I beg to move amendment 41, in clause 31, page 16, line 30, leave out from “so” to “, in” in line 31 and insert

“by making a direct award of a contract to Great British Railways, a GBR company, or a private business.”

This amendment would allow private sector companies to operate train services on behalf of the Secretary of State.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 170 to 172.

New clause 6—Repeal of the Passenger Railway Services (Public Ownership) Act 2024—

“The Passenger Railway Services (Public Ownership) Act 2024 is repealed.”

This new clause repeals the Passenger Railway Services (Public Ownership) Act 2024 so that train services can continue to be provided by private companies.

Clause stand part.

Amendment 44, in clause 32, page 17, line 35, leave out subsection (3).

This amendment requires pre-award publication of public service contracts.

Clause 32 stand part.

[Jerome Mayhew]

Clause 31 has a bit more meat to it than the previous half dozen or so clauses. We are looking at the provision of railway passenger services. The clause provides that the Secretary of State may only secure delivery of the passenger services designated under clause 25 through GBR or a GBR company by directly awarding a public service contract to GBR or a GBR company in accordance with regulation 17 of the Public Service Obligations in Transport Regulations 2023.

Similarly, the clause grants Scottish and Welsh Ministers two options for delivering their designated services under clauses 26 and 27: either by providing the services directly or by securing their provision through a direct award of a public service contract to one or more public sector companies, including to GBR or a GBR company, in accordance with the 2023 regulations. The powers to provide services directly could also be used in conjunction with clause 4 to enable GBR to operate services on behalf of Welsh or Scottish Ministers.

Subsection (5) provides that, where passenger services are secured through a contract with a joint venture, subsidiary of GBR or GBR, clauses 7 to 10, 13 and 16 to 18—the directions and guidance and GBR’s duties—apply to the provision of those services in the same way as if GBR was performing the contract itself. Subsection (6) ensures that the relevant Ministers have the power to operate network services, station services and light maintenance services, as well as to store and consign goods transported by rail, to enable their responsibility for passenger services. Finally, subsection (7) provides that the obligation to provide or secure the provision of a service under the clause does not give rise to civil liability for breach of a statutory duty.

There is an obvious elephant in the room. The clause implies that GBR, one of its subsidiaries or the respective devolved Government-run rail operators are the only efficient and permitted provider of rail services. The public sector is the only permitted provider of rail services, but that should not be the case. There are many very efficient providers of rail services that are being excluded even from consideration by the wording of the Bill. There may be some instances where private operations are best placed to offer a service, either now or in the future, where they can drive innovation and growth, just like open access has.

Restricting awards by primary legislation to GBR companies provides damaging constraints on the flexibility of future Secretaries of State. If a circumstance exists in the future where a private sector operator is able to offer a better service for a lower cost to the taxpayer, why should the Secretary of State of the day be prevented by primary legislation from making such an award? What is the rationale that the Minister can come up with, beyond union pressure and the Labour party distrust of profitable businesses? What is the danger that this primary legislation is seeking to protect the rail industry from by removing any ability of the Secretary of State of a future Government to award a private sector contract in any circumstances, including those we may not yet have foreseen? It is clearly a bad decision.

Amendments 41 to 43 grant maximum flexibility to a future Secretary of State, which is surely what we want, as well as to Scottish and Welsh Ministers, to make an award to the organisation best placed to undertake the operation, whether it be public or private. Amendments 42 and 43 were grouped with clause 18, so they have already been debated, but they are relevant to this clause as well. These amendments do not mandate the Government to permit private passenger services; they simply allow them flexibility. There may well be opportunities for the private sector to operate passenger services, and why not combine the very best of public and private and allow that provision to exist under the auspices of GBR? The amendment would allow Welsh and Scottish Ministers to do the same, as flexibility is a very important tool in the Government’s arsenal. It is only right that devolved Governments also have the ability to decide, if they so wish—they are not required to—to have private operators as well.

Our approach allows the principle of private investment driving growth, innovation and expansion to be an element of GBR as it progresses. After all, it will rely on the private sector rolling stock providers for its fleet, and private sector supply chain and infrastructure providers to support its Network Rail function, and presumably it will incorporate other private sector elements around freight and open access, so it is only logical that it allows itself the flexibility to strengthen passenger services by having private sector investment, which is more likely to take risks under the GBR banner.

If the Government disagree with that assessment, I would like to hear their rationale. Why do they accept the private sector in all the other parts of the industry that I have just listed, but believe that this sector alone is required to be protected from the private sector so much that the Government have to use primary legislation to tie the hands of every future Secretary of State in every circumstance?

[Rebecca Smith (South West Devon) (Con)]

My hon. Friend’s comments provoke the question, is it a concern that the lack of flexibility for the Secretary of State will mean that there is no space for private sector companies in this role in the future? Ultimately, given the measures set out in the Bill, and that the opportunity to give access to other private businesses is entirely in the hands of the Secretary of State, it is potentially foreseeable that there could be no private involvement in the future, which would be a problem.

[Jerome Mayhew]

It is a genuine and legitimate concern of private sector rail operators that the tenor of the Bill will design out private sector and open access operators. Through the capacity duty and the ridiculous lack of an appeals process for GBR decisions, they have designed in a structural conflict of interest, in that GBR is both an operator and the quasi-regulator of its own operations. They will be making decisions without an effective appeal right for access and charging of their direct competitors. That is a genuine and legitimate fear, if the Government do not stop and listen to many experts in the industry.

Amendments 41, 42 and 43 would allow private sector companies to operate train services on behalf of the Secretary of State, the Scottish Ministers and the Welsh Ministers, respectively. I will press them to a vote if I get the opportunity.

Government amendments 170 and 171 provide for the Welsh Ministers to have the power to award a public service contract to any public sector company when exercising the Secretary of State’s function under clause 31(1). Government amendment 172 would apparently remove a provision that is unnecessary—I will take the Government’s word for that because I do not have it in front of me.

New clause 6, which is in my name, would repeal the Passenger Railway Services (Public Ownership) Act 2024, as the title suggests, so that train services can continue to be provided by private companies as well as GBR. We have always maintained that the Government should act as the operator of last resort and allow any organisation, public or private, to provide the highest standard of railway services.

We should step back from ideological certainty one way or the other—whether it is about having a nationalised business or a privatised one—and approach ownership structures based on what works supported by data, not intuition. I fear that this Government are driven by ideology, which is very evident in clause 31, and by their union supporters—I wrote down “paymasters”, but I feel that the tone of the Committee would not permit me to make that assertion; we are all too close to each other—to whom they are far too close to insist on nationalisation irrespective of evidence to the contrary. Passenger numbers have exploded under privatisation and there are popular open-access routes. Those are social goods; they are supporting our constituents to have a better experience on the railways. The Government appear to be seeking to deny that for the future.

I do not expect immediate Government support, but new clause 6 makes clear our rejection of the Government’s “nationalisation or bust” approach—it is more likely to be nationalisation and bust. For that reason, I wish to press new clause 6 to a vote.

Clause 32 relates to contracts awarded under clause 31, which we have just been talking about. It provides flexibility for the Secretary of State or the Scottish or Welsh Ministers to include financial arrangements, operational requirements and property-related obligations within the contract. It ensures that contracts can be tailored to meet the operational and strategic needs of the train service, and provides that obligations to publish pre-award information under regulation 22 of the 2023 transport regulations, which we have already referred to, do not apply to direct awards.

The removal of pre-award publications significantly reduces transparency around direct awards. That is a problem because it prevents external scrutiny of value for money and limits the ability of operators or stakeholders to challenge ineffective or poorly structured contracts. This is the public sector not publishing information about cosy contracts with other public sector organisations, thereby not exposing themselves to critique. Where is the transparency here? The explanatory notes merely restate the lack of a publication requirement; they do not justify why this reduced transparency is necessary or what safeguards will exist in its place. The clause means that the private sector will be unable to critique the operations or question the value for money achieved by the public sector negotiating with itself.

Amendment 44 removes clause 32(3). That will require the pre-award publication of public service contracts to facilitate the application of private sector companies in bidding for contracts. It would also allow the private sector to critique the performance of the public sector. Without publication—all too cosy—and with no ability for external challenges on the provision of services or on value for money, we will lack transparency, which, I am afraid, is a theme that has run through so much of our discussions. I will seek to divide on that; it is an important point.

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairship, Mrs Barker. I have some brief comments on the Conservative spokesperson’s amendments.

[Jerome Mayhew]

The shadow Minister; you are the spokesperson.

[Olly Glover]

Apologies. One recognises one’s status.

We agree with the shadow Minister on the principle that it should not be about ideology between the public and private sectors. We have argued that consistently in the past. If it was so simple that nationalising train operators would lead to transformative performance improvements, Northern would be a globally inspiring example. I realised this morning that this month it reaches its half-decade anniversary of being in the public sector and, certainly for friends of mine in the north, it remains some way from being a globally leading example. That highlights the fact that public and private sector ideology is but one factor needed to give excellent rail services.

I wonder whether some of the shadow Minister’s amendments are perhaps fighting yesterday’s war. Of course we should all continue to advocate for what we believe, but it seems unlikely that—in the near future at least—there will be a change in approach to the core train operating companies’ being franchised out. Perhaps, rather than relitigating that, we need to focus on other aspects of the Bill, as indeed he has done, and on how we can make the new world better—particularly by removing the Secretary of State’s ability to interfere too much. I wonder what the shadow Minister and Government Minister have to say about that.

[Keir Mather]

May I begin by saying that I hope the shadow Minister can forgive my initial sluggishness on this drab Tuesday morning, because he asked a perfectly reasonable question about the application of the clause when we debated it last. I did not give him an adequate answer so, if you do not mind me looking retrospectively for a moment, Mrs Barker, I would like to inform him that all existing designations are unconditional. The clause is not there to be used often. However, it replicates an existing power, with the idea being that if the Secretary of State wanted to exempt a service to a new local authority that had not had an exemption before, she might wish to provide a time limit to check how it was performing before granting a longer-term exemption. I hope that is a sufficiently adequate answer to his perfectly reasonable question.

I will now speak to the amendments tabled in my name. Amendments 170 and 171 enable Welsh Ministers to continue securing rail services in the Wales and borders region on behalf of the Secretary of State. Welsh Ministers will do that by contracting Transport for Wales to run the services. That will ensure that passenger services that cross between England and Wales every day continue to connect communities, contributing to economic growth. Without these amendments, the Secretary of State would be forced to abandon existing agency arrangements and procure all the services that she designates exclusively through Great British Railways, including English sections of the services currently operated by Transport for Wales. That is inefficient, and contrary to the collaborative spirit of devolution. This is about making the system work, not creating barriers where none need exist. The amendments were always intended to be part of the Bill, and we are correcting that now. The amendments strengthen the Bill by preserving today’s devolved responsibilities once GBR is established. That will ensure that Transport for Wales can continue running services into England, maintaining reliability for passengers and ensuring connectivity.

The other amendment tabled in my name, amendment 172, is a minor and technical amendment that removes a redundant provision in the legislation. I am grateful to the hon. Member for Isle of Wight East for his parliamentary question in November 2025 regarding the policy rationale for that drafting, which helpfully drew it to our attention. I am pleased to confirm that it is no longer necessary.

Amendment 41 and new clause 6 are intended to reintroduce private sector companies running passenger services. The Government were elected on a clear manifesto commitment to return franchised passenger services to public ownership. Public ownership, with the whole system working to one clear set of objectives to improve reliability, performance and punctuality for passengers, is the only way to make the railway run better. I think we all agree that the current system simply is not working. However, the amendment and new clause seek to undo all the progress we have made so far. They could cause chaos on the railway and return us to the dark days of franchising, which did not perform for passengers or taxpayers. The Bill is not about re-debating the principles of public versus private; it is about getting on with this generational reform and delivering for passengers, freight users and taxpayers.

Finally, amendment 44 would require the Government and Scottish and Welsh Ministers to publish pre-award details of public service contracts at least a year in advance of entering into the contract. As I am sure the hon. Member for Broadland and Fakenham knows, publishing pre-award information a year in advance would be an unnecessary and impractical administrative burden. The focus for public service operators should be on efficient delivery and clear reporting rather than rigid pre-award timelines. The Government will continue to be required to act transparently by publishing relevant information about the contract, such as contract dates and the parameters of financial compensation, within two months of entering into the contract.

Given those points, I urge the Committee to support the amendments in my name and I hope that the hon. Member for Broadland and Fakenham will withdraw, or not move, his amendments. I also hope that the Committee supports clause 31, which sets out how designated services are to be provided, and clause 32, which sets out supplementary provisions for public service contracts awarded under clause 31.

The Bill makes it clear that the Secretary of State may assign responsibility for running her services only to Great British Railways or a GBR company. She can secure the provision of services by first designating them and then making a direct award of a public service contract to GBR or a GBR company. Public service contracts are a typical arrangement between public authorities and transport operators for providing public transport and are compliant with relevant subsidy control requirements. As clause 32 sets out, contracts may include a range of obligations, including those relating to additional railway assets, operational requirements and financial arrangements—for example, how any payments will be calculated, and performance targets.

Scottish and Welsh Ministers may either provide designated services directly in house or secure them through a direct award to one or more public sector companies, such as ScotRail or Transport for Wales. They also have the option to contract with GBR or a GBR company, which could unlock the integration of track and train in Scotland and Wales. Clause 31 also ensures that GBR’s duties apply to services operated by joint ventures or GBR subsidiaries under contract and gives Scottish and Welsh Ministers powers to handle freight goods where necessary.

[Jerome Mayhew]

The Minister’s response demonstrates an extraordinary lack of confidence by the Government in the efficacy of nationalisation—the very thing that they are seeking to promote in the majority of the Bill. All that amendments 41 to 43 would do is give the Secretary of State flexibility by making them able by law, in certain circumstances, to give a contract for passenger services to the private sector. They would not require it; they are not saying that this is a battle between privatisation and nationalisation. The only ideological battle here is by the Government, who are saying that it is impossible to conceive of any circumstance in which a private business might be able to offer better value for money for the taxpayer and a better service for passengers than a nationalised part of GBR. They are so concerned that a private business might be offered that opportunity, because they are overwhelmingly better, that they are seeking to legislate to tie the hands of every future Secretary of State.

[Laurence Turner (Birmingham Northfield) (Lab)]

Would the shadow Minister follow the logic of his argument as far as to say that the Conservative Government that passed the Railways Act 1993 were ideologically motivated and acted in an ideological manner, given that that Act barred the public sector from taking on franchises?

[Jerome Mayhew]

I was 23 at the time, and I certainly was not following every clause of the 1993 Act as it went through the House—I accept that that shows a shocking lack of dedication to my future career. We can re-argue the battles of the early 1990s or we can seek to learn from the mistakes of the past, if the hon. Gentleman claims that they are mistakes, but let us not repeat them in the opposite direction, which is exactly what the clause is intended to do. If he is right that that was a mistake then, on his own logic, it is equally right that this is a mistake, and I look forward to him supporting me as we vote on amendment 41.

Question put, That the amendment be made.

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[Jerome Mayhew]

I beg to move amendment 45, in clause 33, page 18, line 9, leave out subsections (1) and (2).

This amendment removes the Secretary of State’s ability to give directions and set guidance as to the general level and structure of railway fares.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 148, in clause 33, page 18, line 9, leave out subsection (1).

This amendment removes the power to give binding directions over fares.

Clause stand part.

[Jerome Mayhew]

The clause sets out that the Secretary of State or Scottish Ministers’ power to give directions to GBR under clauses 7 or 8 may be exercised to give a direction relating to fares. That direction could cover the general level and structure of fares that the Secretary of State or Scottish Ministers expect to see on the passenger train services that GBR is running on their behalf. Likewise, the Secretary of State or Scottish Ministers can use the power in clauses 9 or 10 to issue guidance about the general level and structure of fares. Clause 33(3) also allows for provision about the general level and structure of fares to be set out in the public service contract under clause 31, which we have just debated. That allows Ministers to manage overall fare levels on their designated services.

Clause 33 centralises control of fares in the hands of the Secretary of State, allowing Ministers—not GBR—to determine the general level and structure of fares. That cuts directly against the idea that GBR will operate as an independent guiding or directing mind, and leaves the organisation responsible for outcomes that it does not control. The clause provides no statutory principles, tests or transparency requirements for how fare decisions should be taken—by the Secretary of State, presumably —and recent written parliamentary questions 84697, 86756 and 86754 underline the risk built into the model. In response to the questions, Ministers were unable to define what the “right” fare means, they were unable to say which fares will go up or down under GBR, and they confirmed that all future fare decisions remain entirely at ministerial discretion.

If Ministers are to retain that power, the Bill needs at least a duty to publish the assumptions, criteria and objectives underpinning fare setting, so that decisions can be assessed against passenger growth and affordability. At the moment we have none of that. The clause is in complete contradiction to the assertion in the explanatory notes that the Secretary of State’s directions

“are intended to be used as a responsive tool for necessary course correction, rather than as a proactive tool to set requirements on GBR”,

or in other words,

“they are a last resort”.

The clause says, “No, that’s absolute rubbish. We’re not doing that. We’re keeping in the hands of the Minister the power to guide and then direct and establish what the right fares are.”

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

Does the shadow Minister accept that in recent years, when Transport for London was negotiating its fare settlements, the previous Government dictated the level of fares that should be charged not just for the congestion charge, but for passenger rail services? The Conservative Secretary of State and Government were doing that very thing in negotiations with Transport for London for rail passenger services in London.

[Jerome Mayhew]

I think we have to decide what GBR is going to be. Is it going to be a stand-alone organisation that is trying to run itself efficiently, providing value for money for the taxpayer and hopefully, one day, a check on the Secretary of State? Or is it going to be a creature of the Department for Transport that is told what to do and having its decisions second-guessed? This is a big decision that the Government have to take.

The clause creates a huge risk of stasis, as GBR gets bossed around and becomes a passive recipient of instructions from the Department for Transport. I worry that it is a recipe for future disaster, so I have questions for the Minister. What factors will the Secretary of State take into account when deciding the general level and structure of fares? Why is the Secretary of State in a better position to take those decisions than GBR is, given the objects that she has set the organisation? What additional information will she use that is not available to GBR? I will be grateful for the Minister’s answer. At least it is clear that any future failure of the railways will be down to the Department for Transport and the Secretary of State, not to GBR, since the power to guide and then direct and then set fares lies expressly with the Secretary of State.

My amendment 45 would remove the Secretary of State’s ability to give directions and set guidance as to the general level and structure of railway fares, thereby preventing ministerial intervention in how fares are set and making that decision separate from political influence. When considering amendment 45, Rail Forum said:

“We support this as it should be for GBR, as an arm’s length body and the directing mind, to determine fares not the Secretary of State.”

Amendment 148 in the name of the hon. Member for Didcot and Wantage would remove the power to give binding directions over fares—another version of our approach.

The clause as drafted is overreach by the Department for Transport and exactly the kind of micromanagement that the Minister claims will not happen. Why do we need these powers?

[Edward Morello (West Dorset) (LD)]

It is an honour to serve under your chairship, Mrs Barker.

As the shadow Minister outlined, amendment 148 tabled by my hon. Friend the Member for Didcot and Wantage is not overly dissimilar to Conservative amendment 45 in what it tries to achieve, but I will come at it from a slightly different angle. Clause 33, as drafted, gives the Secretary of State the power to issue binding directions to Great British Railways on the level and structure of fares. We have said many times that the Bill already grants the Secretary of State extensive influence over GBR. Allowing binding directions on fares risks tipping that influence into outright micro-management. It opens the door to the imposition of short-term political decisions, rather than long-term, evidence-based decisions about fares being made by those responsible for actually running the railways. It is a tool that can be misused, particularly in times of fiscal or political pressure.

Even if the current Government assure us that they would not misuse the power, the problem is that once it exists, it exists for all future Governments. I hope the Government will recognise the inherent risk in that and support amendment 148, thereby preventing not only themselves but all future Secretaries of State from being able to abuse the power.

--- Later in debate ---

The new approach will reduce complexity, improve transparency and reset the fares system that is currently failing this country. I therefore commend clause 33 to the Committee.

[Jerome Mayhew]

I am wholly unpersuaded. The Minister did his best, but he cannot hide from the huge disparity between setting up a stand-alone arm’s length business, which is meant to run itself efficiently and with dynamism, and taking away its revenue-driving function. It is ridiculous. We will end up with an organisation that is second-guessed by the Department for Transport. We all say it is the Secretary of State, but of course it is not; it is many hundreds of DFT officials. They will each no doubt do their best as they see it, but they will be second-guessing the role of the industry organisation. That is not a recipe for an effective management structure, and I will push amendment 45 to a Division.

Question put, That the amendment be made.

--- Later in debate ---

Discount fare schemes

[Jerome Mayhew]

I beg to move amendment 46, in clause 34, page 18, line 20, after “are” insert “UK veterans,”.

This amendment, alongside Amendments 47 to 50 would require GBR to continue to offer discounted rail fares for veterans.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 51, in clause 34, page 18, line 20, after “are” insert

“members of the UK armed forces and their families,”.

This amendment, along with Amendments 52 to 55, would require GBR to continue to offer discounted rail fares for members of the UK armed forces and their families.

Amendment 47, in clause 34, page 18, line 28, after “are” insert “UK veterans,”.

See explanatory statement for Amendment 46.

Amendment 52, in clause 34, page 18, line 28, after “are” insert

“members of the UK armed forces and their families,”.

See explanatory statement for Amendment 51.

Amendment 48, in clause 34, page 18, line 31, after “are” insert “UK veterans,”.

See explanatory statement for Amendment 46.

Amendment 53, in clause 34, page 18, line 31, after “are” insert

“members of the UK armed forces and their families,”.

See explanatory statement for Amendment 51.

Amendment 49, in clause 34, page 18, line 35, after “are” insert “UK veterans,”.

See explanatory statement for Amendment 46.

Amendment 54, in clause 34, page 18, line 35, after “are” insert

“members of the UK armed forces and their families,”.

See explanatory statement for Amendment 51.

Amendment 50, in clause 34, page 19, line 4, after “are” insert “UK veterans,”.

See explanatory statement for Amendment 46.

Amendment 55, in clause 34, page 19, line 4, after “are” insert

“members of the UK armed forces and their families,”.

See explanatory statement for Amendment 51.

Clause stand part.

New clause 51—Remembrance Sunday ticket fare exemption—

“(1) The Secretary of State must make regulations which require Great British Railways to provide a scheme enabling persons under subsection (2) to travel for free on railway passenger services to and from events that commemorate Remembrance Sunday.

(2) Regulations under this section must include a person who—

(a) is a member of the armed forces;

(b) has been a member of the armed forces; or

(c) is a widow, widower, or one direct family member of any member of the armed forces who has died in the course of their service.

(3) Regulations under this section must apply the provision of paragraph (2)(c) in such a way that one person is entitled to free travel for each member of the armed forces to which that paragraph applies.

(4) ‘armed forces’ as set out in subsection (2) means any of His Majesty’s forces (within the meaning of the Armed Forces Act 2006).”

This new clause would require the Secretary of State to make a travel fee exemption for journeys to and from Remembrance Sunday events for armed forces personnel, armed forces veterans and one representative of a deceased armed forces member across all Great British Railways passenger services.

New clause 59—Police officer fare exemption—

“(1) The Secretary of State must make regulations which require Great British Railways to provide a scheme enabling police officers and Police Community Support Officers (PSCO) under subsection (2) to travel for free on railway passenger services.

(2) Regulations under this section must only make provision for police officers who—

(a) present a valid warrant card or PCSO designation card,

(b) are in full uniform or are undertaking such travel for operational purposes.

(3) Regulations under this section are subject to the affirmative resolution procedure.”

This new clause requires all rail operators to permit free travel for police officers on all passenger services, subject to certain requirements.

[Jerome Mayhew]

The clause requires GBR to provide a discount fare scheme for passengers who are “young, elderly or disabled”—that is it—to ensure they can access cheaper rail fares and tickets. I recognise that the clause does not limit GBR to only those discount schemes, and it can create other schemes that provide for cheaper fares and tickets at its discretion, but these are the only mandatory schemes, so they identify where the Government’s priorities lie: the young, elderly or disabled.

The use of discount fare schemes may be subject to conditions. The clause ensures that discounted fares for the young, elderly or disabled are made available on any services designated by Scottish and Welsh Ministers, as well as on services provided by GBR. It is remarkable that subsection (1) preserves statutory discount schemes only for young, elderly and disabled passengers. The veterans railcard remains entirely outside statute, meaning that it can be changed or withdrawn without parliamentary oversight. Given the strong precedent in the 1993 Act for protecting key concessionary schemes in law, the Bill is a missed opportunity; it is not just a carry-over. In fact, it is an active decision not to give veterans the same statutory guarantee and long-term security as under existing railcards.

Subsection (3) allows any set of conditions to be applied to a scheme, so the whole clause is functionally meaningless without sight of the conditions. We do not know what they are; it is another bit of work the Government have not done. It could be one service, once a month. That risks hollowing out the statutory concession entirely, allowing GBR to comply in form while restricting access in practice.

Amendments 46 to 50 would require GBR to continue to offer discounted rail fares for veterans. Will the Minister support the amendments, or will the Government demonstrate by their actions that they do not rate veterans’ discounts to be as important as the other discount groups? I will look to divide the Committee on every one of the amendments, because this is a politically sensitive issue.

Amendments 51 to 55 would extend consideration to the immediate families of veterans. They would require GBR to continue to offer discounted rail fares for members of the UK armed forces and their families. Again, this is a political issue, so I wish to divide on all the amendments, but I hope that we can be quick.

I will not speak to new clause 51, but new clause 59, in the name of the hon. Member for Didcot and Wantage, would require all rail operators to permit free travel for police offers and police community support officers, if they are in full uniform and travelling for work. It is a noble calling, but where do we stop? If they are travelling to work, they will be reimbursed by the constabulary. No officers commute to work in uniform, for security reasons, so I do not support the new clause.

[Olly Glover]

We understand and support the intent of the Conservative amendments on veterans, but I suppose the debate will get into what should be legislated for in discount schemes, as opposed to specified in other forms. It will be interesting to hear from the Minister why the Government have opted to put certain discount schemes in the Bill and not others. Hopefully, there is some clear logic, but we shall see.

Our new clause 51 would require the Secretary of State to make a travel fee exemption for journeys to and from Remembrance Sunday events for armed forces personnel, armed forces veterans and one representative of a deceased armed forces member across all GBR passenger services. The context is that there is currently an agreement in place for that travel fee exemption, which is agreed by the Secretary of State and the train operating companies. The new clause would simply formalise something that already happens, but would do so in the framework of GBR and ensure long-term certainty and consistency, national coverage across the GBR network and the inclusion of a representative of a deceased service member. At present, deceased personnel are often not represented at Remembrance events if a family member cannot afford the cost of travel. The new clause addresses that inequity. 

The new clause places an existing informal arrangement on a statutory footing and ensures consistency and fairness. The cost implications are limited and predictable, as the travel demand is concentrated around a single annual event and largely happens on that day. The new clause recognises the importance of remembrance for bereaved families and sends a clear message of respect and recognition for service and sacrifice.

On our new clause 59, I understand the shadow Minister’s points, but the intention is simply to reduce red tape and bureaucracy. This is about officers needing to use the train in the course of their duties. It is important that many of them do so, particularly those engaged in highly visible community policing. The new clause would simply reduce the red tape and bureaucracy of them needing to buy tickets, procure travel warrants and so on. It is not about travel to and from work, but about making sure they can easily use the network while on duty.

--- Later in debate ---

[Keir Mather]

As I have just mentioned, we want to carry over those schemes to provide consistency for those groups. We are carrying over the role of the discretionary schemes as set out in legislation. We think that consistency is important but, for reasons that I will come to later, we also believe it is important that GBR is able to move in an agile way and think about evolving needs when it comes to concessionary travel. It is important, in terms of legislative carry-over, to ensure that that remains in place.

[Jerome Mayhew]

The Minister says that he wants GBR to remain agile, but does he foresee a situation in which it is agile by removing the veterans railcard? If he says no, as I suspect he will, why does he not put that on the face of the Bill and support our veterans?

[Keir Mather]

For the reasons I have just outlined. I have already confirmed that there are absolutely no plans to change the existing range of discount schemes, which include the veterans railcard and the armed forces railcard.

--- Later in debate ---

[Keir Mather]

While I do not anticipate provision around the specific instance the hon. Lady described—for example the poppy train being frozen into the licence of GBR—I do expect that GBR will be minded and motivated to continue to ensure that members of the armed forces community, veterans and their families can attend Remembrance Sunday services across the country. In our view, concessionary travel more broadly will improve the ability to do that. It will allow GBR to set provisions in an agile manner through an evolving concessionary fares scheme, rather than freezing them as part of the Bill—and, moreover, to set provisions that are not already locked into legislation and do not therefore need to be carried over, in the interest of consistency for the groups that they affect.

Turning back to my remarks on Poppy Day volunteers travelling to events with their children, I do look forward to that policy continuing in the years to come, although precise arrangements for how that will work will be confirmed closer to the time. All that being the case, we do not see the need for legislative amendments. These are things that the Government and rail industry already strongly support and have been providing for many years. A regulatory framework would only complicate delivery, which is more effectively facilitated at the operational level, so, while we wholeheartedly support the spirit of new clause 51, I urged the hon. Member for Epsom and Ewell to withdraw it.

New clause 59 requires GBR to provide a scheme enabling free rail travel for police officers and police community support officers who are in full uniform or who are travelling for operational purposes. The Government gratefully acknowledge the service of police officers across the country and all that they do to keep us safe. The speed, skill and professionalism of the response by British Transport police and other brave first responders to the horrific train attack in Huntingdon last year is just one example of how police officers and all our emergency services save lives every day across our country.

While I understand the intention of the new clause in supporting that vital work, the Bill is not the correct place to set out the requirements for such a scheme. As the hon. Member for Didcot and Wantage knows, any new staff travel scheme should be the product of negotiations between the relevant organisations. To prescribe a scheme in primary legislation sidelines that process and risks the creation of a scheme that is not fit for purpose, as well as unfunded financial impacts to the railway. Therefore, while I am sympathetic to the intentions of the new clause, the Bill is not the appropriate avenue to establish such a scheme, and I urge the hon. Member not to move it.

Clause 34 ensures that GBR will be able to provide discount schemes, such as those offered today as railcards. First, the clause continues the 1993 Act’s statutory protection for young, senior and disabled passenger discounts. Prices are historically more likely to be a barrier to these groups’ accessing rail travel, and they are covered by the protected characteristics of age and disability. Maintaining these concession schemes in primary legislation supports equal access to employment, education and essential services. It is worth noting that, while other concessionary discounts are not included in the Bill, the Government recognise that they too are important, and there are no plans to withdraw any of the discounted schemes currently being offered.

Nevertheless, the clause also gives GBR the flexibility required to simplify and modernise discount schemes across the network, and to evolve the offer where that is considered desirable to meet passenger needs in the future. Finally, the clause ensures that devolved operators will still be required to offer the core statutory discounts, and that they will have flexibility over whether to participate in the GBR scheme or to create their own.

[Jerome Mayhew]

It is extraordinary that the Government say, on the one hand, that age and disability need to be included in primary legislation, but on the other hand that it is totally unnecessary to have the same security for veterans. We on the Conservative side of the House do not accept that logic and we will be pushing amendments 46 to 55, individually, to votes.

Question put, That the amendment be made.

--- Later in debate ---

Division 52

Question accordingly negatived.

Ayes: 6

Noes: 9

[Jerome Mayhew]

I beg to move amendment 56, in clause 34, page 18, line 20, after “are” insert “aged 26-30,”.

This amendment, along with Amendments 57 to 60, would require GBR to continue to offer discounted rail fares for young people aged 26-30.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 57, in clause 34, page 18, line 28, after “are” insert “aged 26-30,”.

See explanatory statement for Amendment 56.

Amendment 58, in clause 34, page 18, line 31, after “are” insert “aged 26-30,”.

See explanatory statement for Amendment 56.

Amendment 59, in clause 34, page 18, line 35, after “are” insert “aged 26-30,”.

See explanatory statement for Amendment 56.

Amendment 60, in clause 34, page 19, line 4, after “are” insert “aged 26-30,”.

See explanatory statement for Amendment 56.

[Jerome Mayhew]

This should be a short debate, since amendments 56 to 60 serve a single function: to defend the long-term provision of discounts for 26 to 30-year-olds. Although clause 34 refers to discounts for the young, there is potential for the definition to exclude discounts for 26 to 30-year-olds—and that is young to me, at least. Amendments 56 to 60 would require GBR to continue to offer discounted rail fares for young people in this age group. Given the Government’s willingness to identify some characteristics as worthy of discounts in primary legislation—the young, elderly or disabled—what is the principled objection to including other, equally worthy groups? I will press the amendment to a Division.

[Keir Mather]

I thank the hon. Member for tabling the amendments, which would place a statutory duty on GBR and on Scottish and Welsh Ministers to ensure that discounted rail fare schemes are available for persons aged 26 to 30—I do not know whether I should declare an interest, as a holder of one of those railcards.

The Government have stated that there are no plans to change the existing range of discount schemes, including the 26-30 railcard, but we do not consider it necessary or appropriate to list specific age ranges in the Bill in the way proposed. Listing specific age ranges would be unnecessarily inflexible. The Government are absolutely committed to retaining discount schemes for younger people; however, much of the current discount system is fragmented due to its origin in the franchising system, so GBR may want to rationalise the existing range of discount schemes currently targeting younger people to simplify duplicative and overlapping offers and age ranges between 16 and 30, for example, as part of introducing a modernised, more consistent offer for passengers.

Given that Acts of Parliament are drafted to last a generation or more, placing specific age ranges in the Bill would likely remove those opportunities and potentially limit opportunities for young people. For those reasons, I urge the hon. Member to withdraw the amendment.

[Jerome Mayhew]

The Minister says that he wishes to have flexibility. The whole point is that we are trying to remove flexibility, so that GBR cannot take away discounts for 26 to 30-year-olds in the future. The Minister’s argument actually increases my concern that that is a realistic prospect in the Government’s mind, and I feel even more strongly that we should divide in order to ensure that discounts for 26 to 30-year-olds are protected in the long term.

Question put, That the amendment be made.

--- Later in debate ---

Division 53

Question accordingly negatived.

Ayes: 6

Noes: 9

[Jerome Mayhew]

I beg to move amendment 61, in clause 34, page 18, line 25, leave out subsection (3).

This amendment would remove GBR’s ability to set unrestricted conditions about discounted fares.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 62, in clause 34, page 19, line 10, leave out “lower fare” and insert

“fare that is one third lower”.

This amendment would ensure that discounted fares remain at one third off the price of a standard fare.

New clause 13—Report on the potential merits of customer loyalty programmes—

“(1) Within twelve months beginning on the day on which this Act is passed, the Secretary of State must lay before Parliament a report on the potential merits of customer loyalty programmes for rail passengers (‘rail miles programmes’).

(2) A review under this section must consider any beneficial effect on the growth of rail passenger numbers of introducing rail miles programmes.”

This new clause would ensure the Secretary of State conducts a report into potential benefits of a “rail miles” programme for passenger numbers.

[Jerome Mayhew]

Amendment 61 would remove GBR’s ability to set unrestricted conditions about discounted fares. The amendment probably goes too far, so I will treat is as a probing amendment to flush out what conditions the Minister anticipates will be imposed under subsection (3). Will the Minister undertake that the intention is to minimise constraints on discounts, to afford maximum advantage to the groups that discount schemes are in place to promote? I would be grateful if he could clarify the Government’s position on that.

Amendment 62 would ensure that discounted fares remained at one third lower than the price of a standard fare. That would give certainty to those currently using the variety of railcards mentioned above that their discount will remain the same. The Government claim that GBR will bring savings; all the amendment does is prevent discounted fares from costing more. If the Government do not support the amendment, they would be paving the way for GBR to reduce focus on the passenger and revert to the typical standard of a nationalised organisation, where you get what you are given and expected to be grateful for it.

New clause 13, in the name of the hon. Member for Didcot and Wantage, would ensure that the Secretary of State conducted a report into the potential benefits of a rail miles programme for passenger numbers. That is an idea—but in our view, it is not one that should be included in primary legislation. It is qualitatively different from discounts for veterans and young persons.

[Daniel Francis]

I again declare my interest as chair of the all-party parliamentary group for wheelchair users.

Amendment 62 appears to refer not to railcards but to all ticketing. As I have said, it would result in an increase for many tickets for wheelchair users and blind and visually impaired people. As the parent of a child who is a wheelchair user, I know that the discount on a ticket for wheelchair users is 75%, and it is the same for an adult day return. For blind and visually impaired users the discount on an adult day return is 50%.

Some discounts also apply to the carer or companion of the wheelchair user or blind or visually impaired passenger. That provision is not included in the Bill, yet the Opposition thought it was more important to table an amendment to introduce a discount for 26 to 30-year-olds than to table one on a discount for the carer of a wheelchair user or blind or visually impaired passenger. I anticipate that the Government will confirm that the discount remains for carers and companions, and in my mind that does not need to be included in the Bill. I certainly do not support amendment 62, as it would undo the current, more generous discount arrangements for wheelchair users and blind or visually impaired passengers, and cause an increase in their fare.

[Jerome Mayhew]

This may shock the Committee, but I listened carefully to the hon. Member for Bexleyheath and Crayford, and his expertise has exposed a lack of knowledge on my part. I was not aware that the discount in that circumstance was in excess of one third. Given that, I will not press the amendment to a vote. I am grateful for his contribution.

[Olly Glover]

I will speak briefly about the Conservative amendments. I agree with some of the shortcomings identified by the shadow Minister, but there would be a risk in setting in stone some of the current discount and fares arrangements, as amendment 61 seeks to do.

On amendment 62, apart from the good points made by the hon. Member for Bexleyheath and Crayford about the existing differential discount rates, I am not sure of a particularly compelling reason for why the main discount rate of one third should be preserved in aspic—I said that I would not say “aspic” any more, but I have anyway. There may be times in the future when a higher discount, or maybe even a lower one, could make sense.

I assure the shadow Minister that our new clause 13 would require the examination of the idea, rather than a commitment to do it. Our idea is based on the ubiquity of air miles as a highly valued consumer product. So many people talk about air miles in conversation, and the popularity of certain credit cards—I can probably name them, as I do not have an interest, but I will not—is explained by the accumulation of air miles. Why not rail miles? It would promote our network, reward loyal customers and be a brilliant way of promoting domestic tourism, were people able to accumulate rail miles as they currently can air miles. It would also be a good way to promote lower-carbon transport.

Our new clause would simply require the examination of the idea of a rail miles programme, and the production of a report on its potential merits that the Secretary of State would lay before Parliament within 12 months of the passage of the Bill. I hope to hear the Minister’s warm words about the idea, although I would naturally be astonished if he embraced it.

--- Later in debate ---

To achieve the benefits of establishing an expert body to run the railways, we are reliant on allowing it to have the scope to do so. The benefits will not be achieved by constraining GBR’s ability to consider the railway holistically or by developing ad hoc policy via amendments. But the points made by Opposition Members provide a lot of food for thought—or a lot of gin for thought, I suppose. I urge Members to withdraw their amendments.

[Jerome Mayhew]

As I intimated, I am happy to withdraw amendment 61, which is more of a probing amendment, and I will not move amendment 62. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[The Chair]

We now come to amendments 47 to 50 and 52 to 55. Divisions are granted at the discretion of the Chair. Although I understand the importance to the hon. Gentleman of the principle of the amendments, the Committee has already made a decision on the principles, so I am not inclined to allow further Divisions.

[Jerome Mayhew]

In the normal course of events I would not seek to have repeated amendments on variations of a theme. However, this matter is politically salient because it deals with a live political issue between the parties on discounted fares, and whether the Government support veterans and veterans’ families. Each amendment deals with a separate part of the veteran community and also with veterans’ families. It is important that we hear the Government’s view through Divisions on every single one, so I ask you to reconsider your determination, Ms Barker, because of the political salience of the individual Divisions. I am sure you will have noticed that in other areas I have been co-operative, and that I do not cause Divisions just for the sake of it, but I ask you to allow Divisions on this occasion.

Amendment proposed: 47, in clause 34, page 18, line 28, after “are” insert “UK veterans,”.—(Jerome Mayhew.)

See explanatory statement for Amendment 46.

Question put, That the amendment be made.