Passenger Railway Services (Public Ownership) Bill

Lord Faulkner of Worcester Excerpts

2nd reading
Monday 7th October 2024 Lords Chamber

[Lord Faulkner of Worcester (Lab)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Young of Cookham, whether on this or other subjects where he and I have an interest. I extend my thanks to him for the help that he gave to me and my co-author in putting together material on the privatisation in one of three books on railways and politics. In one of them is a very fetching picture of the noble Lord and his family taking their cycles by train and promoting the railway. I am grateful to him for that. I have two current interests to declare, as chair of the Great Western Railway stakeholder board and as president of the Heritage Railway Association.

I welcome the Bill for one reason above all others. I hope that its appearance so early in the parliamentary Session demonstrates the scale of the Government’s commitment to the railway and their determination, not influenced by political dogma, to ensure that the railway plays a greatly enhanced role in the nation’s transport system and is again, in the words of the noble Earl, the envy of Europe.

When the railway was privatised back in 1993, it was intended by the then Government to break the BR monopoly—as the noble Lord, Lord Young, just confirmed in his speech—and to create a framework for competition to drive efficiency. That never happened. It ignored the fundamental truth that railways are not a competitive sport but a team game, requiring the seamless co-operation of many players to work together properly and efficiently. A competitive structure overseen by lawyers, regulators and civil servants is not the way to run an efficient railway attuned to the needs of its passengers and freight customers.

Reconnecting train operators and infrastructure management under a single organisation should bring efficiency in how things are planned, apart from avoiding the expense of lawyers and delay attributors. I welcome the establishment of Great British Railways, in shadow form at least, and congratulate Laura Shoaf on her appointment as chair of the shadow body. She has a great track record in the West Midlands; I wish her well in her new job.

The creation of GBR also gives us the chance to restore some financial and economic disciplines that have not been a feature of the present set-up, and that cost so much more than British Rail did. It is a difficult balance to strike, not least because the playing field in transport has been so uneven. Successive Governments approved the annual increase of rail fares above inflation almost every year in recent times, while in contrast the annual fuel duty escalator has not been used since 2011, so motorists have received tax breaks over almost 13 years. Subsidies for electric cars have encouraged a further shift from public transport to driving. This is not a war on motorists. If anything, it is the disadvantaging of the most fundamental and important element in the transport structure.

It is not just with road users that the railways find themselves competing on unfair terms. By far the most polluting and environmentally unfriendly form of passenger transport is domestic aviation. In a report published by the think tank Transport & Environment UK last month, it was shown that, if a fair equivalent to the fuel duty paid in other sectors were applied to domestic aviation, up to £6 billion a year could be raised. Had High Speed 2 not been progressively scaled back and that railway built to provide a new fast intercity service, particularly to Glasgow and Edinburgh, there would have been a genuine modal shift from domestic flights to the high-speed railway, as has occurred in all the European countries that have had the foresight to build a high-speed rail network.

Even without HS2 going to Newcastle and Edinburgh, there has been a large modal shift to the railway. Pre-Covid, the proportion travelling by rail from London to Edinburgh was 35%; the latest figure today is 57%. Much of that growth has taken place on LNER, and I congratulate it, but the introduction of open-access Lumo services has also played a considerable part.

During the privatisation process, no thought was given to how the social benefits provided by the railway would be paid for. Back in the day, BR understood these benefits and how to offer them as part of the service for which it received the passenger service obligation grant. Busy trains provide low-carbon travel, with emissions even lower when the train is powered by electricity. They reduce traffic congestion and pollution by reducing the number of cars on the road. They can be part of a different lifestyle, encouraging people to walk to the station or use the bus, rather than avoiding exercise by taking the car from the house without walking at all.

Trains connect people and reduce the problems that are experienced in remoter parts of the country. We have already seen how communities such as Okehampton have benefited from being reconnected to the network: passenger numbers are more than twice those forecast and there have been huge benefits to local society. Trains are safer than hazarding your life on the road network, where 1,700 people die annually still. The standards applied to road design and accident investigation are weak and way behind the focus on safety that is a central part of railway culture. Trains are a lifeline for young people who cannot afford private transport or do not want to pollute by using cars or aircraft. They are also essential for the elderly and particularly those who should no longer drive, even if they cling on to their cars.

Despite some problems at older and smaller stations, the railways have opened up a much better lifestyle for those with impaired mobility. One of the biggest changes in the last 20 years has been the large increase in the number of people travelling in or with wheelchairs or who are receiving assistance at stations. Privatisation made no financial provision for these benefits and, unsurprisingly, the private companies were not able to provide all of them without some financial support.

Train services are not like a standard commodity, such as buying soap powder or a tin of beans. They are a careful compromise between providing the best service possible with perhaps 200 different preferences by the passengers who use them. They are also a compromise between fastest journey time or high frequencies and best connections with other trains and other forms of transport.

Contrary to what was believed back in 1993, competition has always been between modes, rather than between train operating companies. For almost the whole period since privatisation, the railways have been working in a difficult environment with constant changes in demands by previous Governments and micromanagement by civil servants. To their credit, the better train operators have managed to make this complex system work and, particularly pre-Covid, tried to improve journey times, provide enough rolling stock for a growing number of passengers and build positive relationships with rail user groups, local authorities and local bus companies. They have been able to draw on funds to help achieve local improvements through initiatives such as the customer and community improvement fund.

Open access operators have, as my noble friend the Minister made clear, been left out of the scope of the Bill. This is sensible—the numbers are small, but they fill a gap in the network that was never filled though franchising. Similarly, heritage special train operators, including those using steam locomotives on the main line, are not covered, which will be a great relief to them given the substantial regulatory burden that they already have to take into account and the significant operating challenges they face, particularly at the moment in sourcing coal for their locos.

I agree that the rail freight operators are best left as they are, but some direct support by government might be required to provide rail freight terminals where they are needed, and there needs to be protection from predatory pricing by juggernaut operators, particularly where overseas companies pay no vehicle excise duty and avoid fuel duty by filling their tanks abroad.

Decarbonising road freight is a huge problem, but on rail it can be achieved relatively easily through extension of electrification and other sustainable forms of traction such as battery power. Getting traffic off our roads and on to the railways is absolutely the right thing to do from an environmental standpoint and is massively popular with the public as well.

Opinion poll surveys show substantial support for the Government’s nationalisation proposals, provided that they are not accompanied by huge fare increases. One of the most important and welcome changes will be an end to the present wholly unsatisfactory arrangements where the Treasury is in control of tactical policy and minimising costs is the primary objective. There needs to be an understanding across government that railways are an opportunity, not a problem, and are an essential part of any national growth strategy.

We look forward to the second railways Bill next year to complete the transformation and to put railways at the heart of the nation’s transport infrastructure. Meanwhile, I welcome this Bill and I congratulate my noble friend Lady Blake of Leeds on taking charge so well today, and I look forward to working with her and with my noble friend Lord Hendy of Richmond Hill during its later stages in this House.

If the House will indulge me, I will conclude with the final words of my third book on railways, Signals Passed at Danger, which I referred to earlier and which is available in all good bookshops. My co-author and I wrote:

“The railways’ capabilities are manifest when the management of the railways is restored to those competent to operate them, with a clear strategy and funding agreed to deliver the outputs of that strategy”.


Let us hope that the Bill is a first step towards achieving that.