Public Spending: Barnett Formula

Lord Hendy of Richmond Hill Excerpts

Wednesday 15th March 2023 Lords Chamber

[Lord Hendy of Richmond Hill (CB) (Maiden Speech)]

My Lords, first, I am grateful to the Lord Speaker, the Clerk of the Parliaments, Black Rod, the doorkeepers and all the staff of the House for making me so welcome. The noble and learned Lord, Lord Judge, the Convenor of the Cross-Bench Peers, has been particularly welcoming. I am so sorry to hear of his incapacity and I wish him a speedy recovery.

I also thank my noble kinsman Lord Hendy and the noble Lord, Lord Faulkner of Worcester, for supporting my introduction. I was not in the least surprised to see my elder brother elevated here, but never in my career in public transport, particularly when I conducted and later drove my number 11 bus around Parliament Square, would I have believed that I might one day be here too. I think we are one of only two pairs of siblings in your Lordships’ House.

I have managed bus operations in both the public and private sectors in London, elsewhere in England and in Hong Kong. I led a successful management-employee buyout when London Transport privatised the company I ran, and later returned to the public sector when the mayoralty and Transport for London were created in 2000. I managed London’s buses, major roads, Thames piers, and taxi and private hire licensing, including during and after the terrible terrorist bombings of July 2005. Then, in 2006, for nearly 10 years I became commissioner of transport, serving two mayors, Livingstone and Johnson, and I had the privilege of leading through the Olympic and Paralympic Games of 2012. For the avoidance of doubt, the credit for all the things that went well through all that time is to the staff, the management and contractors rather than simply to me.

In any event, I would never have equalled the achievements, nor the length of service, of my illustrious predecessor, the late Lord Ashfield, who ran London’s transport for nearly 30 years. The noble Lord, Lord Tunnicliffe, is a more recent and worthy successor in that role, but he had the misfortune to be at the inception of the ill-fated Tube public/private partnership. I do not blame him at all for the results of that, but I did take great pleasure in dismantling those flawed and expensive arrangements.

In July 2015, the then Secretary of State for Transport, now the noble Lord, Lord McLoughlin, abruptly summoned me to be appointed chair of Network Rail, then recently brought back into the public sector from the pretence of being outside it, despite government guaranteeing all its very substantial debts. I think I am grateful to him for that, although I still miss the comprehensive structure of TfL, its long-term planning horizon, its focus on passengers and its contribution to London’s economy.

I still chair Network Rail today and, subject always to the decision of the Secretary of State for Transport, I hope to continue for some while longer. I say that because our railway has great challenges to confront, and passengers, freight, the economy and the nation deserve better than we currently achieve. We have less demand and significantly less revenue than we did before Covid, and we must reduce costs.

The structures used to run the railway are not aligned to customers and are convoluted and excessively contractual. Cost is accounted for in a different place from revenue, track and train are divided, and innovation is supressed. Investment plans are seldom entirely fulfilled in practice, and, despite enthusiasm from all political parties for more investment, we do not have a prioritised, costed and long-term plan. Nor do we have as many private sector contributions to those investments as we should or, indeed, as we did at TfL.

This is all because the railway is not managed as a whole system. Passengers, freight, and regional and local stakeholders are all dissatisfied with a network which, when it goes wrong, can be the responsibility only of the Secretary of State for Transport. TfL was different: as the commissioner, quite properly, the failures were mine and the successes belonged to the mayor. I am able to say all that because the Government have the same view, as do, I think, many on all sides of this House. The reform of our railway is essential, because the connectivity it delivers is a major driver of economic growth, jobs, housing, social cohesion and sustainability, and with the right structure, we will do better. Thus, I am looking forward to primary legislation to create Great British Railways. In due course, with my brilliant chief executive at Network Rail, Andrew Haines, we hope to play the most active part we can in implementing the reforms proposed in the recent White Paper. They cannot come too quickly.

Your Lordships may also know that I am the author of a recent report on the connectivity of the United Kingdom, which has featured in recent Oral and Written Questions. I am looking forward to the Government’s response to my recommendations, which I know is in preparation. One of my conclusions in the Union Connectivity Review was that HS2 could make a better contribution than currently planned to transforming journeys to and from England and north Wales, Scotland and Northern Ireland. It is therefore strange that, as a consequence of spending on HS2, Scotland and Northern Ireland received additional funds as part of the block grant but Wales did not. That suggests that something is amiss with the way the Barnett formula is applied.

I also chair the London Legacy Development Corporation, which is building out the Queen Elizabeth Olympic Park in Stratford. It is the most successful Olympic and Paralympic regeneration anywhere in the world, and possible only because of better access by public transport. Connectivity, urban regeneration and economic growth are intimately connected.

Finally, I have an active interest in transport heritage. I own and drive vintage London buses, similar to the ones I drove and conducted over 40 years ago. I suspect that I am the only Member of this House holding a passenger carrying vehicle driving licence. I am a trustee of the Science Museum Group, where I chair the National Railway Museum’s advisory board, and I chair the Heritage Railway Association, all of which is particularly relevant to my aim to ensure a successful celebration in 2025 of the 200th anniversary of the first public passenger railway in the world, the Stockton and Darlington Railway. That started the railway revolution which drove transformational economic growth and urbanisation both here and around the world. That seems to be a British achievement worth celebrating nationwide.

I referred earlier to my illustrious predecessor, the late Lord Ashfield. His record at London Transport is never likely to be equalled, and certainly not by me. However, he made but one speech in this House in the 28 years he was a Member. Despite my present, virtually full-time role as the chair of Network Rail, I hope to do better than that, and I look forward to contributing to your Lordships’ debates in the future.