Passenger Railway Services (Public Ownership) Bill

Lord Liddle Excerpts

2nd reading
Monday 7th October 2024 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I welcome my noble friend Lady Blake to the Front Bench and congratulate her in leading the Second Reading of this Bill so well. In my view, she has a lot to contribute to transport. After years of experience as leader of Leeds City Council, she saw at first hand how, over the decades, we have grossly neglected public transport investment in our metropolitan areas outside London. This must change, and I hope it will change under the Labour Government.

I support the Bill. I have no ideological bias in favour of public ownership. My bible as a social democrat many decades ago was Tony Crosland’s The Future of Socialism, which totally persuaded me that there was no virtue in public ownership per se. Therefore, these issues have to be addressed in a pragmatic way. I was always sceptical of rail privatisation. The general argument for separating the natural-monopoly elements of business from the operating elements is a sound one economically; it works in telecoms, for instance, where the infrastructure has vast capacity. But that is not true of the railways. There is not infinite capacity in the natural monopoly, and someone somewhere has to decide which services get priority and which do not.

If I might say so, I thought that the noble Lord, Lord Bradshaw, gave an excellent speech in which he outlined some of the major failures of the 1990s privatisation. The railways need a guiding hand, and on this side of the House I fully supported the conclusions of the Williams review. If I might put it this way, it was a bit rich for the noble Earl, Lord Effingham, to say that we want to see the comprehensive reform of the railways. The truth is that his Government sat on the Williams review for five years and did very little about it, because some Back-Benchers thought that it sounded a bit too socialist. I think he should recognise that Labour here is trying to pick up from the mess that the Conservative Government have left.

Some people will say that, yes, they support the Williams review but it does not necessitate public ownership throughout the system, that we lose the benefits of competition, and all that. As someone who has now been a Member of this House for getting on for 15 years and has gone up and down the west coast main line virtually every week, I must say that we had a reasonable service with Virgin, but we have had a disaster with Avanti. I do not understand how anyone can think that this has been a good example of the private sector contributing to public service.

In fact, since Covid, we have not had a competitive railway in any sense. What we have had is the most centralised system of management of the trains in recent times. The Department for Transport lays down the costs for every service and the Treasury collects the revenues. The franchise operators have very little incentive to make any improvements of any kind; all they want to do is collect their fees. We need a fresh start and I think that this Bill gets us part of the way to it.

The only part of my noble friend’s great introduction to this Bill that I paused at was her announcement that we might have to put up with two more years of Avanti. I would like to know why. Can we please see what the contract is that the Government feel they cannot withdraw from? Can we see what performance standards the last Government set for Avanti and whether they are being met? As a Government, let us not hesitate too much about taking drastic action. I know that my noble friend Lord Adonis, when he was Transport Minister in 2009, was advised by the department and its lawyers that it was quite impossible to take LNER into public ownership at the time. He said, “Well, what’s the risk that they’re going to sue?”, and went ahead with it. I cannot see the public rushing to support Avanti if it is deprived of its franchise.

I have some detailed points on the Bill that I think are important and on which I hope we can have a decent discussion in Committee. They are concerned mainly with new Section 30C, on the definition of what kinds of public service contract and public service company are allowed to operate on our public railway. One of my concerns—it relates to what I said earlier about my noble friend Lady Blake and her experience in Leeds—is whether combined authorities and mayors would be able, under the remit in new Section 30C, to run services in their metropolitan areas. It would be a shame if we had in our minds the wonders of the British rail model of the past, because I do not think that it was very wonderful. We need a much more decentralised structure for our public railway, and we need to find the mechanisms to make that decentralised structure work.

My second point is that I do not see any ideological objection to public/private partnerships in running the railway. Let me give an example. You might have a situation where a private company was prepared to commit to electrification plans for a particular line that would not be in the public sector investment plan. My view is that we should allow public/private partnerships on a net additionality rule. If they are going to bring more investment into the rail system, what on earth is the case for not allowing them to do so?

With those points, I say that it is clear that this is a good start—but it is only a start. The whole scheme of reform has to be worked on very hard by the department and its Ministers in the coming months, but, in the meantime, I welcome the Bill.

Passenger Railway Services (Public Ownership) Bill

Lord Liddle Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

My noble friend Lord Gascoigne seeks in his amendment to make good the deficiency pointed out by the Department for Transport: that the Bill has no purpose other than the delivery of a government manifesto commitment and that no alternatives have been looked at to achieve that purpose. He has tried to clarify, and state on the face of the Bill, why we are doing this, and he has put this forward in words that the Government themselves have been using. When the Minister comes to reply, there really should be no problem at all on the part of the Government in stating, “Yes, this is our purpose and this should be on the face of the Bill, so that everyone who looks at this Bill”—I do not mean passengers but those involved in implementing it, from the Secretary of State down—“knows exactly what it is should be guiding them as a principle when they come to make their decisions about how to put it into effect”.

[Lord Liddle (Lab)]

Can I try to help the noble Lord? My understanding is that the Government are committed to a comprehensive package of rail reform, and that the Bill for the comprehensive package will be introduced next spring. The purpose of this Bill is a relatively minor reform, in my view, in the context of the much bigger reform, which is to make sure that the franchises can transition to public ownership at minimum cost to the Exchequer. If we are going to do it at minimum cost to the Exchequer, we have to do it quickly; that is why this is one of the earliest Bills that the Government have put forward.

[Lord Moylan (Con)]

The noble Lord puts the Government’s case very well. How much the House has lost in not seeing him on the Front Bench as the Minister, given that he was the shadow Minister up until the general election.

We are told by the noble Lord that the Government have a package of reforms. We all have a package of reforms. We know what the package of reforms looks like; it is in the Shapps-Williams review. Yet what we are seeing from the Government is a package of reforms that differs significantly from the Williams review; that is why it needs such careful scrutiny.

Given the passage of time, I will be brief on the remaining amendments. All the amendments in my name seek to test the effects of this measure on the performance of the industry in the light of the nationalisation that the Government are proposing.

Taken separately, the amendments deal with different types of performance. Some deal with the performance of the railways in so far as they engage with passengers; that is, on timeliness, efficiency, service quality and so forth. Some relate to the performance of the railways in relation to finances; we will come to finances in more detail later. The Government claim that this Bill has no financial consequences—there are those of us on this side of the House, including the noble Baroness, Lady Randerson, who treat that approach with great scepticism. Other amendments seek to examine the measure’s effect in relation to the performance of the network as a whole.

I hope that all these amendments will be accepted by the Government. If they are to make these changes, there needs to be transparency and the public need to be able to see metrics published, possibly by an independent body or possibly by the Department for Transport—we are open to persuasion on that—which show how the railway is performing.

Having come to power committed to transparency, I know the Government would not want to resile from that. So, if they are not able to support the detailed amendments as tabled, I expect that the Minister will have no difficulty in saying that the Government will put forward amendments on Report showing how this Bill will be monitored in its implementation.

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[Baroness Scott of Needham Market (LD)]

My Lords, I am sure that all of us want the same thing that the passengers want: a railway which is reliable, punctual and affordable. In too many parts of the country, they have been let down and this has not been delivered. Personally, I can understand why the Government have chosen this way of doing things and improving matters. But I do also think it is beholden on this House, particularly as we are now in Committee, to really focus on the way in which the Government intend to do this. It is in that spirit I move Amendment 1.

I am arguing what I argued in my Second Reading speech—that, in order to make the transition to public ownership a success, the Government should first take on those operators which are demonstrably failing passengers. They should turn those services around to deliver tangible improvements for the travelling public. It follows that the management of currently high-performing operators—as I shall show noble Lords, they do exist—should be retained for as long as possible to ensure that passengers continue to receive good service while minimising costs to taxpayers.

This amendment would require the Secretary of State to first nationalise the worst-performing operators to deliver immediate benefits to passengers and taxpayers, while enabling services that are currently working well to continue for the time being. Specifically, it places the Secretary of State under a duty to prioritise the termination of franchise agreements where the incumbent operator is in default of their agreements and gives them a duty not to terminate non-defaulting franchise agreements early unless there are no franchise agreements to be terminated due to default or because of their expiry. It would also require that terminating such an operator early would improve existing service provision.

I will say a word or two about the railway I use. I have travelled between Suffolk and London several times a week for more than 25 years now, and I can tell noble Lords that my service has never been better. Greater Anglia has spent £1.4 billion upgrading its rolling stock. It returned £65 million to the Treasury in the year ending in March and is predicted to return £100 million next year. It has a 94.8% public performance measure; I think Avanti is currently at 62.2%. Greater Anglia’s cancellations are at 1.4% and Avanti’s at 10.2%, but Greater Anglia’s full term expires in September 2026 and will therefore be one of the first to go.

It is genuinely difficult to see how that performance could be bettered. Indeed, with new management operating and a whole new set of structures it could conceivably get worse, initially at least. On the other hand, the poorly performing franchises have the potential for significant improvement—indeed, that is why the Government are doing this—so by using a strictly chronological approach they risk losing the confidence of the public right at the start of this process.

Current national rail contracts give the Secretary of State powers to act against failing train operators, both in general and where remedial measures are in place, and she has broad rights to information provision about possible contraventions, so could the Minister outline how the Secretary of State has used these rights in relation to CrossCountry and Avanti contracts? The grounds for default under the national rail conditions are passenger service performance, non-compliance with remedial agreements and contravention of other obligations, so has the Minister sought advice on CrossCountry’s and Avanti’s performance in relation to those provisions? Is either TOC in breach of any other provision? With Greater Anglia, West Midlands Trains and East Midlands Railway all performing well, can the Minister say whether they will be allowed to run their full course?

Regardless of where your Lordships stand on the question of renationalisation, in the end, as members of the travelling public, we all want it to work. By taking a strictly chronological approach, which leaves poor performers in place, the Government risk seriously undermining their own flagship policy. I beg to move.

[Lord Liddle (Lab)]

My Lords, I have an amendment in this group that is closely aligned with the noble Baroness’s, on which she has spoken very eloquently. It would reaffirm the Secretary of State’s powers to, if necessary, withdraw franchises from operators.

I tabled my amendment because I am a strong supporter of the Government’s policies and it would be tragic if we could not complete the transfer of companies to public ownership with remarkably quick speed. Yet, when we had the Second Reading debate, the noble Baroness, Lady Blake, pointed out to us that, unless there was a basis for withdrawing the Avanti franchise, it would run for another couple of years. It would be tragic if the worst-performing franchise, along with CrossCountry, was allowed to continue for this extended period and thereby to delay the Government’s ability to introduce the kind of rail reform that a unified railway under a guiding mind would make possible. To tell you the truth, on the basis of what I have heard, I think our Ministers are being a bit feeble. They could stand up to Avanti with much greater determination than they have.

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[Lord Hendy of Richmond Hill (Lab)]

The answer is that it is the Government’s policy to take train operations into public ownership. The words the noble Lord mentions in Clause 2 just emphasise that intention.

[Lord Liddle (Lab)]

I would like to raise another point about Avanti. As I understand the law, the Secretary of State has a clear right to withdraw contracts on the basis of passenger service performance. Is it the case that the present Secretary of State cannot make her own judgment of that and is bound by whatever was decided before the last election? Would a court really not accept that the present Secretary of State has the right to make that judgment and act on it?

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[Lord Hendy of Richmond Hill (Lab)]

I will first say that I am delighted to see the noble Baroness, Lady Pidgeon, in her place. I hope that her questions will be easier than the ones she has asked me for the last 16 years.

I thank noble Lords for explaining their amendments in this group, which consider the impacts of public ownership on the freight sector and the British Transport Police. I shall speak first to Amendment 6, in the names of my noble friend Lord Berkeley and the noble Lord, Lord Moylan, and Amendment 41 in the names of the noble Baroness, Lady Randerson, and the noble Lords, Lord Bradshaw and Lord Moylan.

These amendments highlight the importance of the rail freight sector, which has a crucial role to play in supporting a productive economy and in helping to decarbonise transport on the way to net zero. The Bill in front of the House sets out with two very specific purposes: to enable franchised passenger services to be brought into public ownership as existing contracts expire, and then to enable the Government to keep them there in accordance with their manifesto commitment. As such, the Bill has no direct impact on freight operators or on the availability of network capacity to accommodate freight services. Indirectly, though, freight operators should benefit from public ownership of passenger services, for reasons I am happy to explain.

In the old franchising model before the pandemic, a franchise operator’s commercial motivation was to maximise its own profit—evidently, the difference between its revenues and its costs. If that meant running additional services, it would seek to do so through the usual industry processes of bidding for access rights and then for a timetable that included the extra services. It would not matter, and has not mattered, to the franchise operators that this might deprive freight operators of the opportunity to serve new markets in the future. There are various examples of franchise bidders seeking to win contracts on the back of proposed service enhancements that risked crowding out, or actually have crowded out, potential future freight growth.

Under public ownership, that unfortunate incentive will no longer exist. Publicly owned operators will instead be remitted to act in the interests of all users of the railway, including freight customers. We have made it clear that the forthcoming railways Bill will require Great British Railways to enable the growth of rail freight and that the Secretary of State will set an overall freight growth target to ensure that it remains a key priority. I am sure that we will debate these points further once the railways Bill is before your Lordships’ House.

The noble Lords, Lord Bradshaw and Lord Young, my noble friend Lord Berkeley and others asked how capacity will be allocated. I can certainly tell them how it is done now, because we have had an immense struggle to obtain a timetable on the east coast main line which seeks to justify the £4 billion-worth of public investment to speed up services and provide more passenger capacity. One reason we have had that struggle is that, although there is an appeal mechanism to the Office of Rail and Road, there is in fact no current decision-making process to allow a timetable to be completed, except by agreement. I believe and hope that it is currently in its last stages, but I am not certain.

One of the things that the Government have in mind is that Great British Railways ought to be the body that decides. The noble Lord, Lord Bradshaw, will recall what was the case on the old railway: somebody had to decide which services were of greatest priority and which ones had to be fitted round them. Under the current Bill, however, there is no change to the existing role of the ORR in access decisions for passenger and freight services. Under the future railways Bill—and we will consult on this—there will be appropriate safeguards for both freight and open access operators. We will set out details on that in due course, before any changes to the current approach are made. There is no need to require the publication of a report on this matter. Commissioning a report after this Bill, when in fact there will be no change at this point, will not add benefit to the debate.

I turn next to Amendment 40, in the names of the noble Baronesses, Lady Pidgeon and Lady Randerson, and the noble Lord, Lord Moylan.

[Lord Liddle (Lab)]

Before we move on to the British Transport Police and while we are still considering freight paths, the noble Lord, Lord Bradshaw, for whom I have enormous respect because of his experience on the railway, made the point that investment decisions are very important to getting more freight on to the railway. Is not the real question about freight the priority it is given in the investment decision-making process? I know the Bill is not about that, but, since there is concern about this in the Committee, can the Minister give us any guidance as to how investment will be prioritised?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend Lord Liddle for that intervention. All I can say at this point is that I would hope the rail network enhancement programme is published more frequently, and with more success in what it contains, than it has been for some years. We will have to wait and see what the fiscal situation allows.

[Lord Liddle (Lab)]

Would that be a decision for the Secretary of State or for Great British Railways?

[Lord Hendy of Richmond Hill (Lab)]

I think in due course we will have to come back in the substantive Bill with a proposition on how those decisions are made, who makes them, and for what period of time the plan is valid.

Passenger Railway Services (Public Ownership) Bill

Lord Liddle Excerpts

Report stage
Wednesday 6th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I will speak to Amendment 2, and to Amendment 10 in my name and that of my noble friend Lady Scott. Amendment 2 was the Liberal Democrats’ Amendment 1 in Committee, requiring the Secretary of State to terminate franchises for default and to nationalise the worst-performing operators first, while allowing train operating companies that are currently working well to continue.

The Minister explained to us, both in this Chamber in response to our amendment and in private discussions, that this cannot be done without major costs to the taxpayer. The existing contracts have been written and signed by the previous Government so as to make it difficult to penalise defaulters. We accept what the Minister says and we are not prepared to cause the taxpayer greater costs than necessary in this process. So, having listened and learned, we turned our amendment around and wrote Amendment 10, which simply proposes giving the Secretary of State the freedom to enable services that are working well to have an extension to their franchise and to continue for a period of time suitable to the Government. Can the Minister explain to us the Government’s approach to this and whether existing contracts could be extended, as our amendment suggests?

Our view is that the Government are going to be hard pressed in dealing with the numerous parts of the rail systems that are failing, and they need to allow themselves a bit of space by letting the bits that are working well continue until they get around to the overall process of nationalisation. The Government’s whole approach has been nationalisation gradually rather than one big effort, and I hope this amendment works with the grain of their intentions.

[Lord Liddle (Lab)]

My Lords, from listening to the noble Baroness, Lady Randerson, I think there is a misunderstanding about what the Government are trying to do. As I understand it as a humble Back-Bencher, we are trying to get rid of the franchising system because, as it is, it does not help us to run a railway in the way we want to. In his opening remarks the noble Lord, Lord Hendy, said that one of the points is to have a simplified fare system that will greatly raise the prospects of increasing passenger revenue and passenger use of the railway, because the fare system is an obstacle to that. We cannot do that while we have the franchise system, so we have to get rid of the franchise system.

If there is any fault in what is happening at the moment, it lies on the opposite side of the Chamber and with the Transport Ministers who gave operators such as Avanti the very loose targets that they have to meet. I advocate that we should be tougher with Avanti, have it in every month, and if things have not improved, we should take the risk of taking the franchise off it and saying, “See you in court”. That would be my approach, but the problem is what the Conservatives have left us with, and that is very difficult to solve. I do not support this amendment, which would result just in extending the existing system.

[Lord Young of Cookham (Con)]

My Lords, I am glad I let the noble Lord, Lord Liddle, speak before me, because I listened very carefully to what he said at Second Reading, when he made a powerful speech in favour of pragmatism. I think that was an expression that he used; I see him nodding in assent. Pragmatism is the reason behind Amendment 10. It is a question of whether we let ideology trump pragmatism. The amendment is very similar to one I proposed in Committee. It is less ambitious—the one I proposed in Committee would have allowed the franchise to be renewed for a longer period than 12 months—and therefore one that is it easier for the Minister to accept.

There is an additional reason that has not been mentioned so far, which is that there will be pressure within the Minister’s own department to absorb the franchises as they fall due. I think his department would welcome the flexibility under Amendment 10 to enable an existing franchise to be extended for a further 12 months, but no longer. The Minister will get his way: all the train operating companies will be nationalised and all the franchises will come to an end. What we are arguing about is some flexibility. If a franchise is being run perfectly competently, if the existing company would be happy to run on for another 12 months, and if the department is having to recruit more civil servants to absorb the existing ones, I honestly cannot see why the Minister has set his face against Amendment 10. If there is the word “resist” in his brief, perhaps he will reflect on whether a little bit of flexibility would be in order.

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[Baroness Randerson (LD)]

My Lords, this group raises some interesting questions about the various shapes that the ownership of rail services can take. Our interest on these Benches, which we raised in Committee, is specifically the interface between the Government’s picture for national rail services run by the Government and those run by devolved authorities. We are interested in seeing that nothing in this Bill attacks devolution as it currently exists or stops the further development of devolution when it is properly and fully thought through. We are interested in ensuring that nothing in this Bill would prevent current devolution models continuing and new ones from being established. Those devolution models include aspects of private sector involvement.

In addition, in Committee, the noble Lord, Lord Liddle, raised some interesting questions about alternative public/private models and not-for-profit models. I hope that he will speak about those again in this debate.

I will be listening very carefully to the Minister’s response. If I understood him earlier in our discussions about this, he has reassured us about devolution, but I need an additional public response on that issue. With that, I take note of a very interesting aspect of this debate.

[Lord Liddle (Lab)]

My Lords, I will speak briefly, as the noble Baroness, Lady Randerson, mentioned what I said in Committee.

It is right to raise these questions here, but they are questions for the future and for the big Bill that we will get next year. Personally, I do not want to see the re-creation of British Rail. My dad used to work for it, and to my mind it did not have great success as a monopoly nationalised industry. Therefore, it is right that, in the debate about the Bill setting up GBR when it comes around, we should explore the models of ownership that might work on these concessions. I would not rule out co-operative models, or heritage railways, running part of the national network.

My main concern is that we do not get stuck on the idea that this has to be a public sector monopoly. After all, the main thrust of Labour policy, the manifesto on which we won the election and the Budget put forward by Rachel Reeves is that we should use public investment to generate private investment, which will multiply the effects on economic growth. I do not see why the railways should somehow be different from that general principle. I discussed this with the Minister, and he explained how one thing being looked at is using the private development of Network Rail-owned land to improve investment in services. That strikes me as a very good idea and something that we should look at. Noble Lords are right to raise this question, but I hope we are going to have an open-minded debate about it in the coming year.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lords, Lord Lansley and Lord Moylan, for their amendments in this group. I will speak first to Amendment 4. Following enactment of the Bill, there would be just two routes by which the Secretary of State could secure the operation of passenger services. The first option, and this is the option we plan to use, would be to make a direct award to a public sector company under the amended Section 30 of the Railways Act 1993 and in accordance with the Public Service Obligations in Transport Regulations 2023.

The second option, which is a very limited option, would be to use the power to continue an existing private sector franchise temporarily under new Section 30A. This power is deliberately limited only to circumstances where the Secretary of State is satisfied that a transfer to a public sector company is not reasonably practicable. This means the Government would expect to use it only as a last resort, for a short period, to avoid a transfer causing disruption to passengers or staff. Apart from this very limited power in new Section 30A, the Bill leaves no other route by which the Secretary of State could contract with a private sector operator to run either existing services or new ones. This is entirely consistent with the Government’s very clear policy in favour of public ownership of services that form part of the national railway network.

On the point from the noble Lord, Lord Lansley, about DfT OLR Holdings Ltd, I confirm that award to it is securing the provision. All services currently designated under Section 27 will be provided under Section 30 by a public sector operator as existing contracts expire. The noble Lord also asked about the Secretary of State’s power to secure the provision of new services through a public sector company if those services had never been provided under a franchise agreement. Regulation 21 of the Public Service Obligations in Transport Regulations 2023 allows the Secretary of State to vary the terms of a public service contract to include additional services, and so would provide the necessary statutory basis for her to secure the provision of new services from a public sector operator.

The noble Lord asked whether the Bill will leave an option for the Secretary of State to procure East West Rail services from a new private sector operator, and the simple answer is that it will not. The Government have no plans for long-term private sector operation of the new East West Rail services, which will commence operation next year, nor any other services that the Secretary of State is responsible for procuring.

There are—and, after this Bill, there will remain—two ways in which other parties might operate or secure the provision of services on the rail network. One possibility is that a third party might operate them as an open access operator, as is the case with Hull Trains, for example. Another possibility is that a mayoral or combined authority or other local authority might secure the operation of services either by running them itself or by procuring a third party to do so. As I will explain in relation to the next group of amendments, the Secretary of State can facilitate this by granting an exemption under Section 24 of the 1993 Act, which takes the relevant services out of the scope of the surrounding provisions of that Act.

I noted with interest that my noble friend Lord Liddle remarked about involvement of developers, for example. I echo his sentiment that there will be ways of getting private capital in, particularly through development, that have not really been explored so far.

I hope that my explanation reassures the noble Lord, Lord Lansley, that the Government have carefully considered the implications of the Bill and the options it will and will not leave open, and I hope he will feel able to withdraw this amendment.

Amendments 5 and 6 from the noble Lord, Lord Moylan, deal with competed concession contracts. As I set out to the noble Lord in Committee, these amendments would remove the opportunity to deliver the benefits of public ownership, which a clear majority of the public support and which was a specific commitment in the manifesto on which this Government were elected. For the following reasons, I cannot agree to the amendments.

First, a concession model would mean the taxpayer continuing to fund substantial profits for private sector operators. A concession model along the lines of Transport for London’s contracts would expose operators to more financial risk than today’s contracts, where government bears virtually all the financial risk. Under such a model, train operators would price their bids to generate even more profit than the £110 million to £150 million per annum that they can earn under the current contracts. Our plans for public ownership will eliminate those fees and profits entirely—in the Government’s view, continuing to line the pockets of private shareholders is not a good use of taxpayers’ money.

Secondly, TfL concessions are a relatively inflexible form of contract which is not well suited to the needs of the national railway network. For a concession contract, the procuring authority has to define the service levels and standards at the start of the procurement process, and those levels and standards then endure for the life- time of the contract. Changes to the service specification can be achieved only through costly negotiation and agreement with the operator which already holds the contract.

That is very different from the London bus market, for example, which we discussed in Committee, where the concession model is much more suitable because there is a large number of small individual contracts. For the London Overground, much of which is heavily constrained by the geography of the railway network and the other services that run on it, it might be satisfactory, but the whole of the national railway network requires greater flexibility to adapt to changing patterns of demand. Finally, and most importantly, a concession model would not resolve the fragmentation of the current system, nor would it deliver on the Government’s commitment that rail services should be run by and for the public.

The noble Baroness, Lady Randerson, referred to devolved Administrations and local mayoral authorities. We will come to devolution further in the next amendments.

I urge noble Lords not to press their amendments.

Passenger Railway Services (Public Ownership) Bill

Lord Liddle Excerpts

Consideration of Commons amendments
Wednesday 20th November 2024 Lords Chamber

[Lord Moylan (Con)]

My Lords, I shall endeavour to be brief. I repeat what other noble Lords have said in expressing my gratitude to the Minister, as I mentioned at Third Reading and when the Bill passed, for his courtesy and collaboration in our debates on the Bill.

The Government’s problem is this: they wish to reform the railways. There is a great deal of support in your Lordships’ House, across all parties, and generally among the public for a reform of the railways. We would like to discuss what the Government are going to do on a number of issues. Had they brought forward the measure in this Bill as part of a large and comprehensive Bill introducing those reforms to the railways, we would have had the opportunity to have those discussions. We would have been able to discuss, for example, the role of freight, and the tension between the priority given to passenger services and freight services that inevitably exists in a constrained system. We would have had the chance to discuss the continuation of open access and competition on the railways. We could have discussed the devolution of the operation of train services to regional and local authorities, such as exists in London and might exist in other parts of the country. We would have been able to do all those things as part of a comprehensive reform Bill.

But the Government have decided not to bring forward a comprehensive reform Bill, of which this is part; they have decided to take this step first—that is, to seize control of the train operating companies—and the great Bill of reform is promised for the future. The Government say that it will be brought forward within 12 to 18 months—that is a challenging target. As I have said, tediously, in the past, over and over again, even after that Bill has gone through its parliamentary process and passed, it will still take several years for it to be implemented.

[Lord Liddle (Lab)]

My Lords, I agree that there is a substantial degree of consensus on the need for reform, which the previous Conservative Government started five years ago with the Williams review. However, when we came into office, we found that a very partial Bill had been prepared which did not cover all of the issues that needed to be included in a railway reform Bill. It is the neglect of his previous Administration that has led to this situation.

[Lord Moylan (Con)]

I am not here to defend the previous Government, and I was not making a tedious trivial party-political point when I said that. I will say that I suspect the previous Government were dilatory and slow in bringing forward a massive reform of the railways because it is a very complicated business, and that goes to my point: I doubt this Government will be able to bring forward a Bill within 12 to 18 months precisely because of that complexity. Because of this large gap in time, through the passage of this legislation we are creating a new situation for the railways that could endure for four to six years, with no sense of accountability or purpose that the Government have, because the answer on everything that we wish to discuss —freight, open access, devolution—has been, “We can’t discuss it now; we can’t tell you anything now; you have to trust us”, just like the Government said “Trust us” to the pensioners, to the farmers and to large businesses that are landed with business rates.

The truth of the matter is that we do not see why we should trust the Government. That is without any disrespect to the Minister, but he is just one person and, like all of us, fragile and frail. We cannot build an entire railway system and entrust it to the Government on the strength of one particular Minister because of his noted, genuine and respected skills. We need to know what the standard will be to which we can hold the Government accountable during this new and quite lengthy period.

The objective of the purpose clause is not to set an objective for the railway, as the Minister has sometimes said; it is to set an objective for this Bill, and the Bill is about seizing control of passenger railway services. All we are saying is that the standard we expect to be set is that the purpose is the improvement of passenger services. If we cannot see those improvements then at least we would have a standard to which we could hold the Government to account, and that should be in the Bill. Warm words butter no parsnips. They are nothing to which we can hold the Government accountable. So, if my noble friend Lord Gascoigne chooses to press his amendment to a Division, we on this side will support him.

I turn to Motion B. I do not think the Government realise how helpful Motion B was intended to be to them. It is after all one of those rules in life that, if something is doing well today, it is likely that tomorrow it will not be doing so well, and vice versa. What are the Government now holding out as a practical prospect? They are going to move ahead, and one of the first franchises they are going to take control of is Greater Anglia, one of the best performing and most popular. What is likely to happen to Greater Anglia? Just by random chance, it will start to deteriorate and the Government’s programme of nationalisation will be damaged in the public eye as a result, whereas if they had seized control of Avanti, which is what we were guiding them towards through Motion B, then some improvement would have carried them forward and shown how well nationalisation was working. So we were trying to be helpful to the Government, but the Commons has claimed financial privilege on this issue and, as far as we are concerned, we give way.

On Motion A, I am sorry to hear the noble Baroness, Lady Randerson, say she is going to trust the Government. She will be joining a long queue of people who have trusted the Government, but I fear she will be disappointed. But that is enough for now.