Passenger Railway Services (Public Ownership) Bill

Lord Moylan Excerpts

Report stage
Wednesday 6th November 2024 Lords Chamber

[Baroness Randerson (LD)]

My Lords, Amendment 1 is impossible to disagree with. It is fundamental to the survival of our railways that things improve. They have reached crisis point because of decades of under- investment, poor management and poor political decision- making. However, the presence of this reminder might be useful for the Secretary of State. It might be a statement of the obvious in some ways but useful for her because the big problem with nationalisation is that Governments in the UK have consistently failed to invest long-term. We can improve buses by investing within a couple of years, but when you invest in the railways it takes a couple of decades for it to make a big difference. That is the Government’s challenge in renationalising the railways and the buck now stops with them.

On Amendment 16, I understand and strongly support the wish for thorough and transparent public consultation on the contents of the forthcoming rail Bill. I remind noble Lords of the example of the public consultation undertaken by the previous Government on their plan to close ticket offices. It led to a massive national outcry, forcing them to drop the plan, so I am a great believer in the impact of public consultations. The Bill that we are expecting in the near future is considerably more complex, but the problem with this amendment as written is that it extends the timescale that it all will take. It will take far too long before we get the legislation that we all hope will make the big difference. I will listen very carefully to the Minister. We hope that there will be some legislation by the end of next year at the very latest.

One way or another, the Minister has been associated with plans for the future of the railways and the creation of Great British Railways for some years now. There is surely nothing raised in our debates that he has not thought of, he has not worked on, or that would come as a surprise to him. He has been exceptionally generous with his time in cross-party discussions in the last couple of weeks. I urge him to explain when he replies what the timescale is likely to be and to assure us that there will be full consultation and that there is a grand plan.

[Lord Moylan (Con)]

My Lords, we have had lengthy discussion on this Bill in Committee, and it is not my intention today to repeat unnecessarily the arguments and the evidence adduced during those debates. The longer that we went on in Committee, the clearer it became that this is a very bad Bill that has been accompanied by a degree of arrogance. I do not say this as a personal comment on the Minister; it is on the part of the Government in general. There has been a tone, sometimes said quite explicitly, of “We won so we can do what we want”. That is an argument. It has some merit, but the merit that you would expect to find in an argument made in a playground.

Another type of arrogance has also been underlying our debates: “We want a better railway, but we are not going to tell you what it will look like. That’s all going to come in the future—don’t ask your pesky questions now. That will all be dealt with, and you have to trust us”. That is not a basis on which the House should be passing this type of legislation. The amendment in the name of the noble Lord, Lord Berkeley, goes some way to address that latter point. We all have a common desire for a better railway, but we will no doubt disagree on the details of how it is to be achieved. My noble friend Lord Grayling said that these are very complex issues. I do not think that anyone would disagree.

Therefore, on the prospect of having the Bill published in draft for pre-legislative scrutiny, I disagree with the noble Baroness, Lady Randerson. I do not think that will add materially to the time taken before legislation is enacted because it is likely to produce a better Bill when it eventually arrives in your Lordships’ House, one that can go through faster and be implemented better with better outcomes. It is the outcomes that we are interested in, not a particular timescale, although like her I will hold the Government to their undertaking that a Bill will come forward within 12 to 18 months.

It is more important to get the outcome right than to worry about a few weeks here or there, which is as much as we would be discussing in relation to the amendment tabled by the noble Lord, Lord Berkeley. I am deeply disappointed that he is not going to press it to a Division as I would be very tempted to support it if he did. However, I expect and hope that the Minister, when he stands up, can satisfy the noble Lord, Lord Berkeley, by saying that there will be some sort of pre-legislative scrutiny of the very large and complex Bill that he is expecting to bring before your Lordships’ House in the next 12 or 18 months, to use his phrase.

The amendment in the name of my noble friend Lord Lansley is very good and commends itself. Like him, I would like to hear what the Minister says in response. I note that my noble friend does not intend to press it to a Division.

Amendment 1, tabled by my noble friend Lord Gascoigne, is indispensable. A number of things are missing from this Bill. A number of important parties have been wholly excluded. One of them, for example, which we will come to later in debate, is the staff. There is no reference to the staff in this Bill. We take for granted that they will be TUPE-ed. That basic legislative cover is there and does not need to be stated. They will not lose their jobs as a result of this but will be TUPE-ed over. However, has any consultation been carried out with the staff? You would expect that normally, would you not? Do they want to change their employer? Do they want to be working for the Government? They may all say yes, but one would have thought that in an undertaking such as this the Government would have bothered to ask them. There has been no consultation with the staff.

The other glaring omission from the Bill is, of course, the passenger. It is a passenger railway services Bill, yet it says nothing at all about the passenger. My noble friend Lord Gascoigne is attempting to put this lacuna right and to put the passenger back at the head of the Bill, as the driving force of what the Government are trying to do and to require Ministers to test their actions under this Bill against the standard of whether it will improve matters for the passenger. That is why, if my noble friend intends to divide the House and seek its opinion on this matter, I recommend that we support him.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

I thank the noble Lords, Lord Gascoigne and Lord Moylan, for Amendment 1. I absolutely support the idea that the Government should be clear about what the railway is for and what we want it to achieve. Far too many conversations in this industry are about tracks, signals and trains and how the railway works—or, in many cases, does not work so well. There needs to be much more focus on what the railway is for, but you can do that only if the organisation fundamentally works.

I am clear that when we establish Great British Railways, we should set out a clear statement of purpose, and we will set out a proposal for this statement of purpose in the consultation we will launch ahead of the substantive railways Bill. I am also very clear about the purpose of the Bill and the Government’s wider plans for the railway. Improving the performance of passenger services is clearly a big part of that purpose, but it is not and cannot be the only purpose. The Secretary of State has set out six key objectives against which she expects the railway to deliver. In summary, the railway should be reliable, affordable for passengers and taxpayers, efficient, of suitable quality, accessible and, of course, safe. She and I are reminding senior railway leaders of these objectives very clearly and very often. I expect that to carry more weight than a statement of purpose in a Bill that, if we are honest, might not be read widely by those on the front line of running the railway. Given the range of objectives that the Government wish to meet, I would not support the idea of singling out one objective, even a vital one, and placing it in this Bill.

Turning to the specific wording of the amendment, which is about performance, the easiest way to improve the performance of passenger railway services would be not to run so many of them, and to try to run fewer freight trains. It would be much easier to make trains run on time if the railway were less congested. Of course, I do not advocate that as a solution, but it illustrates the point that trying to reduce the Government’s objectives for the railway to a single purpose might be counter- productive. I hope that my remarks will have reassured the noble Lord that I am entirely on board with his underlying suggestion that the railway needs a clear statement of purpose, but I am not convinced that it needs to be enshrined in primary legislation right now, nor that it should focus exclusively on the performance of passenger services.

The noble Lord, Lord Grayling, asked me to set aside my ministerial hat and opine about the performance of the London Overground and the type of operator that operates it. I shall not set aside the hat, but I will say that one of the differences with the Overground is that it operates within a consistent and easily understood fares structure, which has enabled a significant increase in patronage over the period it has been operating. We must change the railway fares: there are far too many of them and they are deeply confusing. But one of the reasons for public ownership of the main network is to ensure that we have control of the operation and that there is enough information to be able to do that.

I will not trouble to respond to the point about arrogance and the Government acting, according to the noble Lord, Lord Moylan, as if we won the election, because it is rather self-evident that we did. I will remind him that this measure is very popular with the public, and every recent opinion poll suggests that a very large majority wish to see the railway in public ownership. We will return to the matter of the staff, but he acknowledges that the transfer of undertakings regulations will apply, and they do involve some consultation. But if you went to Waterloo station today and asked the staff there whether they want to change their employer, most of them would tell you that they have changed employer so often that some of them cannot remember who their employer is, and do not much care. The most frequent description of railway employment that I get when I speak to railway men and women—

[Lord Moylan (Con)]

Are not the staff of Waterloo station already employed by Network Rail?

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Moved by

[Lord Moylan]

2: Clause 1, page 1, line 12, at end insert—
“25B Termination of existing franchise agreements(1) The Secretary of State must terminate franchise agreements for default in accordance with the terms of the agreement as soon as it is possible to do so.(2) The Secretary of State must assess and rank existing franchise agreements according to performance criteria established after consultation with relevant stakeholders.(3) Subject to subsection (1), the Secretary of State must only terminate a franchise agreement pursuant to a break clause if—(a) there are no other franchise agreements which are performing worse under the criteria in the list referenced in subsection (2), and(b) the Secretary of State is satisfied that provision of the services by a public sector company will improve existing service provision.(4) In this section, “break clause” means a contractual provision in a franchise agreement which entitles the Secretary of State to terminate the franchise agreement before the end of the franchise term by notice without reason.”Member’s explanatory statement
This amendment would require the Secretary of State to terminate franchise agreements for default and to nationalise the worst performing operators first, while enabling services that are currently working well to continue.

[Lord Moylan (Con)]

My Lords, in the course of debate at Second Reading and in Committee, numerous noble Lords drew attention to the fact that the manner in which the Government are approaching the termination of franchises is going to result in some very perverse outcomes. Admittedly, most of the franchises still in existence are relatively short, but the Government—with a view to saving money, as far as I can make out—are determined to terminate them in the order in which the contract falls in.

That has the bizarre consequence that some of the most popular, effective and highly rated franchises are going to be terminated early at the head of the list, while those that are most reviled by the public—I am not going to mention any names in the course of this brief speech—and regarded as being hopeless at what they do will have the longest continuation in existence. It is of course the case that if they fell into default, the Government could terminate them early without expense, but we heard from the Minister earlier that none of them is as bad as that. None the less, some of them are very bad indeed.

This case was made most compellingly at Second Reading by the noble Lord, Lord Browne of Ladyton, but it has been made by other noble Lords as well. I think there is strong demand among noble Lords for the worst franchises to be brought to the head of the queue. My Amendment 2 would have the effect of bringing that about: the worst-performing operators would be terminated first, while services that are currently working well would be enabled to continue. Amendment 10 in the name of the noble Baroness, Lady Randerson, has a similar intent and effect. It is drafted differently—it is expressed as providing flexibility to the Government, whereas mine is perhaps a little more mandatory in its tone—but they are similar in various ways.

With the time the Government have had for reflection on the strength of feeling in the House about this issue, they should be able to come forward and say something now that would alleviate noble Lords’ concerns. Otherwise, I will be interested in testing the opinion of the House on my Amendment 2.

[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.

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[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord, Lord Young, for his intervention. I think he is right, but he will forgive me if I consider it further and write to him.

[Lord Moylan (Con)]

My Lords, with the leave of your Lordships’ House, I may speak for slightly longer than would be normal because I would like to address a comment made by the noble Baroness, Lady Randerson, about my Amendment 2. She said that it was the same as Amendment 1 tabled by the Liberal Democrats in Committee. In fact, that is only superficially the case. While proposed new Sections 25B(1) and (4) are the same as in the amendment tabled in Committee— I think, by the noble Baroness, Lady Scott of Needham Market—the meat in the sandwich, so to speak, has changed. There would be no additional cost in early termination fees as a result of this amendment as drafted because the franchises would be terminated not as they fell in but in order of worst first, even though that might take a little longer.

I listened very carefully to what the Minister said. Although the Minister found it helpful, the intervention from the noble Lord, Lord Liddle, was, to this side of the House, slightly infuriating. Throughout the debate in Committee there was a constant jumping between asking us to please focus on this narrow, technical Bill to then, when we wanted to talk about the narrow, technical Bill, being told that we should be talking about the great, big, wonderful Bill that will be coming in 18 months, because that is really what this is all about. But we cannot talk about that Bill because we have not seen it—indeed, we are not even going to get to see it in pre-legislative form. So although the Minister found it helpful, it illustrated the constant problem we have had in dealing with the Government on this measure.

For that reason, I am afraid I am not sufficiently satisfied with the Minister’s comments in respect of my Amendment 2 and I would like to test the opinion of the House.

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[Lord Lansley (Con)]

My Lords, the purpose of Amendment 3 in my name is to explore the question of when and under what circumstances it is the Government’s intention to meet their duty in Section 4(1)(d) of the Railways Act

“to promote competition in the provision of railway services for the benefit of users of railway services”.

It was prompted by a very brief exchange that took place in Committee, where the Minister confirmed that it is not the Government’s intention to remove that duty. However, it is clearly their intention, in relation to passenger railway services, very substantially to reduce competition and perhaps to exclude it altogether. There may well be other areas of activity in the provision of railway services which are open to competition, and I want to examine where those should be. Of course, I approach this not with the intention that the duty to promote competition should be removed from the Act, but with the view that it should be exercised.

I am in favour of competition. I might say, in this context, going back many years, that where privatisation is concerned, we have found that competition between private organisations yields benefits. In the railways, in some circumstances, we have found that the absence of competition has been at the heart of the problem: that the performance has not been exposed to competition and therefore has not improved in the way we would have wished it to. So, competition works, privatisation does not necessarily work, but the combination of privatisation and competition, in my view, has worked in the past. However, we are not here to discuss privatisation; we are here to discuss competition, and there is a continuing role for competition, in my view.

I am not planning to talk at length about Amendments 13 and 17 in this group, I will leave that to my noble friend on the Front Bench, but Amendment 17 is directly relevant. One of the principal opportunities for competition would be with open-access operators. In Committee, we touched upon but did not find out whether, and to what extent, it was the Government’s intention to continue to permit open-access operators or indeed to promote them. In my view, promoting them can be a very effective way of stimulating competition and innovation, which are often—as Schumpeter would have said—very intimately linked together.

My contention in this amendment is very simple: to explore where competition will be available. Clearly, it can be done with things such as the provision of rolling stock and services to railways, and maybe, to some extent, in relation to rail freight. As far as passenger railway services are concerned—and we are dealing with that here—the Government’s intention appears to be that every aspect of the passenger railway services should be subject to the “directing mind”—as the Explanatory Notes sets out. Therefore, it will be very difficult for there to be any substantial competition, except if that can be achieved by the role of open-access operators. I hope, when he responds to this debate, the Minister will be able to say they will have a continuing role, or even that they might be encouraged to bring the innovation and competition that would enable us to avoid the downside of a dominant provider.

We have seen this in other circumstances. For example, in France, the dominance of SNCF has led to abuse such as anti-competitive pricing or the overbooking of train paths to restrict competition from other providers. We do not want to see the dominance of public sector providers, on passenger railway services, to lead to that kind of abuse. Still less do we want to see monopoly activity on the part of public sector companies in passenger railway services lead to an elevation of the interests of the companies themselves over the interests of the users of railway services. The general duty to promote competition is for the benefit of the users of railway services because, very often, they are the ones who most see the benefit of that.

I will just tease the Minister, finally, by saying that in this legislation he has the opportunity to move in the opposite direction to the fourth railway package under the EU’s transport legislation. Here is an uncovenanted Brexit bonus for the Government, in being able to move in the opposite direction to the thrust of legislation in the European Union. With that teasing moment, I beg leave to move Amendment 3.

[Lord Moylan (Con)]

My Lords, I rise to speak to Amendments 13 and 17 in my name, but also to respond to my noble friend Lord Lansley in relation to Amendment 3. We come now to the heart of a considerable confusion that exists in the Bill, one that the Government have done their very best to avoid and that needs to be flushed out.

My noble friend Lord Lansley refers to competition. In fact, he refers to the abusive practice by monopoly railways in France. That, of course, is in response to European Union legislation, which has had to mandate access to competition in order for it to flourish in the European Union. It is going in the direction that we went in, somewhat later than us. We are now going back to the Attlee Government, basically, and moving away from that. It is a Brexit bonus, as I think I said in an earlier debate.

The matter is made worse because the Government have not been clear about their view on competition. It has been made much worse by the Government’s confusion and blank refusal to address the question: who is going to make the decisions about competition? Who is going to decide, in relation to open access, which providers will have access to the service? I refer, as I was encouraged to do by the Minister, to the Labour Party document Getting Britain Moving. In its section 7 on “The role of open access”, beginning on page 22, it says clearly:

“The ORR will continue to make approval decisions on open access applications”,


but that is not confirmed by the Minister. Instead, we have the spectre of Great British Railways making open access decisions. That appears to be part of the great controlling brain: one of its functions is that it would make those decisions about open access. But in doing so, it will be making decisions directly about competition with itself.

We are very concerned that the sort of abusive monopoly activity seen in France, which my noble friend has referred to, is exactly what we would be exposing ourselves to if we allowed this measure to go through without having appropriate safeguards in place in advance. That is the thrust of Amendment 17, which simply calls for a report. In Committee the Minister made fun of me for calling for so many reports, but he should understand that we are doing this as a way of drawing attention to an issue of serious concern without trying to hobble or wreck the Bill. He has not given us any assurance in response. He has taken no notice of our very genuine and serious concerns.

Amendment 13 relates to a similar topic, in relation not to open access for passenger railway services but rather to access for freight services. They too compete, so to speak, for paths on the railway; they need access to the railway if they are to operate. The previous Government had an informal and non-statutory target of seeing the volume of freight on the railways increase by 75% by 2050 from a base of, I think, two years ago. This amendment would effectively put that target into the Bill.

Nobody in the Labour Party, either in opposition or in government, has resiled from or rejected that target. If anything, I think they want a more exacting target. The Minister, if pressed, would probably say that it was a perfectly respectable target, one that he would want to sign up to, so there should be no objection to seeing it in the Bill. It would give some assurance that Great British Railways, in its operations, would not simply favour its own activities at the expense of freight operators. Ideally, we would also want some sort of assurance that it would not favour its own passenger activities at the expense of open access operators.

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[Lord Lansley (Con)]

My Lords, this is the last group on which I plan to speak. My amendment was prompted by a debate in Committee that gave rise to the question of how the new legislation would work. We have established, including during the previous group, a number of things that do not change, including the licensing of railway services and the prohibition on operating without a licence. The relationship with open- access providers therefore does not change, since they can make applications to the Office of Rail and Road for that purpose—I am paraphrasing, but that is, broadly speaking, how it works.

Where we have a change is in the process for franchising, which is to be removed. The Government have chosen to change the franchising provisions in the Railways Act, in Section 30 et cetera, and to replace that text with what we see in the Bill. I really want to explore this question: to what extent will all designated railway services be brought under Section 30, from new Sections 30A to 30C? I want to explore the consequence of the use of the word “only” in that provision. It says that a service must “only” be provided by

“a direct award of a public service contract to a”

wholly owned public sector company. In effect, it will be wholly owned by the Secretary of State—not, as we have discovered, other public sector companies.

The removal of the word “only” would, in the way in which the text works, as far as I can see, create an opportunity for the Secretary of State to provide or secure the provision of services by routes other than the direct award under Regulation 17. Clearly, that is not the Government’s intention. I will not return to the debate I promoted in Committee, but it would be good legislation to leave that option open to the Secretary of State, even if it were not the Government’s present intention to use it, because they may find it valuable to be able to do so in future.

Let us look at a practical example. Imagine that the Government thought it desirable to say that a service such as the one from Fenchurch Street to Southend and Shoeburyness should form part of the Overground services under the operating control of Transport for London. As far as I can see, as things stand, if that service is designated under Section 23 of the Railways Act—the designation requirements—it will have to be run by a public sector company wholly owned by the Secretary of State, unless it is the subject of an exemption under Section 24. In Committee, I think we heard the Minister say that the Government have no plans to extend the exemptions under Section 24. That raises another question for the Minister. Would he entertain that there may be circumstances in which it would be desirable to extend Section 24 exemptions? While London is a straightforward example, will the Government be open to that possibility, if it were a practical mechanism of securing the best operation of those services?

To what extent is the language of the Bill very deliberate, in that it requires that the Secretary of State may secure the provision of these services only through a direct award, but it does not say that the Secretary of State may provide or secure the provision of these services only by this route? I am making the distinction between “provide” and “securing the provision of”. This is customarily seen in legislation as a distinction between a government department doing it itself and doing it by means of a contract.

Where in this does the Department for Transport’s operator of last resort holdings company sit? Does giving an award of a contract to OLR Holdings Ltd constitute securing the provision of a service, or does it constitute providing the service? Is it regarded as part of the department for these purposes, or is it part of a wholly owned public sector company? There would be something rather odd now about treating it as part of a franchise agreement, since these franchises have already ended. Bringing it under a regime that is about the ending of franchise agreements seems odd.

My second example concerns East West Rail. We are not far away from the point when East West Rail will be running services itself on its new rail services. That will be very welcome—not least from my point of view, living in Cambridgeshire—when it reaches, as the Budget told us, all the way into Cambridge in due course. It will be running services quite soon in Oxford and Bletchley. It has not had a franchise; clearly, it will not now be given a franchise. It is a wholly owned public sector company. Is it the Government’s intention that it will be brought within the scope of Section 30? If so, this is odd, as this is an arrangement for franchises, but it has never had a franchise.

Of course, on the face of it, the Government will continue to designate railway services. Presumably—and here is a question to the Minister—there will be a comprehensive designation of railway services under Section 23, and that will, as a consequence, bring them all under Section 30 because of the way the legislation is now to be phrased. Therefore, is the intention, in effect, to bring all designated railway services under the scope of Section 30 et cetera, other than those exempted under Section 24?

I am sorry for asking a range of questions to explore how this works. We did, as the Minister has kindly mentioned, have the opportunity to discuss this a few days ago, so I hope he will have had the opportunity to think about explaining precisely how these interactions in the legislation will work. I beg to move.

[Lord Moylan (Con)]

My Lords, I am very grateful to my noble friend Lord Lansley for posing those very interesting questions. I am sure that the Government have answers to them, but they illustrate that this legislation is essentially very rushed and that they have not properly considered it.

I promise not to repeat what I said in Committee, but I cannot resist referring back to the final impact assessment, produced by the Department for Transport. It said that the purpose of the Bill is to meet a manifesto commitment, so it has not undertaken the normal practice of looking at alternative methods by which the same objectives might be achieved, because they are all in a terrible rush as the Government want to have a headline, essentially, and want to get ahead of the franchises as they expire. Therefore, I appreciate what my noble friend Lord Lansley has said, and I look forward to the Government’s reply.

Amendments 5 and 6, standing in my name, are linked. If Amendment 5 were to pass, I understand that there has been discussion with the Government Front Bench that Amendment 6 would pass without a Division in order to avoid having two votes on the same topic.

In Committee, I referred to two different models by which the private sector might be involved in the running of railways. One is the franchise system that we are currently discussing, which is the main subject of this Bill, but the other, generally dubbed the concession system, is the one used by Transport for London for the operation of all its services other than the London Underground, which is directly provided by Transport for London. All the other services—the buses, London Overground, the DLR, the tram and so forth—are provided under a concession system; that is, they are run by private companies on a contract.

The key difference between the franchise system and the concession system is that under the franchise system, as envisaged at privatisation, the fares risk rests with the operator. That was the model that was set up back when privatisation was introduced. If the fares went up and the companies generated more fares income, they would keep it; if they lost money on fares, it would be their problem that they did not make money because the fares were not good enough. Companies had the incentive to generate more fares, principally by generating more passengers, through all the clever things that they would do.

I was frank and straightforward in saying at Second Reading that that aspect of privatisation has never worked well because, essentially, private operators are not in control of fares income, which is closely correlated with the economic cycle—which of course they cannot control, manage or in any serious way mitigate. That aspect has never worked well, and Covid put an end to it in any meaningful sense. It has never recovered from that, nor, given this legislation, is it ever going to have the chance to recover.

The concession system is different, in that the fares risk remains with the franchisor. In the case of Transport for London, it is the franchisor of the services I referred to and it retains the fares risk. The obligation of the private sector operator is simply to have the trains and equipment in the right place, pointing in the right direction first thing in the morning, properly staffed, cleaned to a certain standard and so forth. If it fails to do those things, it will suffer financial penalties. The important point is that all those things are within its control. It receives a fee for that, but, in practice, because of competition, it is a modest fee given that risk is very limited. The risks are all things that are just a matter of it doing its job properly; if it does it properly, it will get that modest fee without penalty.

The purpose of Amendment 5 is to open up an option. It makes no obligation on the Secretary of State. When a franchise is terminated, the Secretary of State would have the option of awarding it not only, as the Bill is currently drafted, to a public sector company that is a subsidiary of the Department for Transport but to a private sector entity on a concession basis. The reason for it is simply that we know that it works. We know from Transport for London that the system can be made to work very effectively. We know that some of the best services on the Transport for London network—some of the best modes—are provided under this system. Why should it be that the Government would want to rule that out? Of course there could be a role for the private sector operating on that concessionary basis.

My noble friend Lord Lansley’s amendment gives the Government more options than mine does. My amendment gives the Government one extra option, but he would give the Government effectively limitless options by deleting the word “only”, whatever options might be available. It would give the Government more flexibility in dealing with circumstances that they may not have foreseen when they drafted this Bill.

Amendment 6 goes with Amendment 5 simply by defining in a separate clause what I mean by concession. Amendment 5 opens up the choice to do something on a concession basis and Amendment 6 says what a concession is. Despite every effort on my part and that of the Public Bill Office, we could not quite combine these into one amendment, so they stand on the Marshalled List as two amendments which, in practice, are closely linked, as one amplifies and clarifies the other.

I would very much like to hear from the Minister why Amendment 5 would not be acceptable, except to a control freak. That appears to be perhaps the Government’s vision for the railways.

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Moved by

[Lord Moylan]

5: Clause 2, page 2, line 15, after “Regulations” insert “or by the competitive award of a contract in the form of a concession to a private sector entity.”

[Lord Moylan (Con)]

My Lords, if I may respond to what the Minister said, he is asking us to make a huge bet on what he refers to as the benefits of public ownership. Most of us who are of a certain age can remember public ownership, and we remember that the benefits were few and far between. He is asking us to take a leap of faith that this time round it is going to be different, but he will not—

[Lord Bradshaw (LD)]

The noble Lord has spoken as if public ownership is something evil. I remember, when I worked on the west coast main line, that 90% of the trains ran on time. That is a far cry from what is now the case. It was so different from what he is saying that he really should take a history lesson in what was right about British Rail.

[Lord Moylan (Con)]

My Lords, I made no reference to good or evil. I am talking about operational efficiency. I am sure the noble Lord is correct in drawing attention, as has happened several times today, to the deficiencies of the current operation of the west coast main line, but other noble Lords have rightly drawn attention to the fact that there are private sector operators in this country currently operating with the efficiency levels that he refers to, and better—so the private sector has a lot to be said for it as well.

The fact is that public ownership is something about which the country largely breathed a sigh of relief when we moved away from it—rightly or wrongly, whatever the history behind that might have been—and every other European country over the last few years has moved away from exclusive public ownership operation. Even train companies such as Deutsche Bahn, which stood once at the pinnacle of public regard, are now something of a joke in their own country.

[Lord Watts (Lab)]

My Lords—

[Lord Moylan (Con)]

I am only trying to move an amendment.

[Lord Watts (Lab)]

It is the introduction to it that is the problem. Is it not the case that the public support public ownership of the railways, and that the public sector had to take over the east coast line because the private company failed to deliver the service?

[Lord Moylan (Con)]

My Lords, the noble Lord brings me to exactly my point. The benefits of public ownership that the noble Lord was able to refer to were, first, that it is popular and, secondly, that it was in the manifesto. Those two things might be absolutely true, but they are not quantifiable passenger benefits. They are not passenger benefits at all; they are political facts that sit there in the background.

Of course the system has broken down, especially since Covid. I have acknowledged that, and the need for reform. What this amendment seeks to do is allow a degree of variability, non-uniformity, difference of practice, choice, options to the Government, rather than having a single, purely nationalised, purely state-controlled machine that we are told will bring us benefits, one of which, as far as I can make out, will be flexibility.

I really did not discern any others, except that we will not be paying fees to private sector operators—a point the Minister has made several times. We will not, but in the picture of the cost of running the railways the fees are extremely small; they are a tiny percentage of what is involved. If the private sector can continue, post Covid, to generate the sort of growth in passenger numbers that it generated before Covid after privatisation, and we can get back to those happy days, the amount of money being paid to operators would be swamped by the revenues that would be coming in. That is the bar that public ownership has to match and we have no guarantees that it will do so. We are asked to take the whole thing on trust. To that extent, I wish to press my Amendment 5 and test the opinion of the House on it.

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[Baroness Pidgeon (LD)]

My Lords, our Amendment 7 is about rail devolution, discussed extensively in Committee from all sides of the Chamber. We believe it is really important that this first piece of rail legislation from the new Government not only meets their manifesto commitment to public ownership of the railways but allows further rail lines to be transferred to metro mayors and local and regional authorities where there is a strong case, and a desire, by the locally elected members. Local accountability is key.

I remind the House that we have discussed in detail the huge success of the Overground and the Elizabeth line in London and of Merseyrail in the Liverpool region, and the desire for metropolitan areas such as Greater Manchester to deliver a truly integrated public transport offer, branded under one logo and accountable to the mayor. These not only improve transport but contribute to housing and economic growth. I hope that the Minister can offer some stronger words today about future devolution, not just the limited existing devolved lines. The Minister started to outline this in response to the previous group, and I hope to hear more.

We on these Benches want our railway to become a reliable, fast, cost-effective and efficient service for everyone, with local services run in a way that serves the needs of local areas and local communities. I sensed in Committee that the Minister was listening very carefully to the points that were made, especially given his direct experience in a former role of running and expanding the Overground service in London.

I thank the Minister for his time, since Committee, meeting with my noble friends to discuss our amendments further and the assurances that we would like to hear at this stage. I hope the Minister can today assure the House that, as franchises end and come into public ownership, there will be genuine consultation and discussion with devolved authorities on how future services should look, and indeed on how best to run them—including the option for locally run and accountable devolved rail services, in addition to those already devolved. We believe that this will help bring about the transformation of the railway that is the aim of this Bill. I look forward to hearing from the Minister real assurances in this area. I beg to move.

[Lord Moylan (Con)]

My Lords, I will speak to the amendments in this group, particularly Amendment 12 standing in my name. I have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Pidgeon. Both amendments are aiming at the same thing.

I said earlier today that there are a number of crucial things missing from this Bill: one is staff, and we will come to that, and another is the passenger, and we have dealt with that. The third is the local authorities, the regions, the metropolitan authorities and devolution as a whole. On this side of the House we have always had great aspirations for the powers of combined metropolitan authorities and regional government, and for their expansion. We are largely responsible for promoting and establishing mayoralties in Manchester and the West Midlands, and in other places as well, such as Teesside and so forth. We have done that with a view to expanding their powers, and part of that was to take on a greater role in transport. We are seeing the beginning of that in Manchester with the buses, and Merseyrail is operated by the combined authority.

In doing that, we are coming from a successful metropolitan model, London, which already has many of these powers. As far as we can make out, these powers, where rail is concerned—not buses—are effectively to be closed down where they do not already exist. They will not be expanded further—the Minister has been quite clear about that—and we will not see the growth of rail on a metropolitan basis.

My Amendment 12 is simpler than that advanced by the noble Baroness, Lady Pidgeon. It would require a preliminary report that outlines the proposed framework in which Great British Railways is going to communicate with local authorities and regional authorities about passenger railway services. That it is going to communicate is something that the Government have committed to, as the Labour Party document Getting Britain Moving said so. There is going to be a great deal of consultation and involvement on every possible front, but, again, we are told that we have to take all of this on trust—that none of this will become manifest until we see the great rail Bill that will come in the future, with a bit of consultation but without seeing a proper text in advance for pre-legislative scrutiny.

We are trying to get it established now, as a principle at least, that the Government can initiate these communications before that Bill comes into effect. They can set up structures that allow those communications to take place; this amendment requires the Government effectively to do that.

If the Minister cannot agree to the precise amendment tabled by the noble Baroness, Lady Pidgeon, I very much hope that he will at least be able to agree to my amendment, which asks him to get those structures—which he envisages happening—in place as soon as possible, so that local authorities and the relevant regional authorities can be involved.

[Baroness Randerson (LD)]

My Lords, in response to the previous group, the Minister emphasised— I think it was in reply to the noble Lord, Lord Moylan—that the concession model would not comfortably fit national rail services. I accept that, and he made my point for me in making his response. The Government must not be allowed to create a national monolith, because one size will not fit all. Part of the variability that we should celebrate in this House is that which comes with devolution, because it fits local areas comfortably.

The Government have made a great deal of the £22 billion or £40 billion black hole and the shortage of public money. Money is undoubtedly in short supply. The Government have also made a lot of their support for devolution, but if devolution on rail transport services is to flourish then there has to be an alternative source of funding and of investment. Local authorities, even on the big scale of metro mayors, will not have the resources to invest in a pure public sector model.

Our concern in our Amendment 7 is that the Government leave themselves the scope to access or call upon alternative models of funding. That would be very much along the lines of what the noble Lord, Lord Liddle, suggested: some form of local partnership or an alternative structure, other than a pure public sector company. As my noble friend Lady Pidgeon says, we will be listening carefully to the Minister’s reply.

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[Baroness Randerson (LD)]

My Lords, I am very pleased to speak in support of my noble friend Lady Brinton and the significant group of signatories to this amendment. This eye-catching group of people campaign on disability-related issues and have made important points in this debate and others aligned with it. In addition to that amendment, which speaks for itself, there is Amendment 11 in my name and that of my noble friend Lady Scott.

Although the experiences of people using wheelchairs and those who do not have perfect sight and so on are very much at the sharp end of passengers’ experiences, the passenger body generally does not have a good experience in Britain these days. There are huge problems for passengers of every age group and every level of physical ability, so there is a massive job to be done in improving that experience. People would put up with a second-rate experience, perhaps, if they were paying second-level fares, but they are paying premium fares for a very rough deal, and those two just do not sit together.

Amendment 11 seeks to establish a body that will work on behalf of passengers: a body dedicated to passengers’ needs and to creating the kind of experience that those of us who are lucky enough to travel abroad on trains know can be achieved with a perfectly normal, non-premium rail service in other countries. If they can do it, I do not see why we cannot.

I am very pleased to see Amendment 15 in the name of the Minister, and I look forward with great interest to what he is going to say about it, because I hope it will reassure us that the Government’s plans include the creation of a passenger standards authority —or something similarly named—that will look out for passengers. I also hope that the Government will produce a commitment that suits the needs of the signatories of Amendment 8.

[Lord Moylan (Con)]

My Lords, I rise with some humility to make a few comments on Amendment 8, which, of course, is one where the noble Baronesses, Lady Brinton and Lady Grey-Thompson, bring an experience that cannot be gainsaid in your Lordships’ House. I said in Committee that I fully acknowledge—from my own personal knowledge—that the Minister is personally committed to seeing improvements in regard to accessibility. I know that it is a matter of importance to him, but none the less, fine words and parsnips come to mind. Action is needed and we need to see real progress. If Great British Railways offers something in that regard that has not been offered before, that would be greatly to its credit.

In relation to Amendment 11, from the noble Baroness, Lady Randerson, this is another example of what the Government could be doing now. It is already the Government’s policy to have a passenger standards authority; they have set that out in the document Getting Britain Moving. Like so many other things, it is wrapped up in a Bill that we are told we might see in 12 or 18 months. I have expressed in Committee a degree of doubt and scepticism as to whether the Government will meet that target. I hope they will, but these are very complex issues, and it could take even longer than that before we see the Bill. Then, of course, it has to be passed and enacted, and then, as I keep pointing out, it has to be implemented. Change on that scale does not happen overnight; it will take several years for it to be implemented. Where in that timeframe is the passenger standards authority going to stand? Will we see it coming to life at the beginning of the process or at the end? Could it be four or five years away before it comes into existence? We have no idea.

The amendment from the noble Baroness, Lady Randerson, would at least say, “This is one thing you can get started on now. You can get it up and running very quickly and it could be something that passengers could benefit from at a really early stage”. I really do not understand why the Government cannot accept, if it turns out that is the case, what the noble Baroness is proposing.

I have no comment on Amendment 15 in the name of the Government except to say that it is, of course, entirely unobjectionable from our point of view.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I will speak first to Amendment 8, which was tabled by the noble Baroness, Lady Brinton, and is supported by the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Holmes, and my noble friend Lord Blunkett, and to Amendment 15 which is tabled in my name. I thank the noble Baronesses for their amendment and for the productive discussion we had last week. As I said in Committee, I feel personally ashamed of the industry that I am so familiar with as so many deficiencies come out of the way that it treats passengers, particularly those in need of some assistance. Many of those deficiencies are a result of the fragmented structure of the privatised railway.

The noble Baroness, Lady Grey-Thompson, has shown me and described to me the plethora of apps that you need to buy tickets, the differences in how they work, what they do and whether they enable you to book a seat, a wheelchair space or a ticket for the whole of your journey. I am shocked by it, and I cannot bear for her to show me much more, because all she would do is show me more apps that work differently from those that she has already shown me. We cannot and should not tolerate that. The lack of consistency in train design has been highlighted today, as has the lack of reliable, accurate information about whether crucial facilities such as lifts and accessible toilets are working, and there are other issues.

Looking ahead to the wider railways Bill, establishing Great British Railways will provide the opportunity, for the first time in three decades, to begin to take a coherent approach to these matters. Some of them can be done quickly, some of them we can start now and some of them will, by virtue of the longevity of rolling stock and structures, take a long time, but if we do not start, we will never achieve them. However, I also agree that the noble Baronesses and the many disabled passengers on whose behalf they speak should not have to wait for Great British Railways to come along before we start to improve things, so, as I discussed with the noble Baronesses last week, the Government have tabled an amendment and we also have a number of verbal commitments that I shall place on record in the House today.

First, the Government will work with the disabled community to develop and publish an accessibility road map that will explain the actions we intend to take to improve things for disabled people or others requiring assistance in advance of GBR being set up. We are not waiting for it to do that. The road map will suggest how the Government can work with the industry to prevent situations like those we have heard about in this House so far. As discussed, it will cover important matters that the noble Baronesses have raised with me. They include measuring and reporting on lift reliability and maintenance, providing confirmation and clarity about the legal obligation of operators to provide every disabled person with assistance when travelling whether or not a pre-booking has been made, and improving consistency in the service provided to disabled people across the board. We will engage with the disabled community on the development of the road map to ensure that when it is finished, it works for them.

Secondly, I commit before the House that this Government will provide the funding to develop phase 5 of the passenger assist app. As the noble Baroness, Lady Grey-Thompson, knows from our previous discussions, I have made it clear and will continue to make it clear to those involved that the development of this next phase of the programme must be done in consultation with the noble Baronesses and representatives of disabled people to ensure that it delivers the assistance that people deserve and addresses their needs.

Finally, we have tabled Amendment 15, which is before the House today. It amends the Equality Act 2010 to make it clear that publicly owned train companies are subject to the public sector equality duty. Although it is the Government’s view that the public sector equality duty already applies to publicly owned train operating companies, we are concerned that that is currently not as clear as it needs to be. By adding them to the list of public authorities in the Act, we will ensure that there can be no mistake. Network Rail and Transport for London are already named in the Act, but train operating companies previously were not, which is something that, if this amendment is agreed, we will remedy.

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[Baroness Randerson (LD)]

My Lords, I have one very brief question for the Minister, following the warnings by the noble Lord, Lord Young. Have the Government looked at this from the point of view not just of what I would call the finished product of the nationalised railway system but of how the categorisation of a mixed economy would work? We, the nation, will be in a situation of a mixed, some-and-some economy for a significant number of years to come.

[Lord Moylan (Con)]

My Lords, my noble friend Lord Young sought throughout Committee, with great forensic precision and courtesy, to get answers to the sort of questions he has been raising today, and I have sought, with rather blundering efforts, to get answers to very similar questions. Here we are on Report, still asking questions that the Government have consistently failed to answer throughout. The reason is that, as I said earlier today, this is a rushed Bill that has not been thought through properly as to its broader consequences. These are consequences not to be dealt with in a future Bill coming down the road but that flow directly from the measures in this Bill. I very much hope the Minister can give some account of them today and explain how the Bill and this nationalisation will affect the public finances in what I call, in my blundering way, balance sheet terms.

There are other items. Since we discussed this Bill in Committee, we and the country have had the body blow of the employers’ national insurance increase delivered by the Chancellor of the Exchequer. Amendment 19 in my name is there to probe what the consequences of that will be for Great British Railways. Will there be a very significant increase in staff costs on the railways as a result, and what impact is that likely to have on the revenue expenditure that the railways can undertake?

In Amendment 18, I ask for clarity on something that also flows directly from the Bill—it is a direct consequence of it, and not something to be dealt with in a future Bill—to do with the harmonisation of staff wages, terms and conditions as they transfer from diverse employers in the private sector to a single employer owned by the state. Drivers and other staff are employed by the railway companies on terms agreed with trade unions but not necessarily the same terms as between one company and another, so drivers’ pay, terms and conditions will vary somewhat between one company and another. The Government have resisted saying, at any point, what they will do about this if they are a single employer. Of course, theoretically, each franchise as it falls due will be placed in a separate company from the others, so it is perfectly possible, legally, for it to have a separate agreement with its staff, different from that which another nationalised company has with its staff, replicating the current arrangements, if it chooses to do so. Is that the Government’s intention, or is there an intention that wages, terms and conditions should be harmonised? If the latter, do the Government imagine that they will be harmonised on the basis of the lowest common denominator, the highest common denominator, or some denominator that might be found in the middle as a sort of average? This is a direct consequence of the Bill, but nothing has been said by the Minister about it.

I come back to the question of staff consultation. There has been no staff consultation about the change of employer. The idea that the Minister might wander around Waterloo station randomly consulting drivers as he accosts them, which he held out when he spoke earlier, is an attractive and enticing one. That is to be encouraged—there are not enough Ministers going around randomly accosting staff whom they employ in the public sector—but it hardly constitutes what might be called formal consultation in industrial relations terms.

I hope I am forgiven for saying this, but earlier I saw the Minister having a quiet chat in a break for a Division with his brother, the noble Lord, Lord Hendy, with his great industrial relations experience. Who knows? Perhaps he was pointing out to the Minister that normal industrial relations consultation requires a little more than simply wandering around and chatting to the staff on the station as you meet them, welcome though that is.

I very much hope that by now, with all the warning that the Minister had about these issues in Committee, he will be able to give an account of himself that will satisfy the legitimate questions of my noble friend Lord Young, and will be able to explain to us what his employment and industrial relations strategy is as a direct consequence of the nationalisations that will take place under the Bill.

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Tabled by

[Lord Moylan]

12: Clause 2, page 3, line 32, at end insert—
“30D Preliminary Report on Communication with Local Transport AuthoritiesThe Secretary of State must, within six months of the day on which the Passenger Railway Services (Public Ownership) Act 2024 is passed, publish a preliminary report outlining the proposed framework for communication between Great British Railways (GBR) and local transport authorities across the United Kingdom.”

[Lord Moylan (Con)]

My Lords, this amendment deals with devolution and requires the Government to start work on that in the next few months and explain how they are going to do it. One thing that is new today, as far as I am aware and I have listened fairly carefully to all parts of this debate, is that the Minister has said that he intends to issue his consultation document before the end of this calendar year. Did my ears hear that correctly?

[Lord Hendy of Richmond Hill (Lab)]

I said I hoped to.

[Lord Moylan (Con)]

On the basis of that “hope”, which I imagine the Minister will expect to be held to—and which I will be holding him to—I am prepared not to move this amendment, because it will simply be timed out by that consultation document which would replace it, so to speak.

Amendment 12 not moved.

Moved by

[Lord Moylan]

13: Clause 2, page 3, line 32, at end insert—
“30D Statement on the impact of the Act on rail freight targetThe Secretary of State must, within six months of the day on which the Passenger Railway Services (Public Ownership) Act 2024 is passed, make a statement in each House of Parliament outlining how the Government’s plans to achieve a 75% increase in the volume of rail freight in the United Kingdom by 2050 are affected by the provisions of that Act.”Member's explanatory statement
This amendment would require the Secretary of State to make a statement outlining the Government's plans to take all reasonable steps to achieve a 75 per cent increase in the volume of rail freight in the United Kingdom by 2050.

[Lord Moylan (Con)]

I am afraid the case is rather different in relation to Amendment 13, which relates to freight and requires the Government to state not simply that they intend to meet the 75% target for the increase in freight volumes but how they intend to do so. It remains wholly mysterious how the Government are going to do this, and it is time that that veil should be drawn back and we should be allowed to know. This amendment would require them to do that. I wish to test the opinion of the House on Amendment 13.