Lord Moylan
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Railways Bill
Lord Moylan ExcerptsThursday 10th September 2026
(1 month, 2 weeks ago)
Grand CommitteeRead Full debate Railways Bill 2024-26 View all Railways Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 25-II(a) Amendments for Grand Committee (Supplementary to the Second Marshalled List) - (10 Sep 2026)
Lord Lansley (Con)
I think it might fall to me to speak next, if my noble friend does not want to speak to his amendments at this stage.
Lord Moylan (Con)
My Lords, before I turn to the substance of this group, I would like to say that I received this morning from the Minister, as I imagine other noble Lords have, a letter setting out certain corrections to statements that he made on Tuesday. I have not had the opportunity to study that, but I hope that there will be an opportunity at a later stage in Committee, if necessary, to come back and question the noble Lord on the points made in that letter.
However, I also yesterday received an email from a group calling itself the Association of British Commuters. It referred to the debate that we had on Tuesday concerning what constituted in this context a wholly owned subsidiary of GBR and whether that was consistent with some sort of public/private partnership for the purpose, for example, of developing land. This was not a strange email; it was very coherent, sensible and well written. The thrust of it was that not only did noble Lords on these Benches get it all wrong—if I may say so to my noble friend Lord Lansley; if he has not received the email, I will send it to him—but so did the Minister.
I have two questions before I start on this section. First, has the Minister received this email? If not, I am very happy to send it to him. Secondly, does he expect to return to the Committee at the earliest opportunity to make corrective statements? Clearly, if he has not seen the email, he will not be able to answer the second question, because his officials will not have had the chance to advise him, but he is under an obligation to return at the earliest opportunity if he has something to correct, as he has today—I am giving him that opportunity. When I sit down, I will send him the email. If he tells me at the end that he has not received it, I will very happily send it to him, as I will to my noble friend Lord Lansley.
I turn to the group of amendments that we have been debating. I shall speak to—I shall not read out the numbers—all the amendments that I have tabled in this group, which are quite a lot. I shall also speak briefly on Amendment 27 on behalf of my noble friend Lord Grayling.
These amendments go to the heart of the devolution agenda. None of us is satisfied with what the Bill contains on devolution to local authorities, strategic authorities, regional authorities—whatever they are called. I have been thinking about why none of us is satisfied and what the fundamental flaw of the Bill is in this regard. The answer is that there is no devolution in it. What the Bill does is give those authorities the right to request things from Great British Railways—as I said on Tuesday, I find the phrase “right to request” quite objectionable in a free country, because we all have a right to request things of Ministers as part of our democracy. In other words, they have the right to ask to become customers. If those things are granted to them, they will have those services provided by Great British Railways and they will make payments towards them, if necessary, to justify the carriage of passengers on that particular route. All they have, therefore, is the right to request to become customers. There are no devolved powers in any of this. There is no devolved running of railways, because that would be inconsistent, I suspect, in the Minister’s mind with the single directing brain that is going to be controlling the railways. So there is very little.
The amendments that I have tabled fall into two groups. Two of them relate to devolution in general, and the second group relates to TfL in particular. To start with TfL, I need to start by saying that although it is not a current interest, as many noble Lords in the Room will know, I used to be deputy chairman of TfL and indeed worked closely with the Minister during that time. The Mayor of London has made it clear that he wants further devolution of rail services to TfL. In fact, this is a process that started when I was deputy chairman of TfL and the Minister was commissioner, and very successful it has been. Lines that were, in effect, abandoned became busy commuter routes, with very little investment—just through good management, making the stations attractive and having some new trains. It has been a huge success. The London Overground is one of the huge rail successes that this country has achieved in the past few years—all of it run on a concession model, incidentally, involving the private sector or external train companies of one sort or another.
The Mayor of London wants more of that—that is understandable. I think Londoners want more of that. The Mayor of London now has a high-powered friend in Downing Street. The Prime Minister has said that power has been hoarded in SW1 for too long. He wants power carried to every postcode in the land—et cetera—and the Government will be redistributing power. This Bill does not redistribute power to anybody in local government. So I would hope that the Minister would have changed his mind in recent weeks and would be extremely sympathetic to these amendments.
Amendments 28 to 30 seek to ensure that the Secretary of State remains properly involved in arrangements between GBR and TfL, rather than allowing those relations to be determined solely within GBR. This is the bear in the room again. GBR is going to be so huge. It will make all the decisions. Everybody else is just a taker of decisions by GBR, they are not participating in them.
Amendment 159 seeks to protect existing TfL and London Underground arrangements and would ensure that they could not simply be displaced without proper process and consultation.
Amendment 301 makes the principle even simpler: where GBR is making a decision affecting TfL, it should inform TfL and allow TfL itself to determine whether the decision is sufficiently significant to require consultation. That seems entirely consistent with the Prime Minister’s philosophy. The same principle lies behind Amendments 23 to 25, 156 and 297 in relation to mayors and local government more widely, to which I now turn.
Amendments 23 and 24 would give greater flexibility for railway functions to be exercised locally and for the necessary financial arrangements to flow in either direction. At the moment the Bill allows GBR to collect money from local authorities. Why should it not be the other way round? What if GBR makes a profit on a line? Why should it not pay money to the local authority? Why is everything so one-sided in the Bill?
Amendment 25 would provide an independent route to the ORR where agreement cannot be reached. There is no way in the Bill of resolving disagreements. So let us provide one. Let us have an appeal to an independent ORR. It is not that I think the ORR is tremendous, but it is currently the only available appeal body. If the Minister says he is happy to have an appeal but would like a different structure, we would be open to discussing that, but let us have an appeal route so that disagreements can be resolved independently.
Amendment 156 would allow mayoral and combined authorities to procure local passenger services through concession agreements, including using private operators where that offers the best solution. Currently they are limited to using GBR to provide the services. What if GBR is no good? I know that GBR is going to be managed beautifully and nothing will ever go wrong in the utopian vision we are looking forward to, but what if it is not actually very good? What if people are constantly on strike? What if the management is sloppy? Why should you not be able to turn to a private train operator to manage your local service? This is not a question of track access or timetables, because they have been agreed, but why would you have to use GBR to provide these services if you are genuinely enjoying devolution?
Amendment 297 would require GBR to notify a mayoral combined authority before taking a relevant decision. I accept the point made by my noble friend Lord Lansley that that terminology might be improved, but I am not entering into that issue at the moment. That would allow the authority itself to judge whether the decision is sufficiently significant to require consultation. Why should GBR be the body to decide whether something should be consulted on, when it is the local authority that has the knowledge of how sensitive it might be with the local communities that could benefit from consultation?
These amendments test how far the Government intend to follow through on the Prime Minister’s policies. Do they genuinely trust mayors and local authorities to shape local services? Do they support further rail devolution to London where TfL can demonstrate that it would improve services? Will they ensure that GBR becomes a partner in genuine devolution—not simply acquiring local authority customers—rather than just a national body through which decisions are centralised? Given the new Prime Minister’s stated agenda, I hope we will see a different approach from the Minister for the first time.
The amendments tabled by the noble Lords, Lord Blunkett and Lord Berkeley, and my noble friends Lord Lansley and Lord Grayling are at the heart of many of the issues that I have raised in this group. They also sit squarely with what the Prime Minister himself advocated when he was Mayor of Greater Manchester—a song that he has continued to sing, on the whole, since he became Prime Minister, about the importance of devolving power, giving local leaders greater control over transport and allowing places to shape growth around their own priorities. It is time for the Minister to step up, get real and get with the swing of where, we are told, Burnham’s Britain is going.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, before we move on, I return briefly to a point raised in Committee on Tuesday on Amendment 146, regarding the long-term rail strategy and its relationship with devolved railway responsibilities. I was less than clear on this issue when we discussed it previously and thought it would be helpful to make a point of order to provide clarity and correct the record.
For clarity, the Government consider that Clause 15 is correctly drafted and accurately reflects the devolution settlement. The Secretary of State’s long-term rail strategy will cover Great Britain. It will cover all of England and Wales and will address the railway in Scotland with regard to reserved matters only. Reserved matters include issues such as cross-border services, technical standards and railway safety and security. Scottish Ministers have devolved responsibility for matters such as Scottish passenger services and Scottish funded infrastructure. Accordingly, Clause 15(3) prevents the long-term rail strategy making provisions about functions of the Scottish Ministers, who will cover those matters in their own strategy.
I hope that explanation is helpful. The key point is that there is no inconsistency between describing the strategy as Great Britain-wide and providing an appropriate carve-out for devolved Scottish functions. I also reassure noble Lords—
Lord Hendy of Richmond Hill (Lab)
I am grateful to the noble Lord. We thought that we had been saved by the bell, but we were not, so I thought that it was right to put it right.
I should say to the noble Lord, Lord Moylan, that to my knowledge I do not have an email from the Association of British Commuters, although I do get several emails a day. If he sends it to me, I shall talk to officials about what it suggests. I think that is the most I can say.
Lord Hendy of Richmond Hill (Lab)
On group 1, of course this matter is of significance to this Government, with a new Prime Minister, and I firmly believe that the Bill already empowers mayors in local areas. I am clear that Great British Railways will not work unless it works for and with mayors and local communities.
In answer to the noble Baroness, Lady Pidgeon, who quoted me, I stand by what is said. This is absolutely not a tick-box exercise.
I turn to Amendment 22A in the name of my noble friend Lord Blunkett, to which the noble Baroness, Lady Pidgeon, has kindly spoken today. I absolutely agree with him and with the noble Baroness that the partnership approach that the Bill sets out must be effective. GBR must engage with partnership offers seriously, and the bar for GBR to reject a partnership must be exceptionally high. As we are aligned on the intent behind the amendment, which she described as the principal amendment in this group as it covers all circumstances, I commit to taking it away and I shall see what can be done after this debate.
I turn to Amendments 147 and 156. The Government absolutely support further rail devolution where it is in the interests of passengers and the wider rail network. That is why the Bill already provides a route for passenger rail services to be devolved through exemption from designation by the Secretary of State in Clause 28. Where services are devolved, mayors already have flexibility to choose their approach to securing passenger services and may secure them via a concession contract, including to the private sector, if they so wish. The Bill does not change that. TFL, as the noble Lord, Lord Moylan, describes, operates on precisely this basis. There is therefore no need to duplicate the existing devolution provision in the Bill, which already achieves that intent in full.
On Amendments 23 and 24, Clause 5 is already intended to support local commissioning arrangements: it enables mayors to contribute funding where they wish to secure services or improvements that reflect local priorities and go beyond the national railway offer. This gives local leaders a mechanism to invest in additional rail outcomes for their area where they choose to do so, providing the local input that we know is so important for enhancing our communities. The details of these arrangements, including revenue-sharing options, will be agreed separately from legislation via collaborative partnerships between GBR and mayors. Work on developing this model has already begun, using Greater Manchester as a pathfinder—I am going to meet the new mayor of Greater Manchester tomorrow.
The Government absolutely support greater local influence over rail services, but allowing mayors to run rail services is a financially significant decision, with safety and public interest impacts; that is why it is right that the current process in the Bill for devolving services to local leaders remains the route that is used for this. That route is well understood, familiar to industry and proven effective. Allowing mayors to run GBR services outside of the usual process is not necessary and does not better serve local communities.
I turn to Amendments 26, 64, 304 and 333. The Bill is focused on mayoral strategic authorities to reflect their growth across England and the role that mayors can play to convene local partners and tackle regional challenges. Mayors have the most far-reaching and flexible powers; therefore, this level of authority is of the appropriate scale and capability to integrate rail with wider public transport, enabling them to engage effectively with Great British Railways.
Furthermore, as outlined in the Cabinet statement Rewiring the State, published in July, the Government consider that mayors who are directly accountable to the residents who elect them can provide the best governance for their communities. As a result, the suite of powers available to areas with mayors will be commensurately greater, recognising the role that they play as leaders in their regions. However, this is not to say that other levels of local government will be excluded from engagement with Great British Railways, and I take the point that it is important that no local authority is left out, as indeed the Prime Minister said a few days ago. The plan is for all tiers of local government to benefit from local GBR business units, and some existing authorities have collaborated well with the existing structure, including Devon, with several new stations, and, recently, Cornwall, with the Mid Cornwall Metro.
Our approach does not intend to exclude anyone from working with the railway, but we think it is sensible to use mayors as a focal point for powers, responsibilities and representation in their local areas. That said, I am happy to see if there is anything we can do outside the Bill to reassure foundation authorities that their views will be properly considered, and I will reflect on that further.
Lord Moylan (Con)
My Lords, I think that illustrates a point. The Minister talks of devolution, but everything is flowing one way, so I will come back to this point. It arose in relation to Scotland—and, I think, also Wales—on Tuesday. GBR will be obliged to consult with local authorities on matters of significance. Significant is the word. But GBR will decide what is significant. Amendments I tabled that would allow the local area, or, in the case of Scotland, Scottish Ministers, to decide what is significant for them were brushed aside on the grounds that it would be far too difficult, they would have to review hundreds of decisions and could not possibly do that.
Of course, GBR has to review hundreds of decisions to decide whether they are significant. In local authority terms, one picks out very quickly what the significant decisions are because one has the local knowledge of what will cause a terrible fuss, which GBR does not have. Does the Minister see that the Bill cannot survive claiming a devolution mandate on the basis of this mentality, which keeps coming back? The Minister wants to be a proactive partner but, given GBR, I find that a rather terrifying thing, because it suggests that the other partner will be managed the whole time by GBR; then, at the end of the process, it will think it had a successful partnership. It is the wrong mentality, and it has to change.
Lord Hendy of Richmond Hill (Lab)
I think the noble Lord is in a different place in his imagination of this. These proposals will generally originate with GBR. Its structure, which I described on the first day in Committee, will be organised locally and regionally and so it will know how those proposals are going to affect local communities.
There will be timetable changes, station improvements and infrastructure improvements. It is much easier for GBR to identify those in relation to the local and combined authorities that it deals with than it would be for them to sift through what, sadly in many cases, is railwayese in describing what is going on. I do not agree with the noble Lord. I believe this will work and that it will be a genuine partnership with those authorities.
Baroness Pidgeon (LD)
My Lords, these amendments cover directions and guidance from the Secretary of State. They push for greater transparency around those, which is something that we really support. Information that has supported key decisions and directions should be placed in the public domain. It is really important that Great British Railways develops an open culture right from the start and that it is clear where and how decisions have been made and on the basis of what evidence. The amendments in the name of the noble Lord, Lord Grayling, focus in particular on any Secretary of State directions relating to the level and structure of fares, which are, I think, of great interest to everyone. Clarity on these points from the Minister would be helpful as we continue our scrutiny of the Bill.
Lord Moylan (Con)
My Lords, I shall speak to Amendment 37 in my name, which is a probing amendment. It would limit the power of the Scottish Ministers to issue directions to GBR to circumstances where a KPI has been missed or performance has not been up to snuff.
I do not advance that because I think it is an appropriate thing to put in the Bill; it is a question of probing when the Government think the powers should be used, because it is not clear. We are meant to have a single directing mind—GBR is meant to be the single directing mind—but, as I said on Tuesday, we have several other directing minds here, too. One of them is the Secretary of State, who can issue directions—after all, directions are exactly what a directing mind would be expected to produce—but, now, we also have the Scottish Ministers issuing directions, and it is not absolutely clear that they cannot overturn the directions of the Secretary of State. I want to know what the powers can be used for, how clashes and contradictions can be avoided, and how all this is coherent with the Minister’s claim that he is creating a single directing mind in the shape of Great British Railways.
I wish to comment briefly on the other amendments in this group. My noble friend Lord Grayling has tabled Amendments 34 to 36, to which I have added my name. It is an important constitutional principle that directions issued by the Secretary of State are not only published but laid before Parliament. The Minister will say, “You can’t possibly expect MPs to read these things. They haven’t got time. They might be full of railwayese. What is the possible advantage of putting them in front of MPs?”, but I think that MPs and Peers would value having these important directions put before them so that the Secretary of State can be held accountable for his or her actions in the management of the railways.
My noble friend Lord Lansley’s Amendments 32 and 33 are also entirely reasonable. Where relevant functions have been delegated and the Secretary of State proposes to give GBR directions affecting infrastructure, capacity, timetables, charging or performance in Scotland or Wales, surely it is right that the Scottish or Welsh Ministers are consulted.
Lord Hendy of Richmond Hill (Lab)
My Lords, I am grateful to noble Lords for their contributions to this group.
On Amendments 32 and 33, tabled by the noble Lord, Lord Lansley, access to railway infrastructure is a reserved matter. It is important that access and timetabling decisions make sense across the entire rail network; therefore, there must be one central decision-maker, to avoid fragmented and disparate decision-making, which increases delays, cancellations and disruption. However, GBR must consult Scottish and Welsh Ministers before issuing, revising or replacing its access and use policy. It must consult them on other decisions if those decisions may affect their interests, and must take into account their transport plans when making access decisions. There are therefore already adequate safeguards for devolved Governments in relation to the access regime.
Lord Moylan (Con)
On my Amendment 37, if the Minister insists on responding solely in the literal sense to explicitly probing amendments—seeking in this case to work out how a conflict in directions between Scottish Ministers and the Secretary of State, for example, might be addressed—all he does is encourage further amendments to be tabled to the Bill to bring the subject back so that it can be debated. One has to keep finding wording that will make that happen. I genuinely would like to know how he sees these multiple direct laws, producing directions, operating together. Do they collaborate, what happens in the case of contradictions, and so forth? These are questions to which Parliament is entitled to an answer.
Lord Hendy of Richmond Hill (Lab)
I believe I did answer the noble Lord: the memoranda of understanding between Scottish Ministers and this Government, and between Welsh Ministers and this Government, set out the processes by which these things will be co-ordinated. Were there to be any real difficulty in the circumstances he is describing, we would not have been able to get as far as we did in drafting the MoUs, which we have done, and in the agreement of Scottish and Welsh Ministers to the provisions of it.
Lord Moylan (Con)
My Lords, when I was deputy chairman of Transport for London, I found London TravelWatch a rather annoying body. I suspect that when the Minister was the transport commissioner he found it even more annoying than I did, because of course it was there to complain as well as to make suggestions for improvements, so I can understand that there may well be a level of resistance to the suggestion from the noble Baroness, Lady Pidgeon. However, I have added my name to her amendments because, objectively speaking, she is absolutely right: this is a very important statutory body. It should be treated on a level footing with other transport users’ committees. I can see no possible grounds for objection that the Minister may have. I suspect this will be one of the concessions he makes on Report and, if he does not, it will be inserted in the Bill whether he likes it or not. I look forward to hearing him say that the noble Baroness is spot on about this and that he willing be able to accept, if not her amendments as drafted today, at least amendments in lieu to the same effect that he might produce in the near future.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness, Lady Pidgeon, for these amendments. I should directly contradict the noble Lord, Lord Moylan: as the commissioner of transport for Transport for London, I found London TravelWatch a very constructive body. I enjoyed dealing with it; there were other people we dealt with who were far more difficult.
Lord Hendy of Richmond Hill (Lab)
Some of the board.
As the noble Baroness says, London TravelWatch plays a vital role as the statutory watchdog for London, championing the interests of people who travel across all modes of the city’s integrated transport network. That is precisely why the Bill will strengthen its rail powers to ensure there is consistent passenger advocacy across Great Britain.
However, the passenger watchdog will have a new role in the reformed railways which will be different to the role of London TravelWatch. It will go beyond being solely a watchdog and passenger champion. It will have a central role in holding rail operators, including GBR, to account by setting consumer standards for the industry and monitoring operator compliance with them. It would not be appropriate to have two different bodies setting standards, which is why the watchdog will work closely with London TravelWatch to ensure that standards applied across all operators reflect its expertise. That is why London TravelWatch is treated differently in the Bill and why GBR, the Secretary of State and the Office of Rail and Road must consult only the watchdog on certain matters such as the licence, the long-term rail strategy and GBR’s business plan. London TravelWatch is not expected, for example, to have any role on the licence.
That said, I can reassure the noble Baroness that I absolutely agree that London TravelWatch must continue to have a voice on matters that impact the London transport network, and indeed the wider scope of London TravelWatch that she referred to. I understand that Transport Focus, the future passenger watchdog and London TravelWatch will update their existing collaboration agreement to reflect changes in roles. I expect this will include additional expectations around consultation and engagement where matters will affect London and the other services which London TravelWatch oversees. For these reasons, I urge her now to withdraw her amendment, though I am happy to discuss this with her further after Committee.
Lord Lansley (Con)
My Lords, I have two amendments in this group: Amendments 65 and 73. Rather than the broader issues of funding, mine are much more nitty-gritty questions about the transparency of the business plan and how the funding processes for Great British Railways are to work.
Amendment 65 is to Schedule 2, which is that part of the Bill where Great British Railways shows us in its business plan how its money is received and allocated towards activities. If I remember correctly, we are in that bit where it has to set out various things. We are at line 27 on page 71:
“The plan must set out … the activities Great British Railways proposes … the costs of carrying on those activities, and how Great British Railways proposes to meet those costs”.
Strictly speaking, all the things that I am asking for in Amendment 65 might be comprised within that.
This is an opportunity for us to be clear about what Great British Railways should do. In a separate group I will come to another issue related to the relationship with local government bodies. In this particular instance, there would be important transparency in Great British Railways being required, when setting out its business plan, to show what contributions are received by GBR itself from GBR companies, presumably by way of profits or revenue remitted to GBR for this purpose, and vice versa: how much is being paid out through GBR companies and how much is being received. Amendment 65 is for that purpose: where the activity is carried out by a GBR company, the contributions received from or provided to GBR in relation to those activities. I hope that is a straightforward transparency issue when the business plan is being presented. A good plan would do that anyway; it is just a case of trying to be clear about that now.
This affords me the opportunity to say something to my noble friend Lord Moylan. We discussed on Tuesday the question of GBR companies, and he returned to this issue and chastised me, saying that I was inaccurate. I do not think I was as inaccurate as he might imagine.
Lord Moylan (Con)
I would never dream of doing that. It is inconceivable that I should do that. I drew to my noble friend’s attention an email that I had received that said that he had made a mistake and that the Minister had also made a mistake. I gave no opinion myself on that. It was very well argued, and I shared it with the Minister and the noble Lord. In writing to the noble Lord—I hope he has received that by now—I explicitly said that I did not know whether it was right or wrong, but I wondered whether he wished to make a comment. Of course, the noble Lord, Lord Lansley, may wish to make a comment at any time he chooses, but not a comment, I hope, that is intended to be a rebuttal of any chastisement, or even a mild criticism, suggested by me.
Lord Lansley (Con)
I thank my noble friend for that correction. He has shared the email with me. I think it is worth putting on the record the point, made in that email, that it is important to distinguish between joint ventures on the one hand and corporate activities of companies on the other. However, the point of the debate on Tuesday was that I was seeking to establish under the legislation that GBR companies do not have to be wholly owned. Hansard will show that the noble Baroness, Lady Jones of Moulsecoomb, was seeking to establish that GBR companies are required to be wholly owned. That was the simple debate.
As I understand it, Clause 99 of the Bill makes it clear that GBR companies are a subsidiary of GBR, and a subsidiary under the Companies Act does not require to be wholly owned. If the Government had wanted GBR companies to be wholly-owned subsidiaries, they would have said so. So, as far as I am concerned, it is a subsidiary and, as we know, under the Companies Act, a subsidiary is a matter of control, not of complete ownership. As far as I am concerned, I got what I wanted out of that debate, which was my assurance that GBR companies are not required to be wholly owned.
Lord Moylan (Con)
My Lords, we are now redebating what was debated the other day. However, since there was an element of confusion, the noble Lord has accurately characterised the difference in position between himself and the noble Baroness, Lady Jones of Moulsecoomb, but it was in the context of an important debate about whether GBR would be able to carry out partnership—I use the word loosely—arrangements with private sector developers for the development of land in which GBR had a stake, with a view to achieving things like more housing or whatever it might be. Of course a subsidiary does not have to be wholly owned, since it is a question of control, so there can easily come a point where a joint venture company might not be controlled by GBR, and the question then is whether those arrangements would still apply.
The fundamental issue in the debate as I saw it—I entirely understand what the noble Lord is saying—is whether the structure proposed by the Government in the Bill inhibits what we would all agree are desirable developments that could take place using GBR assets working with the private sector. I heard the Minister give assurance on that, and of course I accept that, but I was merely advancing this to him because the suggestion was that confusion had arisen about joint ventures, subsidiaries and wholly-owned control in the course of debate, and that the Minister had fallen into that confusion, along with others. Therefore, I was giving him the opportunity to say whether that was in fact the case, although I do not expect him to do so today because he has only just had the email.
Lord Lansley (Con)
I think that was an intervention. I can only speak for myself, but I do not think I am confused now. The Bill does not inhibit this from happening in future and that is a satisfactory position for us to have reached. That is relevant to this debate in that my Amendment 65 is about the relationship between GBR and its companies, and financial transactions—the resources provided to or the resources received from GBR companies—ought to be explicit in the business plan.
I turn to Amendment 73. Now we really are in a happy position. It is many years since I was responsible for the public expenditure of a government department. I do not mean as Secretary of State; I mean as the official responsible. Knowing what powers one is using in relation to spending money is important. Amendment 73 is a probing amendment but I have used the structure of saying that the same activity should not be funded out of both the powers in the Bill, where financial assistance can be provided by the Secretary of State to GBR, and Section 6 of the Railways Act 2005, which noble Lords who know these things better than I do will remember is a broad-ranging power to provide financial assistance to GBR. I want to establish at this point—we might return to it at a later stage to see whether it is a satisfactory position—which GBR activities will be in receipt of financial assistance from the Government under the Section 6 power that exists now under the 2005 Act, or the financial assistance to be provided under this legislation. We need to avoid the confusion of two different powers providing financial assistance to the same activity.
Baroness Pidgeon (LD)
My Lords, what an absolute pleasure it is to hear from my railway expert noble friend Lord Bradshaw. It is such a delight that he has been able to join us in Committee in person today and to contribute to our debate, particularly after he had a significant birthday yesterday.
Funding certainty is absolutely crucial for the railway going forward. Being able to plan investment and work properly, and deliver it in a timely manner, is essential. My noble friend Lord Bradshaw’s amendments try to show the seriousness of changing mid-programme railway investment and putting in additional steps for any material change to an agreed funding settlement by involving the ORR for an independent assessment, which should be published. This would ensure transparency and expert assessment if funding for the railway is changed, particularly mid-year.
Amendment 65 in the name of the noble Lord, Lord Lansley, would require more transparency. That is welcome, as was the contribution from the noble Lord, Lord Harper. In fact, it is notable that he has spoken on every group apart from the one with solely my amendments on London TravelWatch. I will not take that personally, but I say, “Once a Secretary of State, always a Secretary of State”. I look forward to the Minister’s response.
Lord Moylan (Con)
My Lords, I have a number of amendments in this group: Amendments 55, 56, 70, 78 and 86. I start with Amendment 78. Paragraph 15 of Schedule 2 states:
“Financial assistance given to Great British Railways or a GBR company”
primarily to enable it to carry out its infrastructure functions under Clause 3(1)(a)—this is one of the general functions that we discussed on Tuesday—is not to be treated as
“a subsidy for the purposes of the Subsidy Control Act 2022”.
This is a probing amendment to find out the justification for that. I suspect that the justification is that it is not treated as a subsidy currently and, therefore, the Bill simply carries forward the existing situation. I wonder whether that is appropriate.
The Subsidy Control Act 2022 exists for a purpose and requires that public authorities should consider whether subsidies are proportionate and necessary, whether they distort competition or investment, and whether their benefits outweigh their adverse effects. I wonder why the management, renewal and operation of infrastructure on railways should be specifically exempt from those requirements. This exemption does not apply to the other general functions listed in Clause 3, but it applies to this one. I do not want to be hypercritical, because I know that these things are very difficult and there are often excuses, but why should this condition not apply to these functions—particularly when there is a general lack of confidence in these functions being carried out with great efficiency at the moment and when they always seem to be very expensive? Is there a reason other than simple inertia? I do not think that inertia is enough.
The Act also requires safeguards on transparency, the scrutiny of particularly significant subsidies by the Competition and Markets Authority, and ultimately the ability to challenge subsidies decisions via the Competition Appeal Tribunal. Noble Lords may say, “All of this is going to happen. It’ll be GBR doing stuff for GBR rail, so how does competition come into this?” But, as noble Lords know, a great deal of maintenance activity on the track is carried out by private companies contracted for that purpose; that may upset the noble Baroness, Lady Jones, but there we are.
As far as I know, there is no indication in the Bill that that will change, and so I understand why the provision of subsidies might raise competition concerns. There is an appropriate authority here that can address them. That is my first question. It is a probing amendment, but I would like to know why these potentially very substantial sums should be outside the regular framework.
In Amendment 70 I am simply asking for the business plan to be published. I think it is important that people should be able to see it. It is possible the Minister will say that he has every intention of publishing the business plan; TfL publishes its business plan, and most other similar organisations publish their business plans. As far as I can see, there is no statutory obligation in the Bill—I may have missed it—to publish the business plan each year or period to which a new business plan would apply.
Amendments 55, 56 and 86 are about building financial discipline, both in the Government and elsewhere. Here, perhaps, I contest the comments made by my noble friend Lord Harper and will say something about the amendments tabled by the noble Lord, Lord Bradshaw. There is a serious issue here and I do not think that the noble Lord has got it right. I do not actually think that my amendments have got it right, but this is the right place for us to talk about the general question of how the Government treat the railways in terms of funding and the provision of funds—not how much they give, but how they do it and what the process is.
The reason for that is as follows. I used to be in a local authority and very often we had to set a budget in March but did not know until Christmas—even after Christmas—what the subsidy from government would be. It is extremely difficult to put budgets together at short notice. With the railways, it is even more difficult. The noble Lord, Lord Bradshaw, has already said that significant changes require a great lead-time and planning to be delivered and just as long for them to be reversed.
Most of my amendments are trying not to fetter Ministers—I accept the comments from my noble friend Lord Harper that Ministers have to be accountable for public expenditure and that they have to make difficult decisions sometimes—but to build in a notice period. I have suggested two years so that, if changes are to be made, they would be lagged by that period, so that Great British Railways knew where they were going to be.
When the noble Lord, Lord Bradshaw, talked about timetables and so forth, he was discussing the operational side of the railway, but there is also the infrastructure investment side of the railway, which may extend to building a completely new railway. One of the problems we have—we all acknowledge this—is that it is impossible to build new infrastructure on a one-year settlement. We give long-term settlements to railway developers so that they know that they will have the money to carry the project through to the end. Should that change in funding not also be subject, if it is necessary, to some sort of notice period?
Further down the line from that, we have the supply chain. A colleague of mine recently visited a British train manufacturer. I will not say which one because I cannot remember. Maybe I can, but what I was going to say might be adverse—not about the manufacturer but about its situation—because it is down to using one manufacturing line at the moment, as the orders have effectively dried up.
We all know that the ideal situation is that British train manufacturers have access to a steady supply and a steady stream of demand, so that they maintain jobs and do not go from famine to feast. Where is the discipline going to come from, as a result of all these changes, to address that? What sort of lags and notice are necessary? As I said, I do not think I necessarily have the answer in these amendments, although they all point to this debate. We may not get further on this today, but the Government will have to talk seriously about this. When they create a wholly new structure to operate the railways—Great British Railways—funding has to be mentioned. An understanding of the approach to funding, not just for the operations but for the infrastructure, has to be addressed.
Lord Moylan (Con)
My Lords, it is difficult to follow my noble friend Lord Young of Cookham because his expositions of difficult issues are always so clear and compelling. There is a movement on the left wing of the Labour Party—which is well represented in your Lordships’ House—to nationalise the roscos so that we can have a full sweep of nationalisation. To date, nationalisation of the railways has cost the Government nothing because, of course, they already owned nearly everything. All it has done is allowed certain franchises to expire at no cost to the taxpayer.
But the cost to the taxpayer of nationalising the roscos would be absolutely enormous, which is one of the reasons why the Government have resisted pressure from the more Corbynite wing of their party to proceed on that basis. My noble friend Lord Young of Cookham is suggesting that, at the stroke of some scribal pen in the Office for National Statistics, at least the financial consequences, if not the legal consequences, of nationalising the roscos would land on the Government’s plate as a result of the Bill—in other words, as a result of eliminating the relative multiplicity of buyers of rolling stock that exists at the moment and replacing it with a single buyer: a state-owned entity. As I understand it, that is the gravamen of what my noble friend is saying.
The amendment is almost too gentle for the circumstances because this is something that we would need to know in advance of the passage of the Bill. It is dilatory of the Office for National Statistics to say that it would review this matter only after the Bill has passed because it is of such consequence that legislators should know before they pass the Bill whether it will ensue as a consequence of their doing so. This is a matter of considerable importance. I do not know whether the officials advising the Minister perceived the full complexity of the noble Lord’s amendment in advance. They may not have given him a full response to the points made by my noble friend—although they may have done so, of course—so he may wish to follow up in writing. That may be acceptable to my noble friend—I do not know—but this is an extremely important matter that we really need to know about.
I do not propose to comment on the other amendments in this group so I turn to my own amendments, which were slightly mocked by the noble Baroness, Lady Pidgeon. We have been told—I accept that this is probably the case—that, should the Bill pass into law, it is likely to set a framework that will last for many years. People say that it is often 20 or 30 years before you get round to restructuring the railways; that is roughly the cycle on which it happens. I think, therefore, that it is very disappointing that the Government are seeking to restrict the debate to very narrow issues around the structure of the railway, which is the main basis of the Bill, when noble Lords want to debate other matters.
For example, in our debate on the previous group, the noble Lord, Lord Bradshaw, who is sadly not in his place any more, wanted to discuss the whole structure of funding the railways—not the amounts of funding but the mechanism by which it is done—in order to avoid crashing from one decision to another and to make it possible for both the railway and suppliers to plan what they will do with some knowledge that the funding will continue for at least a period into the future. Essentially, the Government want to escape having that debate and say, “Everything’s fine as it is so we’ll carry on as before”.
Through my amendments here, I want to have what I think is a very important political discussion about the Government’s vision for the level of subsidy that should go to the railway and for the balance between fares and taxpayer funding to support it. We have in this country a particular balance that is different from what exists in many European countries, and we have held on to it, but where do we want to go with it? The noble Baroness says that the railways will always require funding but, for their first 100 years, they did not require any public subsidy at all, and they provided the most comprehensive, intense and innovative transport system you could imagine, reaching to nearly all parts of the country. Further, they did so at a time when there were practically no roads, and there was certainly no air travel. Yet they did this without subsidy. We really only talk of subsidies to the railways when you get to the 1920s and 1930s, when money started leaking out of government and into the railways. That was before we had the full subsidy regime that came in with the Second World War and what followed. So it is possible to think about it.
I am not saying that it is particularly realistic to think about it, because I accept what the noble Baroness says: there is likely to be an element of subsidy all the way through. But what is the Government’s plan and what is the direction of travel on this? Would the Government not like to set out their policy and vision? If they do not want to do so today, then where in this process is it going to appear? Is the noble Lord going to tell us that it will all be in the long-term rail strategy, so that we can have a debate then about what is the appropriate level between taxpayer and fare payer? Remember that only 10% of the population makes regular use of the railways; the rest of the population is expected to subsidise it through their taxes, but only 10% actually use it. Is that a fair and sensible balance in an allocation of subsidies? These are important issues.
Amendment 112 is closely related but not quite the same. It asks for the railways to publish annual savings targets. Why should they not have such targets? There are great inefficiencies in every organisation. I do not say “in every public sector organisation”, although that is true, because there are inefficiencies in private sector organisations as well. When I was deputy chairman of Transport for London, we had a process for trying to reduce, with an annual savings target of 3% per annum. We took out that amount of cost year after year, bringing it down because we could find those efficiencies. I had learned from local government officers that they could do exactly that, because they knew where the inefficiencies were. In fact, they built them in a little, to give themselves some fat, but if they were required to reduce them under pressure, they could do it. Why should Great British Railways not have a similar discipline imposed on it? Where is the sense of financial discipline that we are looking for?
These are times when the Government have very little money; I think we know that. The tax burden is higher than ever, yet public expenditure is under huge pressure. Choices about defence and so forth cannot be made sensibly because of commitments elsewhere. I am not disagreeing with or criticising the noble Baroness. It is all very well to say that railways will always require subsidies, but the fact of the matter is—I believe this firmly, and I am a believer in the railways—that a railway that relies consistently and heavily on subsidy, in the current and foreseeable fiscal circumstances of this country, is a railway that will come under huge pressure and will be cut. It is not sustainable unless it can show that it is contributing from its own efficiencies and through generating higher fare income, which does not necessarily mean through higher fares but can be a combination of fares and passenger numbers. It needs a plan to show that it is doing that. These amendments ask the Government to set out that plan or tell us when they are going to do so, in the interests of Great British Railways itself.
Lord Hendy of Richmond Hill (Lab)
My Lords, Amendments 57, 58 and 61 are about the funding of passenger services. In principle, I support the intentions of these amendments and acknowledge the benefits to business planning that aligning the funding cycles could bring. However, the reality of passenger services funding is that it is inextricably tied to passenger revenue, which changes in response to a number of factors that are difficult to predict, particularly over longer time spans.
Certain factors, such as wider economic conditions and the weather, are outside both GBR and government’s control, so it is quite difficult for any Government to commit passenger services funding in fixed five-year periods, given the revenue-forecasting challenges. It will, however, be a goal to work towards, and in particular it cannot be achieved before GBR’s funding settlement processes have bedded in and Ministers have confidence in how the settlements operate.
I recognise how important it is that GBR has the confidence to plan across track and train to make the most of integration. That is why it will be required to produce and publish a business plan covering all its activity, including on passenger services, and this plan will span the duration of the five-year funding period, regardless of changes to passenger funding. In addition, once Ministers have more experience of funding an integrated body and GBR has demonstrated that it is fiscally responsible, the Bill will provide a route to include passenger services in the five-year funding settlement in future, via statutory instrument. That will allow passenger services funding to join the five-year settlement. I hope the noble Baroness sees that we are as aligned as we can be on this amendment and that she can therefore support the Bill as drafted.
Lord Moylan (Con)
Is the noble Lord’s position that one of the consequences of this Bill, if enacted—we will not know for some months until after it is enacted—is that roughly £25 billion-worth of rolling stock could be added to government debt? I do not want to argue about the figure, but I believe that is roughly right. We are going into this in the dark, not knowing whether that will be the case. What soundings has the Minister taken with Treasury colleagues about this interesting possibility?
Lord Hendy of Richmond Hill (Lab)
Since it is independent, nobody can predict the consequences of an Office for National Statistics examination until it concludes one. I said that the Secretary of State will work with it, because it will also need to consider the recent past. The Bill is in Parliament because it has cross-government agreement from all the departments of government. We cannot contemplate what the future might hold in respect of the decisions of the ONS.
Lord Moylan (Con)
I am sorry to press the noble Lord. I agree that if the ONS is independent he cannot say what its decision will be, but he could secure that decision before the passage of the legislation. That cannot be too difficult. Given the consequence, it must be possible to secure the decision first. Nobody, I think, is suggesting that you would try to manipulate the decision; that is not my objective. Could the Government not take that approach? These are very significant sums, and to hold one’s nose and just jump into the dark seems reckless.
Lord Hendy of Richmond Hill (Lab)
I already said that one thing the Secretary of State will do is to help the ONS with its understanding of both the recent past and what will happen as a consequence of the Bill. In the recent past, the Government have specified, to the most extraordinarily detailed degree, all the rolling stock used in all franchises for probably the past 10 or 12 years. They have also determined how long it runs for and how long it lasts. In those circumstances, we are very content to wait for the ONS to do its work when it chooses to do it.
Lord Lansley (Con)
My Lords, I have two amendments in this group. Amendment 59 looks at the statement of objectives that the Secretary of State sets out for GBR and what is intended to be achieved over the funding period. The objectives, as we can see in paragraph 2(2),
“may include objectives as to standards to be achieved when carrying on activities”
that are to be set out in the business plan. It is a simple proposition and one of those happy subjects that we always discuss in Committee: should the word be “may” or should it be “must”? The implication of “may” is that it may not be, and we are considering whether it would be acceptable for the statement of objectives not to include reference to the standards that are to be achieved in relation to these activities. One of these lists about which we are not supposed to be too specific follows, but standards to be achieved are not set out as such in that subsequent list. They tend to be objectives relating to other things.
However, my other amendment is intended to see how these things interact. Separately, in Clause 65, Great British Railways has the responsibility to consider whether it should have a performance scheme, which, as I understand it, is essentially about minimising disruption to the network and to passengers. The question is: where are the objectives in relation to minimising disruption to passengers? I do not see them in paragraph 2(3). You could argue that they arise from the carriage of passengers and goods, but I do not think it is sufficiently explicit. I am not sure whether it is included in objectives as to standards. Are those the same standards as in a performance scheme?
I see the two amendments being linked. We are looking to ensure that the objectives set out standards and are clear about what is required in terms of avoiding disruption and enabling passengers to be confident about the availability of services according to the timetable. I beg to move.
Lord Moylan (Con)
My Lords, it may be helpful to the Committee, since I have such a large number of amendments in the group and no one else who is present has any, if I speak now, and then it will be easier for the noble Baroness to comment on the amendments I have moved.
I shall start with Amendment 63A. I have tabled it because in the last 24 hours I have been contemplating the wipe-out of 10% of the global population by artificial intelligence, which a whistleblower at Anthropic has said is a very likely prospect some time in the next 10 years. It is possible that these claims are somewhat overblown—I do not know—but it is astonishing that we have a Bill whose measures in all likelihood, as I say, will stay in place for 30 years but we are not having any debate about digital, artificial intelligence or the innovative future of the railway.
Lord Lansley (Con)
May I just interrupt my noble friend? I think he has moved on to the next group. We are on the group led by Amendment 59, to which I just spoke.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
And today’s Committee is due to conclude with Amendment 63.
Baroness Pidgeon (LD)
I will speak to my Amendment 82 in this group, to which the noble Lord, Lord Moylan, has added his name. It would create a new board of Great British Railways, and it provides detail of the composition of this board. The board would increase the transparency and accountability of the Secretary of State’s decisions, as it would create a vehicle for these to be properly discussed and would ensure that a wide range of expertise were at the table. If the Secretary of State decided to make a decision that was against the advice of the board, the reasons for that would need to be set out clearly and publicly.
The membership of the board would represent Great British Railways and other key stakeholders in the running of the railway, such as open access operators, freight operators, the Office of Rail and Road, the Passengers’ Council and organisations that represent passengers with accessibility requirements. It would comprise of at least six members. To make sure that there is a voice for other stakeholders, no more than half of the board’s membership would be employed by or otherwise represent Great British Railways.
This amendment would allow for any decision or direction from the Secretary of State concerning Great British Railways to be notified to the board prior to its being made. The board would then need to publish any decision or direction it had considered and whether it had approved it. If the board did not agree with the Secretary of State, it would still be free to go ahead with the decision, but it would need to publish a statement setting out its reasons for that. For us, this is a way to ensure that the Secretary of State uses the powers in this Bill wisely, with a proper sounding board for feedback from experts with different viewpoints in the field. I hope that the Minister will consider this proposal seriously.
The other amendments in this group are around clear objectives for Great British Railways. Amendment 64A from the noble Lord, Lord Moylan, would require consultation with the supply chain and railway service providers when preparing objectives for a funding period. That would appear to be a sensible way to ensure industry buy-in and prioritisation. Other amendments seek different ways to try to measure and assess the performance of Great British Railways. I hope that the Minister will be able to provide details of how the Secretary of State and Parliament will assess this going forward, and I look forward to his response.
Lord Moylan (Con)
I beg the Committee’s pardon: I got slightly muddled because of changes to the groupings.
I come to my Amendments 60, 64A, 83, 84, 87, 94, 124, 125 and 291. The central issue running through these amendments is accountability. We are creating an enormous, new, publicly owned organisation that will, in all likelihood, receive billions of pounds of taxpayers’ money and exercise extraordinary control over the railway. It therefore needs clear objectives, measurable performance indicators and consequences for when it fails to deliver.
Amendment 60 addresses the funding objectives. As drafted, the Bill says that the Secretary of State “may include” the specified objectives. My amendment would change that to “must include”.
Amendment 64A would require consultation with railway service providers and the rail supply chain when those funding objectives are prepared. GBR will continue to rely enormously on the private rail supply chain. These businesses invest in skills, equipment and capacity on the basis of decisions taken by the Government and GBR, so it is sensible that those decisions are informed by their expertise and knowledge, as well as the consequences for employment and profits in the private sector that would arise from those decisions being made. They should be consulted.
The remainder of my amendments address what might be called the problem of the missing key performance indicators. We have repeatedly been told that GBR will be held to robust performance measures, but what does “robust” actually mean? Amendment 124 would answer that question by establishing a proper, statutory KPI framework covering the things that passengers and taxpayers actually care about: reliability, safety, passenger experience, affordability and value for money, passenger growth, financial sustainability, productivity and efficiency, and freight performance. Of course, one can argue about what should be on the list; I would be willing to enter into discussions with the Minister about putting in something else or maybe adjusting something that I have proposed. However, we need to know what performance indicators are in the Bill—otherwise, we will be allowing GBR far too much unconstrained power and latitude, with little accountability.
Amendment 94 would ensure that the long-term rail strategy is geared towards enabling GBR to meet these KPIs. The Government may say that a long-term rail strategy should not be dictated by short-term measures, but we have to get from the short term to the long term. A 30-year aspiration is of little value if there is no way of measuring whether GBR is moving towards it year by year.
Amendment 125 would, therefore, require annual reporting and quarterly updates against those KPIs. Even I admit that quarterly updates might be a little onerous so, if the Minister objects, I will meet him half way and say, “Let’s have semi-annual updates”—I am a reasonable person and am open to suggestions—but something is needed if we are going to succeed. It is no good saying, as we did the other day, that the target is to achieve 75% growth in freight by 2050. Only the day before yesterday, the Government produced a statement saying that they have set an interim target. So they appreciate what I am saying, which is that there should be interim targets. However, the interim target is that freight should achieve 40% growth by 2040. None of us will be here. Nobody is asking, “What is the 2030 target?” There is no 2030 target; there is merely a 2040 target. That is not good enough. It is playing with achieving targets and would be simply laughable in the private sector. We need these targets; as I say, quarterly updates may be too onerous, but an update every decade or 15 years is just not good enough.
Amendment 291 would give the ORR the important, independent job of assessing whether GBR is actually achieving its targets. Surely GBR cannot be allowed to mark its own homework.
Amendment 84 would apply the same principle during the transition. This is a generational restructuring of the railways, involving employees, operators, freight, open access, local authorities, the supply chain and millions of passengers. A quarterly ministerial Statement—or even one once every six months—on progress towards GBR becoming fully operational would increase transparency, maintain focus and, importantly, prevent drift.
Lastly, Amendment 87 concerns consequences. When I have asked the Minister privately how the Secretary of State will exercise control over GBR, he has said—he said this in a meeting for all Peers the other day, so I think I can repeat it—“Of course, she can always sack the chairman”. I suppose she can, because she is the sole shareholder in the business, but there was nothing about sacking the chief executive. Of course, it is not the Secretary of State’s job, as I understand it—we are not vouchsafed of these arrangements—to appoint or sack the chief executive; that would be a decision for the board. I am trying to introduce some accountability for the chief executive. We are giving the Secretary of State the power—not a duty, obviously—to dismiss the executive head of GBR when the organisation is failing against the KPIs and has also failed to act on guidance issued by the Secretary of State. It is not enough just to sack the chairman. You will not get anybody of any quality applying for the job if they are the only person whose head can roll; the chief executive needs to have their neck on the block as well.
My noble friend Lord Lansley’s Amendment 59 is obviously sound. The Secretary of State may
“include objectives as to the standards to be achieved in relation to railway services”,
but that “may” ought to be a “must”.
My noble friend Lord Grayling’s Amendment 66, to which I have added my name, would require GBR’s business plan to contain measurable performance indicators for its statutory duties. This is simply basic accountability. If Parliament gives GBR duties, its business plan should explain how its performance against them will actually be measured.
Lord Hendy of Richmond Hill (Lab)
Let me come to that point. I believe that there is a provision, but before I say so, let me check.
The long-term rail strategy is designed to provide ministerial direction on the long-term trends that will affect the railways and, at a high level, what they expect GBR to do about them. The business plan is clearly the right place for short and medium-term targets to be included, which GBR should set for itself and which the ORR should review and comment on.
Lord Moylan (Con)
Can I be absolutely clear about that? The Minister is saying that GBR should set its own KPIs. The ORR may look at them and comment but, having heard the comments, GBR will set its own KPIs and amend them, or not, as it sees fit. That is the plan.
Lord Hendy of Richmond Hill (Lab)
The long-term rail strategy will set out the Secretary of State’s expectations. The business plan will set out what GBR believes it can achieve to move towards the long-term rail strategy. The business plan has to be agreed with the Secretary of State, who might well disagree with some of its targets. In the end, GBR has to satisfy the Secretary of State about the progress that it proposes to make. I do not think that is much different, as the noble Lord will recall, to the Transport for London business plan, which translated the mayor’s transport strategy into targets related to the budget of the organisation and which were agreed by the mayor.
Lord Hendy of Richmond Hill (Lab)
My noble friend is right that some of these KPIs relate to wider economic circumstances than the railway currently has, but we discussed on the first day in Committee the fact that the need for a long-term freight target is so that GBR focuses on its own part in growing freight. Clearly, it is much subject to what shippers want to send, how they want to send it, where they want to send it and so forth, but I do not see any conflict in GBR having a long-term freight target. It may have to take different action if the economy or the things which are transported by rail change over time. There has been no greater case of that than the case of coal and steel, which were once a significant part of railway freight but which today are virtually nothing. On the other hand, intermodal traffic and construction materials have vastly increased, and there is no doubt in my mind that the railway could contribute more than perhaps it has done in the recent past to growing those particular categories if it were minded to do so, and the freight target is designed to make it think about how it could do it.
I do not see any contradiction in that; it will be like running any other business. The noble Lord, Lord Moylan, referred to his experience at Transport for London and it is, of course, exactly the same. It is a large organisation which is contributing to, but to some extent dependent on, the economy of London; that will be true of the railways as a whole. I agree with noble Lords that there should be KPIs for GBR, and it should be held to account for meeting them. The reason we are discussing these now is because there is no doubt that, in the end, they should be in its business plan, set next to the costs that they incur and the revenue it will derive from them.
I should go back to what the noble Lord, Lord Lansley, said. Paragraph 5(1) of Schedule 2 says that GBR must keep the business plan up to date. We are pretty clear that that means annually; it could be more often if circumstances change. It is not unknown for businesses of this scale to have to change their business plan if the economic circumstances dictate, but I think annual is reasonable. I would not expect the Secretary of State or the board of GBR to tolerate any circumstances where it did not propose an annual business plan.
If I may, I will try to find my place regarding Amendment 66. I am glad that the noble Lord agrees that GBR’s business plan is where its KPIs should sit. However, these need to evolve over time while, by contrast, GBR’s duties are unchanging—a core list of ambitions guiding GBR over the next decades. While GBR’s business plan is where it will show both how it will discharge its duties and set out its KPIs, there is an important distinction between them. Duties and KPIs are not the same thing. KPIs need to be driven by the specific, often numerical, outcomes sought by the Government, whereas duties are behavioural expectations. Some of the duties would be impractical to even turn into measurable KPIs. How would GBR measure whether it has provided businesses with certainty or acted in the public interest? I believe it is right that the two should not be statutorily linked.
Amendment 87 proposes action about the chief executive. I hope the noble Lord understands that, primarily, the powers of the Secretary of State rest with the right, in the end, to dismiss the chair if that chair fails to do the job that the Secretary of State expects of the chair and the board. That might well be the case if the Secretary of State believed that the chair failed to challenge the executive and chief executive effectively. The Secretary of State will also have the right, as we discussed this afternoon, to issue legally binding directions to GBR, and those could be where remedial action is required. The Secretary of State could also remove accounting officer status from the CEO, effectively taking financial management of the company into the department.
Lord Hendy of Richmond Hill (Lab)
What I would say to the noble Lord about all these things is that we are setting this organisation up and, conventionally, it is the chair and the board that support, hire and fire the chief executive. I do not believe that his amendment is the right way of doing this. It should be done through the chair and the board, and the expectations of the Secretary of State should be conveyed to them. Whatever action might be necessary regarding the chief executive should be taken as a consequence of that relationship.
On Amendment 83, the Bill already does what the noble Lord is trying to achieve. Much of the substance of this amendment is already enabled by the process created by Schedule 2. GBR is already required to produce a business plan containing all its activity and how its costs will be met, which will be reviewed annually, as we have discussed, to ensure it is up to date. The plan will be published, which will allow Parliament and the public to hold GBR to account. The ORR will monitor GBR’s delivery of its business plan. I agree with the noble Lord that transparency is important, but we do not need to hardwire in excessive bureaucracy, as this amendment would.
On Amendments 59, 60, 62 and 64A, I can understand the desire to codify the contents of the statement of objectives, but this legislation needs to be drafted to last as long as the last Railways Act has and therefore needs to be open to future Governments to suggest their own objectives for the funding period. The Bill provides a suggested list of what could be included, setting a strong precedent for future government but leaving options open for Secretaries of State. This is a tried and tested method, being the same approach that underpins the periodic review of funding today. The periodic review is widely considered one of the most successful parts of the current regime, which is why the Bill replicates the five-year length of it. Similarly, the statement has to be capable of accommodating different approaches based on wider environmental and socioeconomic circumstances. That is why the current list of potential topics to be covered by the statement serves as a guide for future drafters but does not constrain the Government.
Lord Moylan (Con)
My Lords, the Bill should be amended to say that the business plan is annual, especially as that is the Government’s clear intention. The Minister has just said the business plan is going to be annual and it was precisely to get stakeholder engagement with business away from the annual cycle that the amendment was tabled. Can the Minister take account of that? It is not good enough to turn up once a year and have a word with the industry about what your plans are. That is what we are trying to get away from.
Lord Hendy of Richmond Hill (Lab)
I think I understand what the noble Lord is saying. I am expecting an organisation, as GBR will be, to be constantly in discussion with the wider railway industry and the supply industry, and indeed its customers, simply because, as we have discussed, the market will change over time. I do not see that there is any confusion between an annual exercise of producing a business plan and the sort of engagement over a prolonged period that will confirm and vary industry’s advice over time about what should be in it. That is a perfectly natural way of doing business. If I refer, as I probably do too often, to Transport for London, that is precisely the way in which Transport for London did it. The business planning cycle was an annual cycle, but the engagement with those parties who had an interest in both the inputs and results was an activity throughout the year.
Lord Moylan (Con)
The Minister has just changed the story. A moment ago, he was saying that engagement with business stakeholders would be through the business plan. Now he is saying that it is not actually through the business plan once a year—because anyway, we do not know it is going to be once a year, but it is likely to be once a year—but it will be a continuous process. Of course, it can in a sense be both, and other things, but that is not giving us the level of assurance and precision that I think noble Lords are looking for. This is one of our big opportunities to speak up in Committee for the interests of the supply chain—there may be other opportunities coming in later groups. This is the chance for the Government to nail down our interests. We are interested in passengers and freight, but we are also interested in the supply chain, and trying to secure for it a degree of visibility about the future is important. What we are getting is not very clear, I am afraid.
Lord Hendy of Richmond Hill (Lab)
I agree with the noble Lord that the supply chain is crucial. Actually, for much of the supply chain, what really makes a difference is the five-year periodic settlement. That highlights the need for this engagement to go on, both at the time when the five-year plan is formed and the rest of the time. I do not see any contradiction in those two things happening. The five-year settlement for infrastructure could not possibly be done properly without the involvement of the supply chain, but they do not go away for the next four years until the next one. The dialogue with them is constant—and so it should be. I had better make progress, if I may.
I turn to Amendment 82, tabled by the noble Baroness, Lady Pidgeon. I do not often completely disagree with the noble Baroness, but I do here, I am afraid, because her amendment would fundamentally blur accountability for the railway system and undermine the clear responsibilities in the Bill. I do not think that interposing another board between the Secretary of State and the board of GBR would be right. However, the Bill contains a number of provisions such that both the Office of Rail and Road and the passenger watchdog will have many opportunities to provide the Secretary of State with advice before she takes decisions. The reality is that she will most likely have taken advice from either, or both, of them before any performance matters should escalate to the point of requiring a direction.
On Amendment 84, as we discussed in earlier groups, the Government are dedicated to providing a steady drum beat of publications that will inform the House—and, indeed, this Committee—on progress in establishing GBR. I encourage the noble Lord, Lord Moylan, to look at the Government’s policy publication timetable on GOV.UK; indeed, I have just written to noble Lords about the publication of the draft access and use policy by Network Rail. Given the ambitious timeline that we are working to on this, it would not seem to make much sense to divert resources away from the business of establishing GBR in order to write progress reports that would largely duplicate existing information that the Government are already making available.
Given what I have said, I encourage noble Lords and the noble Baroness not to press their amendments.