Passenger Railway Services (Public Ownership) Bill

Lord Snape Excerpts

2nd reading
Monday 7th October 2024 Lords Chamber

[Lord Snape (Lab)]

My Lords, it is a great pleasure to follow my noble friend Lord Cryer and to congratulate him on a superb maiden speech, which informed and entertained both sides of this Chamber. I am delighted to say, and I am sure I speak on behalf of colleagues from both sides of the Chamber on this, that despite his early fame in the film world, the attractions of Hollywood did not drag him away from a political career and he stuck to his parents’ views and principles. I will come back to Bob and Ann in a moment, but my noble friend’s career, as a Member both of the other House and of this House in the years to come, shows equal talent to that of his mother and father.

My noble friend was elected in 1997 in that Labour landslide—unusually, with his mother. That was a fairly unusual combination: fathers and sons occasionally get elected, but mothers and sons rarely do. I take this opportunity to pay tribute to Ann, his mother, who fought a long, and for her sometimes unpleasant, battle on behalf of women who were being exploited in various parts of the country. The championship that Ann showed will be and is being followed by her son, and I know that she is enormously proud of his elevation to this House.

Going back to my noble friend’s experience in the other place, he became the longest-serving chairman of the Parliamentary Labour Party, which is enormously to his credit. Those on this side of the House, particularly those who have spent some time down the Corridor, know just how fractious meetings of the Parliamentary Labour Party sometimes are. It shows the strength and character of my noble friend that he was not just elected but re-elected chair. There were instances of—I should not say it—skulduggery when we elected the chair of the PLP, but my noble friend was respected enough to hold off against any plots against him and to be re-elected. He quite rightly reminded us of the difficulties that our party suffered under its previous leadership, and the fact that he played such a prominent and courageous role in opposing anti-Semitism in the higher ranks of our party is, again, greatly to his credit. I know I speak for both sides of the House when I say that we look forward to hearing him again in the future.

I also congratulate the two other maiden speakers. I know the noble Lord, Lord Grayling, because I have taken an interest in transport for many years. I cannot say that I have entirely agreed with him over the years, but I thought that his contribution today was excellent. I particularly congratulate the noble Baroness, Lady Pidgeon, who also made a superb maiden speech. She greatly enhanced her reputation right from the start by her knowledge of the subject that we are discussing today—transport.

I also congratulate my noble friend the Minister on her appearance during this debate. I hope I do not cause her too much embarrassment when I say that I do not share some of the good feeling of many of my colleagues about the Bill. I do not think it tells us very much. It was 2021 when the Great British Railways project was brought before us following the publication of the Williams-Shapps report. Here we are, three years later, and all we have to show for it is the total bill for GBR so far, which I understand is about £61 million. I have no idea what that money is being spent on and what will happen in the future, because this is very much a skeleton Bill.

I spent my working life in the railway industry, as my father did. I have bored noble Lords from both sides with some of the stories from my past. I started on the railways in a signal box, as a teenager in the late 1950s. I qualified as a signalman at 18. I have to say —my late father would agree with me on this—that working for a nationalised railway in those days was not all it was cracked up to be. In those days, the railway industry was dependent on Treasury largesse, but many of us spent our time, as I did, in signal boxes built by the Victorians, some of which are still working and are perfectly safe. They were built to last, unlike some of the modern equipment on the railway system.

However, the fact that we in the railway industry never had the opportunity or the finance to modernise until recently made me feel that perhaps an injection of money from elsewhere—from the private sector, if you like—might benefit it. I listened with interest to the contribution of a former Secretary of State in the noble Lord, Lord Young of Cookham. He outlined graphically and aptly the difficulties in trying to persuade the Treasury, against all other financial pressures, to put money into the railway industry. However, we managed it on two occasions over the years, following the 1955 modernisation plan and with some of the modern equipment that has been installed since.

The fact is that we competed for scarce resources against hospitals and schools, and against one’s colleagues. I chaired the Channel Tunnel Back-Bench committee in the other place, when many of my colleagues from the parliamentary party said, “What do you want to waste money on that for? I need a hospital in my constituency”, “I need to repair schools in my constituency”, or, “There is a finite amount of money available and I want some of it for my constituents”. That is a perfectly legitimate stance to take, but it indicates the difficulties of depending entirely on His Majesty’s Treasury for finance.

Look at what happened immediately after the 1994 Act. The concept of privatisation and the way it was implemented was crazy, and I said so at the time. I understand that John Major, then Prime Minister, wanted to privatise the railway based on old-fashioned regionally based companies. He was a bit sentimental in that way. What was his comment about old maids cycling to church on a Sunday morning? Some of the old maids in the Cabinet at that time were not prepared to allow him to privatise on that basis, so we got the rather nonsensical and fragmented system that we have at present.

However, at least initially, a lot of money came into the railway industry that would never have come had matters been left to the Treasury. There were lots of new trains. The crazy system was such that millions of pounds were made and taken out of the industry by those running the companies that provided the trains, but many of those trains did end up on our railway system.

I was speaking recently to a gentleman known to many noble Lords on both sides of the House, Christopher Austin, the former British Rail parliamentary affairs officer who retired upon privatisation in 1994. I asked him whether in 1994 we would have got the Treasury to agree to the amount of investment into the new trains that took place, and he said, “No, we wouldn’t have done: we would have been scratching around”.

I congratulate my noble friend Lord Liddle on his contribution earlier. I went to see his boss in the late-1970s about the renewal of the classic diesel multiple units that were introduced in the 1950s. He said, “I’d love to be able to say that we can find the money to renew them, but we can’t at the present time”. Because of that, those classic diesel multiple units from the 1950s were eventually renewed in the 1980s on the basis of Treasury parsimony, if you like—the Treasury certainly had a big input—which said that, for every three-car classic diesel multiple units that you have inherited and are now past their sell-by date, you have to replace them with two-car diesel multiple units, and so we got the sprinters and pacers. We have only just got rid of the pacers. Anybody who has travelled on them will know full well that they were known by drivers as “threepenny bit wheels”—noble Lords will remember the old-fashioned threepenny bits. Travelling on them, hearing them screeching around curves, was more third-world than modern-day history. That was a result of the parsimony. It was asked at the time by BR management whether a similar number of seats should be provided as the trains being abolished. They were told, “Just put the seats closer together”, and the result was the discomfort of those cut-price trains, some of which we still have at the present time.

My noble friend understandably had some harsh words to say about franchising. But what will happen in this city, for example, where TfL franchised its railway system, and with Chiltern Railways—in my view the one success of the whole privatisation process, where a line that was being run down by British Rail now provides two trains a day to Birmingham and an extensive commuter system? Again, BR management did not want to close these down, reduce the services and stop early-morning and late-night trains, but it was given a block amount of money every September and told “Run the railway with that money and don’t come back for any more”. My noble friend the Minister when she comes to wind up will say that this will not happen in future as far as the Treasury is concerned, and I will believe her. Well, I will try to believe her—let us put it that way—because it has never been noticeably generous, and I will need some evidence that it will be so in future.

I say again: look at the big cities. How will we provide train services in and around those big cities with one national rail system making decisions here in London? Many of our metropolitan mayors want the right to implement their own train services in their way, and that is a model that does not fit too well with nationalisation as a whole. So, although I wish the Bill well, we will certainly return to these issues in much more detail when we see exactly what plans His Majesty’s Government have for the railway industry.

Passenger Railway Services (Public Ownership) Bill

Lord Snape Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Lansley (Con)]

My Lords, I will briefly ask the Minister a question for when he comes to respond.

I am very supportive of what my noble friend says in his Amendment A1—that we be clear about the purpose of this legislation—but the Minister will be aware that the Bill will substantially achieve that by amending the Railways Act 1993. Section 4 of that Act, as amended, sets out the general duties of the Secretary of State and the Office of Rail and Road. While they are listed in relation to the Office of Rail and Road, they are added as duties of the Secretary of State under Section 4(3)(a).

Section 4(1)(zb) says that it shall be the duty of the Office of Rail and Road—and, by extension, the Secretary of State—

“to promote improvements in railway service performance”.

Will the Minister confirm that nothing in this Bill would change the continuing duty of the Secretary of State to promote improvements in railway service performance?

Can the Minister also say that it will not change the duties of the Secretary of State and the Office of Rail and Road otherwise listed in that subsection, including

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

I am interested know precisely how the Minister and the Government propose to meet that general duty, which is not changed by this Bill.

[Lord Snape (Lab)]

My Lords, I am always fascinated when Members of the party opposite attack proposals from this side of the House on the grounds that they are ideological. What could be more ideological than the privatisation of the railway system back in 1994? In my view, Amendment A1, to which the noble Lord, Lord Gascoigne, spoke earlier, would create another bureaucracy—something the Conservative Party are normally against. No one would say, and I certainly would not, that a nationalised railway will be the answer to all our problems. Having worked in it, I know only too well it will not be. On the other hand, I think if you asked the average rail passenger for his or her view of the current system, they would say that anything would be better than what we have at the present time.

When it comes to ideology, I followed with interest the words of the noble Lord, Lord Grayling, who talked about failings in the increased cost of electrification leading to the delay, and in some cases the cancellation, of various electrification projects. My noble friend the Minister, who will respond, has great experience of Network Rail, and he might comment on some of the costings—many of us would take an interest in those matters. I was surprised, to say the least, at some of the expensive projects that Network Rail has embarked upon and the failure of that organisation to work within the original estimates, as far as costs are concerned. I hope it will not upset the noble Lord, Lord Grayling, too much, but his sojourn as Secretary of State for Transport is not looked upon by the railway community with any great favour. His view that in some cases electrification was unnecessary and that what was needed was bi-mode trains did not particularly please passengers. I recently moved home, from the Birmingham area to Gloucestershire, where I now have the pleasure—doubtful pleasure that it is—of travelling on Great Western’s bi-mode trains. They are often subject to cancellation and, again, the usual view from my fellow passengers is that the sooner the railway is renationalised, the better.

My noble friend Lord Berkeley is regarded as an expert on railway costings—he shakes his head, but he should not be so modest; he certainly played a major role with his views on HS2 and its finances. He mentioned the Office of Rail and Road. In the context of this amendment, can my noble friend the Minister tell me what role is envisaged for the ORR in future? I hope he will not be too offended if I say it is a misnomer: it is certainly an office for railways, given that it intervenes on various grounds—in my view, improperly, because there are proper roles for those responsible for railway safety in the industry—but appears to play no role at all as far as the road network is concerned. The fact that something approaching 2,000 people are killed on our roads on an annual basis is not something that detains the ORR. I hope my noble friend can tell me what role he envisages for the ORR in the newly nationalised railway system.

Finally, just to hark back to 1994 and the privatisation Act, fundamentally it adversely affected the railway industry. In 1994—again, I apologise for the history lesson—the railway system in Britain was regarded as the most efficient and effective in western Europe; certainly the subsidies paid to the rail industry in those days were less than those paid in countries such as France and Germany. The sectionalisation of the railway industry in the 1990s, largely at the behest of a Conservative Government—I do not make any complaints about that, as Governments have opinions—led to a much more readily identifiable system of costings for the industry overall. For the first time, we saw exactly which parts of the railway were profitable, which were not and which needed perhaps more money spent on them in the future than had previously been envisaged.

The relationship between Sir Bob Reid mark 1, the then chairman of the railways board, and Mr Nicholas Ridely, the Secretary of State at the time, was an extremely fruitful one. I am not here to announce any great fondness for Lord Ridley but I think that he appreciated what the railway industry was doing, largely at his behest at that time. I understand—although I do not wish to attribute words to him long after his death—that he was more than a little concerned about the mode of privatisation envisaged by the Government at the time, largely because of the success that he felt he had had in improving and defining the railway industry’s relationship with the Government of the day.

I hope that, when my noble friend the Minister responds to this amendment, he will appreciate at least that, whether the railways are privatised or public, all too often railway passengers—or customers, as they are somewhat laughably known these days—do not feel that their views on the provision of the service are listened to or that there is a proper voice for them. It is some years since the transport users’ consultative committees were abolished. Can my noble friend say what plans he has for better passenger consultation in the future?

In conclusion, I hope that my noble friend will not get too bogged down in the bureaucratic desires of the party opposite. Future amendments that we will come to, from the Conservative Party or its Front Bench, appear to believe that railway management has nothing better to do than put together various plans, which no doubt will be torn apart by those who feel that the railways are not delivering the service that they should. I await with interest my noble friend’s response to the amendment. I know that he will bear in mind that we ought to be concerned about the passengers of the future—the passengers of the past having been sadly neglected.

[Lord Sterling of Plaistow (Con)]

My Lords, trade moves by trains. Why do I bring that up? Some of your Lordships may remember that when Freightliner was put up for sale, P&O—the Peninsular and Oriental Steam Navigation Company, to give its full name—bid for it, and we were told by the competition authorities that, at that time, we already controlled 25% of transport movements for the whole of the UK and therefore we could not take it over.

I went to see the Secretary of State for Transport and everybody involved with this—our own people—to say that it was ridiculous. In practice, what we really wanted was to have a fast line for container trains, at night as well as in the day, from Glasgow right the way through to Istanbul, non-stop, for 2,500 miles, moving trade backwards and forwards in a major way. We had only about 3% of the trade in Europe, and I thought that, at that stage, it would have made a huge amount of sense. With those double trains going right the way through and the movement of trade, we would now be in a much finer position for doing trade in a much more major way, 2,500 miles away and further. I thank your Lordships for listening to me.

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[Lord Moylan (Con)]

My Lords, I start by apologising to the noble Baroness, Lady Randerson, if I caused any confusion; I will try to do better. I welcome the noble Lord, Lord Hendy, back to his place from his excursion, no doubt by rail, in foreign parts. We missed him at Second Reading, but we had an excellent substitute in the shape of the noble Baroness, Lady Blake of Leeds.

I will make a preliminary remark at this stage, which I intend to save me making it on future groups of amendments. It is that we are, essentially, at least as far as the amendments tabled by Members from the Conservative Party are concerned, seeking information from the Government in relation to this Bill. If the Government are candid with us and give us the information that we are looking for, we will have achieved our objective on behalf of the public, and that will be the end of the matter.

I turn to the debate that has taken place so far. The part that has sparked me most, which I felt I had to answer, were the remarks of the noble Lord, Lord Snape. First, I agree with him about what a degradation it is that passengers have become customers when, of course, they really ought to be passengers. But there is also the question of ideology, which I hope to take out of the debate that we will have in Committee today and on Wednesday.

Of course there is always an element of ideology when one talks about privatisation and nationalisation. The railways, which, I think, are 200 years old next year, have been nationalised for only about a quarter of their entire existence. We must not think that nationalisation is the natural condition of railways in this country. They flourished and grew and were developed in private hands; we should always remember that. The truth is that in 1945-46, the railways were nationalised largely because, after six years of war, they were bankrupt. There had been no investment in them during the whole of that period, and they had deteriorated. Nor was there any prospect of their making sufficient profit that private capital could have been recruited to make up that deficiency.

Whether the then Government believed in nationalisation as an ideological matter or not, if the railways were to continue running at all it was going to have to be in government hands. Parts of the system were privatised in the mid-1990s for equally practical reasons—we discussed some of them at Second Reading. One reason was to attempt to improve customer service through competition; one was to recruit private capital into the railways on a consistent basis, which the Government had never been able to provide during the whole of the time they owned the railways—not enough capital and never enough consistency because no budget went beyond 12 months—and another was to try, frankly, to break the grip of the rail unions on pay, so that the astonishing disparities that exist between, let us say, a train driver and bus driver, which are entirely due to the monopoly supply of labour by ASLEF, might be evened out.

What we discussed at Second Reading, I am perfectly happy to admit, is that on some of these fronts privatisation has been successful, and on others less so. If the Government, who have won a majority on the basis of promising to nationalise the train operating companies, wish to give the other side of it a kick and see if they can make it work on that basis, I do not personally object—at least not on ideological grounds. But the House is perfectly entitled to have its practical questions about how this will work addressed. That is what the amendments in this group and many that will come before the Committee later intend to address.

The Government claim that this is a very small Bill. On the other hand, when they talk to the public it is a huge Bill, “because we are nationalising the railways”. They are not really nationalising the railways, because to nationalise something you normally have to pay for it and this Bill is not something where they are paying out to shareholders. All they are doing is letting the franchises that exist expire and then tying their hands and preventing themselves from renewing them except in emergency circumstances. It is, as I would have said at Second Reading if I had had more time, less nationalisation and more like dismissing your chauffeur at the end of his contract and deciding to drive the car yourself. At least you knew the chauffeur had a driving licence and some experience and qualification in driving the car, but now we will have the Secretary of State—we were told at Second Reading that she prefers to be known as the passenger-in-chief—as, in effect, driver-in-chief as well. We will see how that works out.

It is a big thing when the Government talk to the public—it is nationalisation of the railways—but when they talk to noble Lords it is a very little thing. All the big things, we are told, will happen in the next Bill— the train further down the line, expected in roughly a year or 18 months. That is the Bill in which many of our questions should be addressed, we are told—we should not ask those questions now. I think we should ask many of those questions now, for two very good reasons. The first is that the Bill presents us with a measure regarded by the Government as preliminary to that very large Bill, so it has long-term consequences. The second—a point made by the noble Baroness, Lady Randerson—is that the Bill sets up a shadow structure that could persist in operation for four or five years or even longer because, first, it will take us a year or 18 months before we see the Bill that will make these great reforms; and, secondly, as anyone who has been involved in the railways or any other large organisation will know, implementing significant change as a result of that legislation is likely to take several further years. We will have to live with the shadow structures set up as a result of the Bill for many years, and their practical consequences deserve the most careful scrutiny.

[Lord Snape (Lab)]

Can I ask the Minister, sorry the shadow Minister—

[Lord Moylan (Con)]

I am not quite yet the Minister, but the way the Labour Party is going, who knows?

--- Later in debate ---

[Lord Snape (Lab)]

I asked for that one, I have to say. It is mistakes being made at both ends of the Corridor recently.

Arising from what the noble Lord has just said, can I ask him to clarify two points? First, on the delay in moving on to the more detailed Bill, bearing in mind that it was 2016 when the Government he favours brought forward the proposals for Great British Railways, what were the Government doing in the eight years since then? Secondly, I have a simple question about the ideology of privatisation: if nationalisation is so bad, why was almost the first act of Governments in two world wars to nationalise the railway industry? What makes it so essential in wartime and yet it can be handed out piecemeal in peacetime?

[Lord Moylan (Con)]

If the noble Lord will forgive me, I am asking the questions in this scenario, and I do not feel I necessarily have an answer to his question about wartime. I might pass it on to the Minister, who once arranged for me to go and see deep in the bowels of Mayfair, under the former Down Street Underground station—I am sure that if the noble Lord, Lord Snape, has not been, it can be arranged for him to see it too—the wartime headquarters of the railway operations executive, including what is claimed to be, although I think with no historical foundation, a tin bath in which Churchill once took a bath. I will say no more about the war than that.

On the former question, I do not know the answer, but I would like to know. Why was it that the then Government, having published what they called the Williams-Shapps review written by Keith Williams—I think he is correct in saying that it was in 2016—and having promised a transport Bill in the King’s Speech one but last, did not come forward with the measures they thought they could offer in that regard? I do not know the answer to that, but I am willing to have a guess and it is relevant to what the Government are embarking on now and to whether they are going to meet their 12 to 18-month deadline of delivering us with this massive Bill that is going to transform the railways. My guess is that the then Government found that grappling with the intense difficulties of reforming the railway on such a large scale meant that, try as they might, they found considerable difficulty in putting together that Bill. It may be that is exactly what the Minister finds as he comes to address these difficulties. This only adds further to my point that the shadow arrangements we are setting up today could be with us for a very long time.

I come to the first amendment in the name of my noble friend Lord Gascoigne. The Government say they have a purpose—they are not doing this for ideological reasons or at the behest of the trade unions—which is to improve passenger services. At Second Reading, I pointed out that in the final stage impact assessment produced by the Department for Transport, given the opportunity it had to say exactly that, it said something completely different. It said that the Bill had been

“prepared to enable swift delivery of a Government manifesto commitment”—

not to improve matters for passengers—and that was why it had not looked, as it normally would, at the alternative options that might be put forward to achieve a similar purpose. That is another reason why it is incumbent on us in this House to look in great detail at what the Government are putting before us. They are in effect asking us to buy into an article of faith. They are simply saying, “Well, it couldn’t be worse than it is at the moment”—that is simply untrue; there are problems with the railways, but they could be a great deal worse than they are at the moment—“so it is bound to be better if we take it over and run it ourselves as part of a national enterprise”. But they have not provided any evidence for that; they have simply stated, “This must be the case and you’ve got to believe us”. As I say, that is one of the reasons why our job is not to do so.

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[Lord Grayling (Con)]

My Lords, I shall raise a question with the Minister, as we are on the subject of the termination of franchises. I should say to the noble Baroness and the noble Lord that I have been there and wanted to terminate franchises. I have never had a problem with a mixed economy, but I have an issue with a uniform economy, because I cannot understand the logic of terminating a very good private sector provider, any more than the Mayor of London believes in terminating his private provider of the London overground—and I suspect, if we see more devolution in future, other parts of the country may want to see a mixed economy as well. Clearly, the Government are very happy to see that in stations, as we learned at the weekend.

However, it is more difficult than one might wish, and as a Minister you have to take a judgment about how much legal and therefore financial risk you are willing to take, and also about the disruption that the termination brings. Nobody should be under any illusion that making a transition between two operators has to be managed extremely carefully and, done at gunpoint, can actually lead to a deterioration of services.

I come to my question to the Minister. This set of amendments discusses the process of termination of franchises and when and how they happen—the order in which they happen. My memory is that, in a private system, at the end of a franchise, there is a payment to be made by the successor franchise operator to the franchise operator handing over control of that franchise. There are various capital costs and other costs incurred. If the public sector is coming in and saying, “Right, we’re taking over the franchise”, what can the Minister tell us about that equivalent process? Will payments be made to the companies that are being phased out, as there were between private operators? What will those payments be and what will be the total cost incurred by the Government in making those payments? After all, the private operators will have invested in capital aspects, on the stations or elsewhere. Therefore, logically, the Government will also have a legal obligation to go through the kind of process that happened in the past when a franchise simply moved between two private operators. Can the Minister address that specific point in his closing remarks?

[Lord Snape (Lab)]

My Lords, I honestly believe that the amendment so ably moved by the noble Baroness opposite is extremely sensible. Like her, I can see no reason why we have a chronological system for dispatching the current franchisees based on the run-out date of their particular franchise.

Like the noble Lord, Lord Grayling, I am in favour of a mixed economy. There are certain aspects of privatisation, heresy though it might sound to some of my colleagues, that were successful. The fact that some of the railway system—rail freight, for example, which rarely gets a mention in these debates—remains in the private sector is indicative of the success of those who took what was, under British Rail, a very much declining sector of the railway industry. I do not wish to do an “all our yesterdays” speech, but my recollection of the freight sector in those days is ancient wagons clanking around the system, being shunted from one marshalling yard to the next, and with an average journey speed between loading and destination of around 12 miles an hour. Since privatisation, the rail freight side has improved greatly.

To return to the very valid point made by the noble Baroness, Greater Anglia is not just a success so far as its operations are concerned; it is a financial success as well. Because of this unfortunate coincidence of the run-out date of franchises, Greater Anglia is forecast to repay to His Majesty’s Treasury around £100 million in the current financial year. As my noble friend Lord Liddle said, presumably—unless my noble friend the Minister can reassure us otherwise— we are going to dispatch Greater Anglia to the railway knacker’s yard while pursuing with Avanti Trains, as he and the noble Baroness said, a franchise operator that, quite frankly, should not be there.

The previous Government, in the run-up to the election, were stupid enough—or ideological enough, perhaps—to give Avanti an extra nine-year franchise, on the grounds that it was showing some improvement. Those of us who travelled on Avanti regularly—thankfully, it is an experience that is now behind me since I moved home—could not find any improvement whatever. Indeed, it seemed to me that the service was deteriorating on an annual basis.

Again, it might be heretical for some of my colleagues to hear this, but aspects of the passenger railway that were privatised were successful. At Second Reading, I mentioned Chiltern Railways. Thanks to the financial constraints that British Rail had to operate under as a nationalised industry, Marylebone station was proposed to be a coach station by Sir Alfred Sherman, if I remember rightly, Mrs Thatcher’s transport guru at the time. The existing railway management, again through no fault of their own but because of financial constraints, had to run the service from Marylebone down, single much of the line and reduce the overall train service. Under the able leadership of the late Adrian Shooter, and with a long-term franchise of 20 years, with various break-off points, my noble friend Lord Prescott and the then chief executive of the Strategic Rail Authority came up with this 20-year franchise, but insisted that not only had the service to be improved but some of the infrastructure had to be restored. Under Chiltern Railways, lines that had become single were redoubled, and a pretty poor commuter rail service now has two trains an hour as far as Birmingham—with a price, incidentally, as my noble friend Lord Liddle might be interested to know, which considerably undercuts the fare of Avanti trains.

There are aspects of the future of the railway industry where a mixed economy would make some sense. I hope that, in those circumstances, my noble friend the Minister will look with some degree of favour on the noble Baroness’s amendment.

[Lord Berkeley (Lab)]

My Lords, the noble Baroness makes some very good points. The Greater Anglia service is awfully good: my two noble friends who have spoken about it have confirmed that, and I have been on it recently myself. However, following the intervention of the noble Lord, Lord Grayling, could somebody from the Conservative Party—maybe the noble Lord, or one of his predecessors or successors—explain the basis on which it chose Avanti and CrossCountry, which are two of the worst performing operators, to be given such very long contracts? I remember at the time there was a big debate between Virgin and Avanti as to which should get the contract. Whatever one thinks about Virgin, it has had some good services in the past, but Avanti is absolutely awful—as is CrossCountry, though for different reasons. Why did the then Government do it?

It is fine to say that we have given it to a private sector operator, but if we end up in a situation where the Government are effectively going to make similar awards to people—not companies, but people—we should know on what basis it is done. I hope my noble friend the Minister can explain what the criteria will be to make sure that we get some decent new franchises and how he is going to get rid of the two existing pretty bad ones as soon as possible.

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[Lord Hendy of Richmond Hill (Lab)]

The answer to the noble Lord is: not yet. He will recognise that those costs materialise only when the franchise transfers, so the department will never have had that total number in the past, and I do not expect it to have it now. As the franchises transfer, the number will become obvious.

[Lord Snape (Lab)]

Before my noble friend leaves that point, I will ask him about the question of performance that has been raised on both sides of the House. The public performance measure national average is 88.7%, but the Avanti West Coast performance measure is only 62.2%—some 25% less. What has to be done to remove a franchisee which has performed so badly, as in the case of Avanti, other than knocking down the buffers at Euston and heading a Pendolino down Eversholt Street?

[Lord Hendy of Richmond Hill (Lab)]

In answer to my noble friend, and in recognition of some of what I have done in the past, it is sometimes a surprise when you read the performance requirements for contracts that you inherit. This is clearly one of those cases. I cannot defend the statistics that my noble friend cited, and I cannot defend a contract that allows that to happen without remedy.

In answer to the noble Baroness, Lady Randerson, we will come to devolution later in Committee.

Passenger Railway Services (Public Ownership) Bill

Lord Snape Excerpts

Committee stage
Monday 21st October 2024 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I will speak briefly to Amendment 18 in my name, which proposes the creation of an independent body responsible for pay and terms and conditions of employment for employees of the public companies that are going to be set up under the Bill.

In the long term, I assume that GBR will be responsible for settling these particular issues, but, in the meantime, the question is: who is going to do that? By default, I believe and assume it will be Ministers. That is going to be a real challenge for Ministers, because the department will inherit from the current train operators a whole range of different terms and conditions for their employees, some of them anachronistic. There will then be a difficult process of harmonising all these different terms and conditions into one composite terms and conditions for the new public sector employees that are going to be created. I would have thought that the Government should welcome an independent pay review body to help them through this potential minefield, with the trade unions, understandably, arguing for everybody to be levelled up, with all the implications that will have for current subsidies of the railways.

Also, I think that an independent pay review body which would, of course, receive representations from the Government as to what they thought was affordable, should look at some of the practices that have grown up over the years that might be due for reform: for example, the refusal of trade unions to fit track sensors to trains in order to identify faults in the tracks. That has been held up because there is no agreement.

Likewise, information about changes to speed limits is now put on a board, but it is proposed that it should be put on an iPad; again, there has been resistance to that. Then there is a hangover from the 1980s. As I understand it, an employee who uses a microwave is entitled to paid leave to have a health check.

An independent pay review body could look at some of these practices and see whether they might be modernised. If the alternative is that we should leave all this to Ministers, I am afraid that what happened in the summer does not leave me full of confidence. I am sure that the trade unions, if they had been really pressed, could have set out their new relationship with the new Labour Government by conceding something by way of reform before the near 15% pay settlement. An independent pay review body could look at issues of productivity and management to see if the costs could be managed more effectively.

I turn briefly to Amendment 19, picking up the discussion we had at the end of the last group of amendments about the impact of private investment disappearing, a point raised by the noble Lord, Lord Teverson. As I understand it, the Minister’s reply is basically this: the train operating companies have provided a minimum level of capital investment. I happen to challenge that. The examples I gave—Chiltern opening new railway stations, double-tracking, single-track lines—disprove it; nearly all the investment was self-financed by Chiltern.

Putting that on one side, the Minister’s argument is that the roscos—the rolling stock companies—will continue to buy the rolling stock and, therefore, there is no impact on the public purse. But he has left out a crucial element in the dialogue: the roscos then lease the rolling stock to the train operating companies by way of a franchise. At the moment, the fag end of those franchises, which the department has inherited, score as public expenditure, I believe. That is a liability of a public train operator to discharge the cost of a franchise.

When we move over to the new system, in which all the train operators are run by the Government, surely the franchise costs—the liabilities to pay the rolling stock companies—will score as public expenditure. That was left out of the Minister’s recent exchange. It was also glossed over in the letter that he kindly wrote to us over the weekend. Perhaps he can clarify what the view of the ONS will be on the franchise liabilities of GBR when it takes over the rolling stock from the train operating companies.

[Lord Snape (Lab)]

My Lords, I express some degree of surprise that my noble friend Lord Berkeley has tabled this amendment. If you make rest-day working in the railway industry mandatory, it ceases to be rest-day working, does it not? The whole purpose of rest-day working is to see that people take a break from their work. While my noble friend outlined the difficulties that have arisen in various parts of the railway system because people have declined to work their rest days, that is not really the fault of the people themselves or their much-maligned trade unions.

The fact is that, particularly since privatisation—although it happened under British Rail as well—railway staffing has been reduced as much as possible. The first thing that Stagecoach did when it took over South West Trains was to make lots of train drivers redundant. Not surprisingly, the ones who were left declined to work their rest days; they declined to work overtime. The number of cancellations in the first two years of Stagecoach’s operation of South West Trains rose accordingly.

I recommend to my noble friend a book called Red for Danger, written by a man called Tom Rolt—LTC Rolt—who sets out railway accidents since the 19th century, many of which were caused by tiredness because of the number of hours worked by drivers and signalmen. I will give one example. In 1892, the Thirsk accident, which killed some 35 people, was caused by a signalman falling asleep. He fell asleep because his infant daughter had been ill, and he had spent two days trying to find a doctor for her, but she had died. He tried to get time off after her death—he was on nights at the time—but the stationmaster refused permission. He had been awake for 46 hours. Two express trains crashed as a result.

Following that tragic accident, in 1906 the House of Commons at least debated the question of railway hours and the fact that many railway workers worked excessively. Perhaps noble Lords will not be surprised to learn that the debate did not spread to this end of the Corridor—obviously, noble Lords at that time had other things on their minds. Coming reasonably up to date, my noble friend Lord Berkeley will remember the Clapham Junction accident in 1988, where a considerable number of people were killed. That was caused by an error by a signal lineman who had worked every single day for the previous three weeks.

Arising from accidents like those, rest days were introduced by the railway industry around the time of the First World War. If train services cannot be maintained at a particular depot without rest-day working, then that depot is undermanned—it is as simple as that. Whether my noble friend the Minister can promise that such circumstances will not happen under Great British Railways is something I will leave with him.

I hope I have made it quite plain that I am not one of those people who thinks that everything about privatisation was wicked, but one of the downsides of privatisation was at least the tendency to run railway operations with a minimum number of people. I hope my noble friend Lord Berkeley will reflect on, understand and accept the fact that rest days are there for a particular purpose, and that he will withdraw his amendment.

[Baroness Pidgeon (LD)]

My Lords, as Liberal Democrats, we recognise that ultimately passengers do not really care who runs the railways. What they care about, as we have been discussing today, is that the trains run on time and at a fair price. We believe that the railways can offer that reliable, affordable, convenient and clean form of transport. It is very clear from today’s debate that the trains are not currently working properly. The system is a mess and people out there feel they are paying more and more money for an increasingly poor service.

While we support the Government’s desire to reform and improve passenger rail services, we do not think that renationalising passenger railway services will automatically deliver cheaper fares or a better passenger experience. As we have heard in the discussion on this group of amendments this evening, there is a fear that this reorganisation will create uncertainty for the workforce—the noble Lord, Lord Berkeley, has already outlined some serious issues.

We want to ensure that the entirety of the rail industry is focused on improving its performance, bringing down the rates of cancelled trains and improving the experience for the passenger. To achieve this, we need staff who are motivated and feel valued for the role they are playing in people’s lives. It is not clear how staff will feel going through lots of change and TUPE processes, and what this will mean for the services to passengers. I hope the Minister can assure us that there is a workforce plan, and that thought has gone into this important area.

Research by the National Skills Academy for Rail shows that 35% of the UK’s current 17,000 train drivers will leave the sector within the next five years as a result of retirement and the sector’s ageing workforce profile. Given that it takes at least 12 months to train a driver, from recruitment to driving in the roster, how are the Government going to attract new entrants into the railways at a time of change and potentially huge uncertainty? How can we be assured that passengers will not face cancelled trains as a result of fewer drivers in the rail workforce? That was an issue passengers experienced only a few years ago when Govia Thameslink Railway took over the Thameslink, Southern and Great Northern franchise and did not have enough drivers who could fulfil the timetable—we need to make sure that passengers are not going to be affected by this.

As mentioned in the earlier discussion by my noble friend Lady Randerson and the noble Lord, Lord Young, terms and conditions differ so significantly that it will take a long time to regularise them, and at huge cost. That will have an impact on not only the workforce but passengers. We do not want good people to leave the industry at all levels—train crews and staff, maintenance and management. On the contrary, we want good people to stay and be proud of the part they are playing in keeping Britain moving and in being a part of our new railway service. I look forward to reassurance from the Minister on these points to ensure that the workforce and passengers are at the heart of these proposals.

[Lord Moylan (Con)]

In speaking to these amendments, I say first that I thought the speech just made by the noble Baroness, Lady Pidgeon, was extremely sensible and contained a great deal with which I agree. It asked a series of important questions of the Minister. I have been around just long enough to have realised that getting actual answers to questions in Committee in your Lordships’ House is a pretty remote prospect, but these questions are of such importance that the Minister might make a bit more than the normal effort to address them.

I draw attention to Amendment 49 in my name, which raises the question of minimum service levels, which the last Parliament enacted as means of ensuring continuity of some service on the railways if strike action were to take place. The Government have not said whether they intend to avail themselves of that legislation and in what circumstances, but nor have they said they are going to repeal it. Many passengers in the country at large, looking to this as a means of protecting them from the ravages of what is sometimes thought to be excessive and persistent industrial action, would expect the Government to have a clear view on when they are going to use these measures—or even if the answer to that is “never”. I hope we can get a straight answer from the Minister on that.

I turn to Amendment 18 in the name of my noble friend Lord Young of Cookham, which relates to an independent pay review body. That amendment or something similar was discussed in the other place when the Bill was before that House, and the Minister in fact gave some encouragement, saying that the Government would at least look at it as part of the great reform Bill coming down the tracks towards us. I would like to hear whether government thinking has developed in any way since then and if there is anything the Minister can add to it.

On the face of it, the amendment deals primarily with agreeing and setting, in a semi-binding way, the pay rates and terms and conditions for railway staff analogously to those in other parts of the public sector. After all, it is the Government’s policy that these people should now be public employees. They should come under a single employer, a single brain and a single wallet, so it would be an independent pay review body along those lines. However, my noble friend Lord Young of Cookham took the amendment in another direction as well and made an interesting point, one also made by the noble Baroness, Lady Pidgeon: how are the Government going to amalgamate, smooth out or harmonise the varying terms and conditions and rates of pay that exist among the different train operating companies as currently constituted, as they bring them under this great big umbrella? Is there going to be a levelling up all round?

Will there be a cost to the public purse? The Government have claimed that the Bill involves no cost to the public purse, but it is patent that, if you employ a large number of people and end up adjusting their pay scales on the grounds of equity, and if those pay scales tend on average to be higher than before, a cost has been incurred directly as a result of the Bill and the action being taken under it. How is that cost to be dealt with? Where is it to come from? Why are the Government not being honest about the Bill involving costs of that character? This is a point we will return to, I am sure, when we come to look at other liabilities being transferred to the Government as a result of proposals in the Bill, as we will do later in this Committee. I invite the Government to think about this seriously, because these are important issues and they should be looked carefully.

Finally, and taking account to some extent of the lateness of the hour, when we started debating this group it was my intention to rise to offer some level of support to the amendment tabled by the noble Lord, Lord Berkeley, relating to minimum rest days. But the comprehensive and unremitting demolition of his position advanced by the noble Lord, Lord Snape, was so persuasive and irresistible that I have decided to abandon that effort.

[Lord Snape (Lab)]

I am grateful to the noble Lord for his kind words. I would just refer him to the proposed new clause to be inserted by the amendment in the name of his noble friend Lord Young, which is headed “Independent body to advise on pay and terms and conditions of employment for employees of public sector companies”. I make it that, during this debate, the party opposite has proposed no fewer than seven different bodies, groups, organisations or committees—call them what you like. As the Opposition rails regularly against too much bureaucracy, I am astonished that they want to create yet another body. In the event of a pay dispute, does the noble Lord not agree that that is why, many years ago, we created the conciliation and arbitration service? Such matters are better referred to it—we are surely running out of lawyers to sit on all these bodies—rather than creating yet another bureaucratic organisation.

[Lord Moylan (Con)]

In response, I say only that seven would be a fantastically tiny number compared to the number of internal boards, committees, liaison bodies and so forth that Great British Railways is likely to require to explain to itself what it is doing, before it even gets round to explaining to the public what it is up to. I regard seven as a very modest and economical number.

Passenger Railway Services (Public Ownership) Bill

Lord Snape Excerpts

Committee stage
Wednesday 23rd October 2024 Lords Chamber

The Mayor of Greater Manchester, who would like to have similar services running at his disposal as the Mayor of London does, is now to be turned away, irrespective of argument. The Government will not countenance his views. Similarly, the Mayor of the West Midlands and others who are in such a position are to be closed down. What, then, is the future of services in London? What is the coherence in the Government’s position? How can they have a single controlling brain and devolution—devolved operation of services—at the same time? Is not the whole principle of the Bill fundamentally a mess?

[Lord Snape (Lab)]

My Lords, I find myself in a somewhat embarrassing position, so far as this amendment is concerned, in that I agree with a lot of what the noble Lord opposite has said. In fact, had he put his name to Amendment 43—which I will speak to—my embarrassment would have been doubled, because he raises a very relevant point, as far as devolution is concerned, about railway services.

I anticipate—my noble friend will tell me if I am wrong —that Great British Railways will assume responsibility for most of the railway stations in England and Wales in future. Actually, I suspect it is only in England because of devolution in Wales. However, when we look at the present situation, most of them—as I have indicated—are owned by Network Rail, but many are run and owned by train operating companies.

Avanti has come under some criticism in your Lordships’ House over the years, not least from me. Avanti runs and is responsible for stations—not small country stations, but fairly large ones such as Birmingham International, a station that I have used frequently over the years. It is a major station with about a dozen different destinations, as far as trains through that station are concerned, yet it is virtually unstaffed after 10 pm. There is a train dispatcher on the platform, as I understand it, but there are no staff at all either in the booking office or on the concourse. I put it to my noble friend: if the major legislation he refers to goes through next year, what will be the position for stations such as Birmingham International? Will Great British Railways assume responsibility for staffing? If so, we can only hope for an improvement in railway staffing.

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[Lord Gascoigne (Con)]

My Lords, I support my noble friend Lord Moylan on Amendments 12 and 13 and I echo some of the great speeches in this group. As my noble friend said, it is right to ensure that, through some mechanism, the nations and regions are consulted, and, crucially, engaged, to ensure that they are brought into the decision-making process so that the service which eventually emerges is as effective as possible.

I am sure some will hark, yet again, that we are calling for more consultation and bureaucracy, but let us be clear: we on this side have always believed in devolution and power to the people. As my noble friend Lord Moylan said, the Government themselves have committed to the concept of devolution when it comes to transport. Therefore, is it not right that we utilise the opportunity to bring the Council of the Nations and Regions into discussions to ensure that we have the best services possible where there is overlap between the nations? Everyone is citing different quotes, but the PM said when the council was created that “we work as one team” and a “partnership”. If it is the view that that is too onerous, as I am sure the Minister will say, then we could at least try to engage the much- trailed but lesser-spotted envoy to the regions.

I support the noble Lord, Lord Snape, as I always do, in his Amendment 43. It calls for the Secretary of State to produce a report on whether a service could be devolved when it awards it to a public operator or renews a private franchise. That is wise and right, and I assume the case for doing so would be to assess the pros and cons for commuters, which we on this side of the Committee believe should be the focus of the reforms.

Supporting this amendment takes me back to what was said on day one of Committee on my amendments, when it was deemed that:

“Amendment A1, to which the noble Lord, Lord Gascoigne, spoke earlier, would create another bureaucracy”.


Later, this noble Lord hoped that the Minister would

“not get too bogged down in the bureaucratic desires of the party opposite”.—[Official Report, 21/10/24; cols. 433, 435.]

Who was so opposed to putting in a mere purpose clause, lest it be too bureaucratic? Lo and behold it was the one and only noble Lord, Lord Snape, who is now calling for an amendment to include a report when a rail service is awarded to a new operator. I welcome this Damascene conversion from the Labour Benches; I say yes to the noble Lord’s amendment but yes to Amendments A1 and 48A.

[Lord Snape (Lab)]

Before the noble Lord ruins entirely my career, such as it is, with his praise, I must tell him that he is comparing lemons with oranges. More accurately, what I said last time had nothing to with the devolution of railway passenger services to our great conurbations. I am rather against bureaucracy; it is the party opposite, as far as this legislation is concerned, that seems to be obsessed with it.

[Lord Gascoigne (Con)]

I do not know what the protocol is but I find it novel, if I may say so, that the noble Lord opposes bureaucracy when this side proposes it and yet supports it when it is convenient to himself.

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[Lord Moylan (Con)]

My Lords, I start with a brief apology to the noble Lord, Lord Snape, for not having signed his amendment and assure him that if he wishes to approach me in the corridors between now and Report, some sort of grubby deal can probably be done between us in that regard. My signature is readily available for the many wise things that he has said in this debate.

[Lord Snape (Lab)]

If we are going to meet to discuss these future amendments, grubby deals or otherwise, better in one of the bars where the noble Lord can put his hand in his pocket.

[Lord Moylan (Con)]

There is the basis of a grubby deal, I suppose, but I am sure it will be done on an equal, Dutch, shared basis.

The Minister has heard what the Committee has had to say from every corner, and he will know that his response will have left noble Lords on all sides bitterly disappointed. He has promised to combined mayoral authorities, to local authorities and to regional authorities every conceivable aspect of devolution except the right and the possibility to run their own trains, which has been done so successfully in London and, I understand although I have no personal experience of it, on Merseyside. That is now suspended; it is off the table, for a number of years at the very least, on no rational grounds at all. As the noble Lord, Lord Berkeley, so rightly said, we need to know the final outcome now.

For all the Minister’s talk of this being a narrow and technical Bill, its effect, in combination with his letter, is to put an end to the further devolution of rail services to local and regional authorities for the foreseeable future, and that is something the Committee is clearly not willing to accept. There is a fundamental difficulty at the heart of this Bill, and that is the commitment made so fulsomely to devolution, endorsed or otherwise by Mr Williams, whose views seem to be plastic and developing and to respond differently to every telephone call he gets from the noble Lord—it is possibly getting to the point of rent-a-quote from Mr Williams. Despite all the commitments made by Mr Williams and by the Labour Party in its pre-manifesto document on rail services, there is not going to be any meaningful devolution. Those commitments are not consistent with the Government’s other commitment to the single controlling brain. It is a contradiction at the heart of the legislation.

As for the ability of local authorities to commission services, as the noble Lord, Lord Berkeley, so rightly said, it is all a question of money. We promise it for buses, but as we said when we discussed the Statement made on buses—on that occasion too the noble Lord, Lord Snape, was very helpful in supporting what I said —it is all very well telling local authorities they can commission new bus services, but they do not have a bean to do so. It is all very well telling regional authorities they can commission more rail services, but unless we understand, as the noble Lord, Lord Berkeley, said, who is going to pay for it and who is going to get the fares revenue, it is all pretty meaningless.

It seems to me that the great single brain is already suffering a serious headache and that the paracetamol of devolution may be what it needs to dilute the effects and to take the pressure off that brain. I think this is a point on which the Government are going to have to give some ground, and I certainly think it is one we will debate again when we return to the Bill on Report. With that, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Snape (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, and I agree with every word she said. I will be very brief.

The dystopian world that the noble Lord, Lord Hamilton, outlined is not one that I would have thought would appeal to most people. He mentioned driverless motor cars, but so far San Francisco is the only city, I think, where driverless taxis—confined to a fairly small part of the city—actually work. As we all know, San Francisco is the sort of place that experiments with all sorts of things. Those driverless cars have not really appealed to most other countries, and whether they will do in the future remains to be seen.

The noble Lord says that with driverless cars, the road network will be much less congested. If they are going to be the only way to get around, it is hard to imagine that the road network will be less congested. The roads will be even more crowded than they are at the present.

Returning to the railway network, we have about 12,000 miles of railway, much of which was built by the Victorians. Will we tear up all those tracks to install the necessary equipment to enable trains to be driven without a driver? That is undesirable, as the noble Baroness correctly pointed out. Even trains on a modern stretch of railway line—for example, HS1 has a continental signalling system, which has been introduced on the East Coast Main Line—need a driver, for the very reasons outlined by the noble Baroness.

As for aircraft, I am not sure about the thought of taking off and landing in a pilotless aircraft. If it is ever introduced, the noble Lord, Lord Hamilton, might find himself sitting in splendid isolation. After all, the crash of two 737 MAX airliners due to computer failure—and one near accident, which was prevented by the pilot in charge—ought to be lessons to us all.

I am afraid of the dystopian world that the noble Lord envisages. A train driver with responsibility for 500 lives behind him—and, in some cases, travelling at over 150 mph, as on HS1—deserves every penny of the £60,000 or thereabouts that the noble Lord and the Daily Mail complain about non-stop.

[Lord Ranger of Northwood (Con)]

My Lords, I will briefly offer my support for my noble friend Lord Hamilton of Epsom’s Amendment 14A and echo the comments of the noble Baroness, Lady Brinton, about what services we are looking to deliver when we talk about driverless vehicles, trains, et cetera.

In referring to my register of interests, I recognise that I have spent my entire career with one foot in technology and the other in transport. The two have overlapped, and we have seen great innovation in technology in transport. This takes me back to what we achieved in London Underground and Transport for London: we looked at how bringing in gate-line technology and new systems such as the Oyster card would enable us to rely less heavily on ticket offices. Eventually we removed a lot of them. That was not just because we wanted to get the people out from behind those ticket office windows; we wanted those people, freed from sitting behind that thick piece of glass, to support passengers on the Underground system by providing assistance, information and other services. This is about innovation evolving the service and removing the need for one sedentary type of activity, enabling something else to happen.

When we think about our trains—again, I note the observations of the noble Baroness, Lady Brinton, on the kind of support that can be required on a train, especially for long-distance journeys—safety and security are primary. It would also be good if we could have more services, if the food and beverage shop stayed open a bit longer because people are there, and even if somebody is there to help you connect to the wifi, which is always eternally promised but sometimes hard to achieve. Having a greater sense of the passenger experience, focusing on developing the passenger experience by freeing people from the role of sitting in the ticket office and allowing them to do other things, will be of great value.

The main point is that we need to leave space for the design of innovation. It is always hard to tell at the early stages what we will be able to do later with that innovation, but as long as we leave space in the Bill to consider it, we can, I hope, achieve our aim of really improving the passenger experience.