Railways Bill

Lord Harper Excerpts

2nd reading
Tuesday 7th July 2026 Lords Chamber

[Lord Harper (Con)]

My Lords, it is a great pleasure to follow the noble Baroness who resides on the other side of the Welsh border from me. I still live very close to it, in the constituency that I had the pleasure to represent for nearly 20 years. I mention that because I share the Minister’s sentiments about the work of those who helped all those affected by the terrorist attack on 7/7. It is particularly memorable for me, because it took place relatively shortly after the 2005 general election, when I first joined the House of Commons. It was my first experience of how, as a parliamentarian, you end up dealing with the impact of a terrorist incident. I remember it very clearly, and the impact on the transport system. I remember—it was a very small price to pay—walking all the way from here to Paddington and seeing the enormous numbers of people whose lives had been disrupted that day, sometimes permanently, by that terrorist attack. So I am pleased by what the Minister said.

I strongly support what my noble friend Lord Grayling said about the Minister’s capabilities in this particular area. I am pleased that the noble Lord, Lord Faulkner of Worcester, added a cross-party aspect to that, because I was fearing that, if only a Conservative colleague had said nice things about the Minister, we might perhaps have been doing him a disservice. But I can add my support to what the noble Lord, Lord Grayling, said, and also note that it was supported from the other side of the House, which I hope means that, when there is a change of Prime Minister in a couple of weeks’ time, we will see the Minister still sitting in his place. I had the great pleasure to work with him very closely when I was Secretary of State and he was the chair of Network Rail, and in the capacity of the work that he did in chairing the Euston Partnership. We worked very well together and I have great respect for his knowledge and capabilities, particularly in the rail arena.

I was listening very carefully to what my noble friend Lady May said about the importance of putting passengers first—or rather customers first. It is important to remember that the rail network is not just about passengers, it also about freight customers, and both are equally important. That is where I have some broad welcome for GBR, but I have some concerns about the way the Government are going about doing it. I support bringing the operation of track and train together; we have already heard the arguments about why a regional model of keeping those together might well have been a better solution.

Of course, the Minister will know that this Bill is not necessary—I had this debate in the department—to bring track and train together. Something that has been very good, which started under us and has continued under the present Government, is joint appointments of individuals running the train operating companies and the network rail operations in that region to get rid of the buck passing and the shifting accountabilities, and having a single individual who is responsible for infrastructure and the train operations. That has actually been very successful. So, to the extent that the Bill is delivering bringing track and train together, I welcome it.

I do not support the removal of private sector operators—I know that is in another Bill. The Government will rue the day that they nationalised or continue to nationalise the passenger operating companies. We have heard that there are other models. The franchising system perhaps had reached an end and certainly had enormous damage caused to it by the pandemic. But there are other ways of doing it; several Members have talked about, for example, the way it happens in London. It is just worth recognising the enormous success of privatisation; I am not going to do it at length, because my noble friend Lord Young of Cookham did it admirably. I just want to focus on one aspect of it that is the clearest exposition of the passengers’ response to privatisation, which is the more than doubling of the number of rail journeys from privatisation to the peak before the pandemic.

I mention the pandemic again because it had a massive impact on the rail network. It drove away, literally overnight, 80% of passenger rail journeys. It caused us to spend £30,000 million of taxpayers’ money on just keeping the rail network going, which I note is a responsibility that we bear on the Conservative Benches. We did not get anything for that in terms of productivity improvements or reform of how the system was run. Even now, we still have not quite recovered the passenger volumes that we had before the pandemic. That is important, because it means that the system requires more subsidy.

I heard a number of Members talk about profits being extracted. The real problem post pandemic is that there have not been any profits. Before the pandemic, the passenger operating companies overall made profits and returned money to the Treasury for the benefit of the taxpayer. Post pandemic, overall, the passenger operating companies lost money and have been subsidised every year by the taxpayer. That is not sustainable, given that most people in the country either never use or very rarely use trains. For the vast majority of people outside London, the most common method of getting to and from work and doing your daily business is to get in your car—and if you do not use the car and you use public transport, you do not use a train, you use a bus. Buses are a much more popular form of public transport than trains and it is important to remember that.

I do not have time to go on at length now about the three areas I want to focus on in Committee. One is about the retail operations. The noble Baroness, Lady Harding of Winscombe, set that out extremely well, so I will not repeat what she said. When I was Secretary of State, officials were very keen on GBR having its own online retail operations—it was an official thing, not a Minister thing. I directed that to be removed. I thought it was a terrible idea. I thought the idea that the state could be nimble enough to run a fantastic digital operation when we already had some very good ones run by third-party retailers was completely pointless. I see that, upon the change of government, officials have snuck it back in again. I say to Ministers that they should challenge that. I do not think it will add anything. One area I will come back to is trying to reinsert competition in this area. I was very pleased to hear the speech from the noble Lord, Lord Dixon of Jericho; I hope that means, if we can craft some sensible amendments along those lines, that they will get support on these Benches, on his Benches and, I hope, from enough Cross-Benchers to encourage the Government to change their mind.

The other areas I want to look at are rail freight, to make sure we have a system where fair decisions are made about allocations, and open access.

My final point is on the tests that are important to judge the Bill. Does it drive up the volume of passengers? Does it reduce the cost to the taxpayer? Does it, as my noble friend Lord Young of Cookham said, make sure that we can get private capital involved? If it all relies on investment from the taxpayer, it will be a failure. Will it deliver a better rail system for all rail customers, both passengers and freight? Those are the tests that we should use to judge the Bill and we look forward to doing so in its next stages in this House.

Railways Bill

Lord Harper Excerpts

Committee stage
Tuesday 8th September 2026 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

Sorry, I did not mean that.

What I am trying to do with these five amendments is to make sure that public ownership of our railways really means public ownership. The Bill, as it currently stands, could allow companies within Great British Railways to have private shareholders. The Bill is, or should be, about bringing our railways back into public ownership, and we therefore should not be creating a back door that allows private ownership to creep in.

This is the worry that the Association of British Commuters, We Own It and Bring Back British Rail have brought to us. They and the others are asking a very simple question: what exactly do we mean when we say that Great British Railways will be publicly owned? At the moment, the answer is not clear in the Bill. The Government made a welcome commitment that all the shares in the parent company of Great British Railways would be publicly owned, but does that extend to the companies sitting beneath it?

The Bill defines a GBR company as a subsidiary within the meaning of the Companies Act 2006. A subsidiary does not have to be wholly publicly owned; it can be partly owned by private investors, provided that the parent company retains control. We could have a railway where the parent company is entirely publicly owned but where companies carrying out important railway functions have private shareholders. Does that not fundamentally change what public ownership means? The Passenger Railway Services (Public Ownership) Act 2024 used a much clearer definition: a public sector company had to be wholly publicly owned. The Companies Act itself provides the Government with the wording they could have used if they intended to require wholly owned subsidiaries. I think we have to ask this: why was that stronger definition not used here?

This is not helped by the Government not being clear about exactly which functions GBR companies will carry out, as the Bill gives these companies the ability to carry out potentially any GBR function. That could include train operations and infrastructure management, which leaves the door open to a very different railway in the future. In a worst-case scenario, the new definition of GBR companies as subsidiaries could even lead to the part-privatisation of rail infrastructure management—a direction of travel thought impossible in the UK since the days of Railtrack.

Railway privatisation has been a disaster: it fragmented the railways, drove up costs and put private profit ahead of passengers. We should not be creating a structure today that would enable a future Government to say, “Well, the legislation already allows private investment and we’re simply making use of the powers that Parliament has already given us”. These amendments would stop that happening. I should also say that I have not yet had the delight of meeting with the Minister, but I am sure that that is in progress.

[Lord Harper (Con)]

My Lords, I will speak to a number of the amendments in this group. First, I strongly support what my noble friend Lord Moylan said at the beginning about ownership. The noble Baroness, Lady Jones, just said that this Bill is about public ownership, but actually it is not. That was the other Bill to which she referred; this Bill is about setting up GBR as the guiding mind, bringing track and train together—however one wants to characterise it. It is not essential to the core purpose of the Bill; the ownership structure is not core to delivering the services. My noble friend Lord Moylan was right to make those points in his opening remarks.

Of the specific amendments, Amendment 2 is very pertinent. My noble friend Lord Moylan focused on the “owned by the Crown” piece, but Clause 1(3) talks about Great British Railways being

“wholly owned by the Crown”.

Even if we accept that GBR should largely be owned by the Minister—in effect, on behalf of the public—who is able to direct things, I am not sure that we should be in favour of it being “wholly owned”. There is a very good argument for having some private capital. It might be that you want to get that capital involved in the company. The noble Baroness, Lady Jones, referred to infrastructure, and we may wish to use it for that and people could have a shareholding. It may be, as my noble friend Lord Lansley said, that we would wish to have some joint ventures. I will give two examples.

One of the countries whose railways people generally admire is Japan. Interestingly, people involved in the railways in Japan largely admire how we do them, as well. There is an enormous amount of cross-fertilisation between experts from both countries. They have very successfully defrayed some of the costs of running their railway by using the value of the property in which the railway system operates—on top of, below or alongside —to generate some effective retail operations and other things that generate a significant amount of money. This keeps down the cost to the taxpayer from running the railway.

Network Rail does some of those sorts of joint ventures already in developing property and that seems perfectly reasonable. Even if we accepted that running the railway piece should be publicly owned—and I do not—it would seem perfectly reasonable if Network Rail, which will now become part of GBR, wished to have some joint ventures with people who develop property and people who help to maximise the returns for the taxpayer on the assets owned by GBR. The state is frankly not very good at doing those things, which are important not just to raise revenue to defray costs but to develop and energise the economy in some of our towns and cities up and down the country. Core railway assets are often where you could develop housing and other things to redevelop areas.

To give a specific example, there was a Written Answer from the Minister recently—forgive me, but I cannot remember whether it was answered yesterday or in the previous few days—about how the Government will develop Euston station. Originally, that was going to be done by HS2, but, when I was Secretary of State, we came to the conclusion that HS2 was probably not going to make a good fist of that. At that time, the Minister was the chairman of the Euston Partnership, which brought together representatives of the Mayor of London, local authorities and private sector companies involved in developing the station. We came to the conclusion that a development-led approach would be better, in order to develop a significant amount of housing for that part of London as well as private sector office and business space, as we had done around King’s Cross and St Pancras, which has had a huge impact on the economy. But that involves working in partnership with the private sector.

I do not know how in the end the Government will structure that approach, but it seems to me that it would be sensible at least to keep open the option that, at the very least, a subsidiary of GBR could potentially own a joint venture or part of the entity involved in delivering the development, either to help to run it or to share in some of the capital gain. You may or may not wish to do that, but ruling out the ability to do that does not seem to me sensible. Therefore, my noble friend Lord Moylan’s amendment, which probes that issue, is sensible and has a lot of merit.

On the issue of private shareholders, I will make the argument just briefly, since this Bill is not about nationalisation, about where the noble Baroness, Lady Jones, misunderstands the point about private companies. As my noble friend Lord Moylan said, from the point of view of the consumer and the delivery of services, privatisation was for most of its life a massive success. It brought into the railways an enormous amount of private capital, new rolling stock, new services and a hugely greater number of people using the railways than had been the case under British Rail, under which passenger numbers had, frankly, been declining since the Second World War. It was a huge success.

Now, it is absolutely true that the passenger franchise model had some issues and, in fact, was effectively destroyed by the pandemic. I am not suggesting that we necessarily would have wanted to carry on with that model, but there are other models involving the private sector. For example, the way that TfL operates in London is that TfL specifies the services but, in a number of cases, it contracts with companies to run those. also, as the then Mayor of Greater Manchester, the Prime Minister set up the bus services that he wished to procure, but it was the private sector that delivered those. Those models seem to me perfectly sensible. If you set them up properly, the company makes money only if it delivers services that passengers require. That seems to me a very sensible model. I know that the noble Baroness does not agree with it, but I just wanted to set out how it actually works, as opposed to her characterisation of it.

The last point that I want to make is on Amendment 8, also tabled by my noble friend Lord Moylan, which talks about the organisational structure of GBR. The reason why that is important—I think we will come on to this in some of our later debates—is that it is, in effect, how you set up the organisation and, therefore, how it takes decisions and who takes the decisions within the structure.

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

My Lords, I thank the noble Lords, Lord Moylan and Lord Lansley, and the noble Baroness, Lady Jones of Moulsecoomb, for their amendments, and the noble Lords, Lord Harper and Berkeley, for their contributions.

I will begin with Amendments 1 and 6, which would specify that the company designated as Great British Railways must be established under existing company law. I can reassure the noble Lord, Lord Moylan, that, as is the case with Network Rail and the train operating companies, GBR will be a private limited company under the Companies Act 2006. It will have its own articles of association. The Bill is constructed around this assumption. For example, Clause 3(6) makes it clear that GBR can carry out business activities by virtue of being a limited company under existing company law. If it were not a Companies Act company, this and other provisions of the Bill would not be appropriate. The alternative to a Companies Act company would be something like a royal charter corporation, such as the BBC, or a statutory corporation, such as the Advanced Research and Invention Agency. GBR is clearly neither of these, given that the Bill does not establish it as such. Body corporate is a general term under UK law, meaning an incorporated organisation, which is what GBR will be. Combined with the drafting in Clause 3(6), the Bill is clear that GBR will be a Companies Act company.

I turn to Amendments 2 and 3. Amendment 2 would remove from the Bill the requirement that GBR be wholly owned by the Crown. As the noble Lord will be aware, this Government were elected with a clear mandate to nationalise the railways, and that is exactly what we are doing. We are ensuring that GBR is owned by the British people and run in their interests—not in the interests of private profit. Public ownership is key to creating a more efficient railway and a better passenger experience. It shifts the focus from profit to passengers and freight, and begins to put an end to the fragmentation and waste of the franchising system, allowing the whole industry to work together in the interests of the passenger. This approach will save the taxpayer hundreds of millions of pounds in fees and allow taxpayers’ money to be spent on things that will benefit the passenger instead.

The requirement in the Bill that GBR must be publicly owned will ensure that any future Government wanting to privatise the railways would have to seek the consent of Parliament to do so. This will put the system on exactly the same footing as it was under privatisation since—as I am sure the noble Lord will acknowledge, given that he is trying to repeal it—an Act of Parliament was required to bring passenger rail services back into public hands. The latest YouGov poll shows that 76% of the public think that railways should be in the public sector and only 13% think they should be in the private sector. As the noble Baroness, Lady Pidgeon, put it so well, previous Governments could have done something about it but they did not. The railway is an asset with significant financial, economic and safety implications, so it is right that Parliament scrutinises every major change to it.

Amendment 3 would ensure that GBR’s subsidiaries do not need to be wholly owned by the Crown. I will speak more about the Government’s policy on this in a moment when I address the amendments in this group from the noble Baroness, Lady Jones, but I am pleased to confirm to the noble Lord, Lord Lansley, that the drafting of Clause 1 already facilitates what he seeks to achieve. The requirement to be wholly owned by the Crown applies only to the parent company that is designated as GBR, not to any of its subsidiaries. For clarity, GBR subsidiaries come within the term “GBR companies”, as defined in the Bill. GBR companies are not subject to the “wholly owned” requirement, so I hope the noble Lord will see that his amendment is unnecessary.

Speaking of GBR’s subsidiaries, I will now address Amendments 5, 334, 335, 337 and 345 from the noble Baroness, Lady Jones. She has said that she is a passionate supporter of public ownership, as we are. Her amendments would mean that GBR must wholly own all its subsidiaries for them to be considered GBR companies. As I have said before, we are committed to the private sector continuing to play a key role in the future rail sector, and this includes within GBR where appropriate. After all, the private sector can bring advantages that the public sector cannot, including greater risk appetite and additional investment that reduces the burden on the taxpayer. GBR will therefore leverage the best of both the public and the private sectors, working in close partnership with private companies, from freight and rolling stock to ticket retailing and the rail supply chain, to unlock benefits and drive growth.

The advantages of this approach were referred to by the noble Lord, Lord Harper, and can already be seen in Network Rail’s successful joint ventures with the private sector, including through Platform4, a subsidiary of Network Rail which uses private sector investment to support community regeneration projects and is expected to deliver up to 40,000 new homes in the next decade through public/private joint ventures. For example, Platform4’s joint venture with Bloc Group has already secured 2,000 new rental homes near major city transport links. These types of investment would simply not be possible were I to accept the noble Baroness’s amendments. In addition, the amendments would prevent GBR from pursuing joint ventures with the devolved Governments, which I hope she agrees would not be the right outcome.

However, I can reassure the noble Baroness that, although the existing Companies Act definition of a subsidiary enables these public/private partnerships, importantly, it does not enable private sector control. Any private sector interest in a GBR company must be a minority shareholding, to ensure that the railway remains owned, controlled and operated by the public. The Government are also clear that certain aspects of the Bill, such as GBR’s access decision-making process and its ticket retailer, passenger services and vital cross-industry functions, will all remain part of the wholly publicly owned and controlled part of the business. This recognises that, while private sector investment is a great enabler of infrastructure development opportunities that can support our communities, it is not always suited to railway functions that must be run in the public interest.

[Lord Harper (Con)]

Before the Minister moves on, this might sound a very picky point, but it is quite important. On his point about joint ventures, he talked about the Government always having a majority stake and having control. Is a 50-50 joint venture possible? If you are a private company making an investment, there is a big difference between having a 50-50 equal partnership versus one where you are a minority shareholder. Would that be possible under the model that he set out and which is structured in the Bill?

[Lord Hendy of Richmond Hill (Lab)]

I am grateful to the noble Lord for his intervention. I will write to him on that rather than say something I might regret.

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[Lord Harper (Con)]

My Lords, I will start by referring to the amendment that the noble Lord, Lord Berkeley, talked to, because it just so happened that, as I was travelling to London yesterday, a car struck a bridge at Burnham. I see that the noble Lord, Lord Faulkner, is nodding; perhaps he was on the same train. The reason why it is important is that, although there was, I think, no significant damage to the bridge, the train was significantly late, which meant that every single person on it was entitled under the Delay Repay scheme to a significant refund of their fare. It was not the only train affected; lots of trains were. The cost to the taxpayer of that single incident was probably very significant, and it does not seem unreasonable that the insurance company of the person who struck the bridge should have to reimburse the taxpayer for the cost of that significant damage. Having had that experience yesterday, I am instinctively supportive of that amendment.

Before I talk about the other amendments in this group, I will make a teensy defence of the Sunak Administration, given what my noble friend Lord Moylan said, and since I was a member of it; I will not make an extensive one because that is not the purpose for which we are here. On this specific issue, we got the Williams review, which my noble friend referred to, and then we set in train the work that has, in effect, come to fruition with this Bill, in starting the process of setting up GBR. A lot of the preparatory work took place when we were in government, and there is a lot of agreement, I think, between how we would have done it and how the Minister is doing it today. The big difference, of course, is on the ownership of the companies but, in terms of bringing together a guiding mind—however one wishes to describe it—and a more seamless operation of track and train, that is certainly something that we intended to do and we started the process. That is my bit of a defence of what we did when we were in government.

Let me now address the amendments, starting with Amendment 7, and Clause 3. The problem with purpose clauses and a list of functions is the danger of what parliamentary draftsmen call undue specificity: as soon as you have a list, you then have a question about whether you are allowed to do the things that are not on the list. In his list, my noble friend Lord Moylan has things that are not in the Government’s list of functions, such as

“providing value for money for passengers and taxpayers”.

But in neither of the lists is what we have talked about: the work that Network Rail currently does, and GBR will continue to do, not just on operating passenger services or facilitating freight services but on maximising the benefit of its property portfolio—not only to generate revenue to offset the cost of providing rail services but to generate a significant amount of economic development and growth in significant parts of the country, as my noble friend Lord Lansley mentioned. The Government are woefully behind their housebuilding targets, but one of their priorities is developing housing around railway stations, and some of that land will be owned by Network Rail and, in due course, GBR. In relation to the amendment, I ask the Minister whether the functions set out in the Bill are sufficiently extensive to give GBR the powers it needs to do its work.

I also want to speak to Amendment 12, and the linked Amendments 80 and 81, on fair and non-discriminatory decisions, which it is important to put in the legislation. GBR will now make important decisions about access for private freight companies to the network, open access operators and—I will not labour this point here, because we will come to it in the next group—ticketing. Unlike the ORR, which did not have any skin in the game, GBR will be making decisions on, for example, freight access or open access, so it will be both a decision-maker and a provider of services, which are in competition. That is also true for ticket retailing. When it makes those decisions, it should have a legal duty to do so in a fair and non-discriminatory way, which is why I support the amendment. It would have two effects: it would govern how GBR operates and it would provide the opportunity for others to challenge it if it does not behave in that way.

Amendments 80 and 81 are linked, because they are about the charges that GBR can make for services where it is a monopoly supplier and, therefore, people do not have any choices. Amendment 81 would provide an appeal mechanism if it charges in a way that people do not think is reasonable. Both amendments would be very sensible to ensure that it behaves in a reasonable way.

There are two other amendments I want to comment on. Amendment 15, which the noble Lord, Lord Davies of Brixton, set out, sounds sensible on the face of it, but I will just flag three issues with it. First, when you move employers, there are potentially pension implications. I understand that the company that provides pensions to rail workers has flagged the time that will be required to do the pensions transition in a sensible way. We have seen in other areas of the public sector that, if you get that wrong, it can cause significant issues.

The second issue is one that we have seen, as the noble Lord, Lord Davies, touched on in his remarks. I suspect that, at the moment, because these are all separate companies, there will be a range of pay structures. We have already seen this—as have the Government, to their own cost—in what they are doing with NHS England. They originally said that they wanted to bring NHS England and all its staff into the Department of Health and Social Care. As they set out on that process, because people in NHS England are in many cases paid significantly more than people in the Department of Health and Social Care, they have discovered either that they cannot do it or that doing it would be very expensive or require the Secretary of State or the Chief Secretary to the Treasury to sign off the move of every single employee above a certain pay band. They have discovered that it is all very complicated, and they are effectively having to do the NHS England/DHSC change in a different way. If you stick everyone in a single company and you have to equalise all their pay and conditions, my concern is that if you do it in a downwards direction, it would clearly not be advantageous to those employees who lose out, but if you do it in an upwards direction then it is clearly damaging for the taxpayer, who has to pay all this increased cost without getting any productivity.

I want to flag one final thing, but will not go into it at length because we have a later group some way down where we will cover it in more detail. The noble Lord, Lord Davies of Brixton, slightly gave the game away when he referred to a letter from the RMT’s parliamentary group: the point of this is to have a single national rail employer so that the trade unions can increase their power and once again be able to deliver national rail strikes, closing down the entire railway network, which they have not been able to do with different rail operating companies, as you could not have a strike in one of them in response to a dispute at another. People should be very clear: if there is a single employer—I have some amendments to test this—we will be back in the days where we have national rail strikes and increase the bargaining power of those trade unions. The experience over history is that that power is not used for the benefit of the passenger and customer but to extract money from the taxpayer. That would be a very damaging thing. I flag that now, but will not go into it in any more detail as I will come back to it later.

Finally, very briefly, I am attracted to Amendment 20 from the noble Baroness, Lady Pidgeon. The only point I would make to her, as I think I said at Second Reading, is that the reason why, when I was Secretary of State, I set up a freight target—there is reference to a freight target in the Bill—was to try to balance the fact that all the conversations we have about railways are always about passengers. The reason for the freight target was to slightly rebalance the conversation and have more of a level playing field. My worry is that, if you put the passenger target in the Bill, you reweight it back towards being all about passengers again. I absolutely agree with her that we want to increase the number of passengers and reduce the taxpayer subsidy, but the reason for having the freight target was to slightly rebalance and have more of a level playing field.

[Baroness Pidgeon (LD)]

My Lords, my Amendments 20 and 110 would require Great British Railways to increase passengers on the railways and to set a passenger target, rather like the freight target, which has just been referred to. One could easily argue that this is not necessary, as any Government will want the railway to grow and passengers and freight to increase. Yet that is not necessarily the case. The Bill currently does not create a clear statutory duty to grow passenger use or to set measurable targets. The reform of the railway should not simply be to stabilise the current system as it is; it should be to actively grow demand and ensure access to the network to support the shift to sustainable modes of transport.

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[Lord Lansley (Con)]

My Lords, I do not have my name on these amendments, but I thoroughly agree with pretty much everything that has been said. I especially support what my noble friend Lady Harding said in introducing this group and am entirely in agreement with my noble friend Lord Young of Cookham. I do not want to get into the question of appeals, because we will come on to how the appeal process should be structured later.

Amendment 47 in the name of my noble friend about the approved document is particularly important. I assume that the code of practice that we are promised, which the noble Baroness, Lady Alexander, was talking about, is the equivalent of the approved document or some part of it. At the moment, we have this ticketing and settlement agreement. We have to know how this is going to work in future. If we do not, we should expect—indeed, we should call for—the Competition and Markets Authority to step in. As things stand, the relevant aspects of the ticketing and settlement agreement constitute part of a block exemption against a Chapter 1 prohibition under the Competition Act. It is, on the face of it, potentially an anti-competitive agreement, but the block exemption exists. The question is whether the agreement satisfies the requirements of the block exemption. We have to look at the agreement to know whether that is the case, which is why Amendment 47 is right. We have to ask the Competition and Markets Authority whether the code of practice or the approved document under the Bill satisfies the requirements of the block exemption.

The fact is that GBR will be in a dominant position. Under the Competition Act, in addition to the prohibition on anti-competitive agreements there is a prohibition on abuse of a dominant position. Much of this debate is saying that, given that we know that GBR will be in a dominant position, we should be actively looking for the Office of Rail and Road, by way of market investigations in this area if necessary, or the Competition and Markets Authority to step in, as the current jurisdiction enables it to do, to counter any abuse. We know from Clause 2(1) that Great British Railways has no Crown immunity. Under Section 73 of the Competition Act, there is a Crown immunity from the constraints, remedies and directions of the Competition and Markets Authority, so GBR does not want to be in a position where the Competition and Markets Authority comes after it to prevent its abuse of a dominant position. For all those reasons, the Government would be well advised to put into the legislation measures that will prevent GBR being tempted to abuse its dominant position and to ensure that the approved document will satisfy the CMA’s requirements for a block exemption.

[Lord Harper (Con)]

I thank my noble friend Lady Harding of Winscombe for her excellent opening of this group, the comprehensive way in which she did it and—I think this is a powerful point—her real experience of a similar process and what actually happens in practice. One of the values of this House is having not just theoretical debates but Members who have experience of how these things work in practice. It is no good just legislating for what we think might happen; it is about what will happen. That was particularly valuable.

In this area, unlike some of the areas in the Bill, there is broad consistency among everybody who has spoken so far. At Second Reading, in other fora and in writing, the Minister set out that the Government want a competitive retail landscape and recognise the benefits of that. So what we are debating here is not the principle but how best to achieve that shared goal in practice. I will try to add to this debate.

Practically, the suggestion in my noble friend Lord Holmes’s Amendment 182 of a functional separation —which the noble Baroness, Lady Harding, also raised—is the cleanest and most sensible solution. That means that GBR is not in a position where it is tempted to abuse a dominant market position. It has a separate retailing arm, the rules can operate in a transparent way, you avoid a lot of trouble and you do not have to set up a complicated mechanism to deal with that abuse. I understand that the Government have set their face against that, but I reinforce that that would be the best solution and would solve a lot of these problems.

If the Government do not want to do that, for whatever reason, we absolutely need to make sure, first, that there is transparency. If all this is hidden away, it is very difficult for whatever mechanisms are put in place, whether it is the CMA, the ORR or whatever legal processes the independent retailers have to do. As the noble Baroness, Lady Harding, said, they are not huge companies with bottomless pits of money to be able to do this. If you do not have transparency, people do not know what is going on.

I will make a slightly different argument, bringing in our friends from the Treasury, than the one my noble friend Lord Young of Cookham made. This is one where the Treasury should be on our side. One of the important things that the Treasury wants to achieve is to reduce the subsidy paid to the rail network because, post Covid, the rail network does not send money to the Treasury; it sucks money away from the Treasury. The only way that will change on the operating side is if there is innovation and more passengers use the rail network. The ticketing retailers are one of the ways, in the innovative way they retail tickets. Importantly, if leisure travel is to be a growth area, the partnerships that they strike with providers of leisure opportunities can then be combined with travel to produce innovative packages. If you are going to do all that, you need that thriving, competitive retailing operation, so the Treasury should want that to be successful.

The other thing the Treasury should want is that the operating cost of GBR’s own ticketing operation should be as low as possible. On the cost of running that operation, I challenge what my noble friend Lord Young said. We know what the third-party retailers get because we know what the percentage commission is. If GBR’s retailing operation is not able to run its services for less money than that, it should not be in business, frankly, because it is adding no value at all and should not be running it. My hunch is it that it will not be able to, which is why, when I was Secretary of State, I said it should not really get involved in this business at all because there were lots of competing providers that were much better at it and, frankly, it should just get those to do it.

However, for reasons I do not quite understand, Ministers want GBR to be involved in this process. So, it is critical that the accounting—I declare my interest here as a chartered accountant—should be absolutely transparent so that we can see what it costs. From the Treasury’s point of view, as I said, it wants to be sure that no subsidy is going into the ticketing operation from the rest of the thing, given that there are competitive operators that can deliver this, I suspect, more cost effectively. That is an argument for the Treasury supporting some of these amendments.

On the subsidy point, I believe there is a question that is not resolved, which the independent retailers are concerned about. I understand that, in written correspondence with the Independent Rail Retailers, the department has asserted that GBR’s online retailer will not be subject to the Subsidy Control Act 2022, arguing instead that it will be governed solely by the Public Service Obligations in Transport Regulations 2023. That approach is inconsistent with the legal framework and assurances given by Ministers during the passage of the Bill so far that GBR will remain subject to public law, competition and subsidy control requirements.

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[Lord Hendy of Richmond Hill (Lab)]

I am about to get there. In turning to Amendments 49 and 181 concerning cross-subsidisation and subsidy control, I can offer further reassurance. The advantage of interventions is that you make your point; the disadvantage is that you stop hearing. As a public body, GBR is required to comply with Managing Public Money principles and relevant subsidy control legislation. The Public Service Obligations in Transport Regulations is the relevant subsidy control legislation that applies to retail specifically.

GBR’s passenger services business will therefore operate within a clear financial framework, ensuring that public funding is used appropriately and fairly. GBR will be required through its business plan to set out its activities, such as its broad retailing function, the costs of these activities and how it proposes that these costs are met. The business plan must cover everything that GBR does, so there should be no concern about transparency.

It is important to note that GBR will be operating a transport service of which retailing is a part. It will have to use all available channels to serve passengers, however they buy their tickets. If it is allocated more funding for retail than would be needed for a simple online retail platform, it is simply because it also has an obligation to provide physical ticket sales—I listed those activities before—including for people who pay cash. They are far more costly to provide, and other retailers are most unlikely to provide them.

In answer to the noble Lord, Lord Young, it will not be possible for GBR to subsidise retail from infrastructure budgets, for example, as ticket offices are not classed as infrastructure. GBR will not be overcompensated to deliver retail functions in a way that distorts the market. Funding will be allocated based on the costs of delivering those services to passengers.

It will also be subject to the oversight of the ORR as the sector specialist competition regulator, alongside the Competition and Markets Authority. In that role, the ORR will be able to take enforcement steps against GBR, should it suspect that GBR is using public funds to act in an anti-competitive way.

[Lord Harper (Con)]

Before the Minister moves on, can I press him on two of the things that he has said? In his opening summary, he set out the Government’s view. The problem is that if the retailers do not buy it—they do not, at the moment—whatever he thinks, they are not going to be investing, innovating and developing because they will not be able to justify that to their shareholders. Part of the problem is the need to take some steps to persuade retailers that they will be treated fairly.

Secondly, I think the Minister inadvertently made this point about accounting. I know about the ticketing and settlement agreement to my cost and about some of the ways that retailing has to be done. If GBR is, in effect, doing different things—if it has an online operation but has to do all this other stuff—it will be even more important that there is clear accounting and transparency about where the money is going. Otherwise, it will be impossible to work out whether it is subsidising its online operations, which are competing with third party retailers, by bringing in more money for its other services.

Frankly, it is really important for the taxpayer that we know how much it costs to retail through ticket offices and how cost effective that is because, at some point, Ministers will have to grasp the issue—I started to grasp it but had to ungrasp in the end—that providing things through ticket offices when hardly anyone buys tickets that way will have to change at some point in the future. There has to be some clear and transparent cost information to enable the right decisions to be taken.

[Lord Hendy of Richmond Hill (Lab)]

I simply say to the noble Lord, first, that there will have to be 100% transparency because, apart from anything else, GBR will have to put all the costs into its business plan. My other point about his first point is that there has been a lot of investment already, with very little protection. Part of what we are doing is to give greater protection for retailers in the future, which they need because they have invested. That is a valid point.

Amendments 47, 51, 52, 53, 136 and 139 concern oversight. The retail code of practice will, as I said, be administered and enforced by the ORR. It is the appropriate body to assess complaints and determine whether GBR has complied with its obligations, but GBR will also be fully subject to competition law, alongside the existing oversight of the Competition and Markets Authority. Nothing in the Bill prevents the CMA from acting on competition challenges in rail, and nothing prevents retailers from referring issues to the CMA—either competition issues relating to the code of practice or wider competition issues. So a second opinion is always available and, of course, if they wanted to appeal to the courts, they could judicially review those decisions further.

Currently, at least, additional approval requirements and further statutory appeal routes simply duplicate the existing regulatory arrangements without providing meaningful additional protections, and transparency, as I have referred to, is already baked into this framework. It is a core regulatory principle for the ORR, which has historically publicised the launching, and formal outcome, of railway licence investigations, and I would expect it to continue to do so. The Bill retains the requirement for the ORR to give notice for any decision not to issue an enforcement order following a licence breach, providing a legislative backstop for this transparency.

I move to Amendments 136 and 139. It would not be appropriate for the ORR’s general duty to promote competition to apply to rail retailing wholesale. If it did, the competition duty would conflict with the ORR’s role in fairly and objectively enforcing the safeguards that the Government have charged it to deliver via the code. Enforcement of the code should be fair and evidence-based, determined simply by whether GBR has complied with the code of practice or not. It should not be subject to other goals, which might cause the ORR to judge operators’ compliance unfairly. This is usual practice for enforcement provisions.

However, I reassure the noble Baroness, Lady Harding, that the competition duty will absolutely apply to the ORR when it is writing the code of practice, so the code itself will have competition principles embedded within it. My officials wrote to her on that subject. The noble Baroness put to the Committee a number of clear propositions that I will consider carefully as a consequence of what she said. I believe I have answered many of them, but I will look at what she said further, and of course the publication of the draft code of practice will help considerably. I will also consider what the noble Lord, Lord Young, the noble Baroness, Lady Alexander, and other noble Lords said. As I said, we expect the CMA to respond to the consultation, so we will see what it says.

On Amendment 17, the Government fully agree that appropriate oversight and scrutiny of public spending is important. However, the amendment is unnecessary. The government policy has long been that GBR will retail tickets online through a high-quality website and app, as the train operating companies do now and have done for many years, without fees to passengers.

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[Lord Berkeley (Lab)]

My Lords, these are interesting amendments. I have had several representations from the rail sector in Wales and Scotland, and they are clearly quite concerned.

The first question I probably need answering is on who will be owning and operating the infrastructure in Wales and Scotland. At the moment, in Scotland, it is done by Transport Scotland, and in Wales, I cannot remember but think it is different. Of course, both those organisations may, and do, operate passenger train services. Given the scope of the Bill, which we have been discussing at length today, will Transport Scotland and the Welsh Assembly be able to let their own contracts with GBR or an independent operator to run trains? Who will be responsible for managing the infrastructure if it goes wrong or needs maintenance, and for the issue in the amendment, which is about co-ordinating with the rest of the UK? To me, it is not clear at the moment, and I would be grateful if my noble friend could clarify. I am probably being stupid, but there we are.

[Lord Harper (Con)]

My Lords, I just want to speak briefly about three groups of amendments within this group. Amendment 145 in the name of my noble friend Lord Moylan has quite a lot to recommend it. The Bill, as set out, sensibly says that the UK Government and the Scottish Government should have a memorandum of understanding about how cross-border rail services should work. That is very sensible, but it seems to me that you would want to have the documents published at the same time; you want them on the same timeline because you want a GB rail strategy to be produced, given the way the rail network works. The whole point about GBR bringing together track and train and having some consistency means it seems very sensible that, if you are to have this memorandum of understanding between UK Ministers and Scottish and Welsh Ministers, you want them on the same timeline. Then what you publish is, in effect, a GB rail strategy with a level of consistency.

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[Lord Hendy of Richmond Hill (Lab)]

My Lords, the first thing I should say about this group is that the Scottish and Welsh Governments have been intensely involved in drafting the Bill, and both Governments are very supportive of it.

I turn to Amendment 21. Clause 4 enables Scottish and Welsh Ministers to make arrangements for their functions to be exercised by GBR, a GBR subsidiary or a company jointly owned. The noble Lord, Lord Lansley, spotted that correctly; he is absolutely right. It is an enabling power designed to support integration where that is considered beneficial. It does not prevent devolved Ministers from continuing to exercise their functions themselves, nor is it intended to provide a general power to delegate functions to any body corporate.

Indeed, under Clause 27, Welsh Ministers will continue to designate Wales-only services and Welsh components of cross-border services. Under Clause 31, Welsh Ministers may either provide those services themselves or secure their provision through the award of public service contracts. Similar powers exist for Scottish Ministers under Clauses 26 and 31. Of course, Scottish Ministers can decide to run their services through GBR or through their own operator. The Government therefore believe that the Bill strikes an appropriate balance between preserving devolved responsibilities and enabling closer integration with GBR, where that is desired by Scottish or Welsh Ministers.

Amendment 22 in the name of the noble Lord, Lord Lansley, would require the ORR to be consulted. Clause 4 already requires consultation with both the Secretary of State and GBR before such arrangements are made, varied or revoked. That is because GBR is the body that may be responsible for carrying out the function, while the Secretary of State has an interest in the wider operation and integration of the railway system, and because GBR will be operating devolved functions alongside reserved ones. They are therefore the parties best placed to provide input on these arrangements. Although the ORR plays an important role as the railway’s independent regulator, these arrangements concern the exercise of devolved functions and national versus devolved governance, rather than regulatory matters. We therefore do not consider an additional statutory consultation requirement to be necessary.

On Amendments 145 and 146, the Government fully support transparency and effective parliamentary scrutiny. That is precisely why we have already published the agreed memorandum of understanding with Welsh Ministers and a framework for the memorandum of understanding with Scottish Ministers. That has enabled Parliament to consider the proposed arrangements alongside the Bill. The memoranda of understanding are intended to provide a basis for joint working between UK Ministers and Scottish and Welsh Ministers on matters relating to rail services and funding. They are not legislative instruments but practical agreements to support effective intergovernmental working.

The amendments would require the MoUs to be published at the same time as the rail strategy and would impose a two-month period before they could come into force. However, the rail strategy and the MoUs serve distinct and seperate purposes. The rail strategy sets out long-term priorities and objectives for the railway, while the MoU supports collaborative working between the UK and Welsh or Scottish Governments. Requiring the two documents to be published at the same time would create unnecessary friction and delay. Similarly, requiring a two-month waiting period before an MoU could take effect would add process without materially improving oversight or outcomes.

[Lord Harper (Con)]

Can I just check that the rail strategy that the Secretary of State will produce will be a strategy for Great Britain, and that the memorandum of understanding will be about how that interacts? If the Secretary of State’s rail strategy is for England only, that does not make sense. What the Minister just said implies that the Secretary of State will produce a rail strategy for Great Britain, in which case there would not be any friction from ensuring that those documents were published together.

[Lord Lansley (Con)]

Before the Minister responds to that point, I add that I am slightly confused because Clause 15, “Rail strategy”, says that the Secretary of State “may not” include provision relating to the functions of the Scottish Ministers, so it may be a rail strategy for Great Britain, but it cannot deal with the functions of the Scottish Ministers.

[Lord Hendy of Richmond Hill (Lab)]

I say in response to noble Lords that the long-term rail strategy is for the whole railway. The Scottish and Welsh Governments are being consulted, but Scotland will also have a strategy covering its own functions because that is the meaning of devolution. I hope that is clear.

[Lord Harper (Con)]

I do not want to overly labour this point, but that is not very clear. The way it works at the moment is that the Scottish Ministers have a role in helping to shape—

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[Lord Harper (Con)]

As I was just saying before we resumed, the advantage of a break is that I had a chance to slightly firm up my question. Before we broke for the Division, I was saying that I thought that not synchronising the rail strategy publication and the memorandum of understanding potentially meant not having a clear, joined-up strategy for Great Britain. I was asking the Minister whether the strategy that the Secretary of State had to produce was for Great Britain and, if so, whether it would not make sense to synchronise that with the memorandum of understanding.

Having had a chance to look at Clause 15, it is indeed the case that the Secretary of State is producing a strategy for the rail network in Great Britain—that includes Wales and Scotland—but it specifically must not contain provisions about functions of the Scottish Ministers, because that is clearly what the memorandum of understanding is going to do. In this case, I think the amendments tabled by my noble friend Lord Moylan are very sensible. Otherwise, you will publish a rail strategy for Great Britain that has quite important functions for Scottish Ministers because they make the call on what Network Rail does on infrastructure in Scotland, for example. It does not make sense to not have that joined up.

I am very happy for the Minister take this away, because it will obviously have consequences, but synchronising those two events will drive very sensible and good behaviour in the way the department interacts with the Scottish and Welsh Governments and will be an improvement in having a better rail strategy for the whole of Great Britain.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I am grateful to the noble Lord, and I, too, have done a little bit of homework while we had the Division. The important thing he draws our attention to is Clause 15(3). Because

“The rail strategy may not contain provision about functions of the Scottish Ministers”,


in effect, it is the rail strategy for England and Wales. Because the rail strategy for Scotland is the function of Scottish Ministers, they will publish a strategy to cover Scotland. It will reflect the devolution funding arrangements and the responsibility for the railway in each country. We are working very closely with Scotland, and GBR will have to work very closely with Scotland, as will the Secretary of State, to ensure that the strategies make sense and, therefore, that the GBR business plan makes sense.

Having said all that, I am still not sure that I can see the connection between the MoUs and the strategies. Indeed, we have been able to strike a memorandum of understanding and publish it with Welsh Ministers—and we have a framework for that in Scotland—without a long-term rail strategy. They are intended to provide a basis for joint working between UK Ministers and Scottish and Welsh Ministers on matters related to rail services and funding, but they are not the same as a strategy, which sets out what the intentions of those Governments are and will form the basis on which GBR will write a business plan.

I think my contention is the same. The rail strategy sets out long-term priorities and objectives for the railway, and the MoUs support collaborative working between the respective UK and Welsh and Scottish Governments. I see the difference between those two instruments—the strategies and the MoUs—but I do not see the need for a waiting period between them taking effect or for them to be co-ordinated. As I have said, we have published the MoU with Wales already and the outline of that for Scotland too.

[Lord Harper (Con)]

Here is my final point—as the Minister will be pleased to know. He has just, perhaps inadvertently, flagged that the drafting of the Bill in Clause 15 is not correct. The Secretary of State will not be producing a long-term strategy for the development and use of the rail network in Great Britain and the railway services that she wishes to see in Great Britain. She will be doing those things for England and Wales. The Bill should really reflect that because it is inaccurate. Again, I am happy for him to take it away, but I think he has let on at the Dispatch Box that the Bill is not correctly drafted.

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord draws my attention to something which, having read it to him, I concluded myself. This is the purpose of Committee, of course: to discover things that you have not thought about. I am as willing as the next Minister, perhaps, to decide what to do. We will take that away, and I am grateful to the noble Lord. For the avoidance of doubt, I still do not accept the contention about the connections between the MoU and the strategies, but I accept the points that the respective boundaries of the strategies could be much better placed than they are.

Amendment 146 from the noble Lord, Lord Moylan, goes further on the provisions on the allocation of ticket revenue from cross-border services operated by Transport for Wales. We do not think that is appropriate. Such operational and commercial matters are more appropriately dealt with through established industry arrangements such as public service contracts and the Wales and borders agreements rather than through an intergovernmental co-operation agreement, which is fundamentally about the governance of GBR, so I urge the noble Lord not to press the amendment.

I turn to Amendments 294 and 295 on consultation. The Government fully recognise the importance of ensuring that Scottish and Welsh Ministers are consulted on decisions that have a significant impact on their nations. That is precisely why the Bill already places a duty on GBR to consult them before making such decisions. The amendment would go further by requiring devolved Ministers to determine whether consultation was required. That would add significant delay for no practical benefit, as Scottish and Welsh Ministers would be required to review decisions that would often be irrelevant to them before steps can be taken. The approach could create uncertainty about when decisions can proceed and risk shifting the focus from effective engagement to procedural questions about whether consultation is required. Scottish and Welsh Ministers will also continue to have important mechanisms through which they can influence the railway, including their respective rail and transport strategies, their powers, which are strong, and guidance. The Government therefore consider these amendments unnecessary.

Finally, Amendment 296 from the noble Lord, Lord Berkeley, specifies that GBR should consult on access decisions where they impact Welsh Ministers. Clause 82 already requires that GBR consults Wales on issues affecting it. That requirement would also extend to access decisions. Therefore, I can reassure the noble Lord that his intent has already been achieved by the Bill but, bearing in mind what he said in support of his amendment, I will write to him, and copy it to other noble Lords, about the ownership and control of infrastructure in Scotland and Wales now and in the future so that he and other noble Lords—though I see the noble Lord is not in his place—can be clear about the present and future arrangements, since I think what he said expressed a degree of confusion about them.

I finish by saying again, as I started with, that Scotland and Wales have been intensely involved in the drafting of the Bill and that both Governments are very supportive of it. Therefore, I urge the noble Lord to withdraw his amendment.

Railways Bill

Lord Harper Excerpts

Committee stage
Thursday 10th September 2026 Grand Committee

[Lord Lansley (Con)]

I have four amendments in this group: Amendments 26, 64, 304 and 333. They are all on the same point, which is that, in the Bill, the definition of a “relevant local government body” is expressed as mayoral combined authorities, mayoral combined county authorities and passenger transport executives. Those first two—mayoral combined authorities and mayoral county combined authorities—are, I think, based on the proposition from some months back that, over time, all the strategic authorities would move towards being mayoral strategic authorities.

Since the original drafting of this legislation, we have completed the English Devolution and Community Empowerment Act. Those of us who worked on that legislation will recall that Section 1 defines strategic authorities, and it does not do so by reference to whether or not they have a mayor; they are, basically, single-foundation strategic authorities, combined-foundation strategic authorities or county combined strategic authorities. It seems to me that, for the purposes of this legislation, the relevant local government bodies with which Great British Railways, in particular, and the Secretary of State should work would be all the strategic authorities. Why would we exclude those that do not have mayors?

I say this because, whether it takes a year or two—or three or four—there will be some strategic authorities that may not have a mayor for a very long time. I do not say this because I want them not to have mayors; I am in favour of them having mayors. It is just that we are quite a long way from that happening. From my quick survey, looking across England, we probably have two long-term single-foundation strategic authorities: Buckinghamshire and Northamptonshire. By my reckoning, at the moment, we have at least four, perhaps five, combined county authorities—Lancashire, Cornwall, Surrey, Devon and Torbay, and Norfolk and Suffolk—with no intention of having mayors. Interestingly, that includes Cornwall. The Minister will remember that, last week, when the Prime Minister was answering questions in the other place for a very long time, he referenced devolution in Cornwall and said

“with or without a mayor”.

Therefore, we are in a very simple position: we want devolution. We want GBR to have regard to the transport plans of strategic authorities. We want GBR to consult with strategic authorities, with the responsibilities that they have. We want statutory information sharing between GBR and strategic authorities. If we put “mayoral” in this legislation, we will restrict the availability of all the statutory consultation, information-sharing and advisory relationships between GBR and non-mayoral strategic authorities. I am sure that that is not anybody’s intention. The simplest thing to do would be to reference the definition of strategic authorities in Section 1 of the English Devolution and Community Empowerment Act; that would be altogether simpler and better in the long run.

[Lord Harper (Con)]

My Lords, I rise briefly to support what my noble friend Lord Lansley has said on his Amendment 26. I had some dealings on this when the Prime Minister was the Mayor of the Greater Manchester and when Andy Street was Mayor of the West Midlands. Both of them engaged with the department on their desire to integrate the national rail network into their plans locally. They wanted to have those conversations, which worked well. In those cases, obviously, they were both mayors.

I agree with my noble friend Lord Lansley. Given the announcement this week that local government reform and the bringing together of unitary authorities, which is, in many cases, a precursor to having mayors, have been held up and there have been legal challenges, it would be much more sensible, as my noble friend says, if we made sure that GBR could have those sensible conversations and had the powers to do that with all appropriate local authorities with a strategic transport function. We should not limit that to those authorities with a mayor.

As my noble friend said, although it was at least the preference of the Government led by Keir Starmer that there should be limits to what you could devolve if you did not have a mayor, it sounds like, from what the Prime Minister said in his answers to Cornish MPs, that he is open-minded about that. Therefore, we could have some significant local authorities with transport powers without a mayor. I know from my own experience that there are a number of proposals in the Cornish area, for example, for some rail infrastructure that would bring significant benefits to the Cornish economy. It would be perverse if the Cornish council could not have those conversations with GBR or if people had to work out weird ways of having to facilitate those conversations because we had not provided for that in this legislation.

I agree with my noble friend. The Minister would be wise either to accept his amendment or, if it needs to be worded differently or other changes need to be made, at least to take it away and come back on Report with a government amendment, or suite of amendments, to achieve the same function. That would improve the position and, in fact, get to a position that I think is the Government’s intention—certainly the current Government’s intention. It may not have been when the legislation was drafted but I think that it would more accurately reflect the position now.

[Lord Berkeley (Lab)]

My Lords, I rise briefly to speak to the amendments in my name, Amendments 298, 299 and 300, which follow on from the amendments about which noble Lords have spoken. I want to double-check that there will be consultation with the relevant authorities—whether it is Scotland, Wales or other authorities—before any change is made to access charges, timetables or anything else.

Several noble Lords have spoken about Cornwall, where I live. It may be down as a mayoral authority but, knowing the politics of Cornwall, I think that it is highly unlikely that anything credible will come out of that. Whether that is good or bad, we can debate.

There is also the question of what improvement—or lack of improvement—is needed to the railway in Cornwall and, to some extent, in Devon. We have been debating for many years whether the line at Dawlish is at risk and by how much. I know that my noble friend the Minister has said that it is all going to be fine. Rock bolts are being put into the hillside to stop it falling down, which I am sure is a good solution, but we still only have one rail line going to most of south Devon and the whole of Cornwall. It would be nice to think that the local authorities—the south-west regional authority is already doing some work on this—are able to take some of that forward with a budget to look at the alternatives and make sure that the various authorities, whoever they may be at the time, are properly consulted, especially on access, charges and things like that.

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[Lord Hendy of Richmond Hill (Lab)]

The answer is that the infrastructure arrangements in Wales are significantly different and Wales does not have its own settlement in that respect. I reassure noble Lords that engagement between the Government and Scottish and Welsh Ministers on both strategies is productive and will continue until their publication. I am grateful to noble Lords who raised this issue, providing an opportunity to place my clarification on the record.

In respect of the second point made by the noble Lord, Lord Moylan, about an email from—

[Lord Harper (Con)]

Before the Minister concludes, may I respond, since I was one of the Members who raised this issue? I thank him for what he has just said and for the very helpful letter that he sent, to which the noble Lord, Lord Moylan, referred. I took the time to study it this morning, since I was the one who raised the issue, and I am grateful to him for making it clear that “strategy” means something slightly different north of the border, in Scotland, because of the role of Scottish Ministers. Again, it is an asymmetrical position with Wales, as my noble friend Lord Lansley, has just highlighted, because in Wales Welsh Ministers do not have the responsibility. That is very helpful, and I am grateful for the Minister’s clarification that the Government do not have to come back with amendments to fix the Bill.

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[Lord Lansley (Con)]

My Lords, there are two sets of issues in this group. Mine is terribly simple and it is by way of a question to the Minister, just to be clear.

I do not understand why, in Clause 7, at the point the Secretary of State may give directions to Great British Railways about the activities in Scotland and Wales, in each case the requirement to obtain consent from Scottish and Welsh Ministers is disapplied if those directions relate to what is in Chapter 1 of Part 3, which is access, charging and timetable capacity.

Timetabling and so on seem, on the face of it, to be tricky things where if these are directions to GBR which impact in Scotland and Wales, they should certainly require the consent of the Scottish Ministers—for reasons that we touched on earlier, a different requirement may rest in relation to Welsh Ministers. But I am surprised to see that the implication of Clause 7 is that the Secretary of State can issue directions to GBR impacting on, for example, the timetable in Scotland but does not require the consent of Scottish Ministers. Amendments 32 and 33 in my name are to probe why that seems to be the case. I beg to move Amendment 32.

[Lord Harper (Con)]

My Lords, I will speak briefly to Amendments 35 and 36, which are in the names of my noble friends Lord Grayling and Lord Moylan. Respectively, they deal with amending Clause 7, on the power to give directions, and Clause 9, on the power to give guidance to GBR. They specifically refer to some extra duties that would fall on Ministers if they were giving specific directions around fares and the fare structure. They set out that if Ministers are giving directions or guidance

“about the level or structure of fares”

they would have to set out

“the assumptions, criteria and objectives used … so decisions can be assessed against passenger growth and affordability”.

I support both these amendments, for the following reasons.

One of the important decisions that Ministers have to take about the railways is to balance the cost of running them and how that cost is split between the fare payer—and of course not just that person who actually uses the railways but, when it comes to track access charges, the other users of the railway network—and the taxpayer. It is a very important decision, given that most people in the country either never use the railways or do not use them very often. A relatively small number of people use railways frequently, and it is important to get the balance of costs split correctly.

Ministers also have to make an important decision in their negotiations with the Treasury around the cost that falls on the department—the taxpayer subsidy piece. I think Ministers signed up to some quite challenging targets in the last spending review to reduce the taxpayer subsidy. There are two ways you can do that: either you cut services significantly or you have to grow passenger numbers. If Ministers are making directions or guidance about fares, it is important to understand which model they are using. What are their assumptions and what is the evidence base for the fare structure? What will that do to passenger numbers and, ultimately, to revenue? Then there is any knock-on impact on costs, what it effectively does to the GBR profit and loss account, and therefore the balance of costs that lands on fare payers versus the taxpayer. Having that level of transparency is helpful for the fare-paying public and for taxpayers.

It is also helpful for Ministers, because it would force a level of rigour in the modelling that is undertaken and, importantly, the assumptions that are made about how passenger numbers respond to fares. It will also enable us to have a grown-up conversation about how we grow passenger numbers, given some of the innovations and service changes that I suspect will be required, particularly in offering better services for leisure travellers, because that is where there is the potential for significant growth in passenger numbers and revenue and therefore for reducing the overall cost of the railway.

These two amendments have a very sensible underpinning. They are not just helpful for taxpayers and fare payers; in the end, they will be helpful for the department, because they would force, as I said, a level of rigour and transparency in its financial modelling. They should therefore also commend themselves to our friends in the Treasury, who I think like rigour and robustness in financial modelling, because this just gets it all above board. Everyone has to be clear about their assumptions.

The amendments would also allow us to challenge the assumptions and enable us to have a much better conversation publicly about how we can drive up the usage of our railways and the flexibilities that we will require to do so. That will then, perhaps, provoke some helpful conversations with the trade unions and about the flexibilities that will be necessary to making sure that we have a financially sustainable railway for the long term, which is, in effect, what we need to guarantee secure jobs on the railway. That is the only way in which we are going to do this in the long term, because I do not think that taxpayers are going to continue wanting to subsidise the railway to the level they do now for the foreseeable future, given that many of them do not use railways frequently. I commend these two amendments and look forward to the Minister’s response.

[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.

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[Lord Harper (Con)]

My Lords, I shall speak briefly to Amendment 46 in the names of my noble friends Lord Grayling and Lord Moylan, which I think is a probing amendment. It would remove proposed new Section 8(6) in Schedule 1, which says:

“The Office of Rail and Road may not grant a licence … unless the Secretary of State consents to the grant, or … the licence is granted in accordance with a general authority”.


I want to probe the circumstances in which the Minister envisages the Secretary of State to have, in effect, a block. My preference would be that the Office of Rail and Road can issue those licences. The new section envisages a general authority having been given by the Secretary of State to the Office of Rail and Road to issue those licences. The only circumstance in which the Secretary of State is required to grant something is if the ORR is trying to do something outside that general authority. Given that it is a general authority, that rather suggests it will give the Office of Rail and Road some broad powers to issue licences, but what are the circumstances in which the Minister envisages that the general authority that the Office of Rail and Road has would not empower it to issue a licence, and therefore when is the Secretary of State’s veto going to be effective?

The whole point, I think, is that we are trying to have GBR operating, as I think the Minister said in his answer to the previous group, without excessive micromanagement by Ministers. Again, if the Office of Rail and Road has been given a general authority to grant operating licences, it would seem to me not helpful if it had to be second-guessed a lot by the Secretary of State. What are the circumstances when the general authority would not run and when the Secretary of State would have to, in effect, give permission? If it turns out that the general authority is very broad and there are not really any circumstances, that power may be otiose and therefore really should not be in the Bill.

I am just trying to understand the limits on that general authority that is given to the Office of Rail and Road, and I would be grateful if the Minister could set that out when he responds to this group.

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[Lord Hendy of Richmond Hill (Lab)]

I am sure it could, but it is desirable to mention the Passengers’ Council, since we are setting it up and it is an important body. The distinction I am seeking to draw is leaving the Passengers’ Council as a consultee, rather than requiring its permission.

[Lord Harper (Con)]

Can I press the Minister on the question I asked? As he said, the Secretary of State is the holder of the licensing power, but the Office of Rail and Road is given a general authority to issue licences for non-GBR operators, but I still do not understand what the purpose is, in new Section 8(6)(a) inserted by Schedule 1, of the requirement for the Secretary of State to consent to the grant. In what circumstances would the Office of Rail and Road be operating outside its general authority? It would be helpful if the Minister could give an example of where that Secretary of State veto would kick in, because I do not quite understand the point of it.

[Lord Hendy of Richmond Hill (Lab)]

I think we are leaving things as they are, but if the noble Lord would like a specific example, I will have to write to him because I do not have such an example immediately in my mind.

[Lord Harper (Con)]

That would be very helpful.

[Lord Hendy of Richmond Hill (Lab)]

The broad principle is that we are leaving licensing in the position it is in at the moment.

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[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.

[Lord Harper (Con)]

My Lords, I will speak to Amendment 54 in the name of the noble Lord, Lord Bradshaw, and Amendment 55 in the name of my noble friend Lord Moylan. Obviously, I have not heard my noble friend’s exposition of the purpose of his amendment, which I look forward to listening to shortly, but I understand why these amendments have been tabled. I think that they are both intended to make it more difficult to change funding for railways, as opposed to other areas of public expenditure, but I am not sure that that is entirely a good thing. I completely understand why that would be a good thing if you were looking at it through the railway end of the telescope, but if you look at it from the point of view of a taxpayer or a citizen, I am not sure that tying the hands of Ministers in that way is entirely helpful.

I will take the two amendments in turn. In terms of background, it is worth saying that, if I have understood the Bill correctly, in part 1 of Schedule 2,

“Funding by the Secretary of State”,

the structure for setting the budgets in the first place is broadly the position now. The Government set out a plan for funding over a multiyear period, they notify various people of that funding and the funding is set out, as are the things that are expected to be delivered by the funding, so that it is all transparent for us to see what is going on. As far as I understand it, the Bill as drafted requires the Secretary of State purely to notify the ORR if they propose to vary the financial assistance—the Secretary of State has to tell the ORR in various circumstances. It is very clear that only notification is required; there is no requirement for the Minister to await the ORR doing anything before the Minister is able to proceed with the funding change. I am content with that set of circumstances, if I have understood them correctly.

My noble friend Lord Moylan’s amendment, which I understand is a probing amendment to test this, would make it very difficult for the Secretary of State to change that funding settlement, except in two cases: if the things they required GBR to do had changed and therefore the funding was different; or there was an emergency in the country at the level of what is set out in the Civil Contingencies Act. We do not have those very often, but there are lots of circumstances in which the Government have to make changes to public expenditure, for all sorts of reasons, without the country being in an emergency situation at the level defined in the Civil Contingencies Act. It is the proper role of Ministers to have that flexibility and the ability to set budgets, make funding decisions and even to choose within the departmental allocation that they have. Even if the Treasury is not changing anything in terms of the money that the department has, it is the job of Ministers to decide how that money is allocated between the different parts of the department’s expenditure, whether it is a—

[Lord Bradshaw (LD)]

May I just say that three months’ notice is not a long time and any arbitrary cut cannot possibly take place in three months because timetables, trains and rosters have to be altered? Three months is a very short amount of time to give the rail regulator to make decisions.

I am not talking about giving the rail regulator lots of extra powers to alter the timetable. I am quite satisfied with where we have got to on that. I am saying that, if any future Government wish to reduce the money, they should have the grace to have the matter properly considered by people who are professionally competent. That does not always include Ministers.

[Lord Harper (Con)]

I am grateful for the noble Lord’s intervention. I had not yet started dealing with his amendment in detail—I was dealing with my noble friend Lord Moylan’s—but I listened carefully to what he said and will deal with it when I get to his amendment.

I am not sure that I agree with my noble friend Lord Moylan, although I understand that his amendment is probing. I would not want to tie the hands of Ministers in the way that he set out. I understand that it is of course desirable not to change funding for any public service once it has been set—one does not do that if one can avoid it—but there are occasions when that is necessary. If we are looking for the appropriate people to make those decisions, they should be Ministers.

The problem with ring-fencing certain parts of expenditure to make it more difficult to make changes is that, in effect, you are deciding that any changes to public expenditure have to fall in other areas. Those decisions should properly be taken by Ministers at the time that those changes are made, because they have to balance the consequences of making those expenditure changes and the changes that they will necessitate to public services, and they have to make the case about why they are doing that. Those decisions are properly for Ministers, rather than expenditure being arbitrarily ring-fenced in legislation.

The noble Lord, Lord Bradshaw, tabled Amendment 54. I am concerned about this amendment, but I would be very happy if, when I finish my remarks, he comes back to say that I have misunderstood it. He referred to arbitrary changes. “Arbitrary” is a word that people usually use when they do not agree with the changes proposed by somebody else. Ministers may well bring forward changes, and they may be because the overall amount of money available to the Government has had to be changed for some reason or because of some event. It may be that Ministers have decided that expenditure needs to be spent in another area or that the Transport Secretary has decided that there is a higher priority elsewhere. Those are perfectly reasonable decisions that will have to be explained to Parliament, and Ministers will be subject to questioning by Members of both Houses in making those decisions, which are properly for Ministers.

I have a slight problem with this because it involves the Office of Rail and Road. I listened very carefully to the noble Lord, Lord Bradshaw, when he was setting it out and he, I think, suggested that that the Office of Rail and Road could come back with alternative propositions. It could come back by suggesting funding decisions balanced between rail and road, starting from his proposition that rail funding is better than road funding. I think the noble Lord was also talking about decisions on taxation or heavy goods vehicles. I humbly suggest that all those decisions are properly for Ministers.

I accept that the noble Lord was not suggesting that those decisions should be taken by the Office of Rail and Road, but he was suggesting that that office should take some time, produce a report and then make suggestions to Ministers. However, it is not the role of a regulator to get involved in making qualitative opinions about where public money should be spent. Those are not decisions for regulators; they are properly decisions for Ministers, who are accountable to Parliament. Unless I have misunderstood the noble Lord’s amendment, I do not think that getting regulators to come back, second-guess the decisions of Ministers and make alternative public spending propositions is good for the conduct of public policy.

The Bill is currently structured such that Ministers have to notify the ORR if they are going to make funding decisions, so that there are right and proper levels of transparency and people know what is going on. There is quite an important principle to maintain, which is that there are certain things that regulators should do and certain decisions that are properly for Ministers. I do not like to criticise the noble Lord, who I know takes a great interest in this area of policy, but I cannot support his amendment because it has those effects, which I think would be deleterious to public policy-making.

In the spirit of balance, the noble Lord will have noticed that I was also not entirely enthusiastic about the amendment tabled by my noble friend Lord Moylan, which I know is a probing amendment. So I think that I have been quite even-handed in my non-approval of both amendments, which have a similar fault: tying the hands of Ministers in making public spending prioritisation decisions.

[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.

Railways Bill

Lord Harper Excerpts

Committee stage
Wednesday 16th September 2026 Grand Committee

[Lord Young of Cookham (Con)]

My Lords, I intervene briefly to speak to my noble friend’s Amendment 63A, on innovation and new technology. This country has had a fine tradition of both innovation and technology in the railways, right from the beginning. We have had the finest engineers—in Victorian times, and then, in the last century, in the 1920s and 1930s, we produced the fastest steam train.

Under British Rail, the engineering was of the highest quality, but it was focused on the heavier end of the rail industry: rolling stock, signalling and track. Post privatisation, innovation and technology switched to customer service, marketing and cutting costs. That was because, under the franchise system, which you did not have under a monopoly, there was an incentive to win new customers, improve customer service and reduce running costs. None of that was there with the previous monopoly, and there is a risk that once you move again to a state monopoly, the incentives we had in the private sector to innovate and use technology will fall away.

There is a risk of losing another change that happened post privatisation. If one franchise, such as Chiltern Railways, introduced a new innovation or service, customers would then expect the same, or an improvement, on Greater Anglia or Great Western Railway. Once you move to a monopoly, that sort of competitive advantage within the industry falls away, and you rely on looking at what happens overseas. That is why I wanted to intervene: to underline the importance of driving forward innovation in technology in the absence of the drive of the profit motive and the need to win business—a motive that risks falling away once we move over to GBR.

[Lord Harper (Con)]

My Lords, I will speak briefly to this group. First, I echo what my noble friend Lord Moylan said about the courtesy of the Minister. I thank him for the two letters I received this week. One, which I think was also sent to my noble friends Lord Moylan and Lord Lansley, was about GBR subsidiaries and clarified in a helpful way that those not doing railway functions can be majority owned by a body other than GBR. The Minister has satisfied me as far as that goes. There was also his further letter to me on licensing, which again was helpful and clarified matters to my satisfaction. I am grateful to the Minister for his courtesy in responding so promptly.

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[Lord Harper (Con)]

Before the Minister moves on, I will add to my noble friend’s point—and this is also aimed at the Whip. The danger for the Minister is that if we debate the amendments on the long-term rail strategy, as we will today, and then we study the document published today and decide that there are matters that we wish to raise, all the Minister is going to discover is that further amendments will be put down. Then, we will have a rather repetitive debate about the long-term rail strategy, when we could have had a single debate about it. This will elongate the length of the Committee and we will end up sitting for longer, which is not enormously in our interest, if it is something that we could have dealt with earlier, and I am sure will not be welcome to the Whip. I put that on the record and we will hold that in our back pocket, if required.

[Lord Hendy of Richmond Hill (Lab)]

To which I respond to the noble Lord that I believe that the publication is helpful and that the remarks that I am going to make in respect of the debate on the group today—and indeed others—will help in any event and will replicate what noble Lords will find in the document from today.

Amendments 63A, 91A, 116A and 130 relate to innovation. I agree completely with the important role that technology and innovation can play in improving passenger experiences and railway operations. From digitalisation supporting simplifications in fares and ticketing to AI enabling more efficient and safer monitoring of the network, technological innovation will present new opportunities for GBR across all its functions. That is why the Bill already includes a function for GBR to carry out research and development and to support innovation in relation to railways in Clause 3(1)(f). That means that a core responsibility for GBR will be to support and promote innovation on the railways, including the potential development and adoption of new technologies across infrastructure and passenger services.

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[Lord Liddle (Lab)]

I will make a brief intervention. This is the first time I have spoken on the Railways Bill and I am generally extremely supportive of it.

I have listened with great sympathy to all the amendments put forward. I understand the motive of most of them, but I worry about the general principle of loading the Bill with lots of duties that Great British Railways has to follow. One of the reasons why the British state is failing and has been failing for some time—this is a criticism of both Conservative and Labour Governments—is that we have got into the habit of wanting to include everything that the state is trying to achieve; it all has to be there. If we want effective public sector organisations, a lot of that everythingness has to be cut away and the board has to decide on its priorities, be accountable for its priorities and be challenged in that way. If we put a lot of statutory duties on the board, that is the road to the bat tunnel—look at the £100 million wasted on HS2. We should be very careful about how we load up this Bill with contradictory duties, putting lots of difficult choices on the statute book. It would be much better to have an effective board that made those choices.

[Lord Harper (Con)]

My Lords, it is a great pleasure to follow the short but well judged speech of the noble Lord, Lord Liddle. I think he will discover it is not enormously dissimilar to one or two of the things that I am going to say.

[Lord Liddle (Lab)]

I find that very reassuring.

[Lord Harper (Con)]

From the little frisson I have created here, I hope I have not damaged the noble Lord’s reputation among his Labour colleagues by agreeing with him. I do not wish to do that. Noble Lords should wait for my remarks and see how in line they are.

I thank the noble Baroness, Lady Willis of Summertown, for her extensive recounting of the considerable progress that Network Rail made on environmental matters, under the leadership of the board by the Minister when he chaired it, and of course under a number of Conservative Secretaries of State. I thank her for recognising the considerable environmental progress that was achieved, which I support.

On this group of amendments, I am supportive of GBR—Network Rail in its new incarnation, as far as the infrastructure is concerned—continuing to have an important eye to environmental matters. But I want to flag pretty much the same concern as the noble Lord, Lord Liddle, to recognise that rail travel is a relatively low-carbon form of transport. When we were discussing the civil aviation Bill, the noble Baroness, Lady Jones of Moulsecoomb, was obviously very critical of aviation. One of the dangers here is that if we load lots of responsibilities, costs and burdens on to the rail industry, and we make it very expensive to build and deliver new infrastructure, we are making it harder to get more people on to rail, which means that we will be taking fewer of them away from aviation and the roads.

The noble Lord, Lord Liddle, gave me a perfect example by referring to the bat tunnel of HS2. One of the problems with HS2, and one of the reasons why I took the decision to cancel the second phase of it, was that the costs had run out of control. Although the present Government were critical of the decision at the time, I notice that in the two years they have been in power, they have not reversed the decision and show no sign of reversing it, because they recognise the same cost pressures. The only word of caution that I would have on framing these amendments is that, if the Government are tempted by the thrust of any of them, my advice would be to bring back some amendments that are more tightly focused. We do not want to make it more costly and difficult to build and operate railways, so that we have fewer of them, fewer services and less investment in infrastructure, which will push people into higher-carbon forms of transport. That would be shooting ourselves in the foot.

There are one or two aspects where I wanted to flag up some concerns. In Amendment 130A, for example, I notice that there is a reference to transition to a zero- carbon railway, as opposed to one that is net zero. I flag that as important for this reason. It talks about generating electricity on railway land, for example, which obviously makes a contribution. If you are trying to get to a zero-carbon railway, I am not sure that that is achievable, but, if you strive to do that with no eye on the cost, and given that public money is not infinite—it is limited—the effect is that you end up making less investment in railways than you otherwise would, which is a bit self-defeating. That is where I would be a little concerned.

There are two other areas about which I am concerned. One is whether this ends up making it so difficult to develop on railway land, either by selling it to others or using the joint ventures that we referred to in an earlier day of Committee, that we end up stopping development, reducing the income to GBR and making it more expensive to own and operate a railway, which is not helpful for the taxpayer. The positive thing, which I absolutely support, referred to by the noble Baronesses, Lady Jones and Lady Willis, and a number of other noble Lords, is recognising that our climate has altered. The work involved in looking at and identifying the parts of the network that are particularly vulnerable to different forms of weather, then putting together a plan to deal with that, so it can be costed and judged accordingly, is very sensible. I know that Network Rail already does a lot of that work, but putting it all together in a coherent way is very sensible.

My final point concerns electrification, which I support. Much of the electrification on the railway in England and Wales was done under a Conservative Government—the Labour Government pre-2010 had done very little, leaving the bulk of it to be done under us. Again, one must have an eye for practicality and cost. Something like 70% of passenger journeys take place on trains that are electrified. Because of the nature of our network, and the years in which it was constructed, electrifying what has not already been electrified will be increasingly costly. That is due to bridges and the rest of the infrastructure. You get to the point at which it just does not make any sense, and this is where our earlier debate on innovation is very helpful.

Noble Lords may have seen some recent rolling stock procurement news, where trains were going to be battery electric. That is helpful, as you enable the train to be electric, without having to electrify the infrastructure. Electrification is not a problem, but we must be careful not to insist that every railway line has an electrical cable running above it and insist that that be how power is delivered. The principle is okay, but you need innovation and flexibility on how you deliver it. There are some parts of the network where trying to do overhead electrification is simply not sensible. It is either impractical from an engineering perspective, or so costly that it would make no sense to do it. Innovations like battery electric trains or tri-mode trains—where you enable that technology to best use the existing network—are the way to go. There is a risk of being too specific in primary legislation about the way we deliver some of these things, albeit that the overall objective is one that I support.

In conclusion, I very much support the work we have done over the years in recognising that GBR will be a very big public landowner, and it absolutely should continue the work that it is already doing. I just say that the existing legislative framework and the duties that fall under it have done a very good job, so I am not sure that we need to pile loads of extra duties on top, as was said by the noble Lord, Lord Liddle. I want to continue that work. I just have a note of caution, as he did, about making sure that we do not overdo it and make it so costly that we either do not develop the railway or reduce the number of people shifting from cars and planes on to a relatively low-carbon form of transport. That would be rather shooting ourselves in the foot. While supporting moves to be environmentally friendly, conscious of changes in the climate, we have to be a bit cautious about the practicalities. I look forward to hearing from the Minister how the Government will balance those two competing objectives.

[Lord Berkeley (Lab)]

My Lords, this has been a very interesting debate, and I congratulate the noble Baronesses, Lady Jones and Lady Willis of Summertown, on making strong points about the need for environmentally friendly policies to justify the ongoing construction and development of railways. As the noble Lord, Lord Harper, and my noble friend Lord Liddle referred to, there is always a risk that if you took the 300-odd amendments in the Marshalled List and applied them to roads, you would be laughing yourself silly. There is far too much detail, much of which is totally unnecessary. That is a different point to take forward.

My concern with Amendment 130A is that the noble Baroness, Lady Jones, is basically saying that the environment, nature, is more important than humans. That is a pretty rough thing to say. I am sure she will have a go at me when I have finished.

If you apply some of these provisions—I compare them with the recent policy whereby our Government have been encouraging people to develop housing near stations—there is a conflict, not everywhere but in certain places. The idea that you can have a nice place to live near a station, so that you can use a more environmentally friendly means of transport to get wherever you want to go, seemed a good one from our Government.

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[Lord Harper (Con)]

My Lords, I wish to speak to several amendments in this group. They cover the role of the ORR. As my noble friend Lord Grayling has just said, it is arguably a bit weird continuing to have a regulator when you are bringing track and train together in GBR. He also highlighted the reason why it matters: the ORR has an important role in making sure that fair decisions are made. We will talk about it a bit at various stages during the Bill. Fair decisions should be made for access to the network for open access operators and freight, and that those powers are exercised in a fair and reasonable way. We will have some debates later about whether the way in which the Bill is set up for GBR means too much marking of its own homework.

I speak first to Amendment 134 in the name of my noble friend Lord Lansley; he is sadly unable to be here today and asked one or two of us to speak to his amendment. It has been co-signed by my noble friend Lord Moylan. It would have the effect that the ORR’s duty to promote competition continues to apply to its functions under Chapter 1 of Part 3, relating to access and use policy, infrastructure capacity, the working timetable, the capacity duty, the charging scheme, the performance scheme and appeals in respect of those policies.

I shall listen carefully to what the Minister says when he responds to this group. It may be that he says that the reason why the role of the ORR is being constrained in the way it is in the Bill as drafted is so that the ORR does not use its powers to undermine the directing mind of GBR. That is a flawed argument. The great majority of passenger services and ownership of assets are in the hands of GBR, or will be when the remaining franchises have expired and GBR has taken over those routes. The promotion of competition operates at the margin. However, that does not mean that competition does not have enormous value because its role can demonstrate the value of particular routes, and more efficient and consumer-responsive services.

Let me give an example that may appeal to those who are particularly keen on the European Union. The European Commission, in a report based on services in Spain and Italy, found that open access on their high-speed rail network could reduce prices, improve quality and frequency, enlarge the rail market and passenger numbers and—this should be attractive to the noble Baroness, Lady Jones—encouraged modal shift. It is important to recognise that the duty to promote competition is linked to the benefit to consumers. It is important to preserve that element of potential challenge. The ORR has limited powers, but we should maximise the extent to which it can use them.

I shall give an example in this country. The importance of capacity—we have had this debate previously—is that you cannot have competition unless there is capacity. It is important that when decisions about capacity are being taken, they must make sure that we can have competition. The line that has capacity is the east coast main line. There, three open access operators—Grand Central, Lumo and Hull Trains—all provide competition against LNER. That is valuable not just because those three open access operators provide different types of services to those of LNER, and a number of them are focused on providing very low-cost rail services, but the effect of having those three operators—this has been documented by independent economic analysis, I understand—is that it holds down ticket prices on LNER. Even people who never use open access operators but use the existing main operator benefit from the existence of the open access operators. That is why it is important to make sure that we preserve that element of competition.

I listened very carefully to the argument put forward by the noble Lord, Lord Boateng, on his Amendment 142 about promoting regional growth. He is right that there is a lot of evidence that improving rail connectivity—it is true of improving road connectivity as well—can deliver economic growth. We have seen that very clearly in what happened—and it is not even complete yet—once we got to the point where we were constructing the first phase of HS2. Anybody who has been to Birmingham will have seen that, even before the rail line is completed, once it was clear that it was going to happen, there has been an enormous amount of investment and economic development in central Birmingham with companies relocating their operations. That has happened on a prospective basis because people knew that that was going to happen, so the noble Lord is correct that regional economic growth is driven by rail.

I think I can reassure him a little bit. When the Government make these decisions about where they invest—the investment that Network Rail and GBR make in the infrastructure is public money—they look at the cost-benefit ratio. Some of the things they look at are not just time savings, but wider economic benefits. That is not the easiest thing to capture when you are looking at prospective benefits and economic growth. Being able to nail that down and produce an economic analysis that is robust that you can turn into numbers that you can then weigh up against the cost is not that straightforward. I do not know exactly how many, but the Department for Transport has a significant number of economic analysts who produce all this information for Ministers when they are taking these decisions. Whether we need to add it to the Bill, I am not quite sure, but the thrust of the noble Lord’s arguments about the importance of the rail network for regional economic growth is absolutely spot on. There are already a lot of things that make sure that that is taken into account, but I support the thrust of what he says.

I will listen, as will the noble Baroness, Lady, Jones, to the Minister’s response, but I take a much more positive view about the benefits of competition on the rail network. As I said in the points I just made, competition helps to keep down costs to consumers and drive passenger growth, particularly by attracting people on to the rail network who perhaps cannot afford to travel on some of the existing services. Some open access operators have specifically gone for no-frills, low-cost services that attract people who would not otherwise use the rail network. You therefore get modal shift, with people shifting off more environmentally impacting forms of transport that produce more carbon per passenger mile on to the rail network, which I think is a good thing. It is good for consumers and the environment, and competition helps to drive that. That is, in effect, as I know my noble friend Lord Young would say if he were here, what happened post privatisation. There was a vast increase in investment and in passenger numbers, which took a lot of people off roads and aviation and put them on to the rail network, which was good for them, the economy and the environment. I want to make sure we maximise the extent to which competition exists with this new model as we move to GBR.

[Baroness Pidgeon (LD)]

My Lords, this group of amendments on the Office of Rail and Road is clearly seeking a different role or structure for the office than that envisaged by the Government. For many, it is more of the same. The amendments are, on the whole, trying to allow the Office of Rail and Road to assess competition on the railways to allow, it seems, more open-access operators. While I absolutely understand and have seen the benefits that open-access operators have brought to the railway, as noble Lords have described—and I hope those operators can continue to bring their services to passengers—there is the issue we have debated on the setting up of Great British Railways and the Secretary of State having so many powers. We have warned about the marking of their own homework.

I think the Government will not move on these amendments, because this is an area they set out clearly in their manifesto, but I fear there is a real challenge here in how the structure will work in reality and what open access will be allowed. The clarity that the noble Baroness, Lady Jones, is seeking will be helpful. Freight is also an open-access operator, although obviously a different type of service. I think the freight industry would appreciate some assurance from the Minister about its role. We have other groups on this issue later, because it is concerned about the legislation as drafted.

I am interested in Amendments 286 to 288, which would give the ORR a role in monitoring and auditing Great British Railway’s statutory functions. That could help with this whole issue of being judge and jury, while marking one’s own homework.

I really like Amendment 142 from the noble Lord, Lord Boateng. First, I should welcome him to the transport enthusiasts’ club, which has many members across all sides of the House. He is welcome to stay through the many other days of Committee on this Bill.

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[Lord Faulkner of Worcester (Lab)]

My Lords, the Committee will be relieved to know that I am going to be brief. Noble Lords will have observed that my name appears on two of these amendments, the lead amendment from the noble Lord, Lord Parkinson, and the excellent amendment from the noble Lord, Lord Beith.

First, on the heritage amendment, I express my gratitude to the noble Lord, Lord Parkinson, for many of the nice things he said about me and heritage railways. As far as they are concerned, I agree completely. I also alert the Committee to the extraordinarily beneficial effect of the amendment that was passed to the Employment Rights Bill making it legal for young people under 16 to volunteer on heritage railways and tramways, which has led to a substantial increase in the number of young people coming forward. The Heritage Railway Association is devoting its annual conference to the subject of volunteering. That was made possible as a result of the amendment that the noble Lord, Lord Parkinson, and I managed to persuade the House and the Government, with, I think, some help from this Minister, to see included in the Bill.

The other aspect of heritage railways that I want to mention is the fact that there are already a number of operations where heritage railways and the national railway are working closely together and providing timetabled services. I hope very much that it will be possible for those to continue under the new arrangements. North Yorkshire Moors Railway is running into Whitby, as it has done for a number of years, and Severn Valley Railway has just announced a new service in the timetable that is giving people in Bewdley the opportunity to commute to Birmingham with just one change at Kidderminster. This is a step forward, as it means that for the first time for many years Bewdley is going to have a decent train service at times when people want to use it, rather than one that is available just for heritage purposes.

On the excellent amendment proposed by the noble Lord, Lord Beith, I remind the Minister of a letter that I forwarded to him from Moreton-in-Marsh Town Council last week. I spent considerable time in Moreton a couple of weeks ago to celebrate the 100th anniversary of the Stratford-on-Avon to Moreton tramway, which they claim to be one of the earliest railways in Britain. It opened in 1826. Great events went on at both ends of the line, including a visit by the noble Lord, Lord Redesdale, to the town where many of the public buildings bear the name of his family. Moreton-in-Marsh Town Council is asking for the Minister’s support for its application for funding from the Cotswold District Council’s community infrastructure levy to provide a community rail hub in Moreton-in-Marsh to bring railways and buses together and provide an integrated service. The council has already gone a long way to doing that and has expanded bus services, but if the Minister is prepared to give a nudge in that direction, that will go down extremely well. I thank the Committee for its indulgence in allowing me to, as the noble Lord, Lord Beith, said, Box and Cox in the chair.

[Lord Harper (Con)]

My Lords, I want to touch on four parts of this group. First, Amendment 90, which I strongly support, was ably moved by my noble friend Lord Parkinson of Whitley Bay. The constituency I represented in the House of Commons for many years, and in which I still live, has a heritage railway, Dean Forest Railway. Although most of its services run on its own tracks, it interacts with the main railway at Lydney and has a decent relationship with Network Rail. I support everything he said in his speech, particularly about the impact on getting volunteers and interesting people in working on the railway. I am afraid the railway indulged me by allowing me to do one of the things I always wanted to do, which was to drive a steam train—I see the Minister is finding that amusing—and shovel coal into the fire as well. It was fantastic. Of course, they do that all the time.

I mention that because it is a big tourist attraction in the area. They run lots of themed days, such as Thomas the Tank Engine days, and bring a lot of people into the area; it is very significant. That interaction of heritage railways and tourism is powerful. If you go to London Paddington, it might not be quite as impressive as platform nine and three-quarters, but you will see the number of tourists taking pictures of the sculpture of Paddington Bear. That interaction of railways and tourism is very powerful, so I absolutely support the amendment. Even if it is not acceptable to the Government as drafted, I hope very much that the Minister will consider it. In the same way that the noble Lords, Lord Faulkner and Lord Parkinson, were able to get the success on the Employment Rights Act that the noble Lord, Lord Faulkner, explained, perhaps the Minister could come back with a government-drafted amendment or some other way of delivering this important benefit for heritage railways.

Secondly, I want to touch on Amendment 95 in the name of my noble friend Lord Lansley and Amendment 101 in his name and that of my noble friend Lord Moylan. The effect of these two amendments would be to require the rail strategy to be laid before Parliament and for there to be the opportunity for a debate. At the moment, Clause 15 requires the Secretary of State to publish the document. As it is currently set out, there are some consultation requirements but there is no requirement for any parliamentary process attached to the rail strategy, and it would be helpful if there were. The amendments do not trespass by insisting that Parliament approve the rail strategy, but it would have to be laid before Parliament and available to the Houses to debate, and the Secretary of State would have to respond to any resolution made by either House. That would force the Government to have a better relationship with Parliament.

Other significant statements by the Government have far more extensive parliamentary processes. The energy national policy statement has substantial consultation requirements, including a Select Committee review. The Planning and Infrastructure Act says that national policy statements must be approved by a Commons resolution. Amendment 101 wants a much lighter touch. It would enable a debate but would not require approval or enable Select Committees to make recommendations. The structure is based on Section 9 of the planning Act for national policy statements. It seems to me that, given the importance that Ministers have placed on the rail strategy, they should embed in the Bill that requirement for Parliament to at least be involved in the process in this relatively light-touch way. That would be welcome. Again, if the Minister does not find this particular solution acceptable, it would be helpful if he could indicate that he is at least willing to have a look at what he might be prepared to put in place.

Thirdly, I listened very carefully to the noble Baroness, Lady Grey-Thompson, who spoke to her Amendment 101A on a railway accessibility strategy, and I think the thrust of her amendment certainly has merit. Again, I would be happy to listen to the Minister. He has a very good track record in this area, in all the roles that he has held, both at TfL and in his capacity as chair of Network Rail, and in his current role. The only point I would add to what the noble Baroness said is that the reason for putting this in the strategy is that the earlier you think about accessibility, the better it will be delivered and at the lowest cost—both of which are very important. Also, if you make the railways more accessible for disabled people, they will be more accessible for everybody.

On thinking about this early, it is not just about the requirements for dealing with people with a physical disability; it is also important to think about things such as signage, information systems, announcements and the data that is available to people with a visual impairment or a hearing impairment, for example, or someone who has a learning disability but is in the workforce. They cannot drive, perhaps, but need to get to work and may find some of the traditional ways we communicate that information difficult to handle. All those things need to be thought about. As the noble Baroness said, there are lots of people for whom public transport is the only way they can get about, until perhaps we have more automated vehicles on the road. That is why this is important. I will touch on that theme in a later group with one of my trade union amendments about consulting disabled people.

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[Lord Hendy of Richmond Hill (Lab)]

My Lords, I am pleased that there is so much agreement that we need a genuine long-term plan for the railway. Indeed, the counterpart of the noble Baroness, Lady Pidgeon, in the other place called it the strongest element of the Bill. I believe we share the same vision for the genuine change that a long-term rail strategy can provide for the industry and the country.

I am sorry that noble Lords have not received the consultation document—for that is what it is. It is not the strategy itself but a document about the strategy. To the extent to which noble Lords have not received it at all, I will make sure that they have a copy in a form that can be read, either this evening or tomorrow morning. I am sorry about the timing.

Amendment 90 is on heritage rail. The noble Lord, Lord Parkinson, and other noble Lords here know that I am a strong supporter of these services, but the strategy is not the right place for consideration of heritage rail. The strategy is intended to be where the Secretary of State sets out the strategic objectives, priorities and challenges of the railway over the next 30 years. These are very much at the macro level, such as societal, technological and environmental trends over the coming decades. The strategy will help GBR make choices that have a fundamental impact on the British economy and society for future generations.

While I absolutely agree with the noble Lord about the past informing the future, I hope he will agree that heritage services are more appropriately dealt with at the next level of operational detail down. Rather than being included in the strategy, heritage services are better considered as part of, for example, the access and use policy. That is where GBR can effectively safeguard the provision of those services and ensure that they have enough access to continue providing the benefits that they do. I hope the noble Lord is as pleased as I am to see that the draft access and use policy published last week included mention of heritage services, showing that they are considered at the heart of GBR’s access decision-making, alongside freight and other non-GBR passenger services.

I would want to avoid too hasty a consideration of heritage railway routes as part of the national network, where, at least at present, that poses significant challenges to some of their finances and existence. I will return to this subject in group seven, and Amendment 118, which will deal also with points that my noble friend Lord Berkeley raised.

[Lord Harper (Con)]

Before the Minister moves on, perhaps I may raise one point and then the noble Lord, Lord Parkinson, will respond at the end. I follow the Minister’s argument about whether the strategy is the right place. The only thing I would be concerned about is whether achieving things in the strategy means GBR taking decisions that have not the intended consequence but the consequence that they impact heritage railways, without GBR having thought about that or taken it into account at that stage.

It may be that it is not right to include full consideration of heritage railways in the strategy document. What I would not want is to have it done at a level down, and then decisions be taken about the overall network that impact it. I will throw that one out there, and the noble Lord, Lord Parkinson, can no doubt respond when he sums up at the end.

[Lord Hendy of Richmond Hill]

I thank the noble Lord. I was looking at what I might say in group 7 about Amendment 118, which might well deal with that. Clearly, the access sought on the national network is access for specific trains at specific times, and therefore it is in the access and use arrangements that that is formalised. Of course, those services pay track access charges, so on the whole it is in GBR’s interest to want to run the services, providing that it is capable of finding the paths. We will come to that in Amendment 118.