Passenger Railway Services (Public Ownership) Bill

Nusrat Ghani Excerpts

Consideration of Lords amendments
Tuesday 19th November 2024 Commons Chamber

Consideration of Lords amendments

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendment 2. If that Lords amendment is agreed to, I will cause the customary entry waiving Commons financial privilege to be entered in the Journal.

Before Clause 1

Purpose: improvement of passenger railway services

[The Secretary of State for Transport (Louise Haigh)]

I beg to move, That this House disagrees with Lords amendment 1.

[Madam Deputy Speaker]

With this it will be convenient to discuss:

Lords amendment 2, and Government motion to disagree.

Lords amendment 3.

[Louise Haigh]

I am delighted that the Passenger Railway Services (Public Ownership) Bill has returned to this House. I thank Members of both Houses for their careful scrutiny, and I commend the collaborative, cross-party approach taken during the passage of the Bill to date. I place on record especially my thanks to the Rail Minister, Lord Hendy of Richmond Hill, and to Baroness Blake of Leeds for their valuable support and for leading the Bill so expertly through the other place. Three amendments were made there that we will seek to address today in this House.

Before I speak on the amendments, I remind both Houses that the Government were elected on a manifesto commitment to bring franchises for train services back into public ownership where they belong, in line with the wishes of a clear majority of the British public and in direct response to the failure of the previous Government.

Public ownership will end the gravy train that sees the taxpayer footing the bill for more than £100 million each year in fees to private operators, which ultimately benefits their shareholders, not passengers and not the taxpayer. It will allow us to strip out inefficiency and waste and will pave the way for the creation of Great British Railways, ending the fragmentation of the failed franchising system and bringing together responsibility for track and train under single, unified leadership with a relentless focus on those who use the railway. I made a statement to the House only last week setting out the early progress that we have made in fixing our railways. There is a long way to go in restoring public confidence and pride in our railways after years of failure, but the journey has begun.

I will briefly set out the Government’s position on the two non-Government amendments that were made to the Bill in the other place. Lords amendment 1 seeks to insert a purpose clause in the Bill and to require me to have regard to it. I am sure that the amendment is well intentioned, and I am delighted that after years of declining performance the Conservative party now recognises that reliability and punctuality actually matter to passengers. I am more than happy to reassure the House that improving the performance of the railways is at the top of my priority list, especially in view of the mess inherited by this Government. I really do not need a purpose clause to remind me of that. In my first few months in office, I have spent my time making sure that railway leaders pay much more attention to punctuality and reliability than they have in recent years.

As well as being unnecessary, Lords amendment 1 is misleading and potentially harmful, because it picks out improving the performance of passenger rail services as the sole purpose of the Bill. If that was really its sole purpose, the best thing we could do would be to cut train services from the timetable; the easiest way to make trains run on time is to run fewer of them. I hope that hon. Members on all sides of the House can agree that that would be absurd. Improving performance is of course a vital objective, but it is certainly not the only one. From saving millions of pounds each year in fees to private operators and stripping out inefficiency and waste to simplifying the arcane fares and ticketing system and making rail services more accessible, all those things and many more are priorities that we will address through public ownership and our wider plans for rail reform. The Government therefore cannot support Lords amendment 1, and I urge the House to oppose it.

In my opening remarks, I set out for the House the urgent need to deliver meaningful change. In view of that, the Government cannot accept amendment 2. The practical effect of the amendment would be to delay the programme of transfers into public ownership and prolong the failed franchising system that has inflicted so much misery on passengers. Delaying the transfers would mean deferring the benefits of public ownership, as well as the taxpayer having to pay millions of pounds more in fees to private operators. Clearly, the Government cannot accept that, especially given that we promised the electorate we would manage the transfer without unnecessary cost. The additional cost to the taxpayer is why the amendment triggers financial privilege, as the House will see on the Order Paper and as you have laid out, Madam Deputy Speaker.

I have also made it clear numerous times that this Government will not put up with the appalling standards of service previously tolerated for far too long. Passengers and our constituents deserve much better. I have heard loud and clear the calls for the poorest-performing services to be brought into public ownership first. I understand those calls and deeply regret that the contracts we inherited from the previous Government make it very difficult to do that, but sadly that is the position we must start from.

We have made it clear that we will bring services into public ownership as existing contracts expire, which will allow us to end franchising entirely within three years and, crucially, avoid the need to pay compensation for ending those contracts early. I assure the House that the Rail Minister and I are monitoring the compliance of train operators with their contracts like hawks. If an operator’s performance is poor enough to trigger a right to end its contract early, we will not hesitate to exercise that right and bring its services in-house at the earliest possible opportunity. We will continue to hold operators’ feet to the fire to ensure that they deliver better for passengers. Our plan to bring services into public ownership as existing contracts end is the right plan and the only responsible one. Lords amendment 2 would wreck that plan, and I urge the House to reject it.

Finally, the Government were pleased to table Lords amendment 3 in response to powerful contributions by Baroness Brinton, Baroness Grey-Thompson and others who spoke on behalf of the many disabled people who use our railways. I echo the Rail Minister’s comments in response to that debate. The railways have not done enough to meet the needs of disabled people. We simply must do better, and we will. Lords amendment 3 sends a very clear message by making it explicit in the Equality Act 2010 that publicly owned train operators are subject to the public sector equality duty.

Lords amendment 3 was accompanied by two verbal commitments by the Rail Minister, which I am happy to reiterate for the House. First, the Government will work with representatives of disabled passengers to develop

“an accessibility road map that will explain the actions we intend to take to improve things for disabled people or others requiring assistance in advance of GBR being set up.”—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. 1550.]

Secondly, the Government will now fund the next phase of improvements to the passenger assist app, which is to be delivered in close collaboration with disabled passengers.

Lords amendment 3 was universally supported in the other place, and I am grateful for the constructive discussions that have taken place in relation to it. I am confident that we can continue to work across parties to improve accessibility on the railways, and I urge the House to support the Government’s position today.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

I thank the other place for providing these amendments. Although the measures in this Bill are not a surprise—and we have stated our opposition to its fundamentals from the outset—we have made the case that, in effectively nationalising the operation of our passenger railways, we risk going backwards. Its core provisions will mean that the progress made on passenger services since privatisation will not be carried on.

That said, we do agree that there is a need for reform, and we support the reform laid out in the Williams-Shapps review. But the reforms proposed by this Government go too far and will undermine any potential progress. That is why the Lords amendments we are discussing are of central importance. Neither of the two amendments passed in the upper House descend from the Government’s intention to bring the franchises into public ownership, and they are clearly reasonable and measured. As the noble Lord Moylan pointed out, a

“glaring omission from the Bill is, of course, the passenger.”—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. 1510.]

This is the Passenger Railway Services (Public Ownership) Bill, yet it says nothing about the passenger.

Lords amendment 1 attempts to put that right and put the passenger back at the head of the Bill as the driving force in what the Government are trying to do, and to require Ministers to test their actions under the Bill against the standard of whether it will improve matters for the passenger. It clarifies that the Secretary of State

“must, in taking any actions under the provisions of this Act, have regard to this purpose”,

which is the

“improvement of passenger railway services”.

It is a simple but deeply important amendment that will ensure that the Bill, which is little more than an ideological undertaking if it lacks the proposed amendments, would be required to act unambiguously in the service of passenger railway improvement. How could anyone oppose that? There is little public appetite for ideological measures that are not based on the improvement of the passenger experience, and to reject this amendment would be a tacit admission that the Government are rejecting the principle that legislation directed at the passenger services should be in line with service improvements. In doing so, they would reject the general public consensus. I urge the Government to support the amendment on those grounds. If they choose to reject it, it is incumbent on them to explain why they have decided to make a significant legislative change to our passengers’ railways that could risk worsening services.

Lords amendment 2 contains a simple measure: to ensure that the Government, when terminating existing franchise agreements, consider operational performance and terminate the worst-performing franchises first, enabling franchises that are currently working well to continue. That would clearly be in the best interests of passengers.

--- Later in debate ---

[Andy McDonald]

Perhaps the hon. Gentleman would like to tell us where he thinks the dividends go when they ship out of the system. The Conservative party was quite content to see massive dividends paid out to Abellio, Nederlandse Spoorwegen, Deutsche Bahn, and every other nation state on the planet that could subsidise its own transport system because of the ridiculous system imposed on this country’s railways by the Conservative party. Rather than serving passengers and performance, what we got was money shipping out of our system for decades, subsidising other nation states’ transport systems—if that is not a good example of barmy ideology, I do not know what is. We are correcting that, and rightly so.

The Minister in the Lords, my noble Friend Lord Hendy, said that

“the Government do not believe that we should either pay compensation for termination or keep paying fees to owning groups of train operating companies when we do not need to.”

He also clarified that some contracts may end early if their performance requires it:

“if we have the opportunity to put passengers out of their misery by ending a failing operator’s contract early and bringing their services into public ownership, we will do just that.”—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. 1519.]

The Government are clear that they are moving ahead with restoring passenger rail to public ownership. They have a clear plan to do so, but Lords amendment 2 creates obstacles to doing that. It is not in the interests of passengers, and I hope the House will throw it out when we vote later.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Mr Paul Kohler (Wimbledon) (LD)]

Our current railway system is simply not fit for purpose, and I know I speak for everyone in this Chamber when I say that has to change. If we are serious about growth, we have to get serious about rail. After years of Tory neglect, we must get our network back on track and put the passenger first. Across the world, there are examples of both publicly and privately owned train companies that do exactly that. Because of that, we need not be ideological about ownership; rather, we can take a pragmatic approach. That is why the Lib Dems have been, and remain, agnostic about the ownership model adopted.

As the Government have themselves admitted, nationalisation is not a silver bullet. It will not automatically deliver cheaper fares, a more reliable and frequent service, or a better passenger experience. While nationalisation might offer economies of scale, it comes with new dangers—those of us in this Chamber old enough to remember the travails of travelling on British Rail are unlikely to become misty-eyed at the prospect of going back to that future, although we might well shed a tear.

In short, nationalisation alone will not fix the mess that the Government inherited from the Conservatives. The devil, as so often, is in the detail, and I eagerly await publication of the forthcoming rail reform Bill, which we will scrutinise keenly to ensure that it does not succumb to the same demons that held back rail in this country for decades, whether it was in public or private hands.

--- Later in debate ---

[Jacob Collier (Burton and Uttoxeter) (Lab)]

I rise to support the Government motion to disagree with the Lords amendment. Britain’s railways are not working as they should, and nowhere is this clearer than in my constituency of Burton and Uttoxeter. Communities such as ours have faced delays, cancellations and limited services. In Uttoxeter, Sunday trains do not run until 3 pm, leaving passengers stranded or having to resort to driving to their destination. In Burton, high fares and overcrowded trains are a daily frustration. On some services, it is so difficult to get a seat that it is a bit like being a Labour MP at Prime Minister’s questions. We can and must do better.

This is not an isolated issue; it is the direct result of decades of privatisation—a model that promised efficiency, but delivered fragmentation and sky-high costs. It has left passengers paying some of the highest fares in Europe, all while billions of pounds flow into the pockets of private shareholders, instead of being reinvested in better services. Our commitment to bringing rail franchises into public ownership is the first step towards reversing this failure. Public ownership will allow us to reinvest £1.5 billion a year back into the system. That money will improve services, reduce fares and modernise our ageing infrastructure. That is about not just the system but the people it serves. Public ownership means that passengers will have a real say. An accountable passenger standards authority will give local people a voice in how their railways are run. My constituents want more frequent services and affordable tickets, and they want to know that when they wait for a train, it will actually turn up. Public ownership gives us the chance to listen to concerns and act on them.

Cutting fares and investing back in the railways is not just about convenience; it is about connecting people to jobs, education and opportunity. For every £1 spent on the railways, the economy gains £2.50. That money goes straight into creating jobs, supporting local businesses and boosting regional economies. Fixing Britain’s railways is about more than just trains and timetables. It is about building a system that works for people, not profit. This Government’s plan for public ownership puts us on the right track. Now we must go further by investing in infrastructure, lowering fares and ensuring that communities such as mine are no longer left waiting on the platform.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I remind colleagues that their contributions should relate to the Lords amendments.

[Mr Snowden]

I want to speak to Lords amendment 2. I will briefly make a few points first, but I fully understand that I should not go through the debate we have already had on this Bill. That debate was about Conservative Members’ belief that we will drive improvement in the railways by putting the passenger at the heart of things, and by ensuring greater competition and private sector investment, while the Labour party argued through its manifesto that it can do that through the nationalisation of rail. We have had that debate, but Lords amendment 2 is about pragmatic ways in which the proposals can be better implemented, with the passenger at the heart of them. I fully accept that we are not having the debate over again; in fact, it is quite refreshing to see the Labour party not breaking one of its manifesto promises, but instead actually pushing on with the Bill.

As I said in my intervention, c2c has a 94% passenger satisfaction rate, but it is one of the first franchises that would lose its licence. Labour’s Lord Snape said on 6 November that it would make no sense to remove a franchise such as the Greater Anglia one, which has great public support for the way in which it operates its services. In response, the Minister said that amendment 1 would not make sense, because we could simply play the game of targets. However, the Government can play the game of targets whether or not the amendment is made. It does not really matter whether the Government can stack targets or cut data a certain way. We need to call things out, and put passengers and improved services at the heart of the Bill. Lords amendments 2 and 1 are pragmatic steps to take. We accept that the Labour party is implementing a manifesto promise, but the Lords have made reasonable recommendations on how things could be done better, and how we can put the passenger at the heart of the Bill. The amendments look at where passengers already get good services, and stage changes in a way that will not be disruptive to passengers who already get a good service on the railway network.

--- Later in debate ---

[Catherine Atkinson (Derby North) (Lab)]

rose—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Graham Leadbitter.

[Graham Leadbitter]

The SNP supports the Bill and the Government’s position on the Lords amendments, mainly because the SNP Government in Scotland have already driven forward with public ownership. Sadly, without full and normal powers of independence—those will come in due course—the Bill is the current means to support and underpin those actions by the Scottish Government.

I accept the Secretary of State’s position on Lords amendment 1. To take an example from my constituency, Inverness Airport station was opened relatively recently, and that adds time to the journey between Inverness and Aberdeen. Kintore station in Aberdeenshire was also opened, adding time to the overall length of the journey, but I do not think anybody would dispute that those are good improvements to the railway. They open up the railway to far more people, meaning that more people are using the line, spending money on rail services, and taking cars off the road, even if the overall journey time has not been reduced. Therefore the definition of an improvement in performance is really important, and the amendment gives no indication of how that will be dealt with. For that reason, the SNP does not support it.

We agree that Lords amendment 2 could result in further loss to the public purse and the paying of excessive fees over an extended period. We want that money to come back to the public purse so that it can be reinvested in the railway and increase the usage of our trains. This is not the 1980s. There is a lot of talk about going back to how things were prior to privatisation, but governance and scrutiny are now in a very different place from 40 years ago, and we should acknowledge that. A railway that is publicly owned might bring about a real and sustained age of the train, which we might recall from our youth, with real infrastructure investment like that seen in Scotland. We want to continue to do more of that. That will drag people back on to the railways and move them off the roads, which will contribute to our efforts on climate change and gently improve people’s lives. That is why we support the Government’s position on the Lords amendments.

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. The hon. Member for Derby North would have been called sooner if she had been consistent with her bobbing, but I know she has been here throughout the debate, so I call Catherine Atkinson.

[Catherine Atkinson]

Thank you, Madam Deputy Speaker. I rise to speak in favour of Lords amendment 3 and the public sector equality duty. I welcome the Government’s plans for an accessible road map, and the fact that they will work with disabled communities to ensure that the Bill properly meets the needs of people with disabilities who travel on our trains. In the other place the Minister for Rail noted that although some changes can happen quickly, such as the map, others take longer due to the longevity of rolling stock.

I encourage the Government to work with rolling stock manufacturers to formulate a plan as to what changes need to be made to our trains, so that they can be modernised to ensure that future generations of stock serve the disabled community. Given the direction on accessibility, sustainability and affordability, I know that not only the east midlands rail cluster that my constituency is in but the whole industry will be inspired to be the first, so that other countries will want to follow. I hope that Lords amendment 3 will encourage all those who are championing improvements for our disabled communities.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Secretary of State to wind up.

[Louise Haigh]

I thank all Members for their important contributions. Let me start by echoing my hon. Friends’ frustration with the Opposition’s position. I sat for two and half years in the place of the shadow Secretary of State, the hon. Member for Orpington (Gareth Bacon), begging his predecessors who sat in my current seat to take action on performance on behalf of passengers, so forgive me, but I will not be lectured by the party that gave Avanti West Coast a nine-year extension. I will certainly not be lectured about putting ideology before the interests of passengers. This Bill is one step towards the biggest reform of our railways in decades. It will put passengers first, and I look forward to debating with all Members of this House as the railways Bill is introduced and passes through the House.

I appreciate the constructive way in which the hon. Member for Wimbledon (Mr Kohler) approached the debate. As I set out in my opening remarks, I am concerned about potentially perverse incentives. We have already published our six objectives for the railway in our “Getting Britain Moving” White Paper, which cover reliability, affordability, efficiency, quality, accessibility and safety. I hope that he and other Members will accept that those objectives adequately and comprehensively support the objective of putting passengers first.

I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for his passionate defence of the Government’s position and his comments on the ideological position that the Conservatives have pursued. He exposed the huge flaws in their argument as they attempt to frustrate the Government’s progress on this important reform.

My hon. Friend the Member for Burton and Uttoxeter (Jacob Collier) gave a passionate account of the impact of the poor performance of the railways that we have inherited. It cuts entire communities off, and he outlined the importance of having an accountable railway system, which these reforms will deliver by having a single point of access to Great British Railways, through which Members across this House and, crucially, local people through their local leaders can hold the railways to account.

There were powerful contributions from my hon. Friend the Member for Gateshead Central and Whickham (Mark Ferguson) and the hon. Member for Guildford (Zöe Franklin) on Lords amendment 3, which will be transformative in ensuring that the railways are accountable under the public sector equality duty, that we lift our ambition and aspiration for our railways, and that passengers, particularly those with accessibility needs, are at the heart of this reform.

I am grateful to the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter), who spoke for the Scottish National party. I agree wholeheartedly that we are not going back to the ’80s or to British Rail—I am obviously far too young to remember it anyway. This is not Network Rail 2.0 or British Rail rebooted; this is an enormous once-in-a-generation opportunity for a new organisation with a new culture and a new ethos, bringing a genuinely new era for our railways. Finally, I thank my hon. Friend the Member for Derby North (Catherine Atkinson) for her consistent passion and contribution on behalf of the wider supply chain. I can happily commit that we will work with rolling stock manufacturers as part of our accessibility road map.

On that note, I ask the House to support the Government’s position by rejecting Lords amendments 1 and 2 and accepting Lords amendment 3.

Question put, That this House disagrees with Lords amendment 1.