Passenger Railway Services (Public Ownership) Bill

Debate between Simon Lightwood and Helen Whately

Committee of the whole House
Tuesday 3rd September 2024 Commons Chamber

[Helen Whately]

Will the hon. Gentleman give way?

[Simon Lightwood]

I will not give way to the hon. Lady, as she has had plenty of time to put her case.

Those transfers of services have been completed successfully and smoothly despite the challenging timescales and circumstances, which have included financial failure and poor operator performance. We have also made it clear that we will transfer services on a phased basis as existing contracts expire over the next few years. This is a measured, responsible approach that will further de-risk the process. The Bill does not alter the ORR’s role in granting operators’ licences and issuing their safety certificates; in that role the ORR already independently assesses the suitability and readiness of any operator, public or private, to take over services and operate them safely. In light of those safeguards the Government do not see the need to commission further analysis from the ORR, as amendment 19 proposes.

On amendment 20, the Department for Transport has already awarded multiple contracts to publicly owned operators and has considerable experience of managing them in practice, taking legal, financial and technical advice as needed. We consider a new independent advisory body to be an unnecessary additional step that would add cost and risk delaying progress. I can assure the hon. Member for Faversham and Mid Kent that the Department for Transport is conducting a full review of the standard terms of service contracts entered into with public sector operators, reflecting the fact that public sector operation is to be the Government’s long-term approach, not just a temporary measure of last resort.

On amendments 13 and 14, the Government do not consider it appropriate to spell out such specific contractual requirements in primary legislation, which would risk constraining future flexibility to adapt operators’ contractual obligations to suit changing circumstances. On amendment 13 specifically, it would not be efficient for the taxpayer to require up to 14 different operators in England, plus those in Scotland and Wales, to each pursue its own separate wide-ranging innovation strategy. Indeed, a key purpose of our wider reform plans is to drive a much more coherent cross-industry approach in such areas. On amendment 14, I question why the four groups identified, while clearly of course very important, should be singled out for a specific mention when there are many other relevant considerations to take into account in service design, including the interests of the taxpayer, freight users, people with disabilities and residents of urban areas to name just a few. The list could be endless, and the important point is that decisions about future service levels should take into account all relevant considerations.

Amendment 1, tabled by my hon. Friend the Member for Blackley and Middleton South (Graham Stringer), would remove the power of the Secretary of State to continue existing franchises. I am happy to reassure my hon. Friend that this provision is included in the Bill as a contingency measure only. It exists in case a short continuation is needed to ensure that services transfer to public ownership smoothly and without disruption to passengers. It is intended to be used only in exceptional circumstances and only for so long as necessary to ensure the smooth transfer. It will be available to the Secretary of State only when

“it will not be reasonably practicable”

for a transfer to proceed. Any continuation would be limited by procurement regulations to a maximum of two years in duration, but in practice we would expect the period to be much shorter. The power is clearly transitional in nature; once services are transferred to the public sector it will no longer be relevant, and clause 2 therefore gives us the power to repeal it in its entirety. This is a sensible, pragmatic precaution that exists simply to smooth the transition to public ownership and protect the travelling public from disruption. I hope that explanation offers my hon. Friend some reassurance.

I move now to amendment 6, tabled by the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter). The Bill does not affect the provision of rolling stock. It would not be responsible or affordable for the Government to take on the cost of renationalising billions of pounds-worth of rolling stock when there are so many other urgent pressures on the public purse. However, public ownership will open the door for a much more coherent approach to planning the longer-term rolling stock needs of the whole industry. Once Great British Railways is established, planning the provision of rolling stock across the network will be one of many areas where a single directing mind for the railway will add real value.

We will develop a long-term industrial strategy for rolling stock that supports manufacturing, innovation and interoperability and aligns with the wider objectives of the industry. It will look to end the boom and bust cycle of rolling stock procurement, ensure sustainable pipelines for future work and consider the best financing structures for future orders in partnership with private capital. I can assure my hon. Friend the Member for Easington (Grahame Morris) that we will consider the points he has raised as we undertake work on this matter. My officials are engaging with Eurofima to consider the potential of UK membership and the role that could play in the UK market. We will set out more plans on that in due course. A report mandating that in primary legislation is therefore not necessary in the Government’s view.

Amendment 7, tabled by my hon. Friend the Member for Derby North (Catherine Atkinson), seeks details of the Government’s proposed approach to procurement and the impact of public ownership on the procurement process and the supply chain. She is absolutely right to highlight the crucial role of the broad and diverse private sector supply chain in helping to deliver high-quality rail services, and I very much welcome the contribution made by businesses in her constituency and right across the country. I can assure her and those businesses that innovation and technical progress will remain as fundamental as they have ever been in delivering improvements for passengers, cost efficiency for taxpayers and benefits for the environment.

I can confirm that there will be no immediate impact on the approach to procurement when services transfer to public ownership. Existing private sector operators are already required to follow the same procurement rules as public sector operators. Under the governance reforms, Great British Railways will provide much clearer long-term direction across the whole railway system, giving businesses and the supply chain the certainty and confidence they need to plan, invest and innovate for the future.

Amendment 15, tabled by the hon. Member for Faversham and Mid Kent, considers the Bill’s potential effects on open access operators. The Bill is specifically about the ownership of services currently operated under the contract with the Secretary of State and Scottish and Welsh Ministers. Public ownership of those services will not prevent open access services from running as they do now. The report proposed by her amendment is therefore unnecessary. However, I take this opportunity to reassure her about the role of open access in the future in the context of the Government’s wider reforms. How we make use of network capacity and grant access is fundamental to the performance of the railway and what it delivers for all its users. Open access operators such as Hull Trains, Lumo and Grand Central are a valuable part of our railway. We are keen for such services to continue to operate alongside publicly owned services, where they add value and capacity to the network.

The hon. Lady’s amendment 16, along with amendment 22 from the hon. Member for Bath and amendments 2 to 5 from the hon. Member for Brighton Pavilion (Siân Berry), touches on the role of devolved and local authorities in the planning and delivery of rail services. Amendments 16 and 22 each refer to exemptions granted under section 24 of the Railways Act 1993. Those exemptions allow services in London and the Liverpool city region to be procured by the relevant authorities in those areas, outside the franchising system. The Bill makes no change to those existing arrangements and it will remain for those authorities to decide how best to deliver the services for which they are responsible.

Amendments 2 to 5 would allow the Secretary of State and Scottish and Welsh Ministers to award contracts to companies owned by certain elected public bodies. While the Government are committed to strengthening local involvement in the planning and delivery of rail services, it will be important to ensure that does not undermine the plan for Great British Railways to act as a directing mind that provides coherence, consistency and clarity for the whole railway. To support that, the Government intend to award contracts specifically to public sector companies owned by the Secretary of State via DOHL.