Passenger Railway Services (Public Ownership) Bill

Wera Hobhouse Excerpts

2nd reading
Monday 29th July 2024 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

Thank you for calling me to speak, Madam Deputy Speaker. I do not think that I have yet had the opportunity to express my pleasure in seeing you in your new role. May I also congratulate the right hon. Lady on securing her new role as Secretary of State?

Our railways are in dire need of improvement. Under the last Conservative Government, passengers were repeatedly failed. Services are poor and the ticketing system is in shambles. All the while the public keep paying more and more, year on year. Rail fares in the UK are already some of the highest in Europe and are set to rise again. I am sure that all Members of this House have heard about, or experienced, cancellations, delays and a ticketing system not fit for purpose. People are crying out for a functioning rail network that they can rely on.

Too often, my Bath constituents would rather travel by train, but take the car instead because a train ticket is far too expensive. If we are serious about meeting our net zero target and reducing emissions, rail must be not just a green option, but an affordable one. Since privatisation, passenger journeys have more than doubled to 1.71 billion per year. However, satisfaction is at its lowest level in over 10 years. We agree with the Government that competition is not working as intended. Fewer and fewer companies are bidding for new franchises as the costs have ballooned. Meanwhile, Government subsidies have increased and intervention is desperately needed.

The UK needs a world-class rail network to support growth and reach net zero. For too many years, it has been held back by under-investment and lack of ambition, particularly in the north and south-west. However, may I ask what will happen to investment after nationalisation, when Great British Rail will have to compete for funding with the NHS and schools? I am sure this Government will agree with us that they must guarantee that funding for a nationalised rail network will not come at the expense of other public services.

We Liberal Democrats want the fairest deal for passengers. Anything that brings down fares is welcome and I look forward to the Government setting out how services will improve when in public hands. Nationalisation is an interesting idea, but Liberal Democrats want an approach that benefits passengers right away. We would freeze fares immediately and then get on with reforms to the broken system. Passengers might not be that interested in who is running the trains, but they are interested in whether they are running on time and at a fair price.

There is inconsistency within the proposed policy: just as private companies do now, Great British Rail will continue to lease rolling stock. Rolling stock leasing companies benefit from a monopoly out of the 1994 privatisation and make excess profits. One quarter of operators’ costs go to those companies and I hope the Government will urgently look into that.

The Liberal Democrat approach is pragmatic. We will scrutinise the legislation according to what is best for passengers. We want one nationwide body with proper powers to put investment in the right place and hold train companies to account. Our proposal is for a railway agency to act as a guiding mind for the railways, putting commuters first, holding train companies to account and bringing in wholesale reform of the broken fare system.

It is currently unclear what the financial impact of nationalisation will be. There are potential savings due to management and performance fees no longer being payable. However, subsidies might increase after nationalisation. Private operators are already subsidised to run unprofitable services, and public sector companies would similarly need financial support, which might increase over time. We are putting down these concerns to make sure that we are properly holding the Government to account on their proposals. Can the Government really ensure that funding will be adequate without fares increasing further?

There is no reason for nationalising companies purely based on their contract expiry date; the Government should start by focusing attention on operators that are demonstrably failing passengers. GBR could then focus on turning those services around to deliver tangible improvement for the public. The Government should at least look at that, and operators that are performing well should be deprioritised. That would be better for travellers and reduce the cost to taxpayers.

There are other questions that we need clarity on. When the contract is up, will train operating companies go straight to Great British Rail or to the operator of last resort? If it is to the operator of last resort, what incentives will there be for operators to grow rail revenues, which are still at 70% of pre-pandemic levels? A larger OLR team will be necessary to manage the increased number of rail journeys while GBR is being set up. The explanatory notes to the Bill do not consider that increased cost.

All that must be part of a wider, long-term rail strategy. Instead of fixating on the issue of ownership, our railways need a rapid and significant change to put passengers first with a focus on the quality of service. We are interested in looking at what benefits nationalisation will bring, but we urge the Government to be pragmatic.

[Madam Deputy Speaker (Caroline Nokes)]

I call Josh Dean to make his maiden speech.