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The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The House divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 1 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
We are now sitting in public and our proceedings are being broadcast. Before we begin, I remind Members to switch any electronic devices off or to silent, please, and that tea and coffee are not allowed during the sittings—there should be ample water at your Benches. The selection and grouping document shows the way in which the amendments and new clauses have been arranged for debate. Any Divisions on amendments or new clauses take place in the order in which they appear in the amendment paper, of which you should all have a copy.
Schedule 1
Licensing of Great British Railways
Jerome Mayhew (Broadland and Fakenham) (Con)
I beg to move amendment 233, in schedule 1, page 55, line 10, leave out “consultation” and insert “agreement”.
This amendment limits the Secretary of State’s powers to set GBR’s licence unilaterally.
The Chair
With this it will be convenient to discuss the following:
Amendment 110, in schedule 1, page 55, line 25, leave out “consultation” and insert “agreement”.
This amendment, along with Amendments 111 and 112, would limit the Secretary of State’s ability to unilaterally set GBR’s licence and require instead agreement from the ORR and the Passenger’s Council.
Amendment 111, in schedule 1, page 55, line 30, leave out “consultation” and insert “agreement”.
See explanatory statement for Amendment 110.
Amendment 112, in schedule 1, page 55, line 34, leave out “consultation” and insert “agreement”.
See explanatory statement for Amendment 110.
Amendment 118, in schedule 1, page 56, leave out line 6.
This amendment would strengthen the ORR’s right to grant a license to a non-GBR operator.
Amendment 113, in schedule 1, page 57, line 20, leave out “consult” and insert “obtain the agreement of”.
This amendment, along with Amendments 114 to 116, would require the Secretary of State to gain the consent of the ORR for making regulations about GBR’s licence.
Amendment 114, in schedule 1, page 58, line 20, leave out “consultation” and insert “agreement”.
Amendment 115, in schedule 1, page 58, line 21, leave out “consultation” and insert “agreement”.
Amendment 116, in schedule 1, page 58, line 23, leave out “consultation” and insert “agreement”.
Amendment 126, in schedule 2, page 62, line 17, leave out “advice” and insert “agreement”.
This amendment would require the Secretary of State to obtain the ORR’s agreement for GBR’s business plan instead of seeking its advice.
Jerome Mayhew
Thank you, Mr Western, and for agreeing to be in the Chair this afternoon. We are part-way through consideration of the schedule, with a degree of overlap: amendment 109 was selected in a separate group to this one, although its wording is intricately linked to that of amendments 110 to 116. I shall try to minimise the degree of repetition for all concerned.
The amendments in this group seek to constrain the Secretary of State’s ability to modify the licence of Great British Railways without first seeking consent from the Office of Rail and Road and the passengers’ council. The Government’s strategy is for the Bill to be the legislative shell for the creation of GBR. Crucial matters of detail, such as the licence under which GBR will operate, together with important long-term strategies, business plans, targets and so on, which we have mentioned more than once in our deliberations so far, are separate from the Bill.
That detail matters and deserves proper scrutiny by this Committee and elsewhere in the Houses of Parliament. When the Rail Minister and his officials appeared before the Transport Committee on 7 January, Members took several attempts to secure an assurance that the draft licence would be published before Parliament completes scrutiny of the Bill, albeit without a specific date set. It is therefore important to include in the Bill stronger checks and balances than exist now, and that is the purpose of amendments 110 to 115.
At present, the Bill merely requires the Secretary of State to consult the ORR. Legally, that is of course very weak and, after such consultation, the Secretary of State may simply ignore whatever it is that the ORR comes up with. Amendments 110 to 112 therefore require the Secretary of State to obtain the Office of Rail and Road’s agreement for the licence to be issued, and amendments 113 to 115 require the Office of Rail and Road’s agreement for the licence to be modified.
In addition, modification of the licence requirements would need consent from the new passenger watchdog. If the passenger watchdog is to be as powerful in championing the interests of passengers as the Government claim they want it to be, it requires proper powers that go beyond an invitation to be consulted. That leads me to amendment 118, which would leave out line 6 on page 56 of the Bill and would strengthen the right of the ORR to grant a licence to a non-GBR operator.
The schedule contains important powers for the Office of Rail and Road to issue licences to operators other than GBR to operate services on the network. However, proposed new section 8(5)(a) in paragraph 3 of the schedule gives the trump card to the Secretary of State, who must consent to the granting of such a licence. Why is that power of veto required? Perhaps the Minister will explain when he responds.
If the Government wish to reduce their involvement in the day-to-day running of the railways and the Office of Rail and Road deems that an application from a non-GBR operator meets all the requirements and conditions set out in the Bill, why do the Government think it necessary to have that overriding power? It does not appear to make sense. Amendment 118 would remove that power of veto. The group of amendments, together, would require the Secretary of State to obtain a formal recommendation from the Office of Rail and Road, and would require that the GBR licence adequately ensures that licence obligations relating to safety and standards are not compromised or undermined. The amendments would ensure that, as GBR is granted new responsibilities by the licence, it continues to be subject to safety standards obligations that are in the licence issued by the Office of Rail and Road to the current infrastructure manager, Network Rail.
Such licence obligations go beyond obligations under the Railways and Other Guided Transport Systems (Safety) Regulations 2006—which are called ROGS for obvious reasons—and would require Great British Railways to participate in the industry’s collaborative structures around collective decision making, managed by the Rail Safety and Standards Board, and comply with safety and interoperability standards set collectively by the sector, including for freight and supply chain.
For those reasons, this group of amendments, taken as a whole, would provide important strengthening of the role of the ORR. I look forward to hearing the Minister’s response.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
May I begin, Mr Western, by saying what a pleasure it is to serve under your chairship? I thank the hon. Member for Broadland and Fakenham for tabling this group of amendments. I shall discuss amendment 233 with amendments 110 to 112, which I believe all share the same intent. Provisions to require the agreement of the ORR and the passenger watchdog before the Secretary of State issues the GBR licence would add an additional and unnecessary level of bureaucracy. If the amendments intend to ensure that the ORR and the passenger watchdog can constructively input into the licence, I assure the hon. Member that the Bill already requires the Secretary of State to consult the ORR and the passenger watchdog, and to invite representations more widely, before the licence is issued. If the amendments were accepted, it would no longer be clear who had the right to determine the terms of the licence. It is only appropriate that, following full consultation, the Secretary of State, as the licensing authority, has the sole final sign-off of the licence. The ORR will then, of course, enforce that licence. That is consistent with the clear accountabilities that the Bill establishes. We therefore cannot support the amendments.
On amendments 113 to 116, GBR will not need to apply for a licence, therefore the amendments’ provisions would apply only in relation to non-GBR licences. In any case, the amendments would add unnecessary complexity to the process for making licence application regulations. The amendments also intend to give an approval role to the ORR and the passenger watchdog in relation to modifications of GBR’s licence. The Bill already requires those bodies to be consulted before the Secretary of State modifies GBR’s licence. Again, requiring approval rather than consultation would risk confusing the clear accountabilities that the Bill establishes.
Amendment 118 seeks to strengthen the ORR’s ability to grant non-GBR licences. Under the Railways Act 1993, all licences are granted by the ORR with the consent of the Secretary of State. In practice, that consent is normally given in advance through a general authority, avoiding the need for case-by-case approval. The Bill does not change that aspect of the licensing regime. Removing the provision for specific Secretary of State consent, as the amendment intends, would not meaningfully strengthen the ORR’s ability to grant non-GBR licences. Non-GBR licences could still only be granted within the scope of a general authority approved by the Secretary of State.
In fact, the amendment would remove a useful route that enables the ORR to issue a licence outside the scope of a general authority or in circumstances where amending a general authority would not be practical. Far from strengthening the ORR’s ability to issue non-GBR licences, the amendment would instead likely weaken it.
Finally, amendment 126 would require the ORR to agree to GBR’s business plan before it is approved. I agree that the ORR provides invaluable input as an expert, independent regulator and it must have a robust role in the determination of GBR’s business plans. That is why the Bill gives it an explicit role to run the funding process, provide advice on the business plan and validate the costs within it, and independently publish its advice, whether that advice is supportive or critical of GBR.
However, it is not appropriate for the ORR, an unelected body, to decide how public money is allocated to the railway. Public spending decisions at this level should sit with elected Ministers who are responsible for funding the railway. I hope the hon. Member for Broadland and Fakenham can see this Government’s commitment to a robust and independent role for the ORR, but it is clear that the ORR can fulfil its role assuring the business plan without needing to be a funding approver to do so.
Further, the ORR will have an expanded monitoring role though the powers in the Bill, being able to monitor all GBR’s activities against its business plan. If GBR does not deliver on its plans, the ORR will be able to publish its findings, as well as escalating the matter to the Secretary of State. The ORR will be a trusted expert adviser to the Secretary of State, combining the strengths of an expert regulator with the need for the Government to control taxpayer money.
I encourage the hon. Member for Broadland and Fakenham to withdraw the amendment, and not to press the others in this group to a vote.
Jerome Mayhew
I listened with interest to the explanation the Minister gave and his request that the amendment be withdrawn. I was particularly interested to hear him describe the role of the ORR as a “trusted expert adviser”. In my submission, when we have GBR as the player and referee in many of the areas it will be active in, with a designed-in conflict of interest, we need more than a trusted expert adviser to hold the Government and GBR to account; we need an independent regulator. That is exactly what the ORR currently is.
I intend to press amendment 233 to a vote and, dependent on the outcome, I will not proceed to press amendments 110, 111, 112, 118, 114 and 115 as they address similar wording in other parts of the Bill. However,but I will seek to press amendment 126 to a vote if we get the opportunity to do so this afternoon.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
New clause 26—Great British Railways: funding review—
“(1) Thirty months after the commencement of any five-year period covered by a funding settlement for Great British Railways, the Secretary of State must publish a review of Great British Railway’s funding.
(2) The review set out in subsection (1) must include figures for—
(a) funding allocated to;
(b) ticket revenue raised by;
(c) amount of government subsidy received by;
Great British Railways.
(3) A copy of the review must be sent to the Transport Committee of the House of Commons.
(4) References in this section to the Transport Committee of the House of Commons—
(a) if the name of that Committee changes, are references to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.”
This new clause adds statutory transparency to rail funding cycles.
New clause 34—Great British Railways: Certainty of Funding—
“(1) Within 12 months of the passing of this Act, the Secretary of State must publish a funding certainty framework for Great British Railways (‘the Framework’).
(2) The purpose of the Framework is to establish and maintain terms for the funding of Great British Railways.
(3) The terms of the Framework must include provision that—
(a) The Secretary of State may not vary, reduce, or reopen the funding settlement for an active Control Period, unless either—
(i) a statutory provision made after this Act amends Great British Railway’s duties requiring funding revision, or
(ii) an emergency has been declared within the meaning of section 1 of the Civil Contingencies Act 2004;
(b) the Secretary of State must publish—
(i) the confirmed funding determination,
(ii) the assumptions underpinning it, and
(iii) any exceptional circumstances to justify any adjustments,
within an active Control Period;
(c) the Secretary of State must agree the funding for the next Control Period not less than two years before it is due to start;
(d) when determining the funding settlement for a Control Period, the Secretary of State must take into account—
(i) the Long-Term Rail Strategy,
(ii) Great British Railway’s duties, and
(iii) whole system planning considerations across infrastructure, passenger services and freight;
(e) The Secretary of State must work with Scottish Ministers to align as far as possible funding determinations so that Great British Railways receives a single, coherent, funding determination no less than two years before the relevant Control Period starts.
(4) The Secretary of State must lay before Parliament a report on—
(a) any funding determination for each Control Period;
(b) any exceptional revisions of the funding determination for a Control Period within that Control Period;
(c) whether the Office of Rail and Road, or any other relevant body, has met any relevant deadline to confirm funding for the next Control Period, and where it has failed to do so, the reasons for that failure.
(5) Nothing in this section amends or removes the ability of Office of Rail and Road to carry out Periodic Reviews for each Control Period.
(6) The Secretary of State must annually lay before Parliament a report on—
(a) the stability of Great British Railways’ funding;
(b) the effect of any instability on—
(i) the efficiency of,
(ii) delivery of services by, and
(iii) management of risks associated with projects run by, or associated with,
Great British Railways.
(7) For the purposes of this section, ‘Control Period’ has the meaning given in any final decision taken by the Office of Rail and Road which concludes each periodic review of access charges as described in Schedule 4A of the Railways Act 1993.”
This new clause would require the Secretary of State to prepare a Funding Certainty Framework, with funding for each Control Period set two years before it is due to start, to enable Great British Railways to plan effectively.
New clause 39—Great British Railways: financial duties—
“(1) Great British Railways has a duty to ensure that its operating expenditure does not exceed its operating income in each financial year (‘the duty’).
(2) The duty does not apply to capital expenditure aligned with national infrastructure investment and enhancement pipelines.
(3) Within 12 months of the passing of this Act, the Secretary of State must provide guidance to Great British Railways about its duty under subsection (1).
(4) This duty must include guidance about—
(a) operational income, including fare revenue, access and charging functions, commercial income, and non-fare revenue streams;
(b) operational expenditure, including staffing, operations, support, maintenance, rolling stock operation, management and renewals; and
(c) the exclusion of capital expenditure aligned with national infrastructure investment and enhancement pipelines.
(5) Great British Railways has a duty to ensure its business plan and operational decisions have as a priority its long-term fiscal sustainability within the objectives set out in the rail strategy.
(6) In meeting its duty under subsection (5) Great British Railways must seek to increase its revenue.
(7) For the purposes of subsection (6), ‘revenue’ includes—
(a) fare revenue through passenger growth,
(b) commercial retail income,
(c) income from property, station and land commercialisation,
(d) freight access revenue, and
(e) market expansion.”
This new clause puts duties on Great British Railways to ensure its operating expenditure does not exceed its income, and to deliver long-term fiscal sustainability. It makes further provision relating to those duties.
New clause 40—Great British Railways: non-reliance on taxpayer funding—
“(1) Within its first operational Control Period, Great British Railways must set out a transition plan towards ending any reliance on taxpayer funding.
(2) The transition plan under subsection (1) must identify—
(a) any efficiency improvements Great British Railways can make, and
(b) any cost-reduction measures necessary for Great British Railways to operate in such way as does not rely on taxpayer funding.
(3) For the purposes of this section, ‘Control Period’ has the meaning given in any final decision taken by the Office for Rail and Road which concludes each periodic review of access charges as described in Schedule 4A of the Railways Act 1993.”
This new clause requires Great British Railways to set out a plan towards ending any reliance on taxpayer funding.
New clause 41—Great British Railways: annual statement of financial performance—
“(1) Great British Railways must publish an annual statement of its financial performance, including—
(a) its operating income and expenditure,
(b) whether it achieved operating cost self-reliance,
(c) the reasons for any failure to achieve operating cost self-reliance,
(d) where it has failed to achieve operating cost self-reliance, any actions it will take in the next financial year to achieve it, and
(e) an assessment of its compliance with its duties under section [Great British Railways: financial duties].
(2) The Secretary of State must lay the annual statement before Parliament.
(3) The Office of Rail and Road must review Great British Railway’s performance as set out in the annual statement, and publish an assessment of whether Great British Railways is meeting its efficiency and revenue targets.
(4) Where the Office of Rail and Road concludes that Great British Railways has not met its duties under section [Great British Railways: financial duties], a Minister of the Crown must make a statement to each House of Parliament setting out—
(a) the reasons for Great British Railways’ failure to meet its duties, and
(b) any corrective action to be taken by—
(i) the Secretary of State, or
(ii) Great British Railways.”
This new clause requires Great British Railways to publish an annual statement on its financial performance, and for the Office of Rail and Road to assess that performance.
New clause 44—Great British Railways: savings target—
“(1) The Secretary of State must publish a savings target for each financial year for Great British Railways.
(2) The Secretary of State—
(a) must keep the target under review,
(b) may revise or replace the target, and
(c) must publish any revision or replacement to the target.
(3) Great British Railways must, when exercising its statutory functions, have regard to the target set by the Secretary of State under this section.”
This new clause requires the Secretary of State to set a savings target for Great British Railways.
Keir Mather
Clause 12 establishes a new funding process for GBR that takes what we have learnt from the successes of the periodic review process today and applies them to the new GBR world. That new funding period review will not only provide GBR with five years of funding to carry out its job of operating and maintaining the railway network, but will create a structure through which GBR will develop and own integrated business plans, across track and train, that reflect its role as the directing mind for the railways. That five-year funding certainty will help to drive the best price for Government and the taxpayer, through lower risk and the benefits of economy of scale. It will also generate consistent, longer term work for private partners in the rail supply chain, keeping good, well-paying specialist jobs alive and thriving.
Jerome Mayhew
Clause 12 is an enabling clause. It is very short and merely refers to schedule 2, so I make no representations to change it and shall not seek to divide the Committee on it.
Olly Glover (Didcot and Wantage) (LD)
I want to make a few remarks about the Conservative new clauses, on which we have mixed opinions. New clause 34 perhaps has some merit in terms of its intention to strengthen protections for the five-year funding review period process. My hon. Friend the Member for West Dorset will speak to our new clause 26 shortly.
We feel that some of the other Conservative new clauses have not necessarily been fully thought through or recognise the reality of how railways work. For example, new clause 40 seeks to end GBR’s reliance on taxpayer funding. Of course, in an ideal world we would love all public services to end their reliance on taxpayer funding—that would be paradise because we would not need taxation—but the reality is that extremely few railways in the world are entirely independent of taxpayer funding. We invest public money in railways because they are significant enablers of all sorts of economic and social benefit, so we have some concerns about new clause 40.
Some of the other Conservative new clauses have good intentions. For example, new clause 41 seeks to require the publication of data on financial performance. But it also seems to be over-fixated on GBR needing to reach a self-financing state, which seems somewhat unlikely.
I have said enough. I look forward to hearing the comments of the hon. Member for Broadland and Fakenham on his new clauses and of my hon. Friend the Member for West Dorset comment on ours.
Edward Morello (West Dorset) (LD)
I wish to speak briefly to new clause 26, which was tabled by my hon. Friend the Member for Didcot and Wantage. In simple terms, the new clause would ensure that Great British Railways’ funding is reviewed, published and scrutinised by Parliament halfway through each funding cycle, so that there is transparency and accountability on public money and it is spent effectively.
Any long-term rail strategy, particularly one that involves large sums of public money, must be open to proper scrutiny, regularly reviewed and accountable to Parliament. This is especially important as the Bill in its current form gives the Secretary of State a significant concentration of power over the future, shape, funding and direction of the railways. If Parliament is to be asked to confer that level of authority, accountability should increase alongside it. New clause 26 provides a sensible and proportionate mechanism to do exactly that without dragging Ministers or officials into day-to-day micromanagement.
As currently proposed, Great British Railways risks becoming the rail equivalent of NHS England—a fear raised previously in Committee—a large, centralised body distant from accountability and with blurred lines between ministerial direction and operational responsibility. Transparency is the safeguard to protect against ending up with another unaccountable arm’s length body.
The new clause would require a statutory funding review halfway through each five-year settlement. That review would set out, in clear figures, exactly how much funding GBR had been allocated, how much revenue had been raised from fares, and how much Government subsidy had been received. Crucially, it would also be sent directly to the Transport Committee, thereby ensuring proper parliamentary scrutiny. That matters because taxpayers are funding the railway twice: once through general taxation and again through ticket prices. Passengers and taxpayers alike deserve to know where their money is going, how it is balanced between subsidies and fares, and whether it is being spent evenly and effectively across the funding cycle, not just all at the start or at the end.
A mid-point review would also allow us to see what is working and what is not, particularly given that GBR will be a new organisation. It would give time to correct course when things are failing, and to continue or scale up when results are delivered. Above all, it is about hardwiring trust into the railway system, with clear information, published transparently and scrutinised by Parliament, with a focus on passengers. We believe new clause 26 would strengthen the Bill and hope the Government will give it due consideration.
Jerome Mayhew
Thank you, Mr Western, for allowing me a second bite at the cherry. I misdirected myself in dealing just with clause 12 in itself, rather than the new clauses in the group.
A forward view of funding certainty is key to stopping the stop-start approach to infrastructure funding. The Committee has received plenty of evidence from the industry—both in written evidence and in the oral evidence we heard on Tuesday last week—that this is a major concern. The date in schedule 2(1)(d) is therefore important, and needs to be a minimum of two years prior to the start of the next five-year funding period. That is because, given that we currently have five-year control periods, funding certainty decreases in the run-up to the end of one control period and the beginning of the other and, as a result, the amount of work undertaken and committed to by Network Rail decreases proportionately. We therefore get a wind-down of activity, with specialist staff being laid off by the supply industry, before it all grinds up a gear at the beginning of the next control period. We end up with a bell curve of activity.
We have heard strong evidence—I will read some out in a moment—about how that uncertainty disrupts the ability of the supply sector to service Network Rail and its infrastructure development plans efficiently. It does two pretty terrible things: first, it drives up costs for Network Rail and therefore for the taxpayer, and secondly, it means that less work gets done per pound. It is expensive and it takes longer.
In written evidence to the Transport Committee, the Rail Forum states:
“The Bill states in Schedule 2 Part 1 that the SoS can ‘vary the financial assistance’ previously agreed as part of the GBR five-yearly settlement during the five-year term. This flies in the face of providing the stability that the Transport Committee was seeking to address through the ‘Rail investment pipelines: ending boom and bust’ inquiry earlier this year. Re-opening of the settlement should only be allowed in very exceptional circumstances that should be explicit in the legislation.”
Why has the Minister moved away from the position that was previously articulated? Why is the sanctity of the funding settlement within a five-year control period—which has been, albeit imperfect, so valuable for the industry—actively removed by schedule 2? To put it another way, why is the Secretary of State being granted new powers to vary the financial settlement without notice?
The Rail Industry Association, which represents the supply sector for the railways, states:
“The railway, and rail supply businesses, need stable funding to be able to plan effectively and be efficient. Changes to the Control Period style five-year infrastructure funding settlement (Schedule 2) undermine this and amplify the uncertainty already faced by suppliers.
RIA and our members are very concerned the current Bill drafting allows the Secretary of State for Transport to remove railway funding mid-period, at no notice and with very limited transparency over the impact, for example, on safety, performance or efficiency.
We disagree with the principle that the Secretary of State should be able to remove funding mid-period. Stable multi-year funding settlements are a longstanding principle for infrastructure networks because short-notice funding changes reduce the efficiency of spending and make it harder for suppliers to plan ahead with any confidence.
Supply chain confidence in the UK rail market is already historically low with 64% believing the rail market will contract in 2026 and 62% freezing recruitment or reducing headcount (over one in three business leaders plan to lay off staff in 2026), according to a RIA-commissioned Savanta survey of rail business leaders.
There is…currently already a lack of full work visibility to the end of the current Control Period, which completes in March 2029, and companies are now repositioning themselves away from rail to target other industrial sectors in the UK and overseas rail markets—the ability for the Secretary of State to remove funding would clearly exacerbate this situation…Concerningly, even on its own terms Schedule 2 does not require transparency over the impacts on efficiency, performance and safety if there are changes within a funding period and longer-term.”
Mr Western, you cannot tell me you agree that that is a very troubling statement from the industry, but I am sure you do agree, or are likely to. The difficulties with the current system are only going to be exacerbated by the proposed changes under schedule 2.
The statement of funds will indicate what the Secretary of State
“reasonably considers may be…available”.
That gives no certainty of funding, which is a key concern of the sector. It would be a backward step from the status quo. Paragraph 4(3)(c) of schedule 2 contains no focus on minimising the cost for the taxpayer, but merely refers to
“how Great British Railways proposes to meet those costs.”
Paragraph 4(5)(b) refers only to “good value for money” and not to good value for money for the taxpayer.
Under paragraph 4(7)(a), regarding the business plan, Great British Railways could retain a huge amount of information from potential open access operators, thereby preventing a level playing field.
Finally, paragraph 7(3) removes the whole point of funding periods, which is to provide funding certainty for five years. On its own, that provision removes that funding certainty—which is obviously a backward step. The RIA has stated:
“The railway has benefited from 5-year funding settlements for infrastructure for over 30 years, but the legislation proposes that the Transport Secretary will be able to reopen these at any time without consultation. Any deviation from 5-year funding stability risks increased future costs for taxpayers and a deteriorating experience for passengers.”
Laurence Turner (Birmingham Northfield) (Lab)
I appreciate what the hon. Gentleman is saying, but we have to consider the new clauses before us as drafted. Does he accept that almost no railways in the world run without subsidy on a net basis and that, where they do, there are unique geographical circumstances? The railways in Great Britain have operated with subsidies under all models since the early 1950s, and the effect of the hon. Gentleman’s new clauses, if they were to be implemented as written, would be Beeching on steroids.
Jerome Mayhew
I agreed with the hon. Gentleman until that last sentence, because new clause 40, which I will come to in a moment, would require not the removal of subsidy but looking towards it—it is aspirational. It would set GBR’s sights on minimising its costs to the taxpayer, not through penny pinching if that would be the wrong decision, but through growth in its revenue by becoming efficient and doing more for less. Those are all good incentives that a private business inevitably has because of the challenge of competition.
New clause 39 would require Great British Railways to focus on other opportunities for funding and on minimising operational costs, just like any other business. The areas of focus under subsection (7) are the revenue opportunities.
New clause 40, on non-reliance on taxpayer funding, would make the direction of travel for GBR clearer. It may be—in fact it is almost certain—that it will never achieve it, but it is a noble objective. It should be clear that GBR should aspire to reduce the need for the taxpayer to support the rail sector by making it as efficient and attractive to passengers as possible, thereby attracting more passengers and freight on to the railways. That would create a virtuous circle, rather than the opposite. We should start thinking about that, which is what new clause 40 is intended to achieve.
New clause 41, also tabled in my name, would require Great British Railways to publish an annual statement of its financial performance. The new clause builds on the theme, forcing Great British Railways to focus on its financial performance and reduce its reliance on the taxpayer. It may be the skimmed-milk version of new clause 40 that the hon. Member for Birmingham Northfield might find more palatable.
It is important that we do everything we can to design into a nationalised structure, where there is no competitive tension, incentives for GBR naturally to seek to achieve efficiency and productivity enhancements. There is a very real need for that, because the taxpayer’s pound can only be spent once, and funds are needed in many areas of Government. Apart from anything else, we need to reduce the tax burden, which this Government have raised to the highest on record, so anything we can do to build a structure that incentivises GBR to reduce its dependence on the taxpayer is a good thing. It also forces public accountability.
Finally, new clause 44 would require the Secretary of State to give GBR an annual savings target. Taking all the new clauses together, the intention is to allow GBR to focus on providing genuine value for money for the taxpayer, not just in abstract terms, and to cut away some of the existing inefficiencies in the infrastructure commissioning and decommissioning process, to provide a longer period of certainty for the supply chain so that it can pass on the resultant efficiencies to the taxpayer. That money can be either reinvested in accelerated infrastructure roll-out, rather like the ability of ScotRail electrification to do more for less, or—heaven forbid—used to produce tax cuts for the hard-pressed taxpayer. I hope the Minister will be bowled over by those suggestions, and look forward to hearing his response.
Rebecca Smith (South West Devon) (Con)
It is an honour to speak with you in the Chair, Mr Western. I will touch on three of the new clauses—one at greater length than the others—to follow up on the words of my hon. Friend.
For me, new clause 39 highlights something that is clearly missing from the Bill: what actually happens when these currently franchised, privately run rail services come into public ownership across the board. Over many years, unions have fought hard for terms and conditions for staff and railway companies, but these are not uniform across the board. There is a huge differential in the terms and conditions that staff are subject to.
I pay huge tribute to the men and women who work on the railway; they are a brilliant group of people. I am obviously on a train every week, coming up and down from my constituency. However, it is really important that we have this conversation about what the Bill will actually mean. As my hon. Friend pointed out, value for money is mentioned only once in the Bill. We are, in effect, writing a blank check for GBR to spend whatever it wants on bringing all these staff into its employment.
We were told very clearly when the Committee began that this is not a civil service; it is the public sector, so there is a difference there, but it is effectively a private body as well. I would be interested to hear the Minister’s comments about how staff are being brought across—obviously some franchises have been brought into Government control already—and about the Department’s plans going forward, because time and again, we see pay going up for public sector workers without that necessarily reflecting any changes in performance.
Laurence Turner
The 1992 White Paper that preceded the Railways Act 1993 said that, at the time, British Rail had the second highest workforce productivity of any railway in Europe. What does the hon. Member think went wrong in all the years under privatisation that followed?
Rebecca Smith
That is a very long time ago. Under privatisation, the unions have done a very good job. In my constituency in the south-west, there are no seven-day contracts, for example. If I want to get a train up from my constituency on a Sunday, those trains are cancelled quite regularly, because the service relies on the good will of the staff to do overtime to make the train even come up to London.
Whatever we do, we need to look carefully at the terms and conditions that will be brought forward into this new public body. Up to this point, it has been down to each individual company to negotiate. That has been done with highly professional and competent union representatives, but we are not on a level playing field at the moment. As a member of the public, I want to be sure that those public sector staff are not receiving undue recompense for what they are doing, which would not be in accordance with other public sector bodies.
Private companies have been expected to give their staff a huge amount of benefits—quite rightly; that is their choice as private companies. If the staff become public sector, things like free rail travel need to be on the table. We must at least acknowledge those issues and make a decision to continue them, rather than assuming it is a given, which is down to unions to negotiate.
There is no conversation in the Bill about that TUPE-ing across of staff members. Value for money is really important. We do not want inequality being built into our public sector workforces simply because we are renationalising something.
Subsection (7) of new clause 39 provides that we should be showing where revenue comes from. That is absolutely justifiable. The private companies that will continue to operate in the railway system will have all that information available to their shareholders—to the people they are reporting to. If Great British Railways does not show that information, there is, again, no opportunity for scrutiny. If commercial retail income is flopping because GBR is not doing a very good job, we have no way to hold it to account for that. I do not see why it should be frightened to share that revenue information. It should instead see this as an opportunity to show good practice and how things could potentially progress under GBR.
I have one more point, which came up right at the end of the Select Committee hearing—I managed a question to the Minister, Lord Hendy, but have not seen a response. There is a huge amount of land and value that belongs to these railway stations, currently run by private companies, in some cases, including for things such as parking. What happens with all that income and all the opportunities for Great British Railways to potentially make some money? How will we know about that money and where it is coming from? New clause 39 seeks to bring that information to the fore and ensure that it is transparent and in the public domain.
Turning to new clause 40—this might be something of a segue, but I am going take the opportunity to put it on the record anyway—there is something about the aspiration to move from heavy taxpayer-funded reliance that speaks to the devolution conversation that we have been having. We have had multiple conversations, and I am sure we will have more, but ultimately GBR is being set up to give more powers to certain local authorities and local areas if they wish it, which is great—we want those communities to be able to control more of what happens. However, as we have been discussing, we are effectively developing a two-tier system, whereby anyone who is not in a mayoral authority will effectively be paying into the railway company and GBR, but not necessarily getting the levers to effect change locally. The Minister has reassured me that that will be done through business units and so on, but given that we do not know the scale of those business units or which regions and communities they represent, it is important that we know how that taxpayer money is to be used for funding across the country.
There has been a huge amount of storm damage in the south-west this weekend. Where will the funding come from under the new GBR? The south-west is not a mayoral strategic authority. Will we get our fair share of funding through the set-up for GBR? New clause 40 sets out the aspiration to move away from taxpayer funding and would surely create a more equitable system for the future.
Finally, new clause 44 would introduce a savings target. My hon. Friend the Member for Broadland and Fakenham has been alluding to the point about the costs we currently see in the system, particularly around infrastructure. That has certainly come up in the Transport Committee, in terms of how much it costs to build a bridge or a new station and the lack of competition and challenge. The new clause would create an opportunity to ensure that we pay as little as possible for the best outcomes. We have had lots of evidence in the past few months to show that other parts of the world can produce the station infrastructure that we need for a lot less than we are paying for it. I believe that is down to how the system currently works, and new clause 44 would force us to look at how it could work under GBR.
Keir Mather
I thank Members for tabling amendments on GBR’s funding and financial framework. In this chunky group of important amendments and new clauses, I first turn to new clause 26, tabled by the hon. Member for Didcot and Wantage, which would require the Secretary of State for Transport to publish a mid-funding period review of GBR’s funding, and new clause 41 from the shadow Minister, which seeks to create a GBR annual statement of financial performance.
In my view, the Bill already creates sufficient transparency about how GBR is funded. Further process could constitute unnecessary bureaucracy. Under paragraph 7(2) of schedule 2, the Secretary of State is already required to publish details of the financial assistance given to GBR using the funding period review funding power. Under paragraph 5 of schedule 2, GBR must publish its business plan and keep it up to date throughout the five-year period. Between those two commitments, the Transport Committee of the House of Commons will already have key information about how much funding the Secretary of State is providing to GBR, and the details on GBR’s business plan to understand what GBR is doing with its money. It would be unnecessary and inefficient to conduct an extra review.
New clause 34 would require the Secretary of State to set funding two years in advance of the funding period. First, I believe that it is misplaced to require that funding be committed two years in advance. There will inevitably be changes to economic circumstances over a five-year period, and new projects will surface. That was well acknowledged by all the witnesses at the oral evidence sessions, including those representing the railways supply chain. If there is no practical discretion, a settlement agreed two years in advance will be redundant before it even starts.
I can also assure the hon. Member for Broadland and Fakenham that the Bill already accounts for the need to provide the railways with certainty, and ensures that the funding process completes before the start of the next five-year funding period. The ORR, which will run the process, intends to set deadlines so that funding is committed in time for the industry to prepare. Secondly as with new clause 26, new clause 34 seeks to introduce additional reporting requirements that are unnecessary, given the transparency requirements already provided for in the Bill.
I now turn to new clauses 39 and 40. New clause 39 would create a duty for GBR to achieve value for money and long-term fiscal sustainability. New clause 40 would require GBR to develop a transition plan toward ending any reliance on taxpayer funding within its first operational funding period. I agree with the hon. Member for Broadland and Fakenham that GBR must deliver as efficiently as it can, ensuring good value for money and reducing costs to the taxpayer, and I assure him that the Bill is already very specific about GBR’s achieving value for money. Clause 18(2)(f) includes a specific legal duty on GBR and the Secretary of State to take into account
“the costs that will need to be met from public funds and the need to make efficient use of those funds”.
The ORR must also provide advice to the Secretary of State on whether GBR’s estimated costs in GBR’s draft business plan represent good value for money, with a requirement to publish a summary of that advice as part of the funding process. That is before the Secretary of State signs off on the business plan. Therefore, the hon. Member’s intent is already achieved by the Bill, and the amendment would only create extra bureaucracy and inflexibility without adding to transparency or financial sustainability.
A statutory transition plan to eliminate taxpayer funding would be unrealistic, and would undermine the railway’s ability to achieve its social goals. The reality is that taxpayer subsidy will always be needed for some parts of the railway. For example, while we aim to have the most profitable and efficient network possible, there will always be some lower-population regions of the UK in which rail travel will not make a profit and will need taxpayer subsidy. Clearly, it would not be appropriate for the Government to withdraw funding and neglect connectivity in those important rural regions, whether that be in Devon, Dorset or elsewhere—constituencies represented by Members across the Committee. Rapidly forcing GBR to operate without public support would be devastating for the economy and for the mobility of the public, not to mention reducing efficiency and the long-term capacity of the network.
Finally, new clause 44 would require the Secretary of State to set and publish an annual savings target for GBR. Introducing a statutory savings target risks creating a rigid measure that might not reflect the operational realities of the railway. Efficiency is already embedded in the Bill’s framework and will be a key consideration when GBR publishes its business plan and sets out how to meet its objectives, including on efficiency. Statutory targets are therefore not required to drive performance.
Edward Argar (Melton and Syston) (Con)
In the context of efficiency and cost, I want briefly to pick up on a point made by my hon. Friend the Member for South West Devon. What assessment have the Government made of the financial cost of bringing together a whole range of diverse terms and conditions and salary structures, from multiple train operating companies, into GBR?
Keir Mather
When it comes to setting up the operational structure of GBR, including questions about workforce and staffing, it is fair to say that no piece of railway legislation for 113 years has specified in statute what the operational decisions will be. Those conversations are ongoing, as they have been while rail companies have been taken into public ownership through DfT Operator, and they are always held, I am pleased to say, in close consultation with the workforce and trade unions.
On the overall principle of cost, I would point out to the right hon. Member that the Department’s view is that establishing GBR is set to cost £200 million to £400 million overall—which is 1% to 2% of a single year of operating budget—but could unlock up to a billion pounds-worth of efficiencies across the rail sector. Value for money is not only baked into the legal duties under this legislation, but is part of GBR’s operational ethos.
Laurence Turner
I again draw the Committee’s attention to the fact that I am a member of Unite the union. Does the Minister agree that changes to terms and conditions, if they happen at all, often take place on a very long-term transitionary basis? Indeed, that is my understanding of what happened the last time that the railways came under public ownership, when many people remained under pre-1948 terms and conditions for several decades. I would not wish to make assumptions or pre-judge future discussions, but can he confirm that nothing in the Bill would prevent similar transition arrangements in future?
Keir Mather
As my hon. Friend rightly highlights, questions about the operational structure of GBR have been left outside the framework of this Bill. That is precisely to allow those conversations to continue and so that the legislation can be fit for the creation of a railway system that works for the long term.
I thank hon. Members for their contributions, but would encourage them not to press their amendments.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
The Chair
I remind Members that decisions on new clauses are usually taken after decisions on existing clauses and schedules, even though we may have just debated them—one for a future day.
Schedule 2
Funding Great British Railways
Jerome Mayhew
I beg to move amendment 119, in schedule 2, page 60, line 2, at end insert—
“(1A) The date specified in section 1(d) must be at least 24 months before the start of the funding period.”
This amendment would ensure the Secretary of State has to notify the ORR and GBR of the amount of financial assistance for the next funding period at least two years before that funding period is due to start.
The Chair
With this it will be convenient to discuss the following:
Amendment 216, in schedule 2, page 60, line 39, leave out sub-paragraph (3) and insert—
“(3) The objectives set out under sub-paragraph (1)(a) must include objectives relating to passenger rail services.
(3A) The objectives set out under sub-paragraph (1)(a) may include, in particular, objectives relating to—
(a) the carriage of passengers or goods, save as already provided for under sub-paragraph (3);
(b) the railway network or railway assets (including objectives relating to the provision of the railway network or railway assets after the end of the funding period);
(c) fares;
(d) the accessibility of railway services to people with disabilities;
(e) the protection of persons from dangers arising from the operation of railways.”
This amendment would align funding of designated passenger train services with the five-year funding cycle for infrastructure.
Amendment 129, in schedule 2, page 63, line 26, at end insert—
“(6A) The Secretary of State may not, however, vary the financial assistance provided to Great British Railways”
This amendment would prevent the Secretary of State from varying the financial assistance provided to GBR.
Amendment 147, in schedule 2, page 64, line 1, leave out sub-paragraph (3) and insert—
“(3) The Secretary of State may not vary the financial assistance to be provided under paragraph 6 unless—
(a) the Secretary of State has consulted the Office of Rail and Road on the propsed variation, and
(b) the Office of Rail and Road provides written consent that the variation does not undermine the approved business plan required by paragraph 4.”
Amendment 215, in schedule 2, page 69, line 25, at end insert “including passenger services”.
This amendment, along with Amendment 216, would align funding of designated passenger train services with the five-year funding cycle for infrastructure.
Jerome Mayhew
Our amendments in this group develop the theme that I spoke about in the debate on the last group. We have tabled two small probing amendments to challenge the stop-start nature of funding under the current control period. Amendment 119 would insert the following new paragraph (1A) into schedule 2:
“The date specified in section 1(d)”—
which, to paraphrase, refers to the funding agreement for a control period—
“must be at least 24 months before the start of the funding period.”
Amendment 129 would insert the following new subparagraph (6A):
“The Secretary of State may not, however, vary the financial assistance provided to Great British Railways”.
Olly Glover
May I correct an earlier omission, Mr Western, by stating that it is a pleasure to serve under your chairship?
First, I want to make some general comments about this part of the Bill, which appears to be based largely on the existing five-year control period framework for rail industry planning and funding. Overall, that is a system that has been felt by the sector to work reasonably well. I had intended not to bore the Committee too much with war stories from my own time on the railway, but perhaps the only drawback of the system is that there tends to be an enormous consultant bonanza halfway through each control period, when the planning starts for the next one even while some of the plans and good intentions of the current control period gather dust on a shelf without necessarily being reviewed. That applies not so much to infrastructure enhancement, but more to process improvements for making the railway better.
First, I will say a little about our amendment 147, and then I want to speak, at perhaps rather more length than usual, about amendments 216 and 215. If there is one hill that I would be willing to perish on when it comes to this Bill and its design, it is probably the decision to not include funding for passenger services as part of the five-year funding settlement.
Our amendment 147 is basically intended to support what the Government are planning to do on five-year funding settlements, but to strengthen and protect them by simply creating a mechanism for the Secretary of State to reopen their funding should a major eventuality arise. The examples that the hon. Member for Broadland and Fakenham gave are pertinent; it is a bit of an extreme example, and hopefully we will not be there, but I think it would be reasonable to review the five-year funding of the railway in case of the outbreak of war. Our amendment would not stop the Secretary of State doing that; all it would do is require them to consult the ORR and make sure that the ORR gives written consent. It is a simple step to provide that little bit of extra governance and peer review.
I agree with the hon. Member’s comments on the shortcomings of his own amendment 129 in this area. I admire his honesty and the reflective nature of those comments—that is commendable, and something to which we can all aspire. Compared with his amendment, which would prevent variations entirely, perhaps ours is a compromise. I agree with his amendment 119, which shows good intention to make sure that the planning and funding happens in advance of the next five-year period.
Before I talk about our amendments 216 and 215, which I really do feel are critical, I want to read a couple of extracts from the policy paper on how the Government plan to fund GBR, which was published on 5 November 2025 as part of the series of factsheets on the Bill, because it will set the context for what I am about to say. The first thing that the factsheet explains is how passenger services—now known as train services—are currently funded. It states that passenger services
“run by government contracted train operating companies, such as Thameslink, are funded differently to”
Network Rail. It continues:
“The overall money available for passenger services is set at the Spending Review and then allocated via an annual business planning and funding process. Train operating companies also receive money from other sources, such as ticket fares. The train operating companies set out what they intend to deliver in annual business plans, then they seek approval from government. When approved, the contents of these plans are reflected in service agreements with the government.”
That is what the factsheet says about how things work today. It goes on to explain how things will work in future and in relation to the five-year funding review periods for other things. It states:
“Given the greater uncertainty of passenger services spend and income, due to changes in passenger demand which are difficult to predict, Passenger services will not be included within this commitment at this point. Passenger services and other activities outside of infrastructure operations, maintenance and renewal will be funded using existing powers, which will be updated to account for GBR. As these powers already work well in allowing the government to provide transparent and flexible funding to the railway industry, we have decided to keep them and continue to use the Spending Review for these aspects of GBR funding.”
Why does this matter? My real issue with the exclusion of funding for passenger services from the five-year funding review periods, and the failure to align it with infrastructure funding, is what the Rail Minister in the other place, the noble Lord Hendy, says about the objectives of the Bill. He has said it on the record on many occasions, including in front of the Transport Committee and when speaking at the Rail Industry Association reception a couple of weeks ago. He says that one of the key aims of the Bill is to properly enable the alignment of track and train—of infrastructure and train operations. He is absolutely right about that; I agree with him very much. Having worked on both sides of the fence, for Network Rail and for train operating companies, I have seen the endless misaligned objectives, budgets and ways of working and can say that he is absolutely right in his diagnosis and his prescription. However, the omission of passenger services from the five-year funding period runs the risk of undermining that. Let me explain why.
The key issue is that critical elements of the running of the railway are included in passenger services funding. Those include staffing on stations, in rolling stock maintenance depots and, critically, of train crew—drivers, guards, conductors and so on—as well as train crew training, which for many train operators has been a complete mess since the pandemic. Often, the temptation is to paint those train operators as evil private sector ogres and figures of terror from whatever fantasy franchise one wishes to quote, but in reality, since the pandemic, they have been subject to very tightly prescribed contracts by the Department for Transport, and that has led to some very poor short-term decisions about train crew training that have, at times, led to serious service cuts. We are thankfully recovering from some of that, but not wholly: for example, CrossCountry is still running at a significantly lower level than before the pandemic.
There is also the key question of the impact on Network Rail delays. A figure is often cited by those who like to bash Network Rail—having worked there, I know that there are plenty of reasons for doing so, but this one is a bit spurious—that 60% of delays are caused by Network Rail and only 40% by the train operators. Therefore, they say, aren’t the train operators wonderful and isn’t Network Rail terrible? The problem is that, partly because of the way that train crew operations and train operators are funded, a lot of the delays counted in that 60% are fundamentally train operator delays—delays that they have the most ability to influence.
Very sadly, from time to time, people commit suicide on our rail network. That is of course terrible. It initially causes very significant delay and passengers are generally sympathetic to that. Generally speaking, the benchmark for clearing and reopening the line in a way that is safe for everyone, having done the scene of crime investigation and so on, is 60 to 90 minutes. Passengers are understanding of that. They are not understanding when 12 hours later the service is still in complete meltdown because the trains are in one place, the drivers are in another and the guards are in yet another.
A few months ago I was travelling from Didcot to Cambridge via London, because we still do not have East West Rail—maybe one day we will, but that is one for another time—and many hours after a fatality between Reading and London, Reading was a trainpark. Every platform was strewn with Great Western inter-city trains or commuter trains, because its train crew and rolling stock diagrams are so complicated that it is not able to recover during disruption. That has happened partly because there is not a whole-system focus on the alignment between infrastructure funding and train crew and train operations funding.
There has been a lot of pressure, through the franchising process, to cut back on train crew costs, and therefore to diagram—forgive the jargon; I am trying to avoid using it. Diagrams are the daily allocations of instructions as to which trains drivers, guards and others work on. The way to reduce train crew costs, particularly given that there have been above-inflation pay increases, is to tighten those diagrams and squeeze every bit of productivity out of them. When the train service is working normally, it is fine if the train does one thing, the guard does another and the driver yet another.
Edward Argar
The hon. Gentleman is making a very good point, in the context of infrastructure and operating companies coming together—although it also applies more broadly—about the tightness of those diagrams and that scheduling. On East Midlands Railway, although normally the trains are short-formed, we regularly see a 10-car train that is packed in the front five carriages because the back five have to be locked, completely empty, and travel to London with no one sitting in them because there is not a member of staff to staff them. That is because the diagrams are so tight that there is no contingency to put extra staffing in place at short notice when someone does not turn up.
Olly Glover
The right hon. Gentleman gives another good illustration of the problem, and of the foolishness of our current obsession with ordering five-coach inter-city trains, which no other serious western European country does. So often, they are either short-formed as five coaches or the other half is unavailable—or even, when it is available, no one knows, because they cannot walk all the way through and access the other half of the train. We should not be doing that anyway, but he makes a very good point.
There are many other examples of what I am talking about, but I hope that underlines why I really do think that amendments 216 and 215 are critical, and why the objectives in schedule 2 should include passenger rail services, which should be subject to the five-year funding period so that they are not subject to the short-term whims of the Treasury—dare I say that it has any influence on this—and so that the fulfilment of the Bill’s key objective of properly integrating track and train is fully enabled. We will press amendments 215, 216 and 147 to Divisions. I look forward to the Minister’s comments.
Edward Morello
As always when following my hon. Friend, I find myself with little to add. All of the very good points have been made, but it is probably worth reinforcing why we think amendments 216, 147 and 215 are important.
Amendments 216 and 215 speak to an absurd anomaly. I am probably unusual in this Committee in that I am not a rail expert—far from it—but the absurdity of not having aligned funding cycles for passenger and infrastructure strikes any outsider as madness. As somebody who regularly travels on the Salisbury to Exeter line, which is in need of electrification and new rolling stock, I ask any Minister who is responsible to tell me when the operator should make a decision on whether to buy new rolling stock, when they do not know whether electrification is going to happen. Do they wait for the electrification and then buy the rolling stock, having just spent all this money extending the life of diesel carriages? Having the two interoperable is just common sense. I would hope that making the two funding cycles run simultaneously would be a non-contentious idea.
On amendment 147, my hon. Friend the Member for Didcot and Wantage gave the example of the outbreak of war, which is definitely an extreme one, but we must also insulate any piece of legislation against future politicians—Ministers—wanting to meddle and perhaps not adhering to the desire that it was designed around. The amendment is intended to make sure that Ministers, whether in the Department for Transport or the Treasury, cannot rip the funding carpet out from under the rail operators. If the Bill really is about long-term planning, then there has to be long-term security of funding as well, and amendment 147 is about making sure that there is an additional safety net should any future Government, of any make-up, not want to adhere to the spirit of the Bill. For those reasons, I hope the Government will give consideration to our amendments.
Keir Mather
I thank the hon. Member for Broadland and Fakenham for tabling amendment 119, which would require the Government to commit funding for a five-year funding period at least two years before the period starts. I can appreciate and identify with his desire to provide certainty to industry, and agree with the ambition that the amendment presents to generate a stable operating environment for the railway. However, as I said in response to new clause 34, I believe that the desire to require funding to be committed so far in advance is misplaced. There will inevitably be changes to economic circumstances and new projects will surface. If there is no practical discretion, a settlement agreed two years in advance may be redundant before it starts.
I can assure the hon. Member that the Bill already accounts for the need to provide the railway with certainty and ensures that the funding process completes before the start of the next five-year funding period.
Jerome Mayhew
I heard what the Minister said, but it flies in the face of the evidence that the industry itself gives him and all of us about the need for certainty towards the end of a control period. All that the amendment seeks is certainty for two years at the start of a control period. How is he going to address that particular issue?
Keir Mather
It is of course our obligation as the Government to meet the concerns of stakeholders, whether raised in the oral evidence session or elsewhere. It is also incumbent on me to point out that we want to abolish boom and bust in the rail system. On the fear about cliff edges, as was acknowledged by the ORR in its oral evidence, in reality there is not a cliff edge when funding always tends to run over the five-year period. Five years is the basis for the decision process by which funding allocations must take place. It is important to take the oral evidence in the round. It is also important to note that the ORR, which will be running the process, intends to set deadlines so that funding is committed with time for the industry to prepare. The amendment is therefore unnecessary.
Amendments 129 and 147 both seek to prevent or restrict the Secretary of State’s ability to vary the agreed funding settlement. I assure Members that the intention of providing a five-year funding commitment is that it lasts for five years. The Government are signed up to that principle. I also agree that certainty for GBR and industry is beneficial. More funding will mean we can get the best out of the railway and encourage investment, innovation and value for money.
Putting a hard restriction on all change, as amendment 129 suggests, would not be proportionate, as the shadow Minister acknowledged. As he noted, there may be unforeseen circumstances that require changes to funding, either to provide more or to reduce the amount. For example, GBR may outperform expectations and need less than is awarded, in which case Ministers will need to recoup the costs for the taxpayer, and can choose to do so in whatever way they see fit.
Keir Mather
Indeed! The operating environment may also change and GBR may need more funding than is committed. It is right that elected Ministers are able to make decisions on public spending and allocate resources as needed, balanced against the clear benefits of certainty.
Amendment 147 would restrict Ministers’ ability to vary funding by adding a requirement that the ORR must provide written consent. Although the Office of Rail and Road will have an important advisory role, it would not be appropriate for it to entirely determine changes to funding. Responsibility for decisions of public expenditure must remain with the Secretary of State, particularly where changes may be required due to wider fiscal circumstances. The amendment would also result in ORR consent being needed for increases in funding and immaterial changes.
The Bill provides assurances. If the Secretary of State considers that the impact of a funding reduction could be material, the Bill requires her to notify the ORR, giving it an opportunity to comment publicly on the likely effects on the railway. That balances the need for the Government to retain control over Government funding with the opportunity for independent evaluation and, if needed, public pressure, to protect certainty for the railway.
On amendments 215 and 216, I thank the hon. Member for Didcot and Wantage for so ably setting out, based on his practical experience, and far better than I ever could, the need for a single guiding mind for the railway. His explanation was buttressed by the right hon. Member for Melton and Syston. I thank the hon. Member for Didcot and Wantage for his amendments, which seek to align passenger service funding within the five-year infrastructure funding cycle. I support that intention. The Government agree that many benefits are derived from integrated funding streams. However, I do not agree that the amendments are necessary.
It is important to note that passenger services are already fully considered under GBR’s statutory duties and through the integrated business plan, in which GBR will plan all its activities on a five-year basis across track and train. The Bill requires GBR to deliver safe, reliable and efficient services, taking passenger needs into account.
Jerome Mayhew
GBR may plan on a five year basis, but it is not the same five years, is it?
Keir Mather
The shadow Minister is right to point out that allocation of funding for passenger services, as opposed to other GBR activities, initially takes place through the spending review funding process. I am about to address his point, but I should say that the Bill contains the ability for Ministers to extend the five-year funding process to passenger services once GBR is set up and prepared to manage that. It would not be responsible to do that from the outset when GBR is still in the transition and set-up phase. Ministers need to feel confident that GBR is financially mature enough before they can consider integrating funding further. I hope that addresses both the shadow Minister’s point and the contribution from the hon. Member for Didcot and Wantage.
Olly Glover
I understand what the Minister is saying, but I am sure that in his line of work he has already encountered many instances where, despite noble intentions for something to perhaps happen at some point in the future, it ends up being years, if not decades, before it does. That is why it would be rather more sensible to enshrine the requirement in legislation.
Keir Mather
Respectfully, I believe it is more sensible to be prudent and cautious regarding the funding of passenger services, rather than risk creating a situation that a newly created GBR might not be in an immediate position to sufficiently accommodate within its operating structure. Erring on the side of caution, I encourage Members to withdraw their amendments.
Jerome Mayhew
As I intimated earlier, amendments 119 and 129 are probing and I will not press them to a vote.
I was interested to hear the Minister’s apparent position that there is no boom and bust, that the current situation for infrastructure funding is fine and that the evidence from the industry appears not to be—
Keir Mather
For the record, I said that we shared the aspiration to abolish boom and bust as it exists within the rail system. That applies to our infrastructure as much as it does to any other part of the railway’s operation.
Jerome Mayhew
I am grateful for that clarification, but although the Minister may share that ambition, he is not choosing to do anything about it. Having said that, I said I was not going to press the amendments to a vote and I will not. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jerome Mayhew
I beg to move amendment 120, in schedule 2, page 60, line 36, leave out “may” and insert “must”.
This amendment would require the statement of objectives to contain standards to be achieved when carrying on activities in relation to railways and railway services.
The Chair
With this it will be convenient to discuss the following:
Amendment 121, in schedule 2, page 60, line 39, leave out “may” and insert “must”.
This amendment would require the Secretary of State’s statement of objectives to include objectives relating to the list in sub-paragraph (3).
Amendment 122, in schedule 2, page 60, line 41, after “(a)” insert “increasing”.
This amendment would require the Secretary of State to set the objective for GBR of increasing passenger and freight journeys.
Amendment 123, in schedule 2, page 61, line 7, at end insert—
“(f) delivering improved productivity and efficiencies.”
This amendment would require the Secretary of State’s statement of objectives to include an objective of delivering improved productivity and efficiencies.
Amendment 206, in schedule 2, page 61, line 7, at end insert—
“(f) customer experience and satisfaction.”
This amendment expands the objectives the Secretary of State sets for railways funding settlements to include customer experience and satisfaction.
Jerome Mayhew
Amendments 120 to 123 aim to strengthen GBR’s value for money and wider performance duties. As drafted, paragraph 2(2) in schedule 2 only gives the Secretary of State the option of tying performance objectives to granting public funds. The performance objectives should be at the core of the granting of funds, so amendments 120 and 121 seek to change the wording of the current drafting by replacing “may” with “must”. In other words, they would make it clear that it is not an option but core to the application of the process, and should therefore be mandatory.
Amendment 122 would make it clear that Great British Railways should aim to increase passenger services. I do not know why this has become such a hot topic; I would have thought it would be obvious—I was about to use unparliamentary language for a moment there. Increasing passenger services should obviously form part of the functions and aspirations of GBR, and that should be included on the face of the Bill. It should be clear that GBR aims to increase passenger services, not just freight. In addition, the list of objectives in the schedule is missing a specific objective on productivities or efficiency, which amendment 123 would add.
This series of simple amendments seek to perfect the currently imperfect drafting, to put performance at the heart of the Bill and to recognise that the pursuit of increased passenger numbers should be a key objective of GBR, in addition to its focus on growing rail freight, which we all agree with.
Edward Morello
I wish to speak briefly to amendment 206, which was tabled by my hon. Friend the Member for Didcot and Wantage. The amendment goes to the heart of what we Liberal Democrats believe the Bill should be about: putting passengers first. It would expand the objectives that the Secretary of State sets for the rail funding settlement to include customer experience and satisfaction explicitly. In other words, it would ensure that when decisions are made about money, priorities and trade-offs, the people who actually use the railways are not an afterthought.
Making customer satisfaction central to GBR would help to rebuild trust in the railways, which many people currently feel have stopped working for them. If we are serious about encouraging people to shift away from the convenience of cars and toward more sustainable public transport, customer experience has to be central. People will not make the switch because they are told to; they will do so because trains are easier, more comfortable and more reliable.
The creation of customer satisfaction targets and objectives that are tied to rail funding settlements will create the incentives for change. It will make it more likely that investment decisions will focus on what actually improves journeys for passengers, rather than just on what is cheapest in the short term. It will find the balance between what is affordable and what is best for users.
Keir Mather
I thank the shadow Minister and the hon. Member for West Dorset for their amendments, all of which look to amend the Secretary of State’s statement of objectives.
First, amendment 120 would require that the statement of objectives contains standards for GBR to meet when conducting its railway activities. I agree that we need to measure GBR’s performance against clear standards to ensure high-quality delivery. However, the statement of objectives, which is a document to set direction and inform the funding process, is not enforceable, and consequently it is not the right place to require standards.
The original drafting provides flexibility, letting the Secretary of State specify what standards should be achieved by GBR when delivering against the objectives in the statement. This allows for circumstances in which providing a standard helps to better articulate the strategic vision for GBR over the five-year funding period.
However, it may not always be appropriate for an objective in the statement of objectives to be accompanied by a standard, particularly when an objective is straightforward or high level, such as a requirement to have regard for security threats or to support economic growth. The Bill contains other mechanisms, including the business plan and the licence, to ensure that there are robust and enforceable measures against which to hold GBR to account.
There is a similar case to be made on amendment 121, which seeks to set a structure for the statement of objectives, and amendment 123, which proposes to expand the list of potential objectives to include a section on productivity and efficiencies. The amendments would change the list from illustrative objectives to a set of requirements. It would fundamentally not be appropriate to impose such a structure on the statement of objectives, which needs to be able to take a different approach each time it is made, in response to wider environmental concerns and socioeconomic circumstances. The intention is that the list serves as a guide to future drafters, and I believe that the flexibility to allow adaptation to circumstances that we cannot predict will ensure that this legislation remains fit for purpose into the future.
Joe Robertson (Isle of Wight East) (Con)
I understand, although I do not agree with, the argument the Minister is making on amending “may” to “must”—he says it would be unenforceable—but he seems, unless I have misunderstood, to have conflated that argument with his point about amendment 122, which seeks not to make a discretionary provision a mandatory one but to expand the considerations. The explanatory statement says:
“This amendment would require the Secretary of State to set the objective for…increasing passenger and freight journeys.”
Perhaps I have misunderstood.
Keir Mather
To my knowledge, I am not conflating the two amendments. My point is that setting objectives that are so closely tied to discernible and prescriptive standards would, in effect, contravene the original intention of the schedule, which is to provide flexibility in setting objectives over the five-year period. If, in the hon. Gentleman’s view, I continue not to meet that intention, I will happily give way again.
Jerome Mayhew
The Minister wants flexibility, and he says that is why amendments 123 and 206—tabled by myself and the hon. Member for Didcot and Wantage respectively—should not be agreed to. Will the Minister set out the circumstances in which he thinks it would not be appropriate for the organisation to focus on
“delivering improved productivity and efficiencies”
or on
“customer experience and satisfaction”?
Why does he need flexibility to ignore those objectives?
Keir Mather
No, I am not willing to say that those objectives, in principle, should not be pursued as a result of this legislation. The question is where within the Bill these things reside. If we are talking about short-term objectives relating to GBR’s operational efficiency as an organisation through, say, a key performance indicator, that is best placed within the business plan. If we want legal duties to ensure that we improve passenger experience or the reliability of train services, they are best placed as legal duties. There is a question about where we apportion the responsibilities and accountability mechanisms within the Bill. I do not believe that schedule 2 is the right place to be as prescriptive as the shadow Minister intends with those specific requirements.
On amendment 123, there is already a mandatory requirement in the Bill for the Secretary of State to obtain advice from the ORR on whether the activities that GBR is to undertake represent value for money. Unlike the list of potential objectives, that is mandatory. I also direct the Member to the assurances that are already in the Bill: there is a duty on GBR to make efficient use of public funds when exercising its functions, and a clear role for the ORR to assess the value for money of GBR’s proposed plans and to publish that assessment.
Edward Argar
Will the Minister confirm that the advice it will be obliged to seek will be published? If it is private advice, it has no teeth whatsoever, because the Secretary of State could accept it or refuse it, as could GBR, and no one would ever know. Would that advice be public?
Keir Mather
The purpose of issuing advice is so that we can enter into an era for the railways where these discussions happen in a way that is far more commonplace than the broken-down patterns of accountability that currently exist. I therefore envisage the sort of adversarial situation that the right hon. Member suggests occurring less than it does under the existing rail system.
The ORR and the Secretary of State are both required to consider value for money when they advise on and approve the business plan. I hope that the relevant measures will show the hon. Member for Broadland and Fakenham that we are serious about getting the best out of GBR and provide him with enough reassurances to seek to withdraw his amendment.
Amendment 122 would specify that the Secretary of State’s statement of objectives may include an objective on increasing passenger numbers and freight. It would narrow the wording of the objective in paragraph 2(3)(a) of schedule 2 from relating to passengers and freight to just increasing the numbers of those things. I do not think it would be wise to require ever-increasing passenger numbers as an objective in itself. Different objectives—such as increased reliability, improved passenger experience or references to spare freight paths—might contribute to that overall outcome while being more important in the moment. Again, that should be for the Government of the day, not inflexible legislation, to decide. I urge the hon. Member for Broadland and Fakenham to withdraw his amendment.
Finally, amendment 206 proposes to expand the list of potential topics that could be covered in the statement of objectives, with the hon. Member for Didcot and Wantage suggesting the inclusion of a section on customer experience and satisfaction. The current list in the Bill is purely illustrative, so Secretaries of State may in future add to the list of topics, and include just some of the topics or slightly different ones in their statement of objectives. I invite the Committee to note that the illustrative objectives already included in the Bill contain reference to the carriage of passengers or goods, as well as to fares and accessibility—all matters that are important to passenger experience—so it is unclear what more would be achieved through the amendment, which would simply add a further example to the list.
Furthermore, the Bill contains a duty for the Secretary of State and GBR to exercise the functions in the manner best calculated to promote the interests of the users and potential users of railway passenger services. Unlike the list of potential objectives, that duty is intended to be mandatory. I hope that demonstrates to the hon. Member for Didcot and Wantage that we consider passenger experience to be absolutely central to GBR’s objectives, and provides him with enough comfort not to press his amendment.
Jerome Mayhew
We have heard with interest what the Minister has to say, but I am wholly unpersuaded that he is adequately reflecting the needs of the industry, so I will seek to press amendment 120 to a Division.
Question put, That the amendment be made.
Jerome Mayhew
I beg to move amendment 124, in schedule 2, page 62, line 9, at end insert—
“(d) measurable performance indicators for each statutory duty listed in Section 18.”
This amendment would require the business plan to include measurable performance indicators for GBR’s duties.
The Chair
With this it will be convenient to discuss the following:
Amendment 125, in schedule 2, page 62, line 9, at end insert—
“(3A) The plan must set out how Great British Railways will ensure its activities minimise costs to the taxpayer.”
This amendment would require GBR to consider how to minimise costs to taxpayers.
Amendment 127, in schedule 2, page 62, line 22, at end insert—
“(c) whether carrying on those activities will be done in such a way as to minimise costs to the taxpayer.”
This amendment would require the ORR to provide an assessment of whether GBR will minimise taxpayer costs before the Secretary of State approves the business plan.
Amendment 128, in schedule 2, page 62, line 27, leave out from “publish” to the end of line 28 and insert—
“the approved business plan in full, apart from any sections which it considers to contain commercially sensitive information, and”.
This amendment would require GBR to publish its full business plan saving any sections which are commercially sensitive.
Jerome Mayhew
We now turn to paragraph 4 of schedule 2, which deals with the business plan and approval by the Secretary of State.
To receive public funding under paragraph 4, GBR is required to include in its business plan an explanation of how it will meet the objectives set by the Secretary of State. Amendment 124 seeks to strengthen this obligation by requiring GBR to set meaningful KPIs against which its performance and meeting its statutory duties—as set out in clause 18, which we will come to in a bit—can be measured. We had the saga of the missing licence; now we have the saga of the missing KPIs—and 19 other documents. This is important, given the absence of any direction from the Government on KPIs, despite being repeatedly requested on the Floor of the House over a number of months. The only response from the Government as a result of that probing is that they will be “robust”, whatever that means, hence the need for amendment 124.
Amendments 125 to 128 would strengthen GBR’s focus on minimising the cost to the taxpayer and increasing the role of the Office of Rail and Road to make sure that that happens. Amendment 125 would require an express focus on how plans will minimise costs to the taxpayer, which is too often overlooked—the Bill makes hardly any reference to value for money. The taxpayer is ignored entirely. This amendment would make it a legal requirement to address that and would—under the maxim that “you get what you measure”—drive behaviour.
Amendment 127 would require the Office of Rail and Road to provide an assessment of whether GBR’s plans to minimise costs to the taxpayer are, in fact, likely to do so. That would be undertaken before the Office of Rail and Road approves the business plan. Again, this is about driving behaviour through focus and making sure that the taxpayer is not forgotten in the deliberations between nationalised Great British Railways and civil servants at the Department for Transport.
Finally, amendment 128 would require GBR to publish its full business plan, save for commercially sensitive sections, which they should of course have a carve-out from displaying to their potential competitors—although most of their competitors have been designed out under the wording of the Bill. Amendment 128 would welcome transparency, which—given the huge amount of public funding that the organisation currently requires and no doubt will continue to require—is necessary, so that the public can see how their money is being spent, and whether the organisation is focused on driving down the cost to the taxpayer and driving up value for money.
I commend all the amendments to the Minister.
Keir Mather
I thank the hon. Member for the amendments, which seek to add requirements to the production of GBR’s business plan and the ORR’s advice on that plan. However, on the subject of the publishing of advice, I briefly return to a question that was put to me by the right hon. Member for Melton and Syston. I feel that I was unnecessarily circumspect in the answer that I gave him, and it did not reflect the incisive nature of his question, which was about a mandatory requirement that exists in the Bill for the Secretary of State to obtain advice from the ORR on whether the activities of GBR represent value for money, and whether or not that advice can be published. I tell him that the ORR must publish a summary of that advice, and it can publish the advice in full. Although I do not wish to predict the future, I expect that it will likely to so, as part of its work in holding the Government to account. I hope that that is a full answer for the right hon. Member.
Edward Argar
I thank the Minister very much. I cannot imagine where that flash of inspiration and recollection came from, but I am grateful to him for the clarification.
Keir Mather
Committees move in mysterious ways—that is all I will say.
I will take each amendment in the group in turn, starting with amendment 124, which would require GBR to develop key performance indicators for each of its statutory duties. I am sure the hon. Member for Broadland and Fakenham will agree that KPIs should be realistic and measurable, so they would also need to be grounded in the specific proposals for what GBR intends to deliver over the next five years. They also need to be allowed to evolve over time, to ensure that they are most relevant to GBR’s planned delivery and can be effectively used to track GBR’s progress.
The way an indicator is set out can influence how an organisation behaves, and we should be able to refine them over the course of several funding periods, to get GBR to deliver in the way that it needs to. Therefore, a more flexible process works better than fixing the nature of the indicators in legislation—and I give way to the hon. Member.
Jerome Mayhew
The Minister is a mind reader; I was just about to ask him to give way. He says he cannot agree to amendment 124 because we need flexibility in the future, but he will see that it refers to
“measurable performance indicators for each statutory duty listed in Section 18”,
so that flexibility would only run so far as any alteration to the statutory duties set out in his own clause 18, which GBR has no ability to change. The Government do not intend for there to be flexibility, so why does the Minister say he needs it?
Keir Mather
I respectfully disagree with the shadow Minister’s interpretation. This is about how GBR discharges those legally binding duties, and whether we should be overly prescriptive about the means by which it does so. It is important to have flexibility. Given the amount of technological change that we have seen in railway processes over recent decades, as well as socioeconomic factors and the need for GBR to balance those duties, we cannot be overly prescriptive about how we ask it to meet them—apart from the fact that it is legally required to do so.
I assure the hon. Member that GBR’s business plan will have not just a robust but a comprehensive set of KPIs against which it will be held to account. Progress against them will be tracked, and GBR will publish updates in line with the requirements in the Bill. The ORR will also monitor GBR and its business plan, and provide advice to the Secretary of State.
Rebecca Smith
I am thinking through the schedule. Forgive me if I am wrong, but ultimately, it is GBR’s business plan. Effectively though, there are going to be wheels within wheels, in terms of each of the business sectors, the different mayoralties, and the operators that are doing different things in different countries. To me, it feels overly simplistic: we have got one plan, which is the plan for the funding of the entirety of GBR, but if there are no KPIs at all, how are we supposed to even compare parts of the country against each other? Surely there will be different funding streams and business cases for different things. To me, it just feels like one overarching plan. How on earth are we supposed to hold the Government to account for delivering that, let alone ensuring parity and equality across the country, and making sure that funding is going into the right places, where it is most needed?
Keir Mather
That is a very important point. While the hon. Member points to a system that is simple in the objectives that it sets out for the railway overall, I see one that provides sufficient breadth to allow the organisation to develop over time and offer a system of operation that is closer to the communities it seeks to represent—and which, most importantly, is agile in adapting to changing socioeconomic circumstances and technological innovation.
The need for objectives that are not overly prescriptive, and the place for KPIs being in the business plan, allows a holistic approach to setting objectives for the railway, which can guide work overall for a national organisation, offering a single uniting mind, while at the same time not fettering GBR’s ability to evolve as an organisation in future.
In that sense, I believe we desire the same outcome: to make sure that the railway operates in the most effective way possible. In the light of the measures in the Bill that I have outlined, I hope that the hon. Member for Broadland and Fakenham will withdraw the amendment.
Amendment 125 would require GBR to include in its business plan information about how it will minimise costs to the taxpayer, while amendment 127 would require the ORR to advise the Secretary of State on this. I agree that it is important for GBR to deliver in the most efficient way that it can. That is why GBR, the ORR and the Secretary of State—all the people involved in the railway, and in the business plan—are all subject to a cost and efficiency duty, which is applied by clause 18. That will ensure that GBR aims to be cost-efficient at all times, which aligns with the intent of amendment 125.
Adding additional requirements for GBR in this space could create perverse incentives. For example, a focus on minimising costs, without other checks and balances, could drive GBR to cancel unprofitable lines even if they are important to local communities because doing so will save money. Clearly, it would not be appropriate for GBR to neglect connectivity in those important rural regions. GBR will also be robustly scrutinised from a value-for-money perspective by the ORR, and the Secretary of State will need to consider the ORR’s advice before approving GBR’s business plan. I hope that is enough to assure the hon. Member for Broadland and Fakenham that the Bill can deliver the outcome he seeks without amendment, while allowing GBR the autonomy necessary to plan in the way it sees as most appropriate.
Finally, amendment 128 seeks to limit the information that GBR could redact from its approved business plan. I agree that GBR’s activity must be transparent, and that will be an important part of how we hold GBR to account. That is why the Bill already requires GBR to publish its business plans. The Bill provides for slightly more discretion for GBR to redact sections of the business plan than amendment 128 proposes. That is because it is important that all types of sensitive data, not just the commercially sensitive, are able to be protected. Personal data, security-sensitive information about stations or anything legally privileged are all examples of content that may need redaction from the final plan. A flexible requirement can be better used to navigate these nuances. However, let me be clear that GBR’s public law duties and wider accountabilities framework will ensure that GBR will not be able to hide information that is important and relevant to public scrutiny.
In the light of these considerations, I ask the hon. Member not to press the amendments.
Laurence Turner
On amendments 125 and 127, I have full sympathy with the ambition of reducing costs to the taxpayer wherever possible. However, the word “minimise” is important here, because a natural reading would be to bring that cost to a minimum.
Each Government have recognised that there is a balance to be struck between the charges raised against the taxpayer, fare payers and other users of the railway. We heard evidence from Richard Bowker, the former chief executive of the Strategic Rail Authority, who has contributed what is sometimes known as Bowker’s law—there are only two sources of income to a railways: passengers and taxpayers.
I fear that if these amendments were incorporated into the Bill, the natural outcome would be that fares would rise, as indeed may charges levied upon freight users of the railway. For that reason, I hope they are not supported.
Jerome Mayhew
Mr Western, you get what you measure. We on this side of the Committee are very keen that we measure the level of involvement for the taxpayer and that we do our best to look after the taxpayer in the design of this structure, so I intend to press all the amendments.
Keir Mather
Schedule 2 will establish a new funding process for GBR that takes what we have learned from the successes of the periodic review process and applies them to the new GBR world. The new funding period review will provide GBR with five years of funding to carry out its job in operating and maintaining the railway network, and will create a structure through which GBR will develop and own integrated business plans across track and train that reflect its role as the directing mind for the railways.
The schedule retains the role of the ORR in testing and scrutinising the plans, ensuring they are ambitious but deliverable, and providing confidence to the Government. The new funding process, with the five years of certainty it provides, will help to result in the best price for Government and the taxpayer, and generate consistent, longer-term work for private partners in the rail supply chain—keeping good, well-paying, specialist jobs alive and thriving in the United Kingdom.
The schedule will also give greater representation to devolved Governments and mayoral strategic authorities, providing them with a real opportunity to advocate for the countries and places they serve at the national level. The funding period review will provide GBR with the structure it needs to set out how it will make our railways reliable, offer better value and be more accessible. I therefore commend schedule 2 to the Committee.
Edward Argar
I will not detain the Committee for long. As ever, I am grateful to the Minister for his succinct explanation. However, I have two concerns; while he may be able to reassure me on these, I certainly think they need an airing. First, how does he propose to ensure that the funding period is properly aligned with a spending review period? I have seen the challenges faced in government when there is a misalignment, or where one period overlaps the other.
I was only very briefly Chief Secretary to the Treasury, but I have also been a Minister in a spending Department, and I have seen the challenges that occur when there is a misalignment, because the Treasury is very clear about non-commitment beyond an existing comprehensive spending review period. How will the Minister ensure alignment and certainty? Without alignment, although there is the impression of certainty, we all know the all-powerful hand of the Treasury if one, as a spending Minister, cuts across its bow on such matters.
The other challenge has been raised by my hon. Friend the shadow Minister a number of times in various contexts. Although I take the point about the five-year period—and the Minister referenced seeking to bring greater certainty to investment decisions with that—I am still not quite clear. I may have missed it, but I do not think I have heard a clear explanation of what steps are being taken to iron out the peaks and troughs that my hon. Friend the shadow Minister mentioned, because it is still a five-year period.
Unless the budget is set for the next five-year period in, say, year two or year three, well ahead of its coming into force—I would posit that the Treasury would be highly unlikely to agree to that—it still does not get around the problem: year one is scaling up, we might see spending in years two and three, and possibly in a bit of year four, but then that spending will drop off again due to a lack of certainty about what is coming in the next year one. I would be grateful if the Minister could clarify how what he sets out in the schedule will help to address the peaks and troughs that my hon. Friend the shadow Minister so ably highlighted to the Committee previously.
Keir Mather
I thank the right hon. Member for Melton and Syston for his contribution. He is right to note that the five-year funding process has a different period from that of the spending review. It is tested in the sense that the funding process for Network Rail works similarly now. As was acknowledged in the oral evidence from the ORR, there is not in reality a cliff edge through the five-year funding settlement, as funding always tends to roll over the five-year boundary, but five years is the envelope through which those decisions take place.
That is my assessment of how the process works; if I have failed to answer any of the right hon. Gentleman’s questions, perhaps he will illuminate me on what they are and I can provide him with a more fulsome response later on.
Question put and agreed to.
Schedule 2 accordingly agreed to.
Clause 13
Charging and terms and conditions
Jerome Mayhew
I beg to move amendment 22, in clause 13, page 7, line 22, leave out “as it thinks fit” and insert “as are reasonable”.
This amendment would ensure Great British Railways only charges what is reasonable for provision of services in circumstances where it is a monopoly supplier.
The Chair
With this it will be convenient to discuss amendment 23, in clause 13, page 7, line 28, at end insert—
“(3) A person aggrieved by a charge, or terms and conditions issued under this section, may appeal to the Office for Rail and Road.”
This amendment allows appeals against the charges and terms and conditions issued by Great British Railways under section 13.
Clause stand part.
Jerome Mayhew
This afternoon is turning into a marathon session, and the only people who cannot take a comfort break are the shadow Minister and the Minister, so far as I can work out; I have my legs crossed.
Clause 13 allows GBR to charge people to whom it is providing a service relating to its functions—this is the important bit—“as it thinks fit”; there is no qualification there. The clause will allow GBR to charge for services that it provides that are currently chargeable under the existing rail regime, such as the back-of-house services currently provided by the Rail Delivery Group, from which all passenger operators, private and public, including open access operators, benefit.
There is a very significant problem with the wording of the clause, because the difference between now and then is that GBR will be a monopoly provider of those services. If we add the two factors together—first, the fact that it is a monopoly provider and secondly, that it is allowed to charge as it thinks fit, with no qualifying criteria—the result is at least the opportunity for GBR to abuse its position to inflate charges and kill competition. GBR will be in direct competition with competitors that can only buy those services from GBR. We know that that will cause a huge issue for open access operators because they have told us so, as GBR will once again be acting as a player and as the referee. That is a clear conflict of interest designed into the structure that the Bill creates. The clause needs to have much greater protections on the calculation of access charges.
The Government use the example of the back-of-house services currently provided by the RDG to explain what would be applicable under the clause. The Rail Delivery Group is a membership organisation consisting of train operating companies, owning groups and Network Rail. The key services they provide are journey information, reservation systems, railcards and working to improve performance, safety and accessibility.
The language in the clause as drafted gives Great British Railways carte blanche where no alternative provider of those key services is allowed—a conflict that will lead to abuse and is contrary to the direction of the Competition and Markets Authority, which expressly said that there needs to be a level playing field when dealing with matters of this kind. That is the Government’s Competition and Markets Authority, so who is right here—the CMA, or the Bill as drafted?
Rebecca Smith
I want to briefly speak to the proposed new subsection added by amendment 23, which would offer anybody given conditions by GBR the opportunity to appeal that decision to the Office of Rail and Road. The issue of accountability and the unequal playing field faced by those on the outside compared with those on the inside came up in the Transport Committee’s evidence sessions and last week. Having heard a lot of that evidence, the amendment appeals to what I think is the right way to do things. We must ensure that organisations engaging with the railway, or offering services to the railway—even if they are being paid separately for them—have the opportunity to appeal a decision that affects or impacts them. I feel that not having such an opportunity is particularly onerous. I support amendment 23 and concur with everything that the shadow Minister has said.
Keir Mather
I thank the shadow Minister for tabling amendments 22 and 23 and the hon. Member for South West Devon for speaking in their support. Amendment 22 seeks to require GBR to set reasonable charges for the delivery of its functions, and amendment 23 seeks to require the ORR to provide an appeals role for anyone who considers the charges set by GBR to be unfair.
On amendment 22, we clearly agree that GBR must act reasonably when setting charges and there is no suggestion that it will not do so. In fact, safeguards to ensure that GBR cannot levy unreasonable charges already exist in the Bill. Clause 18 requires GBR to act in the public interest and to ensure that railway service providers, such as devolved operators, freight operators and open access operators, can plan, invest and make decisions about their own businesses. When setting charges, GBR must therefore do so in a manner consistent with those duties, and it must not set charges that undermine operators’ ability to run viable and successful businesses.
Jerome Mayhew
The Minister refers to clause 18(2)(e), which states:
“They must exercise the functions… in the manner best calculated to be in the public interest”.
Can the Minister not see that GBR’s assessment of what is in the public interest could very well be what it considers to be in its own interest, because it is a public body? The provision would allow GBR to prioritise its own interests, such as the increased receipt of revenue from third-party operators, at the expense of the competition. That is not the safeguard that the Minister says it is, is it?
Keir Mather
I disagree with the shadow Minister’s interpretation of how the duties function in this regard. GBR cannot take a wholly self-interested, cynical interpretation of what constitutes “best use” under clause 60, which we will turn to in due course. GBR has to make a best-use decision that takes into account the needs of open access and freight. Also, under GBR’s duties, it must take account of promoting the interests of users and potential users of the railway, some of whom—even though open access constitutes a small proportion of the railway network usage overall—will be people using open access operators. Further, the duty in clause 18(2)(d) says,
“so as to enable persons providing railway services to plan the future of their businesses with a reasonable degree of assurance”.
Such persons would not be able to do so if they were being levied unreasonable charges.
There are supplementary safeguards that I will turn to. Existing competition legislation will also require GBR to ensure that the charges it sets are fair, non-discriminatory and not anti-competitive. The ORR will retain its enforcement role in consumer and competition law, concurrent with the Competition and Markets Authority, so it will be able to ensure that GBR is treating the private sector fairly. It is also important that, as a public body, GBR must be able to recover appropriate costs from those who benefit from the services that it provides. If it were prevented from doing so, the burden would ultimately fall on taxpayers and passengers. The Government’s ambition is to have a successful rail industry that attracts investment and can support its own costs, rather than unnecessarily relying on the taxpayer.
Amendment 23 would introduce an appeals role for the ORR on these charges. Again, we fully support the principles of fairness and transparency that underpin the amendment. For significant charges, such as charges for access and the use of infrastructure, the Bill already provides an appeals route to the ORR. However, an appeals route to the ORR for every possible charge that GBR may levy in relation to its statutory functions is clearly disproportionate. The amendment would require an appeals route to be provided even when those charges may be small, such as contributions to cover a railcard cost.
Clause 13, in its sum, simply ensures that GBR can recover the costs of managing and delivering services, such as back-office retailing services, by charging those who use GBR services, such as non-GBR operators or retailers. It is essential that GBR should have a clear statutory right to recover costs from users of its services. That supports the sustainability and efficiency of GBR’s operations, and ensures that taxpayers and GBR customers are not subsidising the operations of others. Importantly, it replicates how those cross-industry functions are paid for today. The Bill and existing competition law already provide adequate protections for third parties and a route of redress, should that be required. I urge the hon. Member for Broadland and Fakenham to withdraw his amendment and commend clause 13 to the Committee.
Jerome Mayhew
The Government’s defence is pretty extraordinary. What they are saying is that GBR should be free to charge unreasonable amounts—otherwise there would be no objection to the wording of the amendment, which simply seeks to put the word “reasonable” into the requirement. The Government say that even though this monopoly provider can charge as it thinks fit, there should be no specific right of appeal and that the other operators should rely on the CMA taking an interest or on wider competition law—in other words, after-the-event litigation.
We all know that in a business environment we can argue about the chaos at the end, but a business can already have been destroyed by a decision from a monopoly provider—on which there is no right of appeal and which could not be held back until an appeal has been heard. This is an absolute charter for GBR to run roughshod over independent retail operators, open access operators and even rail freight. It is with no hesitation at all that I seek to push for a vote on both the amendments.
Question put, That the amendment be made.
Keir Mather
In today’s system, the ORR can require Network Rail to pay a fee to cover some of the costs of the ORR’s railway activities; that is done via Network Rail’s licence. The clause will ensure that, in the future system, the ORR will continue to have the independent funding it needs, by allowing it to require a similar fee from GBR. That ensures that the ORR will continue to operate in an impartial and independent way—a crucial part of enabling it to provide high-quality advice to railway funders and to conduct its role as the access appeals body fairly. I commend clause 14 to the Committee.
Jerome Mayhew
So here we are: this is the eminently sensible approach to providing funding for the ORR to continue its operations as a safety regulator. Clause 14 allows the Office of Rail and Road to require GBR to pay a levy to the ORR for performing its non-safety railway functions. That provides the ORR with a legally guaranteed funding source independent of the Secretary of State or Government. The provision aims to provide the ORR with a stable and predictable funding stream that will enable it to plan and carry out its activities. Those were remarkably similar words to the ones used by the Minister—I wonder why!
What I have described replaces the current system under which the ORR requires Network Rail to pay a fee for it to perform its non-safety functions via the process set out in the Network Rail licence. The ORR, as we all know, is an independent regulator, so decisions on its funding should be kept separate from organisations that have a vested interest in its decisions, which is why GBR, despite paying the levy, will not determine the amount. The amount is agreed between the ORR and the Treasury and then provided by GBR through this levy.
This is one of the few clauses through which the Bill is not actively diminishing the role of the ORR. Instead, it provides the ORR with a legally guaranteed funding source, independent of the Secretary of State or Government—save, obviously, for its negotiations with the Treasury. The aim of that is to provide the ORR with a stable and predictable funding stream that will allow it to plan and carry out its duties successfully. That duty already exists in the Network Rail obligation, as I have already mentioned.
I am glad to see from the Government’s explanatory notes on the clause that GBR will not determine the amount of the levy, which will be agreed between the Treasury and the ORR. It seems that the Government do understand the concept of partiality and bias, but are prepared to admit that only when it comes to certain clauses in the Bill.
Keir Mather
I thank the shadow Minister for his support—slightly barbed support, but support nevertheless. I have nothing further to add. I commend the clause to the Committee.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Rail strategy
Olly Glover
I beg to move amendment 134, in clause 15, page 8, line 18, at end insert
“for the next 30 years for”.
This amendment would ensure that the rail strategy set out in Clause 15 must cover a 30-year period.
The Chair
With this it will be convenient to discuss the following:
Amendment 137, in clause 15, page 8, line 21, at end insert—
“(c) the support given to rural communities in accessing rail travel, and
(d) the co-operation with relevant local and regional transport authorities for greater integration between trains, buses, trams, cycling, walking and other active travel options.”
This amendment would require the rail strategy to set out the long-term strategy for supporting rural communities in accessing rail travel and co-operating with transport authorities to integrate travel options.
Amendment 207, in clause 15, page 8, line 21, at end insert—
“(c) the consideration of the national rail network as a whole, and
(d) the development of national and regional integrated timetables including—
(i) any infrastructure enhancements necessary to facilitate such development,
(ii) strategies at a local or regional level to deliver these enhancements in line with the 5-year funding periods; and
(iii) a system of prioritisation of connections between services, taking into account interchange times and overall end-to-end journey times resulting from those connections.”
This amendment introduces a requirement for the rail strategy to consider the rail network as a whole, and the relationship between integrated timetables and infrastructure enhancement to enable such integration.
Amendment 224, in clause 15, page 8, line 21, at end insert—
“(c) the development of rail freight network usage.”
This amendment would require the rail strategy to include developing rail freight.
Amendment 25, in clause 15, page 8, line 21, at end insert—
“(1A) The document issued under subsection (1) must be in force for a minimum of three control periods.
(1B) A control period as set out in subsection (1A) must be no shorter than five years.”
This amendment would require the rail strategy to remain in place for three control periods at a minimum.
Amendment 260, in clause 15, page 8, line 23, at end insert—
“(2A) The rail strategy must include a strategy for level crossings (‘the level crossings strategy’).
(2B) The level crossing strategy must set out an assessment of the impact of level crossings on the economy and community of the area in which the level crossing is situated, for the purpose of reducing disruption caused by level crossings.”
Amendment 261, in clause 15, page 8, line 23, at end insert—
“(2A) The rail strategy must include an assessment the ability of passengers to change between—
(a) main line rail services and branch line rail services, and
(b) rail services and other modes of public transport.
(2B) An assessment under subsection (2A) must consider how to reduce delays and disruption to end-to-end journeys involving a change between rail services, or between rail services and other modes of public transport.”
Amendment 135, in clause 15, page 8, line 25, at end insert—
“(3A) The rail strategy must include an international rail strategy to—
(a) support the development of new international routes,
(b) support operators in introducing and operating any such new routes, and
(c) support new and existing operators in using the Channel Tunnel and London St Pancras High Speed.
(3B) In meeting the objectives under subsection (3A), the international rail strategy must—
(a) consider options to increase rail depot capacity at, and to supplement, Stratford Temple Mills;
(b) consider any enhancements that may be required to conventional rail network in the Southeast of England for the purpose of enabling international rail travel;
(c) consider options for electrification, changes to gauge clearance, and any other alterations to rail infrastructure as may be necessary to increase the potential for increased rail freight to travel via the Channel Tunnel.”
This amendment would require the Secretary of State to include an international rail strategy as part of the Government’s long-term rail strategy. The international rail strategy would specifically look to support new routes and operators, and increase Channel Tunnel and London St Pancras High Speed rail capacity.
Amendment 136, in clause 15, page 8, line 25, at end insert—
“(3A) The rail strategy must include a network electrification strategy to—
(a) require that any new rail lines are electrified, and
(b) set criteria for determining which existing rail lines should be fully electrified, based on current and potential operation of those lines, and set a timetable by which electrification should be completed.
(3B) In preparing the network electrification strategy under subsection (3A), the Secretary of State must take into account the current and potential future—
(a) maximum operating speed of,
(b) average number of trains in an hour using,
(c) average volume of freight transported on,
(d) maximum potential reliability of rolling stock using, and
(e) acceleration requirements of
trains using the relevant lines.”
Amendment 225, in clause 15, page 8, line 32, at end insert
“, and persons wishing to operate services for the carriage of passengers or goods on Great British Railways’ infrastructure.”
This amendment requires consultation with freight operators during the preparation of the rail strategy.
Amendment 213, in clause 15, page 8, line 35, at end insert—
“(8) The Secretary of State must lay before Parliament an annual report setting out any progress on the rail strategy.
(9) The report under subsection (8) must be sent to the Transport Committee of the House of Commons.
(10) References in this section to the Transport Committee of the House of Commons—
(a) if the name of that Committee changes, are references to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.”
This amendment requires regular reporting to Parliament and the House of Commons Transport Committee on delivery of the rail strategy.
New clause 27—Great British Railways: national rolling stock strategy—
“(1) Within 12 months of the passing of this Act and every subsequent 12 months, Great British Railways must publish a national rolling stock strategy.
(2) Each strategy under subsection (1) must set out rolling stock requirements by operating region and route.
(3) Great British Railways must align each strategy to the infrastructure capacity plan in section 60, the rail strategy in section 15, and each funding period as set out in Schedule 2.
(4) Great British Railways must set out how the strategy is used to inform procurement, leasing and allocation decisions.”
This new clause would require GBR to publish a national rolling stock strategy each year, setting out the expected rolling stock requirements per operating region and route, aligned to current and future planned infrastructure, and aligned to the long-term rail strategy and 5-year funding periods.
New clause 28—Great British Railways: cyber security and technology strategy—
“(1) Great British Railways must publish a cyber security and technology strategy (‘the strategy’).
(2) The strategy must set out how Great British Railways will—
(a) use emerging technologies, including artificial intelligence, to innovate in respect of its operations and services,
(b) develop resilience for rolling stock and critical systems in line with industry and international standards, and
(c) increase the use of technology to improve passenger experience and services including—
(i) WiFi access,
(ii) digital ticketing,
(iii) real time information systems, and
(iv) accessibility for passengers with sight or hearing loss.
(3) Great British Railways must publish an annual report describing progress that has been made against the strategy and any challenges that have arisen in delivering the strategy.”
This new clause would require GBR to publish a cyber security and technology strategy, as well as an annual report on progress.
New clause 29—Railway services: Sunday working arrangements—
“(1) Within one year of the passing of this Act, Great British Railways must publish a report on demand for railway services on Sundays.
(2) The report must set out—
(a) current figures for use of railway services on Sundays, and
(b) projected figures if services on Sundays were increased.
(3) The report must identify and set out actions that can be taken to increase demand for railway services on Sundays.
(4) When setting out actions under subsection (3), the report must have due regard to five-year funding periods for Great British Railways.”
This new clause would require GBR to publish a report on current Sunday demand, suppressed Sunday demand, and identify actions to be taken to increase demand for railways services on Sundays in line with the 5 year funding periods.
New clause 54—National signalling strategy—
“(1) Within 12 months of the passing of this Act and every subsequent 12 months, Great British Railways must publish a national signalling strategy.
(2) Each strategy under subsection (1) must set out expected signalling renewal requirements by operating region and route.
(3) Signalling requirements as set out in subsection (2) must be informed by the principle that new or renewed signalling will be digital and based on standards set by the European Train Control System.
(4) Great British Railways must align each strategy to—
(a) the infrastructure capacity plan in section 60,
(b) the rail strategy in section 15,
(c) each funding period as set out in schedule 2, and
(d) current and future planned infrastructure including electrification and rolling stock changes.
(5) Great British Railways must set out how each strategy is used to inform procurement, leasing and allocation decisions.”
This new clause introduces a national strategy for digital signalling rollout to create an approach to signalling renewals, enhancements, and interfaces with rolling stock, and to realise signalling safety, capacity, and performance benefits of digital signalling.
Clause stand part.
Olly Glover
We have reached a rather long group of amendments at this point in the afternoon. I would generally have liked to have used that as an opportunity to be concise. However—[Laughter.] No, no, the substance is too severe for that to be the case.
Let me start off on a positive note: this rail strategy is perhaps the strongest element of the Bill. It is absolutely what our railways need to hopefully get us out of the endless cycle of decision, indecision, dither and delay: “Yes, we’re doing it,” then, “No, we’re not,” or committing to things that are undeliverable before they have been properly planned, thought through, funded and so on.
In this part of the Bill, we even have the potential to put ourselves on as glorious a footing as Switzerland and its approach to its rail network. Somehow, I have managed to avoid talking about Switzerland so far in this Bill Committee—
Olly Glover
Oh right—okay. I seemingly stand corrected. Well, there we go; this probably will not be the last mention either.
It is good that an element of the Bill enables us to have some hope of reaching the glory of the marvellous rail network in Switzerland, which genuinely merits admiration. We so often assume, lazily, that railways in Europe are better than those here. Some of them are in some respects; others are not. However, Switzerland’s railway is pretty much better than ours all over.
I turn to our amendments. Generally speaking, the intention behind them is either to strengthen or enhance what is already in clause 15 regarding the rail strategy. New clause 2 proposes to expand the number of factors that should be considered in developing the strategy, to ensure that critical elements that have not necessarily been well-planned or managed on our network hitherto are better stewarded in the future.
I turn first to amendment 134. It would very simply put what is currently in an accompanying piece of commentary on the Bill into the Bill itself, including the clarification that by “long-term” we mean “30 years”. The problem is that at the moment “long-term” can mean many things to many people, depending on their own particular agenda. We could include in clause 15 the words “for the next 30 years”. That would make it very clear what the rail strategy was focused on, but would not preclude its being changed in the future. That is important, because any strategy should be regularly reviewed and refreshed in the light of changing circumstances. However, the amendment would enshrine the idea that the strategy is intended to get GBR to engage in long-term thinking in its future planning of our network.
Amendment 137 would add a couple of elements to clause 15. First, it would ensure that the long-term rail strategy considered the support that rural communities need to access rail travel and the need for
“co-operation with relevant local and regional transport authorities”
and GBR. That is so we can have a real focus on
“greater integration between trains, buses, trams, cycling, walking and other active travel options.”
I hope that is welcomed by the Government, given their own commitment to introduce an integrated transport strategy at some point in the future.
Amendment 207 intends to ensure that the rail strategy considers the rail network as a whole and the relationship between the integrated timetables that we need to move to and the infrastructure enhancements necessary to enable those timetables. Let me explain that a little further. The historic focus of development on our rail network has been, with some exceptions, an obsession with reducing journey times to and from London on major inter-city routes. In and of itself, that is not a flawed goal. However, tens of millions of pounds will often be spent on cutting a couple of minutes from journey times.
A particular example of that was removing an avoiding line at Stoke-on-Trent as part of the modernisation of the west coast route. It was for the 7 am Manchester to London inter-city train, which has been the subject of so much controversy recently in relation to ORR decisions. That passing loop was taken out just to save 30 seconds from the journey time for one train a day, which does not even stop at Stoke-on-Trent. That shows the extent of the obsession with reducing journey times to London, which I have just alluded to.
What there has not been is an accompanying focus on trying to improve connection times between trains at Birmingham New Street, for example, or at Manchester Piccadilly or in Leeds. That is important, because there is very little point in cutting some time off inter-city routes if that time saving is negated by having a longer connection and waiting time at a regional hub. What puts a lot of people off using trains is the lack of decent connections and having to wait for their next train at stations that might not have particularly amenable environments.
By contrast, that is what has been done so well in Switzerland. It began in 1987, when a national referendum approved what was a 20-plus-year plan, to upgrade the country’s rail network around connections. That led to a nationwide investment in infrastructure improvements designed to enable a nationwide inter-city timetable, so that at all the key hubs—such as Zurich, Berne or Basel—trains would arrive within a 10 or 15-minute window and passengers could easily change from inter-city train to inter-city train, or from a local train to an inter-city train. Such integration is not just limited to the rail network; it is applies to other public transport. Anybody who has travelled extensively in Switzerland by public transport knows that the same level of timetable integration exists for buses, cable cars, mountain railways and so on.
Amendment 207 would create the framework for that kind of thinking: we would have to think hard, in the long-term strategy, about what sort of timetabling we want to see on our network in the future and what infrastructure enhancements are needed to get end-to-end journey times down.
Our amendment 135 would ensure that the rail strategy considers international rail. For the purposes of the Bill, that is not the Dublin to Belfast Enterprise service, which is of course the subject of entirely different legislation—a very good train it is, too, and not just because it is named after that series of wonderful flagships from “Star Trek”—but international rail through the channel tunnel. The amendment would simply require that the rail strategy includes an international rail strategy to support the development of international routes and consider some of the key challenges in increasing capacity, particularly rail depot capacity, to the channel tunnel and beyond, as well as options for upgrading the existing rail network so that we can get far more rail freight directly through the channel tunnel, which is currently not possible because of limited gauge clearance on the existing network.
Our amendment 136 would require the rail strategy to include a network electrification strategy, which another amendment alluded to. Something that has so far been absent from this Government’s thinking, as it was from that of most previous ones, is clear criteria for electrification, of whatever type—including the current fetish for discontinuous electrification with batteries. The amendment would create a framework for us to be very clear about the criteria that will be used for each electrification type, including maximum operating speeds, which lend themselves far more to full electrification than to batteries, the intensity of traffic, whether there is freight, and so on. It is a very strategic amendment that would help to focus the output of the long-term strategy on things that need to be addressed.
I have a bit more to say; I am attempting to be concise, Mr Western, and I thank you for your forbearance, as I thank the rest of the Committee for theirs. Amendment 213 would require the Secretary of State to update Parliament annually on progress on the rail strategy. This is not intended to hamper the strategy or bog it down in bureaucracy; it would merely involve updating Parliament, from time to time, on the development and delivery of the rail strategy. The key purpose is to ensure that the Transport Committee can carry on the great review and scrutiny that it does of so many things—that is not a comment on my contribution, but on that of all Transport Committee members, past and present.
New clause 27 would require the strategy to incorporate a national rolling stock strategy. I understand from remarks made by the Minister and by the noble Lord Hendy in the other place that that is very much the intention anyway. Perhaps we will have another of those debates where they say that that is the intention anyway but for some reason we cannot possibly put it in the Bill. Nevertheless, I will press the new clause, because it is so important.
New clause 28 would require GBR to set out a cyber-security and technology strategy. Technology is changing all the time, and the railway has not always been the fastest at embracing it. There is a particular issue with cyber-security. A couple of months ago, I attended a forum in Parliament, which was well attended by representatives from the rail industry. There are real issues about how software on rolling stock is kept up to date, and the funding for that. The new clause is intended to ensure that proper thought is put into a framework for cyber-security.
New clause 29 would require GBR to publish a report on demand for railway services on Sundays and the current arrangements for staffing of the railway on Sundays, which in my opinion and that of many of my constituents simply does not align with the 21st century nature of the Sunday economy.
Finally, new clause 54 would require GBR, within 12 months of the passing of the Act and every subsequent 12 months, to publish a national signalling strategy. The reason this is so important is that we have been slow to embrace digital signalling and the European train control system in this country. That is starting to improve, with ETCS currently being introduced to the southernmost 100 miles of the east coast main line, but those in the industry are clear that the current fragmented structure makes it hard to introduce ETCS and digital signalling, because open access operators, particularly freight operators, are not necessarily incentivised to align their driver training and locomotive upgrades with the plans to introduce digital signalling.
Jerome Mayhew
Clause 15 requires the Secretary of State to publish a document that sets out the long-term strategy for the railway, which we welcome, after consulting with Welsh Ministers and the passenger watchdog. The Secretary of State must keep the strategy under review and publish any revisions.
The clause does not provide any detail, which is part of the problem. The industry is in the dark now, and it will still be in the dark if the Bill ever becomes law. There is no draft prepared. There is no indication of the direction of travel. There is just subsection (4), which is very limited. All it says is:
“(4) The Secretary of State—
(a) must keep the rail strategy under review, and
(b) may revise or replace it.”
Well, with what and when? We are in trouble here, with no direct reference to even the development of rail freight, which we have seen in other parts of the Bill is apparently in the Government’s mind. Amendment 224 would serve to correct that by making specific reference to rail freight.
More widely, the Government have missed an opportunity to set clear targets for the strategy to achieve. Colleagues will know from the debate on clause 3 that we have already tried to amend the Bill to assist with that. Our purpose clause, new clause 1, would have set a clear direction, and new clause 2 would have set KPIs for what the strategy should achieve. That would have helped to inform our set of amendments to clause 15.
We are told that Great British Railways should be the guiding mind, so our approach is that GBR will implement the long-term strategy for rail, based on the Secretary of State’s long-term priorities for the railways. GBR is intended to be the stand-alone expert implementer of the development of the railway. The priorities are set out by the Secretary of State through the licence in schedule 1, access to funding in schedule 2 and the long-term rail strategy. All recognise that the political cycle and control periods are far too short for rail infrastructure projects. The industry really needs more predictable forward views. There is inevitably an uncomfortable fit between the needs of democracy and the political cycle—political views change with general elections and sometimes even between them—and the long-term investment certainty that large projects need. There is currently no indication of how long term the strategy will be, or even what it will seek to achieve.
Amendments 24 and 25, which we debated with clause 13 but would also affect clause 15—I do not seek to repeat the debate, but I wish to mention the impact that they would have—seek to address those failings by requiring the rail strategy to be geared towards enabling GBR to meet its key performance indicators. Without the amendments, the clause will set out a long-term strategy that includes no requirement to set clear growth targets for passenger numbers or freight use, meaning that there will be no measurable outcomes or performance metrics. I intend to seek to divide the Committee on those amendments when the time comes.
The Liberal Democrats’ amendment 134 would ensure that the rail strategy covers a 30-year period. That is logical given the infrastructure life cycle, and any timeframe is, by its nature, arbitrary, but I have to say that 30 years feels on the long side, given the political cycle of four or five years. I wish the hon. Member for Didcot and Wantage well and we should be having a stab at setting out what long term actually means, but that is why we have tabled an amendment that would set the period at 15 years. That would be long enough to show the direction of travel, as he has in mind, but short enough to have some sense of connection between the political cycle and the objectives of the strategy. We may have a difference of opinion, but we are pointing in the same direction.
Olly Glover
I understand the shadow Minister’s point, but I put it to him that the fact that our Parliaments tend to be four or five years long is precisely why the strategy needs to be very long term, so that we avoid subjecting our railway to the political cycle and the whims and whimsies of the Government of the day. But perhaps the key point is that the Government’s own guidance on the Bill, in the section entitled, “What is the Long-Term Rail Strategy?”, states:
“It will set out strategic objectives for the railway over a 30-year period.”
Would it not be coherent to put that on the face of the Bill?
Jerome Mayhew
From the Government’s perspective, yes, it would be, but we have recent experience—this is a slight tangent, but I hope the Committee will bear with me—of Governments passing key objectives to achieve long out in the distance. I am thinking of the Climate Change Act 2008 and its objective of achieving net zero by 2050. That all sounds good in 2008, but in my view it does not achieve the objective of balancing democratic accountability with a long-term direction. Look, we are slightly arguing about how many angels can dance on the head of a pin. Both parties agree that we want a long-term strategy, but should it be 15 years or 30 years? In a sense it does not really matter, but it needs to be significantly beyond the current five-year control period.
Amendment 137, also in the name of the hon. Member for Didcot and Wantage, would require the strategy to set out a long-term strategy for supporting rural communities in accessing rail travel and co-operating with transport authorities to integrate travel options. It is a worthy objective, although we would want to go further if extending clause 15(1) beyond the railway network and railway services—the catch-all descriptors. The amendment is slightly a halfway house, but it nevertheless points in the right direction, and in so far as it makes progress, we are happy to support it.
Amendment 207, again in the name of the Liberal Democrat spokesman, would introduce a requirement for the rail strategy to consider the rail network as a whole, and the relationship between integrated timetables and infrastructure enhancement to enable such integration. There is perhaps a better solution tabled in the name of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), who is engaged somewhere else as we speak—there may be a better way to achieve that outcome.
Amendment 224, which I tabled, would add paragraph (c) to clause 15(1). As drafted, the provision requires the Secretary of State to
“prepare and publish a document that sets out”
her
“long term strategy for…(a) the development and use of the railway network in Great Britain, and…(b) the railway services that the Secretary of State wishes to see provided in Great Britain.”
This important amendment would add a focus on “rail freight network usage”. Rail freight does, in a sense, come under “railway services”, but we need to give it particular focus, and the amendment offers a good opportunity to do so.
Amendment 25, which is also in my name, would require the rail strategy to remain in place
“for a minimum of three control periods”,
which would be 15 years. We have already debated whether it should be 15 or 30 years, but the provision would provide the industry with a genuine long-term strategy and mean that that strategy is less likely to be used as a political football when Governments come and go. The period of 15 years is short enough to have political weight, but long enough to give the certainty that the industry also seeks.
I will briefly mention amendment 260, which was tabled by my hon. Friend the Member for Runnymede and Weybridge. I know that the subject is close to my hon. Friend’s heart because he has told me so, multiple times.
Jerome Mayhew
Yes, repeatedly, which is great, because my hon. Friend is absolutely fighting for his constituency and his constituents. He has told me of a repeated trouble that communities experience when a level crossing closes very frequently and for long periods with no regard to the economic impact of that on the town in which it is based. That can cause long periods of tailbacks, but there is no consideration of that when the usage of the piece of line is set, and the Bill, as drafted, makes no provision for GBR even to take that problem into account. Amendment 260 would insert clause 15(2A), which states that the
“rail strategy must include a strategy for level crossings (“the level crossings strategy”)”,
and clause 15(2B), which states:
“The level crossing strategy must set out an assessment of the impact of level crossings on the economy and community of the area in which the level crossing is situated, for the purpose of reducing disruption caused by level crossings.”
That is actually a very sensible point, because it recognises that the railway does not impact just trains. If a level crossing temporarily closes arterial routes, there is an impact on other modes of transport, so it would be sensible for a strategy to take into account the full impact of the changes that the Secretary of State has in mind.
Amendment 261, which my hon. Friend the Member for Runnymede and Weybridge also tabled, would insert an alternative subsection (2A) in clause 15, stating:
“The rail strategy must include an assessment”
of
“the ability of passengers to change between…main line rail services”
and from rail services to
“other modes of public transport.”
The amendment would also provide that the
“assessment under subsection (2A) must consider how to reduce delays and disruption to end-to-end journeys involving a change between rail services, or between rail services and other modes of public transport.”
This is, again, my hon. Friend the Member for Runnymede and Weybridge standing up for his constituents and the particular issues that they face with the co-ordination of services. Having heard the experience of Mayor Burnham with the Bee Network in Greater Manchester, the Committee could argue that the increased integration of all modes of transport should properly be a focus of GBR, and the amendment would apply that integration to areas that are not mayoral combined authorities. Later in Committee, we will consider an amendment that seeks to extend the same courtesies to local transport authorities as the Bill extends to mayoral combined authorities, and I know that my hon. Friend the Member for South West Devon will be keen to speak to that.
Liberal Democrat amendment 135, which was tabled by the hon. Member for Didcot and Wantage, would require the Secretary of State to make an international rail strategy part of the Government’s long-term rail strategy. That would specifically look to support new routes and operators, and increase channel tunnel and London St Pancras high-speed rail capacity.