Cost of Rail Fares
Caroline Nokes Excerpts(4 days, 4 hours ago)
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Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
There are a number of Members in the Chamber this evening. I know that some have secured agreement from the hon. Member for Woking (Mr Forster) to participate in the debate, and that is perfectly in order, but I remind the House that the debate is time-limited and I expect that the Minister will be given plenty of time to reply to any points raised. It therefore may not be possible to accommodate everybody who wishes to participate.
Helen Maguire (Epsom and Ewell) (LD)
Many of my constituents commute into London for work, and they complain that since the pandemic the number of trains has halved. They express their dread at the prospect of squeezing on to yet another train. Despite the reduction in service and the subsequent overcrowding, prices have increased. Residents tell me that they pay extraordinary prices for sub-par service. Does the Minister agree with me that as a principle—
Madam Deputy Speaker
Order. I made the point earlier this week that interventions need to be short. They are not mini speeches, they should be spontaneous and they should not be read out. Perhaps the hon. Lady has finished her comments.
Simon Lightwood
I thank the hon. Lady for her intervention. If she would like to follow up with me in writing so that she can finish the rest of her point, I would be more than happy to pass it on.
South Western Railway also offers innovative products that let passengers choose tickets that suit their needs, such as the Touch smartcard. This allows tickets to be added to a smartcard online, via an app or from ticket machines at a station. In recent months there has been an issue with a specific set of points at Woking, for which a temporary fix has been found. In the medium term, a more permanent solution will need to be sought, which may cause the temporary closure of lines for planned engineering.
For the commuter, season tickets are still a great way to save money on travel and are available on a smartcard. For two to three-day-a-week commuters, the flexible season ticket offers further savings against traditional season tickets. In Woking, flexible season tickets offer two and three-day-a-week commuters into London better value than both anytime day tickets and standard season tickets.
Transport
Caroline Nokes Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Transport (Mike Kane)
I beg to move,
That the draft Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024, which was laid before this House on 24 July, be approved.
I want to take a moment to pay tribute to my former constituent Ken Eastham, who died recently at the age of 96. He served the people of Blackley and Broughton in this House from 1979 to 1997. He knew me as a child, and was delighted that I became a Member of Parliament. He worked diligently on behalf of his constituents. I will remember him, his late wife Doris, with whom I kept in contact, and his family in my prayers tonight.
As a fuel that can be used in existing aircraft, sustainable aviation fuel, or SAF, is one of the most effective ways of starting to decarbonise flights. The greenhouse gas emissions associated with the use of SAF are 70% less than those from fossil jet fuel on a life-cycle basis. This Government recognise the urgency of the global climate challenge, and the opportunities that are available from leading on the development of these technologies. It is a core part of our mission to make the UK a clean energy superpower, and it is one of the many steps that we are taking to decarbonise aviation, which include our plans for airspace modernisation. The SAF mandate will support the decarbonisation of the aviation industry by creating demand for SAF in the UK. The scheme has been developed over several years, during which there have been two formal consultations and significant stakeholder consultation. In July this year, we confirmed the detail of the proposed SAF mandate set out in the statutory instrument, and that was received positively by stakeholders.
The SAF mandate is one of several Government initiatives to support the development, production and use of SAF in the UK. The advanced fuel fund, for example, is currently supporting 13 UK plants with £135 million of grant funding. Additionally, the Government are introducing a revenue support certainty mechanism Bill, which was included in the King’s Speech and will support SAF producers who are seeking to invest in new plants in the UK. It will incentivise investment in UK SAF production, helping to drive growth across the UK, secure the supply of British-made SAF, and maintain the UK’s position as a global leader.
Alongside the potential for SAF to reduce carbon emissions on a life-cycle basis—compared to that of traditional jet fuel—there are significant economic benefits associated with the development of a domestic SAF industry. Industry research estimates that such development could generate up to 60,000 new jobs by 2050, adding up to £10 billion gross value added per annum. That supports our growth mission to kick-start economic growth across the UK.
The introduction of a SAF mandate marks an important step forward for the decarbonisation of the aviation sector. It will provide a long-term incentive for SAF use in the UK by setting a guaranteed level of demand, demonstrating the UK’s world-leading commitment to SAF uptake. It will also provide clarity for investors: a clear signal to develop SAF production facilities and more advanced SAF technologies in the UK and globally. Crucially, the mandate could reduce aviation emissions by up to 2.7 megatonnes of carbon dioxide equivalents in 2030, and by up to 6.3 megatonnes of CO2 equivalents in 2040.
Decarbonising transport is a key focus for this Government. It is central to the delivery of the UK’s cross-economy climate targets, and directly supports the Prime Minister’s mission to accelerate our journey to net zero. Delivering greener transport is also one of the five priorities that my right hon. Friend the Secretary of State for Transport has set out for the Department. This statutory instrument will deliver on our manifesto pledge to secure the UK aviation industry’s long-term future by promoting sustainable aviation fuels. It will impose an annual sustainable aviation fuel obligation on every company that supplies jet fuel over a certain threshold in a specified period. The SI will operate a tradeable certificate scheme, whereby the supplier of SAF is rewarded in proportion to its greenhouse gas emissions reduction.
To be eligible for certificates, the supplied SAF must meet strict sustainability criteria, including that it must be a residual waste or residue-derived biofuel, a recycled carbon fuel, a low-carbon hydrogen fuel or a power-to-liquid fuel. The certificates can be used to discharge a supplier’s obligation or sold to other suppliers. If this statutory instrument is approved, the SAF mandate will take effect on 1 January 2025. The SAF mandate will require 2% of jet fuel to be made from sustainable sources in 2025, 10% in 2030 and 22% in 2040. It is one of the world’s most ambitious frameworks to drive demand for SAF.
A successful and resilient SAF industry will need a range of technologies and feedstocks to meet increasing demand. The SAF mandate drives the diversity of technologies and feedstocks in two main ways. First, we will create space for more advanced fuels by setting a future cap on fuels that will be limited by feedstock supply. Fuels derived from segregated oils and fats are known as hydroprocessed esters and fatty acids. We recognise that HEFA will make an important contribution to meeting the SAF mandate, particularly in the early stages of the mandate. HEFA can contribute 100% of the SAF demand required under the mandate in 2025 and 2026. The cap will then gradually tighten, decreasing to 71% in 2030 and 35% in 2040. The mandate will still allow around 1 million tonnes of HEFA-derived SAF to be supplied each year in the UK from 2035.
Secondly, to accelerate the development of advanced fuels, a specific obligation on suppliers to supply power-to-liquid fuels will be introduced. Power-to-liquid fuels have a lower risk of feedstock competition and other negative environmental impacts. From 2028, the power-to-liquid obligation will be set at 0.2% of total jet fuel demand, increasing to 3.5% in 2040. Fuel suppliers will be able to meet their SAF mandate obligation in three ways: they can supply SAF and earn certificates, buy certificates from others who have supplied fuel, or pay a buy-out price. The buy-out mechanism will apply to both the main obligation and the power-to-liquid obligation, which will operate as a method of compliance if there is insufficient SAF supply in the market. This SI sets out the buy-out prices, which represent a significant incentive to supply SAF to the UK market. They are set at a level that encourages the supply of SAF over the use of the buy-out and set a maximum cost for the scheme, thereby delivering a greenhouse gas emissions reduction at an acceptable cost.
As I have mentioned, for fuel to be eligible for certificates, it must align with strict sustainability criteria and be made from sustainable wastes or residues. SAF produced from food, feed or energy crops will not be allowed. Suppliers must therefore report information to the mandate administrator to demonstrate compliance with the sustainability criteria for each application. The mandate administrator will have the power to not issue certificates if sufficient evidence is not provided. It will also have the power to revoke certificates if inaccurate or fraudulent information is provided, and to issue civil penalties to suppliers for lack of compliance.
The information that fuel suppliers provide must be independently verified before suppliers can apply for SAF certificates. To ensure that the design of the SAF mandate reflects the latest technological and commercial developments on SAF, there will be continuous monitoring of trends, and formal reviews will be conducted and published every five years, with the first review carried out by 2030. To support fuel suppliers, the administration of the SAF mandate is closely aligned with the administration of the renewable transport fuels obligation, which currently obligates suppliers of road fuels in a very similar way.
The Government recognise that sectors such as aviation are vital for achieving economic growth, shaping the future of clean energy and delivering for our communities. The development of the SAF mandate, alongside other priorities such as modernising our airspace, is a key part of this Government’s ambitious and pragmatic approach to decarbonising transport and promoting economic growth, ensuring that the UK continues to lead the way on SAF globally. I commend this order to the House.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Before I call the next speaker, I remind Members that it is helpful for the Chair—not least me personally, but there will be other Deputy Speakers later—if you bob up and down. Even if I have your name on a list, it is helpful if you indicate that you wish to speak.
Grahame Morris (Easington) (Lab)
I will not detain the House too long—[Interruption.] Hooray! I just want to make a couple of points. As the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), indicated, we both served on the Transport Committee in the last Parliament, and the Committee did quite a detailed inquiry on the sustainability of fuels in all sectors. We made several recommendations, and I do not believe that there is a cigarette paper—perhaps that is a non-PC term—between the two sides of the House on the issue, but I want to ask a couple of questions.
This subject is really complicated and is plagued with acronyms—HEFA, SAF, ATF, eSAF, HPBM, Jet Zero. I will not be tempted into aviation puns, but there are some important stats. As the Minister stated, estimates suggest that the sustainable aviation fuel industry could create up to 60,000 jobs by 2050—the shadow Minister said that there would perhaps be 10,000 new jobs, but that is in a longer timeframe. The shadow Minister also said that the SAF industry could contribute as much as £1 billion to the UK economy, but by 2050, it could contribute as much as £10 billion, so it is clearly a very important sector.
I am concerned about ensuring that sustainable aviation fuels under this mandate be required to meet the strictest sustainability standards. We must ensure that they are green fuels, and that there is a staged progression towards jet zero—we have heard what that is: 2% from 2025, 10% by 2030 and 22% by 2040—and we really must ensure that the greener fuels are responsibly sourced from the most sustainable locations, preferably in the United Kingdom. We had a debate last week about the launch of GB Energy and the importance of not exporting the jobs created through our efforts on decarbonisation. Will GB Energy play a role in some of these new technologies? We may well develop a hydrogen fuel cell that can produce green hydrogen much more cheaply, but in the meantime, to plug the gap, we must ensure that efforts are made to onshore as many of the jobs and benefits of this exciting opportunity as possible.
Wera Hobhouse (Bath) (LD)
I sense that there is a great deal of consensus across the House on this statutory instrument. There is consensus that the aviation sector is one of the hardest to decarbonise, and probably also that the new technology that is being proposed—SAF, in its different iterations—needs a great deal of technological knowledge. However, the principle of taking the first steps towards creating the SAF mandate—of the requirement for SAF to meet 2% of total jet fuel demand from 1 January, and of increasing that on a linear basis, to 10% by 2030 and to 22% by 2040—has no opposition, and we will absolutely support the Government in that effort.
Virgin Atlantic has already demonstrated that a plane can fly across the Atlantic on 100% SAF, but that was just one flight, and there are hundreds of flights every day. That is the challenge. I congratulate Virgin Atlantic on this groundbreaking achievement but we really need to see how industry, the Government and indeed everybody who is developing new technologies can produce sustainable aircraft fuels at the scale that is needed. This needs a great deal of investment.
We know that biofuels are not a long-term solution, as they compete with food production. SAF from waste, the next generation of SAF, is not a long-term solution either. It is obviously part of the solution, but as the shadow Minister has pointed out, the real challenge is to get to the third generation SAFs—that is, synthetic fuels. We need to develop them as soon as possible, and they need a great deal of electricity. Whatever we say about this, direct air capture needs a great deal of electricity. Producing hydrogen in a sustainable way—that is, getting to green hydrogen—will also need a great deal of electricity. The crunch in all this is: where is all that renewable energy coming from, unless we are ultimately overproducing renewable energy? I believe that GB Energy will have a big say in this and will be crucial in developing all the renewable energy that will ultimately help us to decarbonise the aviation sector. This is really the challenge.
While I welcome the kick-start of a journey to net zero in aviation, the 10% to 22% mandate between 2030 and 2040 is a concern for the Liberal Democrats. We want to get to net zero by 2045, but having planes still running on 78% fossil fuels is just not good enough. The UK has the third largest aviation network in the world and the second largest aerospace manufacturing sector. Almost 1 million UK jobs are directly or indirectly supported by the aviation sector. The future of the aviation industry with SAF is obviously a wonderful opportunity and challenge. Making the right choices on SAF will ensure that the UK can continue to be a global leader, and I think that we are as one across the House in wanting this to happen in order to make the UK the global leader in this area.
It is only right that we take these steps, which support decarbonisation and also create the jobs that we need in the future. What is important is that the Government collaborate with the aviation fuel suppliers to ensure that this initiative really succeeds. I would like to hear a little more detail from the Minister about how the Government will work alongside suppliers to make this a long-term success.
As I have said, we welcome this, but there are other examples of what we can do in the meantime to decarbonise the sector. For example, we could ban short-haul domestic flights on journeys that can be done by rail in less than 2.5 hours. Such a ban already exists in France, so it would be good if the Government at least looked at this. The cost of flying must be linked to the environmental cost. It is ridiculous that I can, at least on some journeys, fly 100 miles to a European city for less than it costs me to go by train from Bath to London. The Liberal Democrats would focus on those who fly the most to reduce the unfair burden on households who fly only once or twice a year. Plus, we would impose a new super-tax on private jet flights and remove VAT exemptions for private, first-class and business-class flights.
To conclude, while we welcome today’s introduction of the SAF mandate on 1 January, I urge the Government to review the targets set from 2030 to 2040 and to be more ambitious than what they are proposing today, so that by 2040 a much higher percentage of aviation fuel comes from sustainable aircraft fuel than the 22% that is currently proposed.
Steve Race (Exeter) (Lab)
Thank you, Madam Deputy Speaker. May I take this opportunity to put on record my congratulations to you on your election and to pay tribute to the staff of the entire House, who have worked so hard to make us all comfortable and able to get on with our jobs in this very complicated and complex place?
I pay tribute to those who made their maiden speeches in previous debates today, including my hon. Friends the Members for Makerfield (Josh Simons) and for Macclesfield (Tim Roca) on this side of the House, and the hon. Member for Witney (Charlie Maynard) on the Liberal Democrats Benches. Given the hon. Member for Witney’s reference to the wool trade, and given that Exeter’s wealth in the middle ages was built on the wool trade, with the wool being brought down from Dartmoor, it is entirely possible that our two places had significant trading links in the past.
I am delighted to give this maiden speech as the new Member for Exeter—only the third in over half a century. In his own maiden speech, my hon. Friend the Member for Lincoln (Hamish Falconer), who was here earlier today, stated that Lincoln was the oldest parliamentary seat in the country, established in 1265. Exeter, another great cathedral and university city, is by comparison a mere whippersnapper, with our seat being established in 1295.
Of the many Members who have represented Exeter in the subsequent seven centuries, my immediate predecessor, Sir Ben Bradshaw, needs little introduction. He served the country diligently throughout his 27 years as a Member, including a decade as a Minister. Elected in the 1997 Labour landslide, he gained early notice as one of the first out gay men ever to be elected to the Commons. After a notorious campaign, Exonians in their wisdom rightly and roundly rejected the outrageous homophobia of his opponent, and I and many others here today are among the many proud successors of his trailblazing role.
Ben loved our city, and the city took him to its heart. He was re-elected six further times, and even this July, despite no longer being the candidate, he was as active knocking on doors as he has ever been and as popular as ever. I might have been having a particularly difficult conversation on a doorstep, but the face of even the most hardened and sceptical voter would light up as Ben marched past in his canvassing uniform of cargo shorts and a check shirt, usually whistling the theme tune from “The Great Escape”. Hugs were exchanged, selfies taken and heartfelt thanks expressed. He is almost universally accepted as having done Exeter proud. He has certainly been a friend and mentor to me over nearly two decades, and I thank him for that.
Ben took particular pride in the turnaround in Exeter’s education under his watch, something to which, as MP, he made a huge contribution. By 2010, not only had every single state secondary school in Exeter been rebuilt, but a new leadership culture had been established where low attainment became unacceptable for our young people in every single part of the city. From having some of the worst state secondary schools in the country, Exeter secondary schools became some of the most improved, to which the most recent exceptional GCSE results bear testimony.
Exeter can now also boast one of the best further education colleges in the country—again, as our recent A-level and T-level results show—a vital but, in much of Britain, badly neglected element in providing wider opportunity for young people, including those who choose alternative routes into work. As a school governor at Willowbrook primary school in Exeter, which serves one of our most economically deprived neighbourhoods, I also pay tribute from first-hand experience to the primary school teachers everywhere, who go above and beyond to give their young children the very best start in life.
This turnaround in Exeter’s education system did not happen by accident. It took hard work, strong leadership and a collaborative culture. I would like to thank some of our leaders for everything they have done to give our young people better life chances in Exeter. They include Moira Marder at the Ted Wragg Trust, John Laramy at Exeter College and Molly Marlow at Willowbrook primary school. And of course, I want to pay tribute to the politicians, including former Devon county councillor Saxon Spence and the then Schools Minister Lord Adonis, who had the vision and the ability to deliver for Exeter.
Exeter’s standing in learning goes beyond our schools system. Next year, the University of Exeter celebrates the 70th anniversary of its royal charter. In that time it has grown to be an outstanding institution, now with well over 30,000 students, but it builds on a tradition of an unbroken history of learning and academia stretching back at least to the 10th century. In Exeter cathedral rests the Exeter Book, an exquisite anthology of Anglo-Saxon poetry and riddles that is still the largest known collection of Old English literature. It is recognised by UNESCO as one of the world’s principal cultural artefacts, making Exeter a UNESCO city of literature.
Today, five of the world’s top 21 climate scientists are UK based and all of them work for our globally renowned University of Exeter and the Met Office. Along with these two institutions and a growing ecosystem of businesses, Exeter is home to a large and ever-growing research and innovation base that is at the forefront of combating and mitigating the effects of climate change. It has become fashionable in some circles to denigrate our universities. I reject this entirely: they stand as beacons of intellectual excellence, the future success of our knowledge economy and the hope of wider educational opportunity for many people.
A good education is what helped me to become a Member of Parliament. I grew up in a council house with my mum, who spent her entire childhood in care, and I was the first in my family to go to university, so I pledge to work with all our education leaders to make sure that every young person in Exeter has the best education to help them to reach their potential. I want this Labour Government to deliver an equivalent leap forward in educational opportunity that their predecessors achieved for their time in 1945, 1964 and 1997.
In relation to this debate, Exeter University is home to the centre for future clean mobility, a partnership with business to develop low emission power systems for the aerospace and automotive sectors.
Our university is also world leading in genomics research. One of the main reasons I am in politics, as a Labour MP, is my sister. She was born when I was 10, and when she was a year old, she was diagnosed with Hurler syndrome, a rare genetic condition with no cure. Given a life expectancy of around five years, she finally died two days short of her 10th birthday. Much of her life was spent being cared for by the NHS and our local children’s hospice, and I will be eternally grateful for everything they did to give us so much more time with her than we expected.
At the time of my sister’s birth, we understood genetic conditions but did not yet have the tools to help. The human genome was finally mapped just a year before she died, and that same year the first enzyme replacement therapy trials for her condition commenced in the UK. People born today with my sister’s condition have a range of treatment options to help to make their life more comfortable and more fulfilling. I am particularly proud that Exeter University, in partnership with our local NHS trust, is at the forefront of this new wave of innovation.
We know that scientific research and innovation, whether on tackling climate change or in medical advances, will make the lives of people in this country and around the world better, but the Government have to recognise the vital role of our universities in economic growth and take advantage of the many opportunities for partnership with the NHS and across the public sector.
I know that this Government will understand the need to ensure that the UK continues to be at the forefront of scientific endeavour; and, as a pro-European, I believe that this is where Britain can make a huge contribution, working with our European friends and partners despite the tragedy of Brexit. I also ask that Ministers recognise that Exeter and the wider south-west have the talent and the institutions in which to invest to ensure that the UK remains at the cutting edge of UK and European innovation.
To succeed in these endeavours we also have to recognise that diversity is a strength, so building communities together on the principle of equality for everyone is vital to our success. In Exeter, the university and the local council play an important role in bringing people together. We have a thriving mosque and Muslim community. We have welcomed hundreds of Ukrainian and Hongkonger families over recent years, and we have large and growing Kurdish, Afghan and Nigerian communities, among others. Everyone brings something new and positive to our city, and I love nothing more than our annual Respect festival—a celebration of all our many communities—and our Pride parade. Inclusive Exeter, a community interest company, also plays an important role in bringing communities together. Exeter has become a true beacon of living well together.
It is a privilege and an honour to represent all the people of Exeter in this place, and I thank them for their vote of confidence in sending me here. I also thank my local activists and, of course, my family and friends, some of whom are in the Gallery, for all their support over the years. Without them I would not be here.
Exeter is a happy and optimistic place, and I hope to do it proud by serving it as conscientiously and as successfully as my distinguished predecessor.
Passenger Railway Services (Public Ownership) Bill
Caroline Nokes ExcerptsTuesday 3rd September 2024
(1 month, 1 week ago)
Commons ChamberRead Full debate Passenger Railway Services (Public Ownership) Bill 2024-26 View all Passenger Railway Services (Public Ownership) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 3 September 2024 - (3 Sep 2024)
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I remind Members that in Committee they should not address the Chair as Madam Deputy Speaker. Please use our names when addressing the Chair. “Madam Chair”, “Chair” and “Madam Chairman” are also acceptable.
Clause 1
Prohibition on franchise extensions and new franchises
Helen Whately (Faversham and Mid Kent) (Con)
I beg to move amendment 18, page 1, line 12, at end insert—
“25B Report on impact of prohibition on franchise extensions and new franchises
The Secretary of State must lay before Parliament—
(a) within six months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, a report on the anticipated impact of the prohibition on franchise extensions and new franchises under section 25A; and
(b) after a period of five years has elapsed after the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, a report outlining the actual impact of the prohibition on franchise extensions and new franchises under section 25A.”
The Second Deputy Chairman
With this it will be convenient to consider:
Clause stand part.
Amendment 19, in clause 2, page 2, line 14, at end insert—
“(1AA) Before making a direct award of a public service contract to a public sector company under subsection (1A), the relevant franchising authority must provide information to the Office of Rail and Road on the public sector company’s ability to become responsible for the provision of the relevant passenger railway services.
(1AB) The information provided under subsection (1AA) must include an overview and analysis of the capacity of the public sector company to provide the relevant services while maintaining or improving existing service provision.
(1AC) Following the receipt of the information provided under subsection (1AA), the Office of Rail and Road must publish an opinion on whether it is reasonably practicable for the public sector company to provide, or secure the provision of, the relevant passenger railway services.”
Amendment 13, page 2, line 17, at end insert—
“(1BA) Every contract made in accordance with subsection (1A) shall place a duty on the public sector company to encourage and invest in innovation across all aspects of its operations, including but not limited to—
(a) operational efficiency;
(b) fares and ticketing;
(c) stations and onboard services;
(d) passenger information; and
(e) digital transformation.”
Amendment 14, page 2, line 17, at end insert—
“(1BA) Every contract made in accordance with subsection (1A) shall place a duty on the public sector company to consider the needs of—
(a) passengers;
(b) residents of rural areas;
(c) residents of areas underserved by the rail network; and
(d) the wider rail network
when considering making changes to existing service levels.”
Amendment 1, page 2, line 22, leave out subsection (3).
Amendment 6, page 2, line 22, at end insert—
“30ZA Impact on provision of rolling stock
(1) The Secretary of State must, within six months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, lay before Parliament a report on the impact of the awarding of public service contracts to public sector companies under section 30(1A) on the provision of rolling stock by rolling stock leasing companies.
(2) The Secretary of State must consult with other franchising authorities before finalising a report under subsection (1).”
Amendment 7, page 2, line 22, at end insert—
“30ZA Impact on procurement
(1) Within six months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, the Secretary of State shall publish details of the Government’s proposed approach to procurement once passenger rail services are provided by public sector companies under public service contracts awarded under section 30(1A) and the impact of the awarding of such contracts to public sector companies on procurement processes.
(2) Any publications relating to the Government’s proposed approach to procurement under subsection (1) should include details of the approach towards—
(a) technological development;
(b) the management of demand and supply;
(c) the supply chain;
(d) future sectoral planning.”
This amendment would require the Secretary of State to publish details of the Government’s proposed approach to procurement and the impact of the Bill on procurement processes.
Amendment 8, page 2, line 22, at end insert—
“30ZA Independent financial monitoring of public sector companies
(1) The Secretary of State must, within three months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, instruct an independent body to conduct monitoring of the financial management of any public sector company with whom a direct award of a public service contract is made under section 30(1A).
(2) For the purposes of subsection (1), “monitoring of the financial management” includes the auditing of accounts, the review of spending efficiency, and the making of recommendations to improve cost-effectiveness.”
Amendment 9, page 2, line 22, at end insert—
“30ZB Report on cost of contracts with public sector companies
(1) The Secretary of State must, within three months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, instruct an independent body to report on the total cost to the Government of contracts awarded in accordance with section 30(1A).
(2) The first report under this section must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A), with subsequent reports to be laid annually.
(3) Any report published under this section must include consideration of any liabilities previously held by franchises which are now public sector liabilities.”
Amendment 10, page 2, line 22, at end insert—
“30ZC Annual reporting of performance of publicly-owned train operating companies
(1) The Secretary of State must lay before Parliament an annual report on the performance of public sector companies to whom public service contracts are made under section 30(1A).
(2) An annual report published under subsection (1) shall include details of a company’s—
(a) financial performance;
(b) revenue growth;
(c) cost control;
(d) innovation;
(e) service quality metrics;
(f) customer satisfaction metrics; and
(g) value for money.
(3) The first annual report under this section must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A).”
Amendment 11, page 2, line 22, at end insert—
“30ZD Performance-based assessment of publicly-owned train operating companies
(1) Public sector companies with whom public service contracts are made in accordance with section 30(1A) are to be subject to performance-based assessments in relation to their management of the relevant passenger railway services.
(2) Performance-based assessments of public sector companies under subsection (1) are to be conducted by an independent body instructed by the Secretary of State.
(3) In conducting a performance-based assessment the independent body must assess the public sector company against published targets in relation to—
(a) the punctuality of services;
(b) customer satisfaction;
(c) revenue and passenger growth; and
(d) operational efficiency.
(4) Every contract made in accordance with section 30(1A) must place duties on relevant public sector companies—
(a) to prepare performance improvement plans where published targets are assessed under this section as not being met;
(b) to place limitations on the remuneration of senior managers while a performance improvement plan is in force.”
Amendment 12, page 2, line 22, at end insert—
“30ZE Impact on performance and efficiency of the UK rail network
(1) The Secretary of State must, within five years of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, instruct an independent body to conduct a review of the impact of the Act on the performance and efficiency of the UK rail network.
(2) A report on the findings of the review must be laid before Parliament.”
Amendment 15, page 2, line 22, at end insert—
“30ZF Impact on open access operators
The Secretary of State must, within twelve months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, lay before Parliament a report on the impact of the awarding of public service contracts to public sector companies under subsection 30(1A) on open access operators in the UK.”
Amendment 16, page 2, line 22, at end insert—
“30ZG Impact on exemption of passenger services
(1) The Secretary of State must, within twelve months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, lay before Parliament a report on the impact of sections 25A and 30, as amended by the Passenger Railway Services (Public Ownership) Act 2024, on the exemption of passenger services under section 24.
(2) A report under subsection (1) must include whether the coming into force of the Passenger Railway Services (Public Ownership) Act 2024—
(a) has made, or is expected to make, it more or less likely for an application for an exemption to be made to an appropriate designating authority;
(b) has made, or is expected to make, it more or less likely for an application for an exemption to be granted by an appropriate designating authority;
(c) has made, or is expected to make, any difference to the basis on which decisions as to the granting or refusing of applications for exemptions will be made by the appropriate designating authorities.”
Amendment 17, page 2, line 22, at end insert—
“30ZH Independent body to advise on pay and terms and conditions of employment for employees of public sector companies
(1) The Secretary of State must, within three months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, establish an independent body with responsibility for—
(a) providing advice to Government on the—
(i) remuneration, and
(ii) terms and conditions of employment
of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A);
(b) advising the Government on value for money during the negotiation of the terms and conditions of employment of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A); and
(c) preparing an annual report to be laid before Parliament by the Secretary of State on the terms and conditions of employment of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A).
(2) Advice provided in accordance with subsections (1)(a) and (b) shall be based on annual investigations of working practices conducted by the independent body and consider—
(a) value for money;
(b) affordability;
(c) domestic and international comparators;
(d) the future of the rail network, including the modernisation of working practices.
(3) Advice provided in accordance with subsection (1)(b) shall include advice on whether any conflicts of interest exist between any Government Minister and any union involved in the negotiation of the terms and conditions of employment, and how any such conflicts should be managed.
(4) An annual report under subsection (1)(c) shall include a comparison with the terms and conditions of employment under the franchise which provided the relevant passenger railway services prior to the awarding of a contract in accordance with section 30(1A).
(5) The first annual report under subsection (1)(c) must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A).”
Amendment 22, page 2, line 22, at end insert—
“30ZA Review of impact on exemption of passenger services
(1) The Secretary of State must, within one year of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, conduct a review of the impact of that Act on the exemption of passenger services under section 24 of this Act.
(2) A review conducted under subsection (1) must consult—
(a) the Scottish Ministers;
(b) the Welsh Ministers; and
(c) English combined authorities
on their willingness and ability to make an application to the appropriate designating authority for the grant of an exemption from designation under section 23(1) for the purposes of applying for or being awarded a public service contract under section 30(1A).
(3) The Secretary of State must lay a report on the findings of the review before Parliament.”
Amendment 2, page 3, line 23, after “Scottish Ministers” insert—
“or an elected public body”.
This amendment, and accompanying Amendments 3, 4 and 5, would expand the definition of “public sector company” to enable public service contracts to run passenger railway services to be awarded to public sector companies owned by local elected public bodies.
Amendment 3, page 3, line 25, after “Ministers” insert—
“or an elected public body”.
See explanatory statement for Amendment 2.
Amendment 4, page 3, line 27, after “Ministers” insert—
“or an elected public body”.
See explanatory statement for Amendment 2.
Amendment 5, page 3, line 27, at end insert—
“(ba) ‘elected public body’ means a body which is—
(i) a mayoral combined authority;
(ii) a combined authority; or
(iii) a unitary, county, district or borough council
or which is composed of more than one of the bodies listed above.”
This amendment in consequential on Amendments 2, 3 and 4.
Amendment 20, page 3, line 32, at end insert—
“30D Independent body to provide advice on proposed contracts
(1) The Secretary of State shall, within three months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, establish an independent body with responsibility for advising the Secretary of State on contracts proposed to be made in accordance with section 30(1A).
(2) The independent body must provide advice to the Secretary of State, including recommendations as to how or whether to proceed with the agreeing of the contract, within three months of a request for such advice being made by the Secretary of State.
(3) Should the Secretary of State wish to proceed with the agreeing of a contract—
(a) having received advice against proceeding with the agreeing of the contract from the independent body; or
(b) without taking such steps as were recommended by the independent body,
the Secretary of State must make a statement in Parliament of the reasons for doing so.
(4) The Secretary of State shall consult other franchising authorities before finalising proposals for the establishment of the independent body under subsection (1).”
Amendment 21, page 3, line 32, at end insert—
“30D Annual report on ticketing effects of public service contracts
(1) The Secretary of State shall lay before Parliament an annual report on the effect of public sector contracts awarded in accordance with section 30(1A) on—
(a) ticket pricing,
(b) tap-in, tap-out options,
(c) single-leg pricing,
(d) digital season tickets,
(e) compensation for delays and cancellations,
(f) ticketing interoperability with—
(i) other train operators, and
(ii) bus and light rail system operators.
(2) The Secretary of State shall consult other franchising authorities before finalising a report under subsection (1).
(3) The first annual report under this section must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A).
(4) Each subsequent annual report must be laid before Parliament before the end of July in each subsequent calendar year.”
Clauses 2 to 4 stand part.
The schedule.
Helen Whately
It is good to see hon. Members so soon after the summer recess. I know that the Secretary of State for Transport, the right hon. Member for Sheffield Heeley (Louise Haigh), has been busy over the summer, but I hope that she managed—like the Deputy Prime Minister—to find some time to let her hair down.
When we last met, I set out why the Conservatives cannot support the Bill. I do not doubt that Government Members sincerely believe in their plan, in getting rid of privately run train operators, and in putting politicians in charge of running train services, but just because an ideological belief is deeply held, that does not make it right. It is certainly not the same as using evidence as a basis for decision making.
Our railways are vital to our economy: millions of people rely on trains, whether to get them to work or school, to make essential journeys, to see family and friends, or simply to visit other parts of the country. Our rail system is complex—a mix of public and private built up over many years. One thing it is not, though, is a toy train set to be played with, but I fear that is the approach this Government are taking. They are rushing through this ideological reworking of our rail system despite the absence of solid evidence to back up their approach, at a time when other countries are choosing to increase private sector involvement and competition in their rail systems.
There is no good reason for this Committee stage to be raced through in one day, rather than through a normal Bill Committee that would allow proper time for consideration and discussion, the time appropriate for such a substantial and significant change. Proper time would allow this legislation to be made better—indeed, fit for purpose—drawing on the strengths of our rail system as well as the weaknesses, and using the lessons of our experience and that of others, while still fulfilling the Government’s intention as set out in their manifesto. Instead, in their haste, this Bill simply takes a one-size-fits-all approach, pulling the plug on even the best train operating companies despite the mixed record of the Department for Transport when it comes to the performance of the franchises it runs already.
In the Government’s haste, the Bill lacks any controls or incentives to reduce the risk of increased costs to taxpayers and passengers. We can say the same for performance: where in this Bill are the incentives to improve that, or the protections for passengers should performance worsen when the right hon. Member for Sheffield Heeley is at the controls of our trains? In the Government’s haste, those things are missing too. In their haste, if they do what they said in their manifesto, they are going to bring thousands of rail workers into the public sector, all under a single Government employer. We will have unions reclining comfortably on ministerial sofas as they discuss pay for thousands of people, funded by the taxpayer, with no safeguards to speak of to make sure the taxpayer gets a good deal.
On Second Reading, I said that some more thought should go into the Bill over the summer. I asked a series of questions and made a number of suggestions. At the very least, I was expecting the Government to table some amendments, but I am sorry to report that, as far as I can see, they are going full steam ahead. There is no sign that any serious thought has been given to the long-term impact of Government-run train companies on growth, or on the efficiency of our railways. There is barely a word on the liabilities that this Bill would transfer on to the Government’s balance sheet, and crucially, no evidence has been shared about how passengers and their journeys will be affected.
Fundamentally, the Government are rushing ahead but travelling blind, pressing on irrespective of the impact on passengers or taxpayers, which they simply do not know. The right hon. Lady has made herself passenger-in-chief and then set off on a journey without knowing the destination. That is not a sensible way to govern. Passengers should always come first, above providers, unions and ideology. That is why our first amendment would require the Government to set out what impact they believe the Bill will have.
Richard Burgon
The shadow Secretary of State is making a case from her ideological point of view, although she denies it. Running through her speech is a deep suspicion of the public sector. Suddenly she is suspicious about the quality of service for passengers. Suddenly she is suspicious about the quality of service provided, and the amount of money being spent on it. If only those suspicions and that scrutiny had been applied by the shadow Secretary of State and her colleagues while they were in government to the disastrous privatised railway service. Is she really trying to convince this House that privatisation of the railways was in any way a success? It seems to me that she is trying to stand as a barrier to public opinion and the Bill’s progress, because the majority of people in this country support public ownership of the railways and the Labour Government were elected with that as a clear manifesto pledge.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I am sure the hon. Gentleman is about to finish.
Richard Burgon
I am, thank you. I will bring my remarks to a close by asking, is it not the case that the shadow Secretary of State is being deeply ideological and is only interested in the privatised model and the pursuit of profit, regardless of the effect on the public?
Helen Whately
Unfortunately, the right hon. Lady’s approach is deeply flawed and risks our facing more strikes in future, rather than fewer. [Interruption.] Yes, to directly answer her question, I can assure her that I have spoken to her predecessor in the role, and I know that the reforms proposed to modernise the railways were crucial not only to controlling increasing costs and fares, but to improving the reliability of our train services. Unfortunately, she gave all that up overnight when she gave away a bumper pay deal of almost 15%, with nothing from the other side to improve services.
The independent body I am proposing would look at pay and terms and conditions in the round. It could shed some light on who is getting a fair deal and help put modernisation at the top of the agenda in negotiations. Given that this Government seem to be set on creating a single huge employer across the network, as set out in their manifesto, which surely means harmonising pay and terms and conditions across many thousands of employees, none of whom I suspect will want to give up whatever terms they most value—a four-day working week, 34 days of annual leave and the extra money they negotiated to start using iPads are some examples—can the right hon. Lady imagine what effect this might have on ticket prices and the efficiency of our network? An independent pay review body could at least gather evidence and advise Government on what makes sense to fill jobs and provide value for money for the taxpayer.
Madam Chair, I am grateful to you for giving me some time to outline our amendments, and I am mindful that other Members wish to talk to their amendments or make maiden speeches, so I will wrap up my comments with a couple of final points. As we made clear on Second Reading, His Majesty’s official Opposition do not support this Bill. Our rail system needs reform, and we have set out plans to do that, but this Bill is not the right way to go about it. On the contrary, the Government are being driven by a flawed ideological belief along the lines of “public sector good, private sector bad”. It is not underpinned by evidence of what works, and they are not being straight with people about the possible downsides such as higher fares for passengers, higher costs for taxpayers and less reliable trains.
Why are the Government rushing through this Bill? Is it to please their Back Benchers, who we know are deeply unhappy about scrapping the winter fuel allowance, or is it to please their union paymasters? I know the right hon. Lady has promised everyone that she is going to move fast and fix things, but this looks more like moving fast and breaking things. I say sincerely to her, as I am sure she will want to make this legislation as good as it can be and, like me, wants to do the best possible job for all our constituents and for the country we serve, that she should please consider the amendments we have tabled and think hard about giving them the Government’s support.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
As a point of information and for my assistance, it would be very helpful if Members wishing to be called could indicate clearly that they wish to speak.
Several hon. Members rose—
Graham Stringer (Blackley and Middleton South) (Lab)
That was earlier than I expected, Ms Nokes!
Before I come to the amendment I have tabled, I should say that I am probably the only Member in the Chamber who remembers the debate on the National Audit Office report after the original privatisation of rail, and if the hon. Member for Faversham and Mid Kent (Helen Whately) applied her proposal to the original decision to privatise rail, against the criteria the then Government were using, she would find that it has been a complete failure. I remember that when in this Chamber I asked Teddy Taylor, a Conservative I respected greatly, how he justified selling off the railways for less than they were worth, which is what the National Audit Office report said, his justification—the policy of the then Conservative Government—was that it did not matter because they would take all the subsidy out of the railways. Had the hon. Lady been present then and had those tests been applied to the original policy, the Conservatives’ policy of privatisation would be seen to be a complete failure.
The other point I would like to make about what the hon. Lady said, which a number of interventions from the Government side brought out, is that a huge amount of money has been transferred to other rail systems and to pension funds in north America and elsewhere that could have been used to benefit the transport system in this country. Incidentally, one of the reasons why passenger numbers have increased on the railways is that the previous Government did not invest in roads over many years. That has led to congestion which has forced people on to the railways; it is not the privatisation of the railways that has attracted those passengers. Those profits have gone out precisely because the Treasury did not want the debt on the balance sheet, but one cannot have it both ways. If we are to repatriate those profits, which I believe taking the railways back into public ownership will do, we of course have to take the debt. An accountancy sleight of hand, because the Treasury does not like seeing the debt on the balance sheets, is the direct cause of the profits being taken out of this country.
On the Government side of the House, there is real enthusiasm for this Bill, and the sooner the train operating companies are back in public hands and that money is repatriated to this country, the better. However, I share with the shadow Transport Secretary a worry that officials in the Department for Transport may not be up to it. Excuses may be used to slow things down, because the operator of last resort is not ready and they are worried about taking on the extra capacity. It is a genuine worry, but it is a problem that should and has to be overcome if we want a publicly owned railway working for the benefit of passengers and the taxpayers of this country, not a privatised system. I have therefore tabled an amendment to remove clause 2(3), which could be used as a loophole as it would allow the Secretary of State to carry on with a franchise under certain circumstances. I ask my colleagues on the Front Bench to be explicit about what those circumstances might be, because my worry is that they will be getting advice from officials in the Department for Transport who have not covered themselves in glory and have failed with the railways over many, many years.
As the hon. Member for Faversham and Mid Kent likes evidence, I refer her to a Public Accounts Committee report in May that is excoriating in describing the officials in the Department for Transport and how they have dealt with the railway system. I will read some of the conclusions from that report, because it should worry us all if we want this Bill to work—not just to be passed into legislation but actually to work.
The first point made by this all-party Committee with a Conservative majority in May this year was this:
“It has been six years since the Department identified the need for a root and branch review of the railway, but it has achieved very little in this time.”
It then says:
“There has been too little focus on passengers and taxpayers and how to get them a better deal.”
Those are the first very worrying points from Labour’s perspective.
The report also says:
“Six years since the Department started work on rail reform, it has failed to resolve fundamental disagreements and clarify key aspects of reform.”
There are other points too, but I do not want to bore the Committee too much. The last point is:
“The Department has failed to engage with the workforce to successfully deliver its reform ambitions.”
That is also very worrying.
I note as well the comments of an official from the Department when discussing the appalling performance of Avanti, which I think is permanently in breach of its contract and which has laughed at the Government and the travelling public as it has received massive subsidies. It is not working for profit; it is not at risk. It has just been ripping off the taxpayer for many years—since it took over from Virgin in fact. A DfT spokesperson said:
“Stripping Avanti's contract would just cause more upheaval for passengers rather than solving the challenges the operator is facing. These include restrictive working practices that can’t be reformed without ASLEF’s agreement.”
I think those officials could be and have been a barrier to reform. I would not expect my colleagues on the Front Bench to do anything but be loyal to the officials who work in the Department, but I would like them to respond on how they are going to overcome some of the potential problems they will find in a Department they control. There are not only the problems where there will be resistance. Owing to the way the franchises are dealt with, some of the better train-operating companies—such as Greater Anglia, which has a reasonable record—will come up first, whereas Avanti has eight years left on its contract. It seems to me that it would be easy for officials to recommend dealing with the best first rather than the worst, which is not in the interests of passengers or the taxpayer. We really need as a Government to get control of that and deal with the worst first, because that is where we are losing money, that is where passengers are suffering, and that is where money is being taken out of the system. As I say, I do not expect the Front-Bench team to criticise the officials they have to work with, but I hope they will take on board the fact that there are real problems and that we need to deliver right across the rail system to create a wholly publicly owned industry as soon as possible.
Passenger Railway Services (Public Ownership) Bill
Caroline Nokes ExcerptsMonday 29th July 2024
(2 months, 2 weeks ago)
Commons ChamberRead Full debate Passenger Railway Services (Public Ownership) Bill 2024-26 View all Passenger Railway Services (Public Ownership) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Helen Whately
I was perfectly clear at the beginning of my speech that we agree that reform is needed. That is why we commissioned a review and set out ambitious plans for reform, including the Great British Railways. I welcome that the new Government intend to introduce that.
I am not here to make an ideological argument. To respond to the point made by the hon. Member for Runcorn and Helsby (Mike Amesbury), sometimes, like with our plan for Great British Railways, the public sector is the right vehicle to solve a problem. At other times, a competitive, private model will lead to better results. The point is, if the Government are going to change things in the first piece of legislation they bring before this House, they need some pretty clear evidence as to why, so I have some questions for the Secretary of State and the Under-Secretary of State for Transport, the hon. Member for Wakefield and Rothwell (Simon Lightwood), who will be summing up.
How exactly will bringing train operating companies into public ownership benefit passengers? Unfortunately, the Government’s impact assessment does not tell us, for sure. What improvements can passengers expect? Who is the Secretary of State going to get to run these companies? Where are all these different, better train operating experts going to come from? If they are out there, twiddling their thumbs in the hope that this day would arrive, would the Department for Transport not have brought them on board already to help with the running of Northern Trains or Southeastern?
It is the same question across the network. Will she be sacking everyone currently working for the train operating companies and replacing them with a horde of superior, yet currently out-of-work, staff? Or, as I suspect, will passengers simply encounter the same group of people in a different colour shirt? What we need to hear is what tangible difference this going to make for passengers, because if the answer is nil, then there are lots of other things she could be doing with her time, such as prioritising the railways Bill.
The railways Bill is the legislation that will actually make a difference to how passengers experience our railways, with simpler tickets, joined-up decision making and efficiency savings that can be passed on to passengers. She could be modernising working practices, instead of bending over backwards to the unions, as reports suggest she has already done. How does she think that creating a single employer and, in the process, uplifting every rail worker’s terms and conditions to the least favourable for passengers, will benefit the network?
She could start by saving the train manufacturer, Hitachi—something that, when in Opposition, she said she could do with the stroke of a pen. I notice that it has been three weeks and that pen is yet to materialise. Perhaps she no longer takes for granted the work her predecessor did saving the Alstom factory in Derby. Or she could prioritise investment in the network, like the £100 billion we spent improving the railways since 2010.
On that point, I feel for her because I know what it is like to argue with a Chancellor for investment in something and not win that argument. It is clear from the Chancellor’s statement earlier that the Secretary of State for Transport lost the argument pretty catastrophically. Rather than setting out to reform welfare or control public spending, the Chancellor opted to slash a host of transport infrastructure projects. She will now review all transport infrastructure plans, putting the entire transport pipeline into chaos, letting down communities across the country and letting down a fair few of her new colleagues, too. Those new colleagues will be dismayed to find that they campaigned on false promises to the electorate, and that their pledges to invest in economic growth and not to raise taxes were not even worth the glossy paper on which their leaflets were written.
Although I know what it is like to lose an argument with the Chancellor, I do not share the experience that the Secretary of State and many of her colleagues will now be going through: of changing their tune just three weeks after they were given a mandate by the electorate and less than two weeks after their party leader had said that trust was the new battleground of politics. It seems as if he has given up on that battle already.
All the same, I welcome the right hon. Lady to her post, and I do genuinely wish her well. I will gladly offer my support to anything that she does to make our railways more reliable and more affordable. This Bill will not do that. It is a rushed piece of left-wing ideology. The evidence, both here in the UK and across Europe, shows that an effective public/private model, where the incentives are properly aligned, delivers more choice, more passengers and greater efficiency.
Over the next few weeks of recess, the Secretary of State and her team will have some time to reflect and reconsider. I hope that they will return in the autumn with a Bill that jettisons the baggage of ideology and takes up the mantle of evidence—a Bill that will have more prospect of improving the rail service for passengers, because, as I said, I have no interest in opposing for opposition’s sake, but this Bill as it stands will not be receiving the support of His Majesty’s Loyal Opposition.
Wera Hobhouse (Bath) (LD)
Thank you for calling me to speak, Madam Deputy Speaker. I do not think that I have yet had the opportunity to express my pleasure in seeing you in your new role. May I also congratulate the right hon. Lady on securing her new role as Secretary of State?
Our railways are in dire need of improvement. Under the last Conservative Government, passengers were repeatedly failed. Services are poor and the ticketing system is in shambles. All the while the public keep paying more and more, year on year. Rail fares in the UK are already some of the highest in Europe and are set to rise again. I am sure that all Members of this House have heard about, or experienced, cancellations, delays and a ticketing system not fit for purpose. People are crying out for a functioning rail network that they can rely on.
Too often, my Bath constituents would rather travel by train, but take the car instead because a train ticket is far too expensive. If we are serious about meeting our net zero target and reducing emissions, rail must be not just a green option, but an affordable one. Since privatisation, passenger journeys have more than doubled to 1.71 billion per year. However, satisfaction is at its lowest level in over 10 years. We agree with the Government that competition is not working as intended. Fewer and fewer companies are bidding for new franchises as the costs have ballooned. Meanwhile, Government subsidies have increased and intervention is desperately needed.
The UK needs a world-class rail network to support growth and reach net zero. For too many years, it has been held back by under-investment and lack of ambition, particularly in the north and south-west. However, may I ask what will happen to investment after nationalisation, when Great British Rail will have to compete for funding with the NHS and schools? I am sure this Government will agree with us that they must guarantee that funding for a nationalised rail network will not come at the expense of other public services.
We Liberal Democrats want the fairest deal for passengers. Anything that brings down fares is welcome and I look forward to the Government setting out how services will improve when in public hands. Nationalisation is an interesting idea, but Liberal Democrats want an approach that benefits passengers right away. We would freeze fares immediately and then get on with reforms to the broken system. Passengers might not be that interested in who is running the trains, but they are interested in whether they are running on time and at a fair price.
There is inconsistency within the proposed policy: just as private companies do now, Great British Rail will continue to lease rolling stock. Rolling stock leasing companies benefit from a monopoly out of the 1994 privatisation and make excess profits. One quarter of operators’ costs go to those companies and I hope the Government will urgently look into that.
The Liberal Democrat approach is pragmatic. We will scrutinise the legislation according to what is best for passengers. We want one nationwide body with proper powers to put investment in the right place and hold train companies to account. Our proposal is for a railway agency to act as a guiding mind for the railways, putting commuters first, holding train companies to account and bringing in wholesale reform of the broken fare system.
It is currently unclear what the financial impact of nationalisation will be. There are potential savings due to management and performance fees no longer being payable. However, subsidies might increase after nationalisation. Private operators are already subsidised to run unprofitable services, and public sector companies would similarly need financial support, which might increase over time. We are putting down these concerns to make sure that we are properly holding the Government to account on their proposals. Can the Government really ensure that funding will be adequate without fares increasing further?
There is no reason for nationalising companies purely based on their contract expiry date; the Government should start by focusing attention on operators that are demonstrably failing passengers. GBR could then focus on turning those services around to deliver tangible improvement for the public. The Government should at least look at that, and operators that are performing well should be deprioritised. That would be better for travellers and reduce the cost to taxpayers.
There are other questions that we need clarity on. When the contract is up, will train operating companies go straight to Great British Rail or to the operator of last resort? If it is to the operator of last resort, what incentives will there be for operators to grow rail revenues, which are still at 70% of pre-pandemic levels? A larger OLR team will be necessary to manage the increased number of rail journeys while GBR is being set up. The explanatory notes to the Bill do not consider that increased cost.
All that must be part of a wider, long-term rail strategy. Instead of fixating on the issue of ownership, our railways need a rapid and significant change to put passengers first with a focus on the quality of service. We are interested in looking at what benefits nationalisation will bring, but we urge the Government to be pragmatic.