Railways Bill (Sixth sitting)

Laurence Turner Excerpts

Tuesday 27th January 2026 Public Bill Committees

New clause 39, tabled in my name, would set out Great British Railways’ financial duties. Its purpose is to provide focus for GBR on its long-term need to stand on its own commercially. A degree of state support is inevitable, and I take the point made by the hon. Member for Didcot and Wantage that to remove state funding for the railways is highly unlikely, but it is nevertheless an aspiration, and we should work towards it through efficiency and revenue growth. I accept that a degree of state support is inevitable, but the aim must be to minimise the need for the taxpayer.

[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?

--- Later in debate ---

[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.

--- Later in debate ---

[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.