Railways: Open Access Applications

Lord Ahmad of Wimbledon Excerpts

Wednesday 4th May 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, the Office of Rail and Road has to take account of passenger interests and the public purse, including the impact on subsequent franchise competitions.

[Lord Bradshaw (LD)]

I thank the Minister for that reply, but he will be aware that two franchises have failed on the east coast main line, at great expense, and a third is now in operation by Virgin Trains, which won the competitive tender. However, the duties of the ORR, stated in statute, are to promote competition. There are no parentheses in the law stating that it has to take account of the effect on the public purse, the benefits that arise to passengers, and the vitiating of the franchising process itself. I wonder whether the Minister will comment at more length on those things.

[Lord Ahmad of Wimbledon]

I agree with the noble Lord; he is quite right to raise the issues that have arisen. Equally, on the issue of open access, I share his concerns and that is why my right honourable friend the Secretary of State has written directly to the ORR to underline that any changes and reforms put the customer at their heart and, indeed, that we ensure equity of access and, most importantly, taxpayer return on the investment made.

[Lord Berkeley (Lab)]

Will the noble Lord explain the Government’s policy on competition in the passenger sector? The operators of the open access services pay a much-reduced track access charge compared with the franchises. How can that be fair on either the travelling public or the operators?

[Lord Ahmad of Wimbledon]

I agree with the noble Lord, because open access has raised this very valid issue of the inequity of application of track fees and the associated costs. Notwithstanding the reports that have been done by, for example, the CMA, which highlighted the importance of competition, the Government’s position remains that we of course support competition but need to ensure equality of access, both for those operating the franchise and for those who come in through open access.

[Lord Rosser (Lab)]

This Question refers to taking into account the interests of passengers and the Office of Rail and Road. At the end of last year, the consumer group Which? lodged a “super complaint” to the Office of Rail and Road, calling for major improvements to make it easier for passengers to claim refunds for delays and cancellations. The Office of Rail and Road called for an improvement in passenger compensation arrangements by this October, under the provisions of the Consumer Rights Act 2015. However, this has now been delayed by the Government via a statutory instrument until October 2017. Can the Minister explain how delaying improved passenger compensation arrangements is an example of taking into account the interests of passengers?

--- Later in debate ---

[Lord Ahmad of Wimbledon]

On the whole issue of franchises, as I have already indicated, my right honourable friend the Secretary of State has written to the ORR on ensuring that customer benefits are put at the heart of this. Another issue that we are looking at is how fares are allocated to different operators across the network through ORCATS. The issue about ensuring equity of fares and sensible fares across the network is well made. I have not seen the specific Which? report; I will certainly read it through and, if there is any issue that I need to pick up on, I will write to the noble Lord.

[Lord Spicer (Con)]

My Lords, why do we not hear more about the success of privatisation of the railways? We were talking 10 years ago about the closure of lines and now we do not know how fast to expand them—certainly on the Cotswold line.

[Lord Ahmad of Wimbledon]

I think we do talk—certainly, the Government are talking—about the success of the railways in terms of where we are now and their future operation. That is why the Government have committed to £38 billion of investment in the rail network, which is the greatest investment since the Victorian age.

[Baroness Randerson (LD)]

My Lords, under the terms of the east coast franchise, Virgin has agreed to reinstate services to Lincoln. Does the Minister agree that Virgin will be unable to do that if the proposed new open access services are granted and agreed, because they will fill all the spare capacity—all the spare slots available—that Virgin intends to use for the Lincoln services?

[Lord Ahmad of Wimbledon]

The noble Baroness is quite right to raise open access. That is why my right honourable friend the Secretary of State has written to the ORR to say that we wish to see the recommended changes to the current open access charging structure before the granting of any new open access agreements.

[Lord Cormack (Con)]

Further to that point, will my noble friend assure us that these much-needed extra services to Lincoln are not going to be cancelled or withdrawn?

[Lord Ahmad of Wimbledon]

When I saw “Lincoln” in my briefing, I assumed that my noble friend would raise this issue. I assure him that under current plans for Lincoln there will be an additional six trains from and five trains to London from May 2019, and upgraded train interiors are being introduced between 2015 and 2017. I reiterate that any open access agreements will be reflective of the changes that my right honourable friend the Secretary of State deems necessary in the charging arrangements.

[Lord Harris of Haringey (Lab)]

The Minister agreed with the noble Lord, Lord Spicer, about the benefits of privatisation. In that case, can he answer the question from my noble friend Lord Rosser about why the Government are conniving with the train operating companies to delay a proper arrangement for the compensation of passengers as a result of delays?

[Lord Ahmad of Wimbledon]

I could not disagree more. On the contrary, we are not conniving. Through privatisation, we have ensured greater accountability of the train operators and will continue down that route. The noble Lord, Lord Rosser, referred to a particular report by Which? and I have already said that I will write to him in that respect.