Railways Bill (Fifth sitting)

Rebecca Smith Excerpts

Tuesday 27th January 2026 Public Bill Committees

[Rebecca Smith (South West Devon) (Con)]

I do not want to stop my hon. Friend’s flow, as I believe he is probably coming to the end of his remarks. On listening to his eloquent speech, it strikes me that these amendments point directly to the fact that if Parliament had more of a role under the Bill, we would not even get to such places. Ultimately, if there is scrutiny throughout the process and an ability for Parliament, once GBR exists, to hold the Secretary of State and GBR to account, we should avoid the need for a civil proceeding, because a lot of the issues could be nipped in the bud before getting to that stage.

[Jerome Mayhew]

My hon. Friend is entirely right. That will be a theme of our comments on and challenges to the Bill throughout the progress of our scrutiny: accountability without responsibility is no accountability at all. Time and again, we see an unwillingness from those who drafted the Bill to trust the role of parliamentarians as scrutineers.

As a former businessman, I know—I have not made this one up; it is not unique thinking—that, in any organisation, you get what you measure. That will have been the case in any organisation that hon. and right hon. Members may have worked in in the private or public sector: the NHS has targets because it gets what it measures. At the moment, the Bill measures very little on GBR’s performance, and where it does, that disappears off to the Department for Transport and is reported to other civil servants.

As parliamentarians, we know our value in holding not only GBR to account but the Government of the day, which will not always be a Labour one. That is our important role, which is done through the Select Committee process and more widely. As parliamentarians, we should seek to improve the Bill. I recognise that we will have a number of Divisions during this process and I am unlikely to win a single one, but I urge the Government to listen—perhaps to the private comments of its own Committee members; they do not have to tell me about it—because these are genuine areas of improvement that we as parliamentarians should be encouraging the Government to add to the Bill. On that note, I will stop.

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[Keir Mather]

I defer to my hon. Friend’s expertise on that particular matter, but my overall point is that, rather than create events in our heads about when this enforcement power may be required, it is important that we give GBR, and the Secretary of State in exercising accountability in relation to it, a full suite of measures to ensure that it remains compliant with the law. Actually, specific duties outlined in the Bill encourage GBR not only to be compliant with the law but to deliver for passengers, including those with disabilities, and to make sure that we have a long-term infrastructure strategy for the railway and unify it in a way that serves the interests of passengers.

Amendment 16 would require the publication of the assumptions, criteria and objectives used when giving directions about fares. The Government have been clear that GBR will have a greater level of autonomy and flexibility over fare setting than train operating companies do today; however, given the need to balance passenger and taxpayer contributions to funding the railway, that freedom will be within strategic parameters and guardrails set by the Secretary of State.

While it is possible that the directions power could be used to set strategic parameters and guardrails for fares, there are alternative routes, most notably the ability for public service contracts awarded to GBR to contain fare parameters and guardrails. Nevertheless, it is crucial that the Secretary of State retains the powers to direct and give guidance to GBR on fares. It is necessary that the Government and GBR alike can respond to exceptional circumstances. Beyond that, the Government are committed to interacting with GBR clearly and transparently, and the refreshed role of the Secretary of State on fares is no exception.

Finally, I turn to two additional amendments, which relate not to directions but generally to the accountability of GBR. Amendment 24 would require the long-term rail strategy to be geared towards enabling GBR to meet the key performance indicators set out in new clause 2, tabled by the hon. Member for Broadland and Fakenham. New clause 4 would allow the Secretary of State to dismiss the head of GBR were it not meeting the key performance indicators proposed in new clause 2. We have already discussed new clause 2, so I will not repeat my arguments, but in relation to amendment 24, the long-term rail strategy is clearly meant to be just that—long term. The amendment would make the strategy a document focused on short to medium-term performance indicators, which could change much more frequently.

[Rebecca Smith]

I would argue that my hon. Friend the Member for Broadland and Fakenham has tabled a key amendment, which relates to something that came up in the scrutiny of the Bill in the Transport Committee; indeed, I asked a question of the noble Lord Hendy about it when I quizzed him on how we as MPs are supposed to hold the Government to account for the delivery of the long-term rail strategy. I appreciate that it is long term, but we have to get from the short term to the long term, and if nothing is set out in the Bill about what delivery is supposed to look like on the route to the long-term delivery, we effectively cannot do our job. The Minister in the other place rightly said, “It’s going to be an amazing railway system. It’s going to be perfect,” but he could not answer me on how we hold people to account on getting from A to B. I would be interested in the Minister’s response to that if he is not prepared to accept amendment 24.

[Keir Mather]

It puzzles me that with all the other transport bodies that have been set up—National Highways is an interesting example—I do not recall a series of concerns having been outlined that one of the most robust systems of parliamentary democracy in the world was in some way, shape or form incapable of—

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[Jerome Mayhew]

I will deal briefly with amendment 143 and develop some arguments on the other amendments. I congratulate the hon. Member for Didcot and Wantage on tabling amendment 143, which pushes in exactly the same direction that I have been pushing today, and also last Thursday, in developing the concern about increasing micromanagement by Department for Transport officials in the name of the Secretary of State, which will undermine the independence of GBR as a tactical organisation.

The culture is already there: the Department has been micromanaging the railways to an increasing extent since 2012 at the latest. This Bill needs to change culture. It is not a steady-state Bill; it is a once in a generation opportunity to change the culture not just of GBR, moving it away from Network Rail, but of the Department for Transport, which is as necessary as the other cultural change. If this Bill is to achieve what it is meant to, the Department’s relationship with the railways should properly be changing. Amendment 143 is a modest but important proposal that would go some way to facilitating that.

Dealing with the group as a whole, and continuing the theme of the exercise of functions and guidance by the Department, the Opposition once again note the contrast between the supposed independence of GBR and the various mechanisms that the Department and the Secretary of State have managed to wheedle into the Bill to grant themselves extra powers, whether as a last resort or, as I fear, to create a micromanaging charter, and where that last resort, as it has been described, has no qualifying criteria—although as we have heard from the Minister, that is seemingly of little consequence.

The clause enables the Secretary of State to “issue and publish guidance”, with notable devolved exceptions, which will allow the Secretary of State to

“clarify policy intentions to GBR.”

The explanatory notes acknowledge that

“in most cases requiring course correction, guidance would be used before directions,”

although I note that it is not required. The Government anticipate that they could move straight to directions if they wish to. However, subsections (1) and (2) are very clear:

“The Secretary of State may give guidance…or revoke guidance”

without any qualifying criteria at all.

What is guidance? It is a steer short of direction, and an application for an injunction against GBR—which we have just voted in favour of—destroys the myth of GBR operational independence. It will be taking orders from the Department for Transport, because that is the status quo ante. Without strengthening this clause and some others, we will confine the relationship between the Department for Transport and the newly created GBR to “more of the same”. That is the fear that we should collectively be fighting against.

The guidance will be not just on the strategic direction or the business case, but on delivery decisions, at the whim of the Department. We can say, “Well, it’s the Secretary of State. This will be done under advisement,” but we all know that in practice it will mean officials micromanaging GBR in the name of the Secretary of State, who will provide the rubber stamp. I fully expect the Minister to reassure me that that would never happen, and that the provision is only for course corrections. Now, if I was in the passenger seat of a vehicle and kept telling someone how to drive, I suppose I would call that a course correction, but they might call it backseat driving. That is the problem: the Bill is designed for backseat driving by the Department for Transport. Will the Minister explain how the clause is nothing short of backseat driving?

I obviously wish GBR the best of luck, and I hope the Minister’s enthusiasm and optimism is fully justified, but I fear that the disastrous consequence of forcing it to walk on eggshells will be constant second-guessing. I have been involved in an organisation in which there was second-guessing—no one was sure who had the decision-making power—and it was a disaster. If there is second-guessing, the organisation as a whole does not know when a decision has been taken. Does the power lie with the board? Does the board have to get clearance from a second board in a wholly different organisation, which might have a different view? Should people in GBR wait for the nod from the Department for Transport before taking action within the organisation, particularly if it is a decision with which its sub-department may not agree?

[Rebecca Smith]

My hon. Friend’s argument highlights the challenge that a lot of the independent retailers, open access users and, potentially, freight users will face if the Bill remains as drafted. Ultimately, they are the people outside the walls of the castle who will struggle to understand who is making what decision and which decision is final. It is a bit like a child going to one parent, getting an answer they do not like, and going to the other parent to get a different answer. Should there be more clarity in the Bill specifically for that reason?

[Jerome Mayhew]

I completely agree with my hon. Friend. When one’s children come and ask for something, the wise answer is always to ask first, “What did your mother say?” If we were able to apply that common sense to this situation, I would not be so concerned. What we have instead is stakeholder management culture seeping into the core aspects of GBR functions.

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[Keir Mather]

Clause 11 introduces schedule 1, which will amend part I of the Railways Act 1993 to set out GBR’s licensing regime in a way that broadly mirrors the existing licence provisions in the 1993 Act. I will deal with schedule 1 in more detail later, but for now I commend the clause to the Committee.

[Rebecca Smith]

I do not think I said this earlier, because I was merely intervening, but it is a pleasure to serve under your chairmanship, Sir Alec.

I appreciate what the Minister just set out in correcting the record from last week, because a lot of what I was going to say had to do with the lack of the licence. In spite of what he said, I still think that it is a problem for us to be debating clause 11, and later schedule 1, without that detail in front of us. It is very generous of him to say that we can be part of the consultation process, but given that we are encumbered with being here for 10 hours a week, I am not quite sure when would be able to do that. With all due respect, I still want to put on record how disappointing it is that we do not yet have the licence. Ultimately, Great British Railways is entirely premised on that licence: it does not operate without it, cannot deliver its functions without it, and will not create this supposedly amazing utopia of perfection for passengers and infrastructure deliverers alike without it.

Debating the clause without that context feels like a completely wasted opportunity—indeed, I fear that this debate will be incredibly short. This is something that I have seen happen with other Bills. The Minister will say that this is what the Opposition would also have done, but we were not in the position to set up Great British Railways, which—next to the NHS—will be the biggest Government-funded and backed body in this country. Without the scrutiny of hon. Members this morning, we cannot do our job properly.

Such scrutiny is in the interest of all the stakeholders—the public, the staff who work for all the railway companies that are to be brought into Great British Railways, and all the other stakeholders that provide services through open access or freight. Whether it is the coffee shop in a station or the trolley service on the train, all these people need this information, and I am disappointed that we cannot provide that scrutiny at this stage in the debate. I would welcome the opportunity to see the draft as soon as it is out, but it is disappointing that has not come in time for debate in Committee. No doubt similar comments will be made on Report and, hopefully, in the other place.

[Edward Argar (Melton and Syston) (Con)]

I am grateful to the Minister for his clarification. When I asked the question and he, with alacrity, answered, I did catch the expression on one of his official’s faces; I have to say that I have, on occasion, found myself in that position in the past, so I sensed what might have been coming.

I have to say that I am deeply disappointed. Although it is important that stakeholders are engaged, this legislation has been some time in the making. The licence is at the heart of how GBR will operate, so the fact that not even a skeleton draft will be made available to hon. and right hon. Members as the Bill continues its passage through this House is deeply concerning. I will speak at greater length when we get to schedule 1, but we are effectively being asked to give the Government a blank cheque, based on assurances of intent, without actually seeing the detail of the legislation.

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[Jerome Mayhew]

I beg to move amendment 109, in schedule 1, page 55, line 10, leave out from “may,” to “grant” and insert—

“at the recommendation of the Office of the Rail and Road in relation to matters related to safety and standards and, after consultation with the Passengers’ Council,”.

This amendment would require the Secretary of State to get a formal recommendation from the Office of the Rail and Road that the GBR licence adequately ensures that licence obligations related to safety and standards are not compromised or undermined.

Schedule 1 contains the meat of what we have been talking about. It amends part 1 of the Railways Act 1993 to set out how GBR will be licensed. Paragraph 2 confirms that GBR should never be exempt from holding a licence, and paragraph 3 inserts new section 7B, which will enable the Secretary of State, following consultation, to grant GBR a written licence to operate specified railway assets. The licence must be in writing and will remain in force unless revoked or surrendered. Surrendering the licence will require the Secretary of State’s consent.

Paragraph 3 also sets out the process for granting licences to persons other than GBR. The Secretary of State and the Office of Rail and Road will continue to be able to grant licences to persons other than GBR to operate railway assets. The ORR may grant such licences only with the Secretary of State’s consent or under a general authority issued by the Secretary of State. Licences must be in writing and will remain in force unless revoked or surrendered. Surrendering the licence will require the ORR’s consent, much in the same way as it previously required the Secretary of State’s consent.

Proposed new section 8A sets out the requirements for the granting of licences by the Secretary of State or the ORR. It provides that a notice must be published outlining the intention to grant a licence, the reasons for doing so, and allowing at least 28 days from the date of publication for interested parties to make representations or objections. There is a duty to consider representations or objections made within the period specified in the notice.

Proposed new section 8B gives the Secretary of State the power to set rules for how licence applications must be made. Among other things, that includes the format of the application, the fee payable—different fees may apply—and the requirements for publishing the application. Before making any regulations, the Secretary of State must consult the ORR. Any fees collected by either the Secretary of State or the ORR in connection with licence applications must be paid to the consolidated fund.

Paragraph 4 clarifies that a licence granted to GBR may specify when the authorisation it provides takes effect. It allows the licence to include a start date or a mechanism for determining it. Paragraph 5 provides that the licence granted to GBR may include a condition requiring it to comply with the provisions set out in separate document that is prepared by the ORR and approved by the Secretary of State. It might be something such as a code of practice—one of these operating documents that we have been talking about so much—and it may relate to the sale of tickets by GBR or third parties, or to services that GBR provides to the rail industry to facilitate railway operations that are of particular interest to the independent retail sector. The paragraph makes it clear that an approved document may be used to regulate GBR’s behaviour in relation to the sale of tickets by parties other than GBR, in the independent retail sector.

Paragraph 6 provides that, before making modifications to a GBR licence, the Secretary of State must publish a notice explaining the proposed modifications and the reasons for them, and must allow the usual period of 28 days for interested parties to make representations. There is a duty on the Secretary of State to consider representations or objections to the notice made within the period specified.

Paragraph 7 clarifies that the ORR must consult the passengers’ council before making any amendments to passenger or station licences that relate to functions of the council. The ORR must also send a copy of the modifications to the council as soon as practicable. Paragraph 9 clarifies that any licence under section 8 of the Railways Act 1993 that was in force immediately before the changes made by the schedule come into force will remain so, per the conditions and periods set out in the licence, unless it is revoked or surrendered.

Here is the mystery of the missing licence: where is it? We have explored this at some length, and the Minister is going to go away and see what he can rustle up in the Department’s cupboard to point us in the right direction, or at least to give us the direction of travel of the missing licence. In oral evidence to the Transport Committee, Ben Plowden, chief executive officer of the Campaign for Better Transport, said:

“I think the licence will be critical. There are various references in the documents that the Government published to a ‘streamlined licence’, so I would be quite interested to see what that means relative to the current licence that applies to Network Rail. I think the Government are going to consult on the draft licence, so we will all have a chance to look at it.

The other point I would make is one I made earlier, which is that the licence will be one of many documents the Government will produce in the next year to 18 months. There is the long-term rail strategy and GBR will produce its business plan. There will be the access and use policy; the new periodic review process; and MOUs with Ministers in Scotland and Wales. There will be guidance on partnerships with mayoral combined authorities, and guidance on the right to request full rail devolution. There is a huge amount still to come.

Understanding how the licence intersects with those other documents and processes is going to be critical, because between them they will add up to the set of arrangements that determine whether GBR is successful or not for passengers. We have to see the licence in the context of all the other things that will be guiding, directing and shaping what GBR does, how it invests, and what it does operationally.”

That is the experts in the industry repeating what the Opposition have been arguing repeatedly today and last week. More accurately, it is the other way around: we have been listening to the industry in a way that the Government have not, and have been expressing the deep concerns in the sector that the current proposals are half cocked. Huge chunks of the direction, guidance and memorandums are simply missing, including the licence that the schedule is designed to address.

[Rebecca Smith]

The Minister spoke earlier about the consultation. It is worth restating that it is not the final draft but a consultation on the draft that is going to happen. We will have sight of the final version of the licence way down the road of the Bill’s progress, and ultimately the final licence may not be ready before scrutiny of the Bill is complete. Does my hon. Friend agree with me that that is something that we need to address? Hopefully the Minister will reassure us.