Williams-Shapps Plan for Rail

Bank Closures: Stoke-on-Trent North – in Westminster Hall at 4:31 pm on 14 June 2023.

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Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes 4:31, 14 June 2023

I beg to move,

That this House
has considered progress on delivering the Williams-Shapps Plan for Rail.

It is a pleasure to see you in the Chair, Ms Fovargue. Reform of our railways has long been a contentious issue. There are countless opinions on the best way to run the rail system—from 100% nationalisation to 100% privatisation, with a plethora of views in between—but one thing the House can agree on is that rail is a good thing. Passenger rail can unlock economic growth across Britain’s regions; it connects communities, and is the greenest form of public transport. There is an ambitious growth target to treble rail freight by 2050, which will deliver huge economic and environmental benefits to Britain. The rail sector is a force for good. It ought to be obvious to anyone that we need more of it, not less.

We can also agree that the status quo is not working. We have an unhappy halfway house between privatisation and nationalisation, which clearly is not working as intended. Across much of our rail network, fares are high, services are poor and passengers are unhappy.

Some elements do work well. One example is open access: on the east coast main line, a public sector operator is competing with private sector open access operators on full revenue risk, which are able to make the best offering to the customer. That has boosted competition, lowered fares, increased the quality of services and created greater innovation. Operators on the east coast main line have recovered beyond pre-pandemic levels, proving that competition, not over-centralisation, is in the customer’s best interests. If we had open access across the network, I am confident that we would be in a much stronger position.

However, open access alone is not a silver bullet that will solve all the problems. Unfortunately, as the Secretary of State for Transport illustrated in his Bradshaw address in February, Britain’s railways operate on

“a broken model…unable to adapt to customer needs and financially unsustainable.”

That is sadly true. The modelling produced during the pandemic was appropriate in a crisis, but is now stalling recovery and pleasing no one. The key to creating a successful railway is correctly diagnosing the problems that the industry currently faces, and prescribing the right solution.

Opposition Members would attribute the woes that the railway faces to the fact that it is not entirely in public ownership. However, that is simply not the case. A perfect storm of factors has converged to create the levels of turbulence that we have become used to. The pandemic disrupted long-established travel patterns, causing passenger numbers to drop as low as 4% at one time. In 2023, they have recovered to around 90% of pre-pandemic levels. However, revenue levels are at around 85% of pre-pandemic levels, with costs fixed at 100%. That is financially unsustainable and needs to be changed.

The temporary contracts introduced during the pandemic are blunting operators’ abilities to attract passengers back, with such contracts making the railway effectively quasi-nationalised, with operators’ hands tied. The Department for Transport has never been so involved in the running of the railways, not even in the British Rail days. The operator of last resort now commands four former franchises, as well as a rolling stock company. Those services are afforded significant freedoms in comparison with normal franchises, and they compete with open-access operators on full revenue risk.

Then there are the Department for Transport-contracted operators, which are on a quasi-nationalised contract with their hands tied and must look to DFT officials to get the most basic things approved. There is also an unacceptable lack of transparency around OLR funding, which ensures that organisations are not operating on a level playing field. The OLR has stated that it

“maintains constant readiness to take responsibility for other train companies…as required”, but we must implement the reforms required to ensure that that is not necessary. The last thing we need is nationalisation by stealth.

I reiterate that we have a broken rail model with unsustainable finances and restrictive contracts. Further to that, we have industrial action on certain routes, with the public left feeling frustrated and rightly demanding improvement. What is to be done? The nationalised models are supposedly a panacea, where high-quality trains run at cost price for the greater good, never cancelled or delayed, and tying together communities that would otherwise rely on gas-guzzling cars to keep connected.

So we are told, but the reality is the opposite. Bean counters at the Treasury keep a hawkish eye on operations. Their chief concern is the revenue produced by the network. At the first sign of difficulty, revenue has flatlined at around 85% of pre-pandemic levels. Remember: they order the Department for Transport to make savings. They, in turn, have little option but to cut services, staff and customer benefits. This further reduces revenue, compounding the problem, which then spirals out of control. If hon. Members do not believe me, they need only look at a real-world example, not from some far-flung socialist country but from here in the UK. What was the result of British Rail’s reign over our railways? Huge operating deficits, lines starved of investment, and dire need of modernisation, culminating in the Beeching cuts of the 1960s. I fully accept that privatisation is not entirely perfect, but I will not take lectures from the Opposition about the fairy tale of nationalisation.

Photo of John Penrose John Penrose Conservative, Weston-Super-Mare

The other thing everybody hated about British Rail was that it was monumentally disliked by its staff. Staff morale was at rock bottom and industrial relations were not great. It was not a worker’s paradise either, even while it was awful for customers.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I entirely agree.

I concede that even under the current system, the separation of cost and revenue across two departments creates perverse incentives. No business that wanted to grow would structure itself in that way. Only with major reform can we break a cycle of decline.

I hope we can agree that the solution will utilise a public-private partnership to bring train and track back together and provide strategic leadership of the railways. The Conservatives, the Labour party and the Liberal Democrats have all identified the need for a body to oversee track and train, and the rail industry has long called for a guiding mind to co-ordinate the network. That is why the Government are creating Great British Railways, which will be responsible for both track and train, as well as revenue and cost.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

My hon. Friend’s analysis of what the Government are creating is correct, in that it would be very good if Great British Railways were to be the guiding mind. The trouble is that it looks as though there will be centralised control of the system, driving out private sector initiative, driving out investment and underpinning the underperformance of Network Rail, to which at least 78% of the current delays on our railways are directly attributable.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

My hon. Friend the former Minister identifies some of the downsides, although, as I mentioned earlier, there is no perfect solution. My next sentence was going to be that creating a big, monolithic public body will not solve all the problems unless there is a mix of public and private working together. The private sector has more than doubled passenger numbers in the past two decades, has increased services by more than a third since 1997, and has increased jobs by 27% since 2011. The private sector must have a role.

I recognise that the private sector has not got it all right. There are significant concerns today around particular services linked to industrial action and rest-day working agreements. I was a keen advocate for TransPennine Express to lose its franchise and for the service to be taken under the wing of the OLR until a new private operator could be found. But colleagues across the House must look to pragmatic solutions to fix the railways, with the private and public sector working together. We need to create a market in which the private sector can deliver for customers. We need to let customer-facing operators act in the interests of the customer, not constantly seek permission from the centre. That is not an ideological argument, but one based on reality: command and control from the centre is not helping the sector to bounce back after the pandemic. If we get the balance right, a public-private partnership will enable operators to deliver for customers.

As chair of the all-party parliamentary group for rail, I hear from all manner of stakeholders in the rail sector, including operators, trade associations, those involved in the supply chains, community action groups, industry journalists and, of course, passengers. It is clear that the vast majority agree that legislation is required to make the public body a legal entity and give it the powers necessary to be truly effective. In November 2019, the all-party group published a report, “Rail Reform: A Guiding Mind”, which called for a similar body. The report was presented to the then Rail Minister. I recognise that the next parliamentary Session will be tight, but a Bill to establish GBR would be relatively thin and ought not to be controversial. I urge the Minister to lobby within his Department to ensure that a Bill appears in the King’s Speech.

Having said that, and without wanting to give the Minister the impression that anything other than a Bill is the preferable way of underpinning the long-term success of the railways, some important reforms can be done in the meantime without legislation. The national rail contracts are one of the last vestiges of the pandemic. They were right in a crisis, but now they need to evolve to provide operators with more flexibility to use their commercial nous and attract customers back. That would restore some financial sustainability and allow the Government to spend more on other priorities.

The independent economic expert body Oxera estimates that the Treasury is missing out on as much as £1.6 billion over two years because of restrictive contracts for operators. That reduces operators’ ability to drive the recovery of passenger numbers. Money is also being lost through the lack of ticket checks on board. Many commuters will be aware of journeys on which their tickets are checked once in a blue moon. That means they could travel for free, knowing that if they did happen to be caught, the savings they would have built up would vastly outweigh any fines they might have to pay. However, at present there is no incentive for rail operators to ensure the collection of fares.

Beyond reforms to the current National Rail contracts, we must look ahead to the end state, as envisioned by Keith Williams, and the passenger service contract, which must be flexible enough to reflect the varying rail market. The public instinctively understand that when they book a flight earlier, the ticket should be cheaper than if they were buying it closer to when they travel. That approach needs to apply to longer-distance rail journeys.

For shorter commuter journeys, we need to introduce more turn-up-and-go services with tap-in, tap-out technology and some degree of flexibility for operators to entice customers on quieter days. I was delighted that in the George Bradshaw address, the Secretary of State signalled that this anti-one-size-fits-all approach is being adopted for future contracts. As a key principle, the future passenger service contracts should be developed to reflect the geography and markets that they serve. They should incentivise operators to use all their creativity and capability to deliver the best possible outcomes for taxpayers by growing revenues and reducing costs.

The Government also need to drive forward fares reform, which the public rightly and understandably care greatly about. Why has it been 18 months since the Government announced the tender for the consolidated online retail solution to deliver radical and long-awaited fares reform? Can we get on and start the tender process? As the Minister knows, it does not need legislation. The prior information notice for CORS was published in December 2021.

The Government have announced one measure relating to fares: a single-leg pricing trial extension on LNER. That is something that should be rolled out more widely to private sector operators. The use of single-leg pricing removes the anomaly of some single tickets being almost as expensive as a return ticket. It means passengers can more easily choose when to travel in the knowledge that the fare offers value for money. For example, if someone commutes in at peak-time in the morning, but then attends an event after work and comes back off-peak, why should they pay for a peak-time return? This is a good step forward that ought to be utilised more widely.

Moving on to freight, I had the pleasure of hosting a cross-party parliamentary reception on this issue in March. Freight makes sense for the environment and the economy. The longest freight trains can ease road congestion by removing up to 129 heavy goods vehicles from the road. If the Government set an ambitious target to treble rail freight by 2050, the sector would deliver nearly £5.2 billion in economic benefits as a minimum. The freight sector would flourish by setting a supportive policy environment and also by opening the east-west freight corridor, which, as I have pointed out on numerous occasions, would be beneficial to industry and the development of the Humber freeport, and would take a significant number of HGVs off the M62.

I want to highlight the Luxembourg rail protocol, which is making progress internationally and is expected to come into force towards the end of the year. However, the UK is yet to ratify it. There has been extensive engagement with the DFT and the Great British Railways transition team, with the DFT including it as part of a consultation last year. Will the Minister confirm today the Government’s position on the protocol? Is he still supportive in principle, and when will the Department issue a response to the consultation? Is there a particular legislative vehicle envisaged to see it implemented? Those involved in the protocol from the UK perspective would appreciate clarification.

The rail model is broken, and both legislative and non-legislative reform is crucial. Misdiagnosing the problem will not make it any better; it will make it worse. Over-centralisation is not in the interests of passengers, the economy or the environment. All parties have identified the need for a public body, but it is important to get the design right and ensure that the private sector is allowed to do what it does best with the package of reform I have outlined today. Along with much-needed changes to ticketing and fares, the Government can deliver rapid and much-needed improvements for passengers, trade customers and the taxpayer.

I know the Minister would be disappointed if I did not raise a couple of local issues, which I have spoken to him about on many occasions. One such issue is the return of the direct train service from Cleethorpes to London King’s Cross. Perhaps he could update us on that. Another issue, which I have not raised with him previously, but perhaps he could look into for me, is that for the past 30 years there has been a Saturday-only train from Sheffield via Gainsborough and Brigg to Cleethorpes, with three trains each way. A few weeks ago, Northern announced that it would make that a daily service, which on the face of it is welcome, but it appears to be more for the convenience of the operator than the passengers, because the one train to Cleethorpes arrives at 11.14 am and the return train is at 1.20 pm. An hour and a half in Cleethorpes is simply not good enough; people need at least a week there to enjoy all the facilities. More seriously, one train arriving mid-morning with a return train at, say, 6 pm would be sensible, but allowing people 90 minutes in Cleethorpes or Grimsby is not ideal if they want to do some shopping.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

I will move to the wind-ups at 5.9 pm.

Photo of Iain Stewart Iain Stewart Chair, Transport Committee, Chair, Transport Committee 4:49, 14 June 2023

It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate my hon. Friend Martin Vickers on securing this timely debate. I concur with much of what he said. The desirability of the amount of time to spend in Cleethorpes I will leave to him to determine, but otherwise it was a powerful speech. He referenced the Bradshaw lecture that the Secretary of State for Transport, my right hon. Friend Mr Harper, delivered a few months ago. That was very well received and warmly applauded by the industry as a direction of travel from, not the paralysis, but the uncertainty that the covid period delivered. That appreciation has waned and has been replaced by a deep concern that what is happening with GBR is starting to drift.

There is a strong call for the legislation to be included in Parliament’s next Session. I understand that the Bill is drafted and has been consulted on. It is a small Bill, so it could be introduced fairly quickly, however as a former Government Whip and Minister I know that it is not necessarily in the gift of the DFT to set the legislative slots, and that all sorts of considerations must be taken into account. I urge the Minister to argue as strongly as he can for that Bill to be included, because it would provide the certainty that we need.

In the absence of that legislation, there is a lot that could be done to give reassurance and certainty to the industry. As my hon. Friend the Member for Cleethorpes has pointed out, there are simply too many decisions that have to be made by the DFT and the Secretary of State himself on the day-to-day operations of the railways and that they should not be making. That level of command and control is not conducive to developing the railway. The single biggest problem, as has been identified, is this split of responsibility between cost and revenue, with the Department for Transport responsible for cost and the Treasury getting the revenue. No business would operate that way, and it has to be ended as quickly as possible.

Industry needs certainty to invest for the long term. That applies not just to the operators, but also the supply chain for engineering and procurement—all the different parts of industry need certainty. They also need the flexibility to respond to post-pandemic patterns of travel, which have not settled down. I do not think that the business world has yet settled on a final mix of home and office working. Just in the last couple of weeks, we heard Google urging more and more of its employees back into work. We will probably not get back to the traditional levels of commuting into the office in the morning and the going home peak in the evening, but the industry needs to have agility to respond to the changing demands.

What can be done in the interim, in the absence of legislation? I strongly urge the Minister to look at the suggestion made recently by Nigel Harris, editor of Rail Magazine, that GBR could be set up in shadow form, in the same way the Strategic Rail Authority was set up back in 2000. It could do work such as developing new passenger service contracts itself, with the Secretary of State only coming in to do the legal bit—the signing—and then it can proceed. I think that is worthy of consideration. Similarly, it could progress with the ticketing reform that is much overdue. It is a thorny issue, because as soon as we reform something we create winners and losers in that model, but it is long overdue. I am not just looking at ticketing reform within rail itself, but rail as part of the wider transport ticketing strategy, so that multimodal tickets can be more easily introduced.

GBR must also not become a heavy command and control body. It has to be the guiding mind, but in a light-touch way. It needs to work with the sub-national transport bodies, the mayoral combined authorities and others so that there is flexibility geographically as well as in the types of service. There is not a plan B. For this work to happen in the absence of legislation, there needs to be a will in DFT and more widely in Government, at both ministerial and official levels. There is an appetite there. I met recently with Lord Hendy and others from the GBR transition team. They want to get on with the work, and they can do it, so I hope the Minister can give me some assurance that that work will progress and the industry can get the certainty it needs.

Photo of Chris Loder Chris Loder Conservative, West Dorset 4:55, 14 June 2023

It is a pleasure to take part in this debate; I congratulate my hon. Friend Martin Vickers on it. I am delighted to follow the chairman of the Select Committee, my hon. Friend Iain Stewart, and I am even more delighted to have the Minister here, so that we can have this discussion.

The Great British Railways initiative emanated from what was nothing short of a timetable disaster in May 2018. It affected large parts of the country significantly, and it led my right hon. Friend Chris Grayling to take that first step and say, “Actually, this does not work. This system does not click together, and it needs proper reform.” Of course, that led to the Williams review. If I recall, that piece of work commenced at the beginning of 2019, and we are now four years on. Admittedly, we have had covid in the middle, which has made things more difficult, but the progress has been unclear.

In the Bradshaw lecture mentioned by the Chair of the Transport Committee, the Secretary of State described the railway system as broken, and I agree with him. There are many reasons why it has become so fractious. We have allowed the trade unions to have much more influence than they should have. During covid, trade unions told train companies they would not allow the training of train drivers. That generated a deficit in the manpower requirement, and it meant that many train companies—including TransPennine Express, I suspect, and many others—have to cope with fewer train drivers than they require, and therefore have a requirement on overtime. That has meant that the influence and power was with the trade unions, particularly the train drivers’ union. We know that that is the case even today.

Having been a member of the Transport Committee since 2020—indeed, under the then chairmanship of the Minister—we have had much debate and discussion about this with successive Ministers, commencing in May 2021, March 2022 and October 2022, and with senior officials, including the permanent secretary. We have got to a place where the industry, as well as the passenger and taxpayer, now needs to see real progress on what can and will happen to improve our railways rapidly. We have talked a little this afternoon about the need for legislation. That is one way, but—not to be too sceptical—I do not think we will see the legislation immediately. Even if we did, with the timescales we have to contend with before the end of this Parliament, its impact would be limited.

I will focus my remaining remarks on what is actually feasible to do, rather than being concerned too much with what is unfeasible or unlikely to take place in what remains of this Parliament. We know very well that the DFT is able to specify the core timetable that operators run today. That is part of the contractual arrangements. I am a huge advocate of releasing some of that specification to allow the private sector to bring back to our railways the innovation and commercial capabilities that we have seen previously. We see it currently; I recall reviewing the statement by FirstGroup that its open-access operations, such as Hull Trains and Lumo, have performed very well. I am a huge advocate of enabling that to happen because my great concern, as someone who worked in the railways for 20 years before I was elected to this place, is the enormous uncertainty in this huge industry, which affects both the economy and the passenger experience.

In my own constituency, I have two operators, South Western Railway and Great Western Railway, both of which have had extended management contracts from the Department to deliver train services. It is of great regret to me and my colleagues locally that there was no consultation about the needs of the community when those contracts were leased. When the current contracts come to an end—if it is in this Parliament—I hope we might have that discussion.

However, in the absence of that consultation, I have an ask for the Minister to consider. Once upon a time, we ran summer Saturday trains, as my hon. Friend the Member for Cleethorpes mentioned, from the Salisbury-Sherborne-Yeovil line down to Weymouth. That service was removed without consultation, and I would be very appreciative if the Minister would ask his Department to consider putting it in the service specification for South Western Railway.

The county town of Dorset—Dorchester—has suffered terribly over the last two or three years. The whole county has been cut off from London on numerous occasions for a number of reasons, whether it was covid or otherwise. The journey time to London from Dorchester is almost three hours; if I recall correctly, it used to be two hours and 15 minutes in years past. I would very much appreciate it if my hon. Friend the Minister would consider such improvements to the railway and ask Network Rail to consider them.

Photo of Jack Brereton Jack Brereton Conservative, Stoke-on-Trent South 5:01, 14 June 2023

It is a pleasure to speak with you in the Chair, Ms Fovargue, and I congratulate my hon. Friend Martin Vickers on securing this much-needed debate. It is also a pleasure to follow my hon. Friend Chris Loder.

I very much supported the enthusiasm of the former Secretary of State for Transport, my right hon. Friend Grant Shapps, when he launched the Williams-Shapps plan. I particularly supported the commitment to ensure that we saw a reversal of some of the damage done by the Beeching mindset. That was why I was somewhat concerned that a Beeching-esque mindset could see some revival under William-Shapps, although it is not inevitable that that will happen.

The Beeching mindset is that where there is a bus, there is no need for a train, and that where there is a train, there is no need for another train in competition. Beeching called competition duplication, as though a competing service and consumer choice were redundant or inefficient. He was wrong, and the nationalised railway continued to decline. However, thanks to privatisation, we have seen competition return, and record numbers of passengers with it. For example, Birmingham New Street to London Euston faces excellent competition from Moor Street to Marylebone, which has helped to keep fares low on those routes, while other places—such as Stoke, unfortunately—face disproportionately higher fares. On the road, there is also the National Express service from Digbeth to Victoria and of course the soon-to-open service from Curzon Street to Euston or at least Old Oak Common.

That is competition, convenience and choice, not duplication; it puts passengers first, and we need more of it. As my hon. Friend the Member for Cleethorpes said, it is noticeable that, where we have seen more effective competition, with open access on the east coast, performance has been better and fares have remained more competitive. Unfortunately, following the pandemic all risk and reward now rests with the Government. With our railways put on life support, they are more nationalised than ever before, with zero incentive for operators to grow revenues or deliver for passengers.

Our railways are facing an acute revenue crisis, but not really a passenger numbers crisis. The Office of Rail and Road’s estimate of 1.4 billion journeys for the financial year 2022-23 is historically high—it is not back to the 2018-19 peak but, mainly due to increased leisure travel, it is well above 2010 levels, and it has increased to where it has been for all but half a dozen years in the post-war era.

Season ticket sales unfortunately plummeted with lockdown and have not recovered. People who previously would have travelled at peak times, paying the highest fares for business meetings, now find it far more convenient to move to Zoom or Teams. It is good, then, to see operators such as East Midlands Railway introducing a new form of season ticket that allows eight days of travel within a four-week period. I just wish that EMR would restore all the services it cut during the pandemic, particularly on its route through Stoke-on-Trent, and add more to serve revived passenger numbers, which, on EMR, are now at 101% of pre-pandemic levels. There is certainly a demand that is not being effectively met by the barely hourly service throughout the week between Crewe and Derby, with only an afternoon service on a Sunday.

Across the national network, the latest quarterly figures, published last week, show that passenger numbers are 88% of what they were in the same pre-pandemic quarter four years ago, but revenue is only 70%. The rail plan needs to inspire innovation and incentivise operators to win back fares. It also means our railways need to up their game in winning an increased number of lucrative freight contracts.

When it comes to the make-up of GBR, there must be the flexibility for operators to provide services over and above the contracted minimum in response to consumer demand. It would be a mistake for the whole timetable to be decided centrally and inflexibly by the Department in London. As my hon. Friend Stephen Hammond said, we cannot just see a transfer of all the bad practice and cultural problems we have seen in Network Rail. The headquartering of GBR in Derby is therefore welcome, as is the commitment in the plan for more regionalised management. We must see a much lighter-touch and decentralised GBR that allows the needs of local economies and communities to be properly reflected.

However, those regions must be got right. Currently, Stoke-on-Trent endures being split over two Network Rail areas, in a farce that has forced us to seek intervention from the ORR and No. 10 to compel Network Rail to engage with the transforming cities fund projects as a single organisation and to stop dragging its heels over the TCF infrastructure works that had already been agreed. Even now, I await the unacceptably overdue progress on improving access to Longton station in my constituency. At the very least, having GBR in Derby would put it on the same line as Longton—the Crewe to Derby line—which would hopefully focus minds on improving services in stations through north Staffordshire, including reopening a station in Meir, in my constituency. Indeed, it would be a great commuter base for GBR staff working in Derby, adding urgency to getting the TCF programme delivered.

GBR will need to make serious studies of the Crewe to Derby route and the impact of High Speed 2. Unfortunately, current designs for Crewe threaten to take away capacity for local trains rather than opening up the promised capacity for more local trains. More capacity was supposed to be the rationale for the whole upheaval that HS2 is causing. What is the point of having HS2 services that no one can get to or use if local and regional services are completely hollowed out as a result? We should use the pause of phase 2 to look again at whether money could be far better invested in upgrading existing rail infrastructure to better provide the enhanced connectivity that is needed.

In conclusion, delivering the rail plan urgently requires more detail of what the plan actually is. It needs opportunities for open access to be prioritised. It needs to enable tangible benefits for passengers and to bring back the intangible glamour of rail travel that helped make it the preferred mode of transport, adding to revenue by adding consumer value. The focus has to be more competitive services to drive up standards for passengers, support economic growth and put our railways on a much more stable footing for the long term.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport) 5:09, 14 June 2023

It is a pleasure to see you in the Chair, Ms Fovargue. I congratulate Martin Vickers on securing this debate. We have heard from colleagues, and indeed a former colleague, on the Transport Committee. I agreed with much of what they said, but not necessarily the conclusions they drew.

We are two years on from the publication of the Williams review, and in that two years we have seen any prospect of high-speed rail serving north of Manchester removed completely. Even the remaining parts of HS2, when opened, will now terminate near Wormwood Scrubs rather than travel into central London to Euston. That is a boon for prison visiting, but hardly useful for connecting to the centre of the city, which was one of the original points of HS2.

Cities such as Leeds and Bradford have been kicked off the HS2 map and offered trams in return. Like Scotland, they will be stuck at the end of what, in high-speed rail terms, will be branch lines. Even the crown jewel in the review—the formation of GBR—has been kicked into the long grass, as if the Government here have an exhaustive and time-consuming legislative programme to get through in this place, and days were not collapsing early, which we frequently have.

Answers to my written questions published this week show that £64 million has been spent over the last two years on the GBR transition. If GBR is being mothballed until after the election—if there is a change of Government, we will be looking at long after that for any action—those costs will continue to accrue and we will be left with a bill into the hundreds of millions for an organisation that, essentially, or officially, does not exist.

The former Secretary of State intervened at the last minute to slap his name on the front of the report. Given that he is now firmly in the sidings and stuck with no route in sight, I wonder whether he regrets his burst of self-publicity, although I think we all know the answer to that. It has been left to his successors to pick up the pieces and make the case for the review and its recommendations, but No. 10 and the Chancellor are clearly not listening, because by their actions—and inaction—they are showing just how low down rail and transport more generally is on their list of priorities. I feel for the Minister because his Department is being targeted by the Treasury for swingeing cuts. The Williams review called for a 30-year strategy for the rail network, but that simply cannot happen when the Treasury sees transport as an easy target for cuts.

Williams ruled out public ownership and public control, yet as we have seen with ScotRail and the Caledonian Sleeper, the Scottish Government disagree. The UK Government insist that the private sector railway works efficiently, but it clearly does not. The review said:

“Simplification is more important than nationalisation”, but while the rest of the UK continues to have passenger services under private operation, that simplification cannot happen. Those who receive the new passenger service contracts envisaged by Williams will still extract profit from the system, and the profit will still come from the public one way or another, whether it is from unregulated fares or direct via the DFT contracts. It is not simplification; it is just a tweaked continuation of the present system.

Scotland was the last part of the UK to see its railways privatised and the first to bring them back under full public control. We have heard many times in recent years that Scotland’s railway and the partnership between ScotRail and Network Rail in Scotland has provided much of the template for the GBR operation—if indeed it comes to pass. However, the semi-integration of track and train is despite Westminster, not because of it. Transport Scotland and the Scottish Government are, as per, trying to operate with one arm tied behind their back, with the operator being fully devolved but the track and infrastructure network still reserved.

What is needed now to complete the integration in Scotland is for Network Rail to be brought under the control of the Scottish Parliament, with a Government that are committed to rail in the long term, regardless of the mindset of the Treasury. That is in part being driven by the target to decarbonise Scotland’s railway by 2035—a target that we are well on the way to meeting, showing how a Scottish Government with control over services are marrying their policy objectives with that of the railway.

Thirty years after the Railways Act 1993, which began the privatisation of the system, we are still seeing the same mistakes repeated and the same political ideology standing in the way of a real plan for our rail network over the next 30 years. The truth is that, while Williams-Shapps may have offered the possibility of a sea change on the network down south, we are now likely to see its demise by a thousand cuts, with its core ideal delayed for who knows how many years.

To conclude, we have GBR on the back burner, possibly indefinitely; HS2 curtailed; the north of England bearing the brunt of cuts yet again; a Treasury on the warpath ahead of any election promises; and no end to the fragmentation and profit-driven structure that has demonstrably failed over the decades. It is time the Government went back to the drawing board, looked again at Williams’s integrated rail plan and their 13-year track record of cuts and more cuts to improvement programmes—cuts that never seem to affect Greater London to the same extent as they affect everywhere else—and started building a railway fit for the future, rather than patching up the work of the great engineers of the Victorian era who built our railways.

Photo of Tan Dhesi Tan Dhesi Shadow Minister (Transport) 5:15, 14 June 2023

It is a pleasure to serve once again under your chairship, Ms Fovargue. I am grateful to Martin Vickers for securing this important debate on the future of our railways. He eloquently explained that the status quo is not working: fares are high, services are not running, and passengers are not happy. The rail model is broken.

Whenever someone puts their name to something and is then no longer there to lead it, the project is usually destined for failure, as was the case when the then Transport Secretary, Grant Shapps, decided to append his name to the long-awaited Williams review, calling it the Williams-Shapps review, and was then unceremoniously moved out of office to be replaced by another Transport Secretary. I knew straightaway that the review was doomed to be discarded and dumped, which is the situation we now find ourselves in.

It has been two years since the Williams-Shapps plan for rail was published, promising the biggest shake-up of our railways in three decades. We certainly have seen a shake-up, including three Prime Ministers and as many Transport Secretaries, two failing train operating companies put under the operator of last resort, endless strikes, and nearly one in 20 services cancelled in the third quarter of 2022-23. As Gavin Newlands remarked, the Government are ideologically opposed to taking rail back into public ownership, as the Labour party has proposed. Great British Railways was hailed by the Government as the solution—a guiding mind with clear, central accountability. That means nothing if the status quo remains and progress continues to stall.

As Chris Loder explained, the path ahead of us is unclear. There is enormous uncertainty in an enormous industry. If Great British Railways is the Government’s flagship rail policy, it has certainly run aground. As explained by the Chair of the Transport Committee, Iain Stewart, there is Government drift on GBR, especially on the legislation. Just a few weeks ago, it was reported that officials were told that it would not be a priority and would not appear in the King’s Speech. GBR has been taken out of the transport Bill, and it may have only a fraction of the powers first proposed. A new headquarters has been announced amid much fanfare and videos produced at taxpayers’ expense, but concrete proposals for it are nowhere to be seen.

I look forward to the Minister providing some clarity. Perhaps he can tell us whether the Government even remain committed to delivering Great British Railways in full. If they are, will he use this opportunity to outline exactly what non-legislative steps will be taken by his Department to move forward with Great British Railways, and when? It cannot become an expensive vanity project, with taxpayers footing the bill. They have spent £50 million and counting on the transition team, and £20 million on consultants alone.

Worse still, the Government forced local authorities into a protracted competition for the opportunity to host Great British Railways’ headquarters, on a promise that it would bring jobs and opportunities. Now, after spending its precious time and resources, Derby is stuck in limbo—a fitting metaphor for the Government, who cannot help but over-promise and under-deliver. I urge the Government to get on with it. As Jack Brereton highlighted, the Government must stop dragging their heels, but they have been too busy lurching from crisis to crisis, while rail operators’ poor performance has gone unpunished or, even worse, been rewarded. In April, the Transport Secretary authorised a £65 million reward payout for First Group, the company that ran two of the worst-performing operators last year. It is absolutely absurd. Passengers deserve better.

We have years of missing annual updates on the rail network enhancements pipeline, which is vital to industry stakeholders. We have had consistent industrial action, which Ministers admit is costing much more than if they had agreed the pay rises for rail workers. We were promised simpler fares; instead, we get a 5.9% increase. We were promised net zero; instead, we got only 2.2 km of rail electrification in 2022. We were promised centralised timetabling; instead, we got service reductions and cancellations. We were promised devolution; instead, we got disparity, with the north left in the lurch.

Our railways are on a downward turn, despite journeys returning to pre-pandemic levels. Passengers and the industry feel as though they have been abandoned. Unity, vision, leadership—that is what our railways need, and what stakeholders and passengers want, not this broken system under this broken Government.

Photo of Huw Merriman Huw Merriman Minister of State (Department for Transport) 5:20, 14 June 2023

It is a pleasure to serve under your chairship, Ms Fovargue, and to reply to this debate secured by my hon. Friend Martin Vickers. I thank him for his work as chair of the all-party group for rail.

Given my former role as Chair of the Transport Committee, it is also a pleasure to be surrounded by former Committee colleagues, including the shadow Rail Minister, Mr Dhesi, who cannot stand to be Chair. We also have two former Transport Ministers. I welcome all continued liaison with the Transport Committee—a great Committee with great members.

In his Bradshaw address in February, the Transport Secretary set out his vision for rail: a customer-focused, commercially-led industry with Great British Railways as the guiding mind for the sector. I welcome the supportive comments of my hon. Friend the Member for Cleethorpes about the Bradshaw address and the need for a guiding mind. I agree and, to answer my shadow, we still support it and will still deliver it.

The case for rail transformation is now stronger than ever. As many have said in the debate, the railways are not delivering the services that customers deserve. The industry remains fragmented, which limits effective decision making. The existing commercial model is not sustainable, with the cost to the taxpayer remaining too high, and the structure does not provide adequate opportunity for private sector investment or initiative. Like my hon. Friends, I fully support the private sector in what it does and what it has done in the past; we need it now more than ever, following the pandemic and the reduction in passenger numbers. We need to put customers at the heart of what we do.

By establishing Great British Railways, we will enable a single guiding mind to co-ordinate the network, bringing infrastructure and operational decisions together, and planning coherently for the future with robust levers of accountability. It will develop local partnerships to bring decision making closer to the communities that the railways serve. Importantly, Great British Railways will enhance the role of the private sector, developing a new commercial model that focuses on operators competing to deliver high-quality, punctual services and excellent customer service.

New passenger service contracts will balance the right performance incentives with simple, commercially-driven contracts. Those will not be one size fits all. I want the private sector to play its part in reinvigorating the rail sector, driving innovation and attracting customers to rail. We are now working with industry on how we can introduce more private sector risk and reward into existing contracts.

On the points made by my hon. Friend the Member for Cleethorpes about open access, I too want to see more open access where it benefits passengers and taxpayers, with a more level playing field in track charging. As part of rail reform, we want more competition to drive up quality and choice. We look forward to working with existing open access operators, as well as new entrants to the market such as Grand Union Trains, which will shortly introduce new services between London and Carmarthen, to maximise benefits for passengers. Legislation is needed to take forward some of the structural elements of reform, but we will ensure that customers feel the benefits as soon as possible, ahead of the introduction of such legislation.

My hon. Friend mentioned the Luxembourg rail protocol. The Government signed it in 2016 and remain committed to unlocking the benefits of greater private sector financing of rolling stock, which the protocol aims to support. The Government intend to implement the protocol, and we will continue to explore all suitable legislative opportunities to do so.

Let me turn to the point made by my hon. Friend the Member for Cleethorpes about lowering barriers to entry to create a more competitive retail market. As set out in the plan for rail, we recognise that there is a multitude of train company websites with different standards of service, which is confusing to passengers. We are looking and working closely with industry partners to review the best way to address that. Reform is not something that can be completed overnight, but delivery is well under way. We have launched national flexi-season tickets, as mentioned by my hon. Friend Jack Brereton, and over 700,000 have been sold since launch. We have delivered on our commitment to extend single-leg pricing to the rest of the LNER network from 11 June. That delivers simpler, more flexible tickets that are better value. In March, we announced Derby as the winner of the GBR HQ competition.

The accessibility audit of all 2,572 railway stations in Great Britain is complete and work is under way to ensure that data is kept up to date and made available to the public. In response to the points on rail freight, the rail freight growth target call for evidence will be published shortly, and we remain committed to introducing a long-term rail freight growth target towards the end of this year.

The transition team at Great British Railways has analysed hundreds of responses to the first-ever long-term strategy for rail call for evidence. The plan will be published later this year. In response to the complex rules and industry processes, the Great British Railways transition team, with the support of the Office of Rail and Road, will identify and recommend such rules and what can be done.

We continue to press ahead to deliver reforms and tangible benefits, including publishing the Department’s response to the rail reform legislation consultation this summer, taking forward workforce reform, developing the new commercial model, and continuing to simplify fares and roll out pay-as-you-go ticketing, ahead of legislation. I was asked many questions about legislation in the debate; I can only say that we will deliver legislation when parliamentary time allows. Such decisions are made collectively across Government and can be confirmed only during the King’s Speech in autumn.

I heard the call from my hon. Friend Iain Stewart, Chair of the Transport Committee; Nigel Harris is indeed an influential figure who has a lot of good ideas. With regard to the suggestion of a shadow body, I am working with my Department—I had meetings in the last week—to try to escalate and set up more of the teams, so that rather than waiting for matters to be transitioned over, they can take those matters and come up with ideas. I am not saying that our idea is exactly the same as the one put forward, but we are looking to create the very same culture. My hon. Friend is absolutely right: so much can be done without legislation, and so much is being done. Since the end of last year, I have met weekly with the team that is transitioning everything to Great British Railways to ensure that whatever can move without legislation does move. The reality is that this change project is more about getting the change delivered than, ultimately, about legislation; legislation delivers paper and powers—it does not actually deliver the change, which is what I am working on.

To the point made by my shadow, the hon. Member for Slough, it is deeply regrettable that today ASLEF has balloted its members to continue strike action. It has balloted to ask for a continuation of strikes, but it has not asked its members whether they would like to take up the fair and reasonable pay offer put forward by industry, which would take average pay from £60,000 to £65,000 for a 35-hour week. That is on the table, but it is not being put to members. We remain committed to that offer, but we ask the unions to do their part and ask their members to give their view on it. I hope that the hon. Member would join me in welcoming that stance, which could bring an end to strikes rather than seeing the unions continue to put this country and rail passengers through absolute misery.

To conclude, nationalisation is not the answer. We need simplification and modernisation. I agree with my hon. Friend the Member for Cleethorpes: privatisation has been a success story. The new model will take the very best of the private sector—innovation, an unrelenting focus on quality and outstanding customer service—and fuse it with a single guiding mind to drive benefits and efficiencies across the system as a whole. I look forward to working with all my colleagues across the House to make this reform work.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes 5:29, 14 June 2023

I think it is fair to say that it has been a lively debate, with contributions from many colleagues. That shows how rail issues always arouse the passions of hon. Members. In contributing, they highlight the interests of their constituents. It has been a helpful debate. I thank the Minister for his response, which I think continues the debate. I hope that as we move forward, the guiding mind, which of course is the Minister, will produce some results.

Question put and agreed to.

Resolved,

That this House
has considered progress on delivering the Williams-Shapps Plan for Rail.

Sitting adjourned.