Railways Bill

Public Bill Committee, 5 February 2026.

Matt Western (Labour, Warwick and Leamington)

We are now sitting in public and the proceedings are being broadcast. I remind Members to switch any electronic devices off or to silent. Tea and coffee are not allowed during the sittings. The selection and grouping document shows the way in which the amendments and new clauses have been arranged for debate. Any Divisions on amendments or new clauses take place in the order in which they appear in the amendment paper.

Clause 59 - Access and use policy

Rebecca Smith (Conservative, South West Devon)

I beg to move amendment 79, in clause 59, page 33, line 19, at end insert

“in addition to a subsequent right to appeal to the ORR”.

This amendment would enable a subsequent right of appeal to the ORR after going through the dispute resolution process.

Matt Western (Labour, Warwick and Leamington)

With this it will be convenient to discuss the following:

Amendment 217, in clause 59, page 33, line 30, at end insert—

“(3A) Great British Railways’ policy about, and procedures for, access to and the use of GBR infrastructure for the operation of trains, must be best calculated—

(a) to promote improvements in railway service performance;

(b) otherwise to protect the interests of users of railway services;

(c) to promote the use of the railway network in Great Britain for the carriage of passengers and goods, and the development of that railway network, to the greatest extent that it considers economically practicable;

(d) to contribute to the development of an integrated system of transport of passengers and goods;

(e) to contribute to the achievement of sustainable development;

(f) to promote efficiency and economy on the part of persons providing railway services;

(g) to promote competition in the provision of railway services for the benefit of users of railway services;

(h) to promote measures designed to facilitate the making by passengers of journeys which involve use of the services of more than one passenger service operator;

(i) to impose on the operators of railway services the minimum restrictions which are consistent with the performance of its functions under this Part; or the Railways Act 2005 that are not safety functions;

(j) to enable persons providing railway services to plan the future of their businesses with a reasonable degree of assurance.

(3B) Without prejudice to the generality of subsection (3A) above, Great British Railways shall have a duty, in particular, to exercise the functions assigned or transferred to it under or by virtue of this Part, or the Railways Act 2005 that are not safety functions in the manner which it considers is best calculated to protect—

(a) the interests of users and potential users of services for the carriage of passengers by railway provided by a private sector operator otherwise than under a franchise agreement, in respect of—

(i) the prices charged for travel by means of those services, and

(ii) the quality of the service provided; and

(b) the interests of persons providing services for the carriage of passengers or goods by railway in their use of any railway facilities which are for the time being vested in a private sector operator, in respect of—

(i) the prices charged for such use; and

(ii) the quality of the service provided.

(3C) Great British Railways shall be under a duty in exercising the functions assigned or transferred to it under or by virtue of this Part or the Railways Act 2005 that are not safety functions—

(a) to take into account the need to protect all persons from dangers arising from the operation of railways, and

(b) to have regard to the effect on the environment of activities connected with the provision of railway services.”

This amendment places requirements on Great British Railways to use the access and use policy to promote high quality service and competition.

Amendment 77, in clause 59, page 33, line 37, at end insert—

“(7) Neither the Secretary of State, nor Great British Railways, may take any action to implement any part of the access and use policy until a copy of the policy has been laid before Parliament for a period of three months.”

This amendment would provide that neither the Secretary of State nor Great British Railways, could take any step to implement any part of the access and use policy until it has been laid before Parliament for three months.

Clause stand part.

Amendment 87, in clause 66, page 37, line 32, after “ORR,” insert “open access operators,”.

This amendment would require GBR to consult open access operators on its access and use policy.

Clause 66 stand part.

Rebecca Smith (Conservative, South West Devon)

It is a privilege to work under your chairmanship, Mr Western. I start by conveying the apologies of my hon. Friend the Member for Broadland and Fakenham, who is not able to be present today. Instead, I am standing in on his behalf.

The clause sets out that Great British Railways must issue documents explaining the policies and procedures for access to and use of GBR infrastructure. Policy must cover procedures for applying for access, the criteria that GBR will apply to its decision making, and a procedure for resolving disputes. Subsection (3) permits GBR to set out the terms—that is, the rights and obligations —that a train operator can expect to receive where it has been granted access to GBR infrastructure. Subsection (6) allows a person aggrieved by a provision in the document to appeal to the Office of Rail and Road.

That is crucial information for all open access operators, and yet the Bill has no detail at all. It just makes reference to a future “document or documents”. In our view, that is a totally unacceptable approach, and it leaves the industry in the dark on mission-critical issues. Furthermore, no draft has been published, no direction of travel set out and no assurance given to the sector. We feel that to be a slightly arrogant approach from the Government and not a good sign of the approach that GBR itself will take to the independent sector.

Under the Bill as drafted, GBR can make the application process as one-sided as it likes, favouring its own services over those of other competing operators—in the interests not of passengers, but of GBR. The key issue is that the Government’s approach to the legislation is an assumption that the interests of GBR are synonymous with those of passengers, but we do not believe that that is always the case. Every organisation seeks to remove competition, which is uncomfortable—it exposes failures and weaknesses, and ultimately will show GBR up—but competition is crucial to improve service to customers, because organisations are forced to respond. That is why we believe that it needs to exist.

The Bill gives GBR the power to design out competition to itself, with no checks or balances save what we consider to be a pathetic appeals process, where the Government’s position is that the appellate body should not second-guess the decision of GBR, only errors of law. That is a core problem with the Bill and something that we feel is akin only to what a judicial review can do in other areas.

The clause gives GBR sweeping control over access rules, with very few safeguards. GBR sets both the access criteria and the timetable dispute procedure, so the body compiling the timetable also controls challenges to its own decisions. Subsection (3) makes the publication of access terms optional, allowing for opaque or preferential conditions. Subsection (4) lets GBR change the rules at any time, with no duty to consult. Overall, the clause lacks the transparency and checks promised in the consultation and risks embedding clear conflicts of interest to the disadvantage of non-GBR operators.

Lumo and Hull Trains, in their written evidence to the Select Committee on Transport, stated:

“Maintaining a fair, evidence-based, and independent process for access to the network is fundamental to ensuring continued growth and innovation.”

Under clause 59, however, the access and use policy will be developed and revised by GBR, setting the framework by which new services are assessed and defining the terms under which the ORR will judge appeals. Giving GBR exclusive control over that framework risks creating real or perceived conflicts of interest.

For more than two decades, the independence of access decisions has underpinned rail market growth. The continued involvement of the ORR in assessing applications objectively, balancing passenger, freight and performance needs, is essential to preserving that success. To ensure a transparent and fair access framework that the ORR can meaningfully enforce, it is important that private operators are involved in the development of the access and use policy and that appropriate statutory protections for open access are in place.

Without consultation or clear safeguards, the access and use policy risks becoming a document shaped solely by GBR’s priorities, which would potentially exclude private operators and leave them with no effective mechanism to challenge decisions that affect their ability to operate. A robust and independent access framework will also help to unlock further private sector investment in new services and rolling stock. By maintaining confidence in fair treatment and predictable regulation, the Government can encourage additional capital into the network, supporting the expansion of rail connectivity and the delivery of GBR’s passenger growth targets.

Freight operators currently benefit from statutory protections that recognise their environmental and national importance. Open access services deliver comparable benefits by driving modal shift, reducing emissions and supporting regional economies, and should therefore receive equivalent recommendation. They recommend that the Bill provide statutory protection for open access services, equivalent to that afforded to freight, and ensure that the ORR retains full authority to make access determinations independent of GBR. That would support the Government’s ambition for a network that is accountable, transparent and responsive to passenger demand.

I think that they are right. A core criticism of GBR is that it is a player and, now, the referee at the same time. Everyone must surely see that glaring conflict of interest. If His Majesty’s Government insist on changing the access and use policy to create a non-level playing field through the very tight capacity duty in clause 63, it should, at the very least, have an independent body responsible for applying the access and use policy. That is basic fairness in organisational structure.

We tabled amendment 76, which was not selected. We are not sure why, because it would ensure that the access and use policy would remain with the ORR by removing clause 59. That would mean sticking with the status quo and the existing access and use policy, avoiding the profound conflict of interest that clause 59 creates. If the Government decide to keep clause 59, which I assume they will, amendment 79 would enable a subsequent right of appeal to the ORR after going through the dispute resolution process. That would give open access operators a mechanism by which they could go to an independent regulator where necessary, giving them more assurance that they could survive in a new GBR world. That is a different point to the right of appeal under clause 59(6), which refers to the right to appeal the contents of a document. Amendment 79 requires a right of appeal to be included in the document itself.

Amendment 217 would place requirements on Great British Railways to use the access and use policy to promote high quality service or competition. At the very least, legislation needs to point GBR in the right direction so that other users can hold their decisions to account. The amendment gives such guidance. Without it, all that is left is clause 18, the general duties for GBR, and a bold reference to the public interest. It is inevitable that GBR will consider the public interest and the interests of GBR to be the same thing. The Government must think again on this, because the long-term damage to the wider rail sector will be profound.

Amendment 77 ensures that neither the Secretary of State nor Great British Railways could take any step to implement any part of the access and use policy until it has been laid before Parliament for three months. That ensures that we are not blindly creating law when we have not even seen important documents relating to how that law will work in practice.

Clause 66 lists the bodies that GBR will be required to consult before issuing its access and use documents: the ORR and Scottish and Welsh Ministers. That is it; they are the only ones that have that opportunity by right. There is no requirement to consult freight or other operators that might be affected. We think that that is an extraordinary approach. Amendment 87 addresses the shocking lack of consultation envisaged when GBR creates its crucial access and use policy documents by adding open access operators to the mandatory list.

Keir Mather (Labour, Selby)

Good morning, Mr Western. It is once again a pleasure to serve under your chairship. I thank the hon. Member for South West Devon for these amendments, which all seek to make changes to GBR’s access and use policy.

First, I will provide a brief explanation of what the access and use policy sets out to do. It will set out a clear and consistent process for any operator seeking to run services on GBR’s network. It will therefore provide transparency and certainty for non-GBR operators—such as freight and open access—on the new policy and procedures they will need to engage with when seeking access to GBR’s infrastructure. It will be very similar in concept to the way the ORR publishes access processes and policies today. It will therefore follow a well-known path by which industry can engage with the access process, and like today, this engagement will be underpinned by legislation.

I can reassure hon. Members that the access and use policy is being developed in collaboration with industry. A discussion paper on the initial contents of the policy has already been published. It can be reviewed by hon. Members of this Committee and anyone else who wishes to contribute to its development.

I will turn to amendment 79, which seeks to add an appeals route to the working timetable after the dispute resolution process. I am delighted to start in a place of agreement with the hon. Member for South West Devon because the addition to clause 59 is, in fact, already in the Bill. The Bill provides, first, a mechanism for resolving disputes relating to the working timetable and, secondly, an appeals route to the ORR.

GBR will be required to set a dispute resolution procedure within its access and use policy for applications to be included in the timetable. That will allow parties to resolve disagreements collaboratively before escalation to the ORR, as detailed in clause 61(5). To be clear, the Bill already provides a subsequent route of appeal to the ORR for operators who have disputes over the working timetable. The amendment is therefore duplicative of that existing appeals route, and risks creating additional bureaucracy and confusion within the process. It would not improve the dispute resolution framework and, in our view, is redundant, but I am pleased that we have found at least one thing in these clauses on which the official Opposition and the Government can agree.

Amendment 217 would add requirements that GBR should use the access and use policy to promote high-quality service and competition. I cannot agree with this amendment. GBR’s duties under clause 18 cover the range of points that the hon. Member for South West Devon has suggested GBR must consider for its access and use policy. For example, I agree that GBR must promote a high-quality service, and this is already reflected in GBR’s duty to ‘‘promote high standards” of performance. We must remember that the clause 18 duties are the key decision-making criteria that GBR must apply at every stage—including when making its access and use policy—and so the requirement to drive towards a quality service is already embedded.

On competition, however, I must clarify that the Government support competition on the railways where it can add real value to passengers and farepayers. As the directing mind, GBR will be required to determine the best use of the network for all operators under a new and simpler legislative framework that ensures passengers and taxpayers are at the heart of decisions that are taken on the railways.

Where competition can support GBR in fulfilling its statutory duties—for example, to grow the economy and to provide improved choice and benefits to passengers —without undermining the vast investment made by taxpayers, we are supportive of the benefits of competition, and GBR must take those benefits into account. However, what the Government will not support is competition for competition’s sake. It is ideological and does not help us achieve the goal of making the railway work better.

The hon. Member for South West Devon seems to be equating promoting competition with fairness, but they are not one and the same. GBR must be fair to all third-party operators at all times. To ensure fairness for all parties, GBR will be bound by the Competition Act 1998, under which rules it cannot discriminate or abuse its dominant market position, and the ORR will continue to enforce this as the competition regulator. GBR does not need to actively promote competition to achieve that aim.

Amendment 77 would require GBR’s access and use policy to be laid before Parliament for three months before it can be implemented. GBR would be unable to implement any part of the access and use policy for a period of three months after it had been laid in Parliament. This would only result in delays for operators seeking to access the GBR network—a concept that is unlikely to be considered favourably by either open access or the freight industry.

The hon. Member for South West Devon should note that the access and use policy is a technical railway document. The purpose of this document is to provide a fair and transparent process for operators to apply for access. It sets out, for instance, the timings for applications, so that operators can prepare for the application window in advance. It also sets out what information applicants will need to supply and how applications will be assessed by GBR in accordance with its statutory duties. It is therefore right for GBR to develop it in consultation with industry and other railway bodies such as the ORR. This document should rightly be industry and expert-led. To reassure hon. Members about the content of the access and use policy, Network Rail has published a discussion document that sets out emerging thinking on a future access and use policy, with input from industry stakeholders. If Members of Parliament are keen to scrutinise the document, they are welcome to do so now, and I encourage them to engage with Network Rail’s external engagement process, or the usual processes in Parliament.

The industry has responded positively to the transparent and collaborative approach that has been taken in the development of the access and use policy. The freight sector has commented on how the discussion document acknowledges the key role of private investment. Network Rail’s engagement with industry will continue as the policy is developed, and there will be a further full consultation on the access and use policy with the ORR as a statutory consultee, which Members of Parliament are again welcome to contribute to.

Amendment 87 would require GBR to consult open access operators on the access and use policy. Once again, we are in agreement: the new access framework must not be designed in isolation, but be underpinned by a transparent and consultative process that has the views of industry at its heart. GBR will absolutely consult open access and other operators that will be affected by its access and use policy. In fact, Network Rail has already begun engagement with nine parties, including existing open access operators, and some prospective operators who have been involved in the collaborative development of the access and use policy discussion document, and have been supportive of the process and challenges to developing the access and use policy. That engagement will continue.

Rebecca Smith (Conservative, South West Devon)

Something that the Minister said reflects back to what my hon. Friend the Member for Broadland and Fakenham said on Tuesday. Not putting private operators, open access and freight on this mandatory list is making us nervous that it is not the Government’s intention to keep involving them in the future. I appreciate what the Minister is saying about them being consulted at the moment, but this amendment is important because it would keep them as a fixture of the future of GBR, rather than as an optional extra, where they can be useful, but if they are not considered to add any value to the railway, they will not be there any more.

As we have already alluded to, industry certainty and assuredness needs to be there for private investment to come forward, some of which I know the Government will welcome. It is a bit of a chicken-and-egg situation: if we do not have them in the framework at the beginning, they are not being encouraged to stay involved and have that confidence. Does the Minister agree?

Keir Mather (Labour, Selby)

The hon. Member is of course right to be wary about the involvement of open access in the railway, because although such provision forms a comparatively small proportion of railway journeys, we have discussed at length how certain access operator services provide great inter-city connections. There is of course a role for open access in the system being created by the Bill.

With GBR having regard to its duties when creating its access and use policy, it will have to factor in how users of the railway, both current and future, are able to make best use of services, whether they are provided by GBR or anybody else. Being bound by competition law, and the transparency and fairness inherent in it, will ensure that those that already provide services on the railway, and those that seek to provide services in the future, will have the opportunity to do so. I understand the hon. Member’s point about making sure that something is prescriptively listed in the Bill so that it is given due regard, but I would say that, whether through existing open access entitlements or the two rail freight targets that exist, there are sufficient assurances that there is scope for the inclusion of those services in the future of the railway, and that the access and use policy has to reflect that. I will turn to that in more detail soon.

All of the work on the access and use policy so far has happened without the need for a long and ever-expanding list of operators in the legislation, which would be the likely result of the amendment. If we name open access operators, we should presumably also list others, such as freight operators and devolved operators. Clause 66 currently requires that GBR must consult

“such other persons as it considers appropriate”,

and that formulation is deliberate; it ensures that consultation can be targeted, relevant and proportionate. Network Rail’s actions so far clearly demonstrate that open access operators are considered to be other appropriate persons in the reading of the clause, so both the reality and the future can be accounted for.

I reassure the hon. Member that there is no world in which GBR will create an access and use policy without consulting the relevant industry bodies that are affected. The amendment would add complexity, without delivering additional practical benefit. Although I thank the hon. Member for the amendments, for those reasons, I urge that she does not press them to a vote.

Clause 59 requires Great British Railways to publish an access and use policy. That key document will provide transparency and certainty for non-GBR operators, such as freight and open access, on the new policy and procedures they will need to engage with. For example, the policy will set out how operators should apply to access and use GBR tracks and infrastructure. It must set out the criteria Great British Railways intends to apply, in accordance with its statutory duties, when making access decisions, as well as its procedures for resolving competing demands and disputes. That will include, for instance, details on the economic and performance assessments GBR will undertake to determine best use. The policy must also include an explanation of how GBR will carry out maintenance and improvements to GBR infrastructure, and other necessary provisions, to ensure that the network works effectively. That exists in today’s system, within the industry network code, and we would expect GBR to draw on that when developing its policy on these key points.

The access and use policy is being developed in collaboration with industry. A discussion paper on initial content has already been published, and can be reviewed by the Committee or anyone else who wishes to input into its development. We hope that the extensive engagement being undertaken will ensure that a robust and effective document is produced that industry will be content with. However, as a backstop, any person aggrieved by a provision in this policy may appeal to the ORR.

Clause 66 will make it a legislative requirement that GBR must consult the ORR, the Scottish Ministers, the Welsh Ministers and such other persons as it considers appropriate before issuing, revising or replacing its access and use policy, which is dealt with in clause 59. That is in addition to GBR being a public body bound by public law principles. GBR must behave in a fair and transparent way, and therefore must consult interested parties, including rail freight and open access. The clause also ensures that GBR consults such persons as it considers appropriate before issuing, revising or replacing its infrastructure capacity plan, before issuing a working timetable and before making, revising or replacing a charging or performance scheme. Those issues are dealt with in clauses 60, 61 and 62.

Clause 66 is essential to provide reassurance to industry and our Scottish and Welsh counterparts that key parts of the new framework—GBR’s policies and processes—will not be designed in isolation, but will be underpinned by a transparent and consultative process. The clause provides the essential framework for collaborative and strategic planning by GBR across the rail network. I therefore commend clauses 59 and 66 to the Committee.

Rebecca Smith (Conservative, South West Devon)

I think I have said everything I want to say, but we would like to press amendment 79 and then amendment 217 to a vote.

Clause 60 - Infrastructure capacity plan

Rebecca Smith (Conservative, South West Devon)

I beg to move amendment 78, in clause 60, page 34, line 14, at end insert—

“(4A) When preparing, revising or replacing the document or documents Great British Railways must consult and have regard to the views of other railway passenger services and services for the carriage of goods by railway.”

This amendment would ensure that GBR had to consult and have regard to the views of open access and freight providers when preparing, revising or replacing the capacity plan.

Matt Western (Labour, Warwick and Leamington)

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 81, in clause 63, page 35, line 34, leave out from “to” to the end of line 37 and insert

“be satisfied that it retains sufficient capacity across GBR infrastructure to allow for—

(a) the operation of GBR passenger services, passenger services not operated by GBR and services for the carriage of goods by railway, and”.

This amendment aims to reduce the ability of GBR to prioritise its own operations where there are network capacity constraints and create a level playing field.

Amendment 80, in clause 63, page 35, line 34, leave out from “ensure” to the end of line 39 and insert

“be satisfied that it will meet its key performance indicators set out in section [Great British Railways: key performance indicators].”

This amendment would ensure that GBR made decisions about allocating capacity having regard to the need to meet its key performance indicators.

Amendment 253, in clause 63, page 35, line 37, at end insert—

“(aa) the achievement of the Rail freight target set out in Section 17, and”.

This amendment requires GBR to retain sufficient capacity over GBR infrastructure to allow for the achievement of the rail freight target.

Amendment 211, in clause 63, page 35, line 39, at end insert—

“(3) Where Great British Railways decides not to grant access to persons to a specific part of the network to reserve capacity, Great British Railways must—

(a) publish a statement (a ‘capacity reservation statement’) setting out the evidence relating to the decision;

(b) consult—

(i) the Office for Rail and Road, and

(ii) any other persons who have sought access to that part of the network.

(4) A capacity reservation statement must explain how the decision taken by Great British Railways under subsection (3) reflects the best use of GBR infrastructure for the operation of trains as set out in the infrastructure capacity plan.

(5) The ORR must review a capacity reservation statement.

(6) The ORR may direct Great British Railways to reconsider its assessment if it considers that the exclusion of other operators is not necessary for Great British Railways to retain sufficient capacity over GBR infrastructure.”

This amendment requires Great British Railways to publish a statement explaining any decision not to grant access to a specific part of the network on the basis of network capacity.

Amendment 229, in clause 63, page 35, line 39, at end insert—

“(3) In exercising its capacity duty, Great British Railways must take account of the Infrastructure Capacity Plan and give due regard to achieving the Rail Freight Target set out in section 17.

(4) Great British Railways must identify and publish a list of strategic freight corridors on the railway network.

(5) In exercising its capacity allocation functions, Great British Railways must ensure that the availability of network capacity on a strategic freight corridor is not materially reduced unless—

(a) the Office of Rail and Road has approved the reduction, and

(b) suitable alternative provision has been made to enable the carriage of goods by rail to continue to be facilitated.

(6) Before revising the list of strategic freight corridors, Great British Railways must consult—

(a) freight operating companies;

(b) owners and operators of rail-connected terminals;

(c) such other persons as it considers appropriate.”

This amendment ensures that capacity allocation decisions reflect both planning priorities and freight-increase ambitions. This amendment requires GBR to publish and maintain a list of strategic freight corridors and ensures that any material reduction in capacity must be approved by the ORR.

Clause 63 stand part.

Rebecca Smith (Conservative, South West Devon)

The Government Whip referred to this as the “meaty” group, so we may be here for a while. That is fine; we have plenty of time.

Clause 60 requires GBR to set out how, in its view, best use can be made of its infrastructure over a specified period. Subsection (3) allows GBR to replace or amend the document or documents that set that out at any time, and subsection (5) requires any plan or revisions to be published. Subsection (4) requires GBR to have

“regard to the need to accommodate”

its own passenger services, other passenger services—including open access services—freight services, and the maintenance and improvement of its infrastructure when preparing the document or documents.

Subsection (6) gives a right to appeal to the ORR, but only on limited judicial review grounds, in line with clause 68; there is no right of appeal on the decision of GBR. The Bill contains a duty to consult the ORR and Scottish and Welsh Ministers, but no express duty to consult other rail operators, despite their activities being two of the four considerations for GBR under subsection (4). The Opposition believe that that is an extraordinary omission; only the ability for GBR to consult

“such other persons as it considers appropriate”

is included, in clause 66(1).

Clause 60 gives GBR broad freedom to set and change the capacity plan at will, with no explicit duty to consult operators or freight interests when doing so. Subsection (3) allows revisions “at any time”, and the “have regard” duty in subsection (4) is weak and does not stop GBR prioritising its own services. In fact, the capacity duty in clause 63 actively requires GBR to prioritise its own services, irrespective of passengers’ interest. Clause 60 lacks the transparency and safeguards signalled in the consultation. Our amendment 78 would ensure that GBR must consult and have regard to the views of other railway passenger services and freight when preparing, revising or replacing the capacity plan. That is the very least GBR should be required to do.

Clause 63 provides for GBR to retain sufficient network capacity for the passenger services it is required to operate, and for engineering access. When granting access under the clause—that is, when issuing any capacity commitment or access contract—and when preparing, issuing and revising the timetable under clause 62, GBR must ensure that it retains sufficient capacity on its infrastructure to operate its own passenger services and to carry out works to maintain and improve its structures. It is required to retain sufficient capacity for services it already operates and for those it expects to operate in the future—for example, as set out in a business plan or public service obligations in transport specification not yet awarded. GBR will continue to follow general and wider legislative duties when taking access decisions, and the explanatory notes to the Bill assure us that

“it must take decisions fairly on the genuine best use of the network.”

The infrastructure capacity plan at clause 60 will indicate the capacity available to different market sectors—that is, how much capacity is best used for freight, for open access and for GBR passenger services. Clause 63 ensures that where GBR has decided what constitutes best use, and where the Secretary of State or Scottish or Welsh Ministers have funded it to operate passenger services, consistent with their allocated section of the infrastructure capacity plan issued under clause 60, GBR must ensure that sufficient network capacity is available for those services to operate, while ensuring sufficient capacity for engineering works. The explanatory notes assert:

“The duty does not enable GBR to secure more capacity for its own services than it thinks would equate to best use.”

However, clause 63 is not designed to achieve a level playing field; it does not even try to. The clause is not interested in maximising passenger choice or services, or in allowing competition to maximise use of capacity for the benefit of passengers. The express obligation in the clause is that GBR prioritise its own planned growth, because it must ensure capacity for all current and expected GBR services. That obligation sits ahead of any consideration of open access bids, or whether the service provided by open access would be better for passengers and therefore in the public interest.

Importantly, clause 63 does not allow GBR to assess whether an open access application is a better use of capacity than the operational or future plans of GBR. There is no requirement for a comparative assessment—in fact, quite the opposite: all GBR must do is ensure that its plans have priority. What does “ensure” mean in a legislative context? It is a very strong—perhaps the strongest—command, where the interest in most cases is not in the steps taken, but only in the fact that the result must be achieved. GBR will be able to claim, on any challenge to a decision, that the duty imposed on it is too onerous, such that almost any capacity decision would be incapable of being challenged—even if there was a meaningful right of appeal, which there is not. Clause 63 gives GBR almost complete discretion to refuse new paths, while making successful challenges next to impossible.

These provisions are the death knell for future open access applications. The duty to ensure sufficient capacity for current and future GBR passenger services, taken with an appeals process on judicial review lines, gives GBR carte blanche to refuse every application. During a Transport Committee meeting, the Secretary of State almost implied that, should an open access service come forward with a good idea she liked the look of, she might well pinch it for GBR’s benefit and not allow the open access to continue with its application.

When discussing clause 63, it is important to set out the importance of open access. We have spoken about Lumo and Hull Trains a lot in Committee, and their written evidence to the Transport Committee explains the issue excellently, saying that open access, which was introduced under the new Labour Government in 1999,

“has been one of the great success stories of modern Britain’s railways…Lumo and Hull Trains have demonstrated how innovative, non-publicly subsidised services can complement conventionally operated services, broadening choice, increasing ridership…and delivering more affordable travel options for passengers…Open Access operators play a unique role in growing rail’s market share, connecting communities in underserved markets, and fostering innovation across the wider network.”

Joe Robertson (Conservative, Isle of Wight East)

This question is possibly better directed at the Minister, but does my hon. Friend think that the clause might be so restrictive because, in truth, the Government do not really want open access, despite what they say?

Rebecca Smith (Conservative, South West Devon)

I agree with my hon. Friend. I alluded to that issue earlier in my comments, and my hon. Friend the Member for Broadland and Fakenham raised it on Tuesday. That is why we are concerned on behalf of not only open access, but first of all passengers, who are not going to get the best possible service because of the inbuilt assertion that open access can ultimately be discarded if the Government do not see it as palatable.

The written evidence from Lumo and Hull Trains also says:

“As the Government and GBR seek to deliver a thriving, growing railway, it is vital that the Railways Bill recognises and protects the contribution that Open Access makes to these shared goals. This will ensure that it will continue to deliver these benefits to the millions of passengers who rely on them, now and into the future…As the Government looks to modernise and centralise rail through GBR, it will be important that competition remains an embedded principle within this framework. Open Access provides a proven model of innovation and efficiency, which can help GBR achieve its statutory objectives. Recognising the role of competition as a driver of value and growth will ensure that passengers, the network, and the public purse all continue to benefit.”

FirstGroup’s written submission to the Transport Committee tells a similar story, saying that open access operators

“receive no government funding, take on full risk, and generate their own revenue— giving them very strong incentives to deliver a service which is endorsed by passengers…The way in which GBR structures its timetable will be critical. It should be obliged to carry out its functions fairly and without discrimination, so that if an open access train service can provide passenger benefit monopoly interests do not prevent that train from running.”

FirstGroup also says:

“Clause 63 must ensure that un-funded services which GBR ‘expects’ are not given train paths in advance of funded open access services, which will provide passenger benefit sooner.”

The Rail Freight Group is also concerned by the clause, telling the Transport Committee:

“We understand that the basis of the new approach will be via Infrastructure Capacity Plans (Clause 61) and, for GBR’s own trains, via the Capacity Duty (Clause 63). It is very difficult from these clauses to have a clear understanding of how the new process will operate, and how rail freight and rail freight growth will be facilitated, including in contractual rights for operators…For example, we understand from our discussions that there could be numerous infrastructure capacity plans across the network which a new freight service will have to navigate. We also understand that when an infrastructure capacity plan is reviewed, existing freight services could be stopped from operating if other services are considered to be higher value, as contractual commitments are expected to expire in line with the capacity plans.”

Nick Brooks from ALLRAIL told the Transport Committee:

“I think we would look for clarification, regarding clause 63, that GBR cannot reserve capacity for hypothetical future GBR long-distance services at the expense of privately funded open-access proposals or existing services that provide immediate benefits—and extra infrastructure income, of course, because open-access operators are paying track access fees too. For that, I think you need to prioritise funded open access over speculative GBR services ‘someday in the future.’”

It is very clear what the sector thinks: clause 63 needs substantial clarification. That is why, along with the Lib Dems, we have tabled a number of amendments, which I will briefly speak to. Amendment 81 would make it clear that capacity allocation should be based on a level playing field, without priority given to any particular operator. That would allow the best outcome for the passenger, and allows the public interest bit in clause 18 to take the lead. Proceeding on any other basis will leave us with a monopoly that is allowed to abuse its position.

Amendment 80 puts forward an alternative approach, based on key performance indicators, but it is clear the Government are not interested, so in the interests of time I will not pursue that further today—that will be one fewer Division, the Government will be pleased to hear.

Amendment 253, in the name of the hon. Member for Didcot and Wantage, requires GBR “to retain sufficient capacity” to ensure that the rail freight target is met. To progress, there would need to be a mechanism to reach a decision if that conflicted with any planned GBR service.

Amendment 211 would require GBR

“to publish a statement explaining any decision not to grant access to a specific part of the network on the basis of network capacity.”

For an appeals process to have any meaning at all, that would need to be a pre-requisite.

Amendment 229 would ensure that

“capacity allocation decisions reflect both planning priorities and freight-increase ambitions”

and would require

“GBR to publish and maintain a list of strategic freight corridors and ensures that any material reduction in capacity must be approved by the ORR.”

The amendment would give a better balance to capacity considerations than the current wholly one-sided drafting. That is incredibly important because, ultimately, the Government are seeking to reduce climate change and achieve net zero. Freight plays a huge part in that, and if we do not have strategic freight corridors to ensure that we can make use of the freight system, we will fall short of what could be achieved.

Finally, new clause 56, in the name of the Libs Dems,

“requires GBR to explore and consider the potential benefits of centralised train planning and auctioning.”

That is an interesting concept and could have significant benefits for passengers and taxpayers by driving competitive pricing for certain routes, while avoiding the abstraction arguments in relation to competing open access applications.

Olly Glover (Liberal Democrat, Didcot and Wantage)

It is a pleasure to serve under your chairship once again on the Committee, Mr Western. I will no doubt be told off for getting her title wrong, but I agree with the Conservative spokesperson, the hon. Member for—

Rebecca Smith (Conservative, South West Devon)

South West Devon.

Olly Glover (Liberal Democrat, Didcot and Wantage)

I knew the hon. Lady’s seat; it is just that I got told off the other day by the shadow Minister, the hon. Member for Broadland and Fakenham, for calling him the spokesperson instead.

Carrying on, I agree with the hon. Lady’s comments on the Opposition’s amendments. I think most of them are sound and reflect the intention to strike a better balance in the Bill between GBR wanting to protect its interests and objectives, and recognising that there are valid and competing objectives elsewhere in the industry, particularly on the freight side, as well as on the open access passenger side.

Let me speak briefly to our new clause 56. The hon. Lady accurately summarised our intention. The new clause does not require GBR to adopt the idea of auctioning train paths, but it does require it to examine the potential of the idea, which is used to good effect on the Italian and Spanish high-speed rail networks. This idea, basically, retains the guiding mind approach to timetable development and construction but would recognise that for routes with a high-revenue yield and limited competition, such as London to Manchester, it may well be best, in the interests of both revenue and getting more people on to trains, to auction off one of the paths—London to Manchester has three an hour—to another operator. That would help GBR to provide some competitive tension to improve its own delivery.

I appreciate that the Government would probably say that Avanti West Coast is terrible and when it becomes GBR everything will be a land of milk, sweetness and honey; however, the real structural problem is that at the moment there is no realistic competition between London and Manchester. That is why—certainly from the figures that I have seen most recently—passenger numbers have recovered far less than they have on the east coast main line, where there is competition and a real spirit of customer choice. I would be interested to hear the Minister’s comments on that.

Keir Mather (Labour, Selby)

It is my pleasure to speak to this long-awaited group of amendment to what are arguably some of the most critical aspects of the legislation. Clause 60 will require GBR to set out its proposal for the best use of its infrastructure, while clause 63 will require GBR to retain sufficient capacity to run its own passenger services and carry out engineering work.

First, I will explain how the Government have reached that conclusion. We are here because the current system for allocating capacity is clearly not working; it is designed so that each part of the railway acts and takes decisions in isolation. There was a four-year delay to the implementation of the new east coast main line timetable that was finally achieved in December 2025. Meanwhile, there is no single body with a clear vision for the best use of the network, and therefore no clear statement of the capacity that can be made available for different users of the railway. As a result, open access operators have expended considerable effort and resources in developing proposals for access to the network, many of which have ultimately been rejected by the ORR.

Both freight and open access operators would benefit from a single body empowered to provide that clarity about future opportunities for them to grow their presence on the railway. The only possible answer to fixing that is GBR, which can take decisions strategically, making the very best use of the limited capacity that we have. Only GBR can review the network holistically with a view to creating more space, which will benefit open access operators where they can show that their new services constitute best use of the network. That will benefit every hon. Member’s constituents, because there will be more opportunity for connectivity and more co-ordination to avoid disruption and delays.

In our new system, the process of allocating capacity starts with clause 60. The infrastructure capacity plan will set out GBR’s view of the best use of the network, showing how capacity can best be allocated between GBR’s own services, freight services and open access services. In creating that plan, GBR must have regard to the need to accommodate all types of services. The clause is one of the most crucial in the Bill, because it is where GBR—having consulted carefully with existing and prospective operators and other interested parties, and taken account of its statutory duties—will set out its view of the best use of the network. Once established, the plan will provide much-needed certainty for operators contemplating investment in new services.

I will be crystal clear for the benefit of the Committee: the capacity duty mentioned in clause 63 does not apply to the creation of the infrastructure capacity plan. Under clause 60, GBR will make its best-use assessment on the basis of the duties in clause 18 and other general duties in the Bill only. At this stage, it will not have any basis to refer to the duty as described in clause 63. It will take the decision fairly and transparently, in line with its duties, with the need to allocate paths for freight, open access and itself in mind.

There is absolutely no intention for other operators to be unfairly pushed out or disadvantaged by GBR. We want the best service for passengers, freight users and the public on every part of the route, to enable the best possible connectivity, quality of service and overall economic benefit. That is the goal, regardless of who provides those services. Were GBR to mistakenly apply the capacity duty at the capacity plan stage as part of its determination of best use, that would be grounds for appeal to the ORR.

Joe Robertson (Conservative, Isle of Wight East)

I note the Minister’s assertion that there is no intention to squeeze out other operators, but given the way in which the Bill and the clause are drafted, that surely is an inevitability regardless of whether he intends for that to happen. It is the outcome that matters. If it will not enable open access and competition, that is in itself a problem, notwithstanding he might not intend that to be the case.

Keir Mather (Labour, Selby)

I take fully on board the hon. Member’s point that we need to ensure services are not squeezed out. The process I am outlining is specifically to ensure that that does not happen. Where GBR has regard to its duties under clause 60 when deciding best use, it has to have regard to the freight target and the need to grow freight, but also the need to accommodate a range of services on the railway. That best use policy is locked in. It is under clause 63 that the capacity duty comes into effect, and GBR can make practical operational decisions about how to effectively actualise those proportions being allocated on the railway.

GBR will have to have regard to open access and freight under its duties in clause 60 when making the macro decision about what constitutes best use, which at the end of the day is not a binary yes or no question. The capacity duty in clause 63 merely ensures that it can provide the services it has been allocated. I will come to that in a bit more detail and set it out further. The hon. Member is welcome to intervene again if he feels my subsequent detail is insufficient.

On the capacity duty more broadly, the Government have been nothing but consistent. Put simply, the services that offer the genuine best value proposition for passengers, freight customers and the taxpayer, consistent with GBR’s duties, should be allocated capacity. Clause 63, meanwhile, creates a legal duty for Great British Railways to ensure there is enough space in the timetable to run the services funded by the Government and taxpayers. To reiterate, clause 63 is a requirement for space in the timetable. It is not a requirement for space in the capacity plan. It does not apply to the capacity plan and it therefore does not and cannot undermine the best use decisions taken at the capacity planning stage. That is because the Government are paying for certain GBR services and must not waste public funds. The clause 63 duty is about managing taxpayers’ money after best use has been determined. It is not about keeping anyone out.

Amendment 78 would require GBR to consult open access and freight operators in preparing the infrastructure capacity plan. Amendment 80 would require GBR to have regard to its key performance indicators when preparing the plan, and amendment 81 would amend clause 63 to require GBR to retain capacity for open access and freight operators. Amendments 253 and 229 would both give freight operators more weight in the capacity process.

Adding a further consultation requirement to clause 60 is unnecessary as there is already a separate requirement in clause 66 for GBR to consult affected operators when developing or amending the capacity plan. Were GBR to publish or amend a capacity plan at any point without consultation, that would constitute a breach of its duties under the Bill and present strong grounds for appeal to the ORR. Amendment 78 is therefore duplicative of the provisions already in the Bill.

As for amendments 80, 81, 253 and 229, the intended effect of clause 63 is to create a statutory duty for GBR to ensure that there is enough space in the timetable to run its own passenger services, which are funded directly by taxpayers. That is because taxpayers spend many billions of pounds subsidising the railway. Any responsible Government would be obligated to protect that investment and ensure that taxpayers get full value from it. The clause is therefore needed to ensure that where GBR considers its services constitute the best use of the network, and where it then allocates capacity to itself, it will actually run the trains that it is proposing to run and which it will be funded for. I do not believe anyone on this Committee would be delighted to find that, following GBR being paid several billion pounds to run services, it was unable to do so. Clause 63 is therefore an essential legal safeguard to prevent that from happening.

The interests of freight and open access operators are protected by GBR’s general duties under clause 18, and freight operators are further protected by the duty on GBR to have regard to the rail freight target set by the Secretary of State under clause 17. Those duties will apply when GBR establishes best use at the capacity planning stage for all operators, including freight. The existence of not just one but two statutory duties is a clear signal of this Government’s view that freight must be front and centre of GBR’s decision making. This will give freight much greater prominence in capacity planning and allocation decisions than the current system, in which capacity is too often allocated on a first come, first served basis without reference to any coherent view of the best overall use of available capacity. The clause 63 duty exists only to protect the Secretary of State’s investment in the railway; it is not intended to influence GBR’s capacity planning or to keep anyone out of the network. The amendments are therefore not compatible with the intended purpose of the clause.

Amendment 80 draws a link to the concept of key performance indicators. As I have set out in previous debates, the Government do not accept the need to make statutory provision about KPIs and so cannot support the proposed reference. As I have consistently said throughout these debates, KPIs should be in GBR’s business plan and not in legislation.

Amendment 211 would require GBR to publish a statement on any decision not to provide access on the basis of capacity. As a public body, GBR is bound by public law principles to behave in a transparent and non-discriminatory way. That means that GBR must set out its decisions transparently, including when granting access, with robust evidence that shows how it has acted in accordance with its duties, access and use policy and any guidance issued by the Secretary of State. If GBR failed to do that, it would be grounds for appeal to the ORR. The amendment is unnecessary because GBR is already required to transparently account for its access decisions, whatever the reason for them.

Finally, new clause 56 would require GBR to report on the merits of a centralised train planning and auctioning scheme, with high-yielding services being operated by private sector operators rather than GBR. This Government were elected with a clear mandate to return franchised passenger services to public ownership. Public ownership, with responsibility for passenger services and infrastructure brought together in a single organisation, is the only way to make the railway run better. It enables everybody to focus on a single set of objectives centred around the needs of railway users and the interests of the taxpayers who fund it, rather than shareholders and private profit. Public ownership of passenger services will save the taxpayer up to £150 million a year in fees to private operators alone. Therefore, GBR, rather than private operators, must be responsible for operating the services that taxpayers will fund it to deliver. Making GBR responsible for essential services also avoids the costs of maintaining a public sector operator of last resort function ready to step in if a private operator suffers financial failure or chooses to withdraw from operating the services.

While I fully support the provision of services by open access operators on the network where they add value and where there is capacity on the network, the model set out by the new clause is not compatible with the mandate that this Government were elected on: to bring franchised passenger services back into public ownership. It is not compatible with the regime set out in the Bill, which already provides clarity about the role of private sector operators and the opportunities for them to run services.

Given what I have set out, I hope that the hon. Member for South West Devon feels able to withdraw the amendments. I commend clauses 60 and 63 to the Committee.

Rebecca Smith (Conservative, South West Devon)

I have listened to the Minister’s comments. As I said earlier, we will not press amendment 80 to a vote, but I wish to press the others to a vote.

Matt Western (Labour, Warwick and Leamington)

The rest of the amendments that we have just debated will be decided at the appropriate point.

Clause 61 - The working timetable

Keir Mather (Labour, Selby)

I beg to move amendment 174, in clause 61, page 34, line 38, at end insert—

“(4A) Agreement under subsection (4) may be general or specific, and the ways in which it may be given include it being given—

(a) in accordance with the terms set out as mentioned in section 59(3);

(b) by means of, or in accordance with, provision contained in an agreement or other document to which Great British Railways and the operator are parties.”

This amendment ensures that changes to the working timetable can be agreed in advance and in general terms, and sets out various of the ways in which agreement can be given.

Matt Western (Labour, Warwick and Leamington)

With this it will be convenient to discuss the following:

Clause stand part.

Clause 62 stand part.

Keir Mather (Labour, Selby)

Amendment 174 will provide greater clarity for all parties that the agreement GBR is obliged to have under clause 61(4) can be made in advance in a contract or other document between GBR and the operator in line with the terms set out in GBR’s access and use policy under clause 59(3). The amendment broadly replicates the current industry practice of making changes to the working timetable through contractual arrangements, so it is familiar to industry and was always the intended approach. I therefore urge the Committee to support the amendment, tabled by the Government in my name.

I thank the hon. Member for Epsom and Ewell (Helen Maguire) for tabling new clause 52, which would require the Secretary of State to publicly consult on and publish a report that recommends an appropriate train frequency that would meet local need and which GBR would then be obliged to deliver. Although this Government support the principle of designing a train service that meets passengers’ needs and local needs, the new clause would embed that responsibility in Government, and not with GBR. That would serve only to continue Government’s micro-management of the railways, under-mining GBR’s intended role as an empowered, directing mind that is enabled to take decisions on the best use of the network.

To take access decisions and plan its passenger services —which GBR will do in accordance with its duties, which are clearly defined in the Bill—GBR, and not the Department, must be able to design its own passenger train services. GBR will also be legally required to consult devolved Governments and mayoral strategic authorities before making certain decisions, such as service frequency decisions that will significant affect their local areas. The Government and GBR will also have to consult the new passenger watchdog when developing their policies, strategies and priorities for the railway, including when GBR is developing its business plan and passenger offer. The Secretary of State will set the long-term strategic objectives of the railway through the long-term rail strategy, which GBR will need to consider when taking decisions about service frequencies. The Secretary of State will also have to approve GBR’s integrated business plan, which will cover both track and train activity.

That framework represents the right balance between an empowered directing mind that can independently weigh up its duties in a considered and rational way when delivering its statutory functions, including developing the timetable, with appropriate consultation requirements and proportionate Government oversight. We do not want to continue the current system, under which stifling Government interference hampers the efficient running of the railways. I therefore urge members of the Committee not to move new clause 52.

Clause 61 requires GBR to issue a timetable that defines

“all planned train movements which will take place on GBR infrastructure during the period for which it is in force”.

Enabling GBR to establish a working timetable is fundamental to running trains safely and reliably at their published times. The current system cannot deliver significant timetable changes, even where there is a strong public interest case for doing so with significant taxpayer investment. That is because the process for revising the timetable is dependent on different organisations taking, at different points, different decisions that affect the timetable’s production. That creates complexity and challenges that can result in significant delays to the implementation of a new timetable being implemented and passengers and taxpayers losing out.

Despite the significant efforts made by Network Rail and the ORR, the new east coast main line timetable was delayed for over four years, which resulted in delayed benefits to passengers. Ultimately, until the current Rail Minister was appointed no one was willing to make a final timetabling decision. That cannot happen again: GBR must be empowered to take decisions or passengers and taxpayers will not see improvements.

Under clause 61, as the directing mind GBR will be responsible for taking decisions on timetabling in a process overseen by the ORR. A person whose application to be included in the timetable is rejected or who disagrees with the terms and conditions of their inclusion may appeal to the ORR. The clause ensures that GBR will deliver an achievable, reliable timetable that the network is able to deliver. Better co-ordination of the timetable and engineering works will reduce delays, improve reliability and reduce cost. GBR’s holistic review of the whole network can also improve connectivity for passengers. Without the clause, the current unacceptable system of timetable delays, disagreements and ministerial intervention will continue, which serves no one.

Clause 62 sets out the steps that GBR must follow before issuing a working timetable, as previously described in clause 61. It is a critical provision as a timetable is the backbone of a safe and efficient railway operation. Without a clear and structured timetable, trains cannot run reliably at their published times. GBR must invite applications for inclusion in the timetable from operators other than GBR’s own passenger services. The invitation must specify the period within which applications must be made and the information that must accompany an application. GBR must prepare and send a draft of the working timetable to those applicants. A person who has had an application rejected by GBR may appeal that decision to the ORR. The clause ensures that the process for developing the timetable is fair and transparent. I commend clauses 61 and 62 to the Committee.

Rebecca Smith (Conservative, South West Devon)

Clause 61(1) sets out that GBR must issue one or more timetables covering all train movements on GBR infrastructure for the period that GBR intends the timetable to cover, to be known as a working timetable. Subsection (3) allows GBR to alter a working timetable, for example to add new train movements, change a planned train movement, allow for maintenance works, deal with disruption, or change the duration of the timetable. Subsection (4) allows GBR to alter a planned train movement of an operator other than GBR only with that operator’s permission. Subsection (5) provides a right of appeal to the ORR for an operator who applied for a train movement to be included in the working timetable by GBR but was refused, or where the inclusion was made subject to conditions. The duty to consult and appeals provisions in clauses 66 to 68 also apply to the working timetable, but not to alterations of the working timetable.

The working timetable is the industry’s master timetable, covering all train movements—passenger, freight, empty stock and depot moves—and all intermediate timings, including non-stopping patterns. Clause 61 makes GBR both the compiler of the timetable and, under clause 59(2)(c), the creator of the dispute resolution process for challenges to its own decisions. This collapses the separation between operator and timetable arbiter that open access and freight operators rely on. Although operators can appeal to the ORR under clause 61(5), that is after the fact: GBR still makes the initial and decisive allocation of paths, embedding a structural conflict of interest.

Government amendment 174 ensures that changes to the working timetable can be agreed in advance, in either general or specific terms. Can the Minister give an example of consent in general as applied to a decision to alter a specific timetable?

New clause 52, in the name of the hon. Member for Epsom and Ewell, would require the Secretary of State to undertake a public consultation on the frequency of services, and then to give GBR a duty to supply whatever frequency of service the public consultation demanded. To be effective, a consultation would have to be national and cover every single community in the country. We believe this is a recipe for chaos and shows no concern for deliverability. The Liberal Democrat spokesperson, the hon. Member for Didcot and Wantage, has been very constructive and thoughtful in his proposed amendments during Committee. This one, which is not in his name, is different and, at the risk of sounding slightly cynical—this is perhaps the first time those of us on the Conservative Benches have done so—is a typical have-it-all Lib Dem amendment, with no regard to the practical consequences.

Edward Morello (Liberal Democrat, West Dorset)

It is a pleasure to speak under your chairship, Mr Western. I wanted to speak briefly in support of new clause 52, which, as the hon. Member for South West Devon indicated, was tabled by my hon. Friend the Member for Epsom and Ewell. It would introduce a duty on train frequency, which is something my constituents—and I am sure those of other Members—write about continuously. The new clause would require the Secretary of State to consult the public on how often GBR services should run, taking account of local need. It would then require the publication of a report, ongoing engagement with communities, and a binding duty on GBR to deliver the agreed frequency, with regular monitoring.

The new clause is designed to ensure that rural and less well-served areas are properly heard, and that timetables reflect how people actually use the railway and not just what is easiest to operate. If I were the shadow Minister, I would probably describe this as a probing new clause designed to draw out some secret piece of information. I heard what Minister said about it. All the other Liberal Democrat amendments have been designed to restrain the power of the Secretary of State and ensure that GBR is not micromanaged, and I think the new clause probably flies in the face of that. We will leave it there.

Keir Mather (Labour, Selby)

I thank the hon. Members for South West Devon and for West Dorset for their contributions. I remain of the view that a unified system under GBR will plan and deliver an achievable, reliable timetable and ensure that the network is actually able to deliver it, so that the services promised to passengers are delivered. Better co-ordination of the timetable and engineering works will reduce delays, improve reliability and reduce costs, and through its role in issuing the timetable, GBR will be able to ensure that all services represent the best use of the network, with a strong appeals role for the ORR to ensure that fairness is embedded in the system. I therefore retain the view that the hon. Members should not move their amendments.

Clause 63 - Capacity duty

Matt Western (Labour, Warwick and Leamington)

Olly Glover, do you wish to move amendment 253?

Olly Glover (Liberal Democrat, Didcot and Wantage)

That is not our amendment.

Rebecca Smith (Conservative, South West Devon)

It is. It was debated in the previous group.

Olly Glover (Liberal Democrat, Didcot and Wantage)

Apologies, Mr Western; the confusion has arisen because the selection and grouping paper lists it as an Opposition amendment. I do not wish to move it.

Matt Western (Labour, Warwick and Leamington)

We move to amendment 211.

Rebecca Smith (Conservative, South West Devon)

Amendment is 211 is mine, and we would like to press it to a vote. [Interruption.] Oh, no, that is also a Liberal Democrat amendment—that says “Opp” as well.

Matt Western (Labour, Warwick and Leamington)

Olly Glover, do you wish to move amendment 211?

Olly Glover (Liberal Democrat, Didcot and Wantage)

Yes, Mr Western. Thank you.

Edward Argar (Conservative, Melton and Syston)

On a point of order, Mr Western. We have just dealt with a couple of amendments that the selection list described as tabled by the Opposition but were actually been tabled by the Liberal Democrats, which I suspect is where some of the confusion came from. Will it be possible during the lunch break for the Clerks to check the list and update it if necessary, or confirm that there is no further mislabelling, just for clarity?

Matt Western (Labour, Warwick and Leamington)

Absolutely. We will make sure there is absolute clarity for this afternoon’s session.

Clause 64 - Charging scheme

Rebecca Smith (Conservative, South West Devon)

I beg to move amendment 242, in clause 64, page 36, line 6, leave out subsection (1)(b).

This amendment would remove the requirement for GBR to charge in relation to trains which are planned to use GBR infrastructure but do not operate, or do not operate in full.

Matt Western (Labour, Warwick and Leamington)

With this it will be convenient to discuss the following:

Amendment 230, in clause 64, page 36, line 7, at end insert

“, except where the services cannot operate due to a failure of the GBR infrastructure or the need for GBR to take capacity for work on the network.”

This amendment would ensure that services are not caught within the charging scheme if they cannot operate due to GBR failures or actions.

Amendment 83, in clause 64, page 36, line 11, leave out subsection (3).

This amendment would prevent GBR charging any sum it likes, rather than what is reasonable.

Amendment 82, in clause 64, page 36, line 28, leave out “at any time” and insert

“by giving no less than 12 months’ notice”.

This amendment imposes a duty on GBR to give other operators a minimum 12-month advance notice of changes to the charging scheme.

Amendment 84, in clause 64, page 36, line 34, at end insert—

“(9) Neither the Secretary of State, nor Great British Railways, may take any action to implement any part of the charging scheme until a copy of the scheme has been laid before Parliament for a period of three months.”

This amendment would provide that neither the Secretary of State nor Great British Railways, could take any step to implement any part of the charging scheme until it has been laid before Parliament for three months.

Clause stand part.

Rebecca Smith (Conservative, South West Devon)

Clause 64(1) requires GBR to develop a charging scheme setting out the charges to be paid for access to and use of GBR’s infrastructure, and the extent to which charges may by payable in relation to trains that do not operate, or do not operate in full, despite their use being planned in.

The base assumption is that charges will be set at the costs directly incurred—for example, the wear and tear caused by the service—but subsection (3) provides for a higher charge to be demanded in particular circumstances,

“provided that it does not exceed the amount that Great British Railways considers is the amount that an efficient operator would be able to pay in those circumstances.”

Subsection (4) confirms that GBR can also set a lower charge where it considers that appropriate, for various purposes, including but not limited to encouraging the use of spare capacity and promoting new services. The Subsidy Control Act 2022 would apply to any decision to lower charges under that provision.

GBR will not charge itself for use of infrastructure, despite being an operator as well as the infrastructure manager, but must include in its charging scheme sufficient information on the charges for its passenger services’ access to and use of its infrastructure to explain how charges in the scheme have been calculated. GBR will be able to make changes to its charging framework at any time.

The Opposition believe that the clause is simply terrible. It confirms the worst fears of other rail users, and gives no certainty for business planning. Subsection (3) allows for a higher amount than the actual cost to GBR to be charged in particular circumstances, but those are not defined or explained. If GBR thinks that the operator has the money to pay it, then it is expected to pay—no rationale for the increase is given. The clause allows GBR to set charges above direct cost based on what it considers an efficient operator could afford, which remains a subjective judgment made by a body that is itself a major operator.

Even with the ORR able to substitute its own decision on appeal, the initial charging decision sits entirely with GBR. That creates scope for charges that disadvantage open access operators, unless and until challenged, which is not the level of neutrality expected for an industry-wide charging regime.

Subsection (4)(a) is an oxymoron. Charges could not be assessed unless there were sufficient capacity to run a service, which by definition would mean that there is assessed to be spare capacity. Subsection (5) does not provide open access operators sufficient information to properly assess the fairness of the proposed charges. Subsection (6) allows for a change at any time, and without notice.

It is clearly impossible to run a service without confidence of track-access charges. A devolved, concession, freight, open access or heritage and tour operator could, at the stroke of GBR’s pen, suddenly find its cost base increase significantly. That is not conducive to long-term business planning, and must harm private sector investment in rail services.

Laurence Turner (Labour, Birmingham Northfield)

I am thinking about the hon. Member’s arguments about clause 64(3). Does she not think that there may be circumstances where higher charges actually help to get private investment into the railways? For example, GBR could agree to fund infrastructure improvements in exchange for an operator paying higher access charges over an agreed period and, through that mechanism, recoup at least some of the costs of that welcome upgrade to the network.

Rebecca Smith (Conservative, South West Devon)

I can appreciate where the hon. Member is coming from. It sounds like a good idea; however, it could still be in the legislation directly, and the illustration he gave still leaves a huge number of questions about what happens if there is more than one user of that bit of infrastructure. Why should the private operator be the one that has to pay for the infrastructure? If anything, there is an issue, which I may come to, about the impact on fares, because ultimately, by the sound of it, GBR is going to have far fewer costs than other operators. In principle, I can see why the hon. Member made that point, but I think it is not clear enough at this stage.

Clause 64(8) allows a right of appeal, but only under judicial review-type provisions, which is no right at all. Any of us who has worked with anyone who ever wanted to get a judicial review knows that it is incredibly difficult. It is also incredibly expensive, so it is certainly not a level playing field.

The industry has rightly been outspoken on clause 64. In evidence to the Transport Committee, the Rail Freight Group stated:

“The Bill sets out the future framework for access charges for freight. In headline terms the charges will be calculated in a similar way to today (costs directly incurred by running the train) which we welcome. However, the Bill provides for extra costs to be levied on freight services

a. Through a mandatory reservation charge for capacity which is booked and then not used (for example, if a customer cancels a train due to poor weather) (Clause 64)

b. Through a general clause 64(3) which allows GBR discretion to charge more if ‘an efficient operator can pay it’. This is a very broad test and far wider than the test in current law ‘if the market can bear it’. This raises the prospect of far higher, and potentially uncapped charges being levied.

Increasing the costs of rail freight will simply make using rail too expensive for customers when compared to road freight, and will reverse modal shift and undermine growth. It is essential that the powers to charge more than the standard charge are strictly limited for GBR.”

The key point there is about reversing modal shift. On the one hand, the Government want to promote modal shift. Indeed, there is a scheme coming in— I mentioned it on Tuesday, but now I cannot remember its name—that will look at different types of transport, and one of the plans is to ensure modal shift. Anything that undermines that is potentially contradictory and a backwards step.

The Transport Committee also heard evidence from Nick Brooks of ALLRAIL, who said:

“I was just going to say something about privately owned investors and privately owned operators, specifically privately owned investors that want to invest in our sector rather than in other sectors—aviation, the road sector, or even completely different sectors. There is a certain risk. There is a commercial risk, of course, and ultimately they are looking for lower fixed costs and higher variable costs. The worry with GBR is this: who determines what the market can bear? Is GBR an independent entity, or not? I think the Bill says it should be GBR itself that determines that, if I am not mistaken.

It is a little bit like another conflict, or potential problem, with track access fees. Who decides the size of the track access fees? If you are a privately owned operator, is it your competitor—GBR—that decides your track access fees? That is a potential cause of worry.”

Lumo and Hull Trains also had similar concerns, which they raised in their written evidence to the Transport Committee:

“A transparent and proportionate charging regime will be critical to ensuring the financial sustainability and competitiveness of the railway. If GBR were able to set and revise access charges without independent oversight (as suggested by clause 64), it could create uncertainty and deter private investment. Independent regulation of charging is therefore vital to maintain investor confidence and ensure fairness between different operators. Open Access operators already make a substantial contribution to the upkeep of the network while receiving no public subsidy. The charges paid by Open Access are calculated independently by ORR to encourage investment, sweat the railway asset and deliver connectivity and the associated economic benefits. It also acts as an additional income stream to Network Rail. These arrangements demonstrate the sector’s willingness to invest and its commitment to supporting the network’s long-term health.

Ensuring that access charges remain proportionate and independently regulated will help reinforce the Government’s objective of crowding in private capital to support network growth. Confidence in a fair charging regime is essential for the continued profitability of private operators. Reinforcing a transparent and proportionate charging system will also help deliver the Government’s wider fiscal priorities by attracting and retaining private investment. By giving investors certainty that network costs are predictable and fairly allocated, the Bill can ensure that private operators continue to play a central role in funding innovation and expanding passenger capacity across the UK.”

Lumo and Hull Trains recommend:

“The updated charging regime must be developed in consultation with private stakeholders, appropriate for the markets being served and regulated with independent oversight from the ORR. This will sustain confidence in a fair and transparent access regime and ensure that private investment continues to play a central role in delivering a successful railway.”

Amendment 83 would prevent GBR from charging any sum it liked without notice. Instead, it would be required to follow the standard pricing structure set out in clause 64(2), based on actual costs incurred as a result of the activity. Does the Minister agree that any serious business case for private investment in our railways will need to have the certainty of fixed costs? How does the clause achieve anything other than the opposite?

Amendment 82 would remove the right of GBR to charge its competitors costs, basically at any time and without notice, on grounds that they have access to more money that they could pay. Instead, it would impose a duty on GBR to give other operators a minimum of 12 months’ notice of changes to the charging scheme, so at least they can react to the change and seek any appeal before the event rather than after it.

Speaking to amendments 82 and 83, the Rail Forum has said:

“We strongly support these amendment, access and other charges should be reasonable and operators should have sufficient warning of changes to be able to plan accordingly.”

The amendments are not just a nice idea being suggested from the Opposition Benches, but something that the industry would like to see as well.

Amendment 84 would provide that neither the Secretary of State nor Great British Railways can take any step to implement any part of the charging scheme until it has been laid before Parliament for three months. Once again, that would put accountability and transparency back into the system—something the Government seem hellbent on ignoring.

The second impact would be to allow affected organisations time to prepare an appeal. Judicial review requires a very short application process of just 12 weeks. This amended clause would help aggrieved parties to prepare a complex challenge in time for a JR timetable. Amendment 84 is more a probing one, so it will be interesting to hear the Minister’s response. The reflection on the judicial review process is particularly important, because we do not want to crowd people out of the opportunity to appeal. Anything he can offer in response would be appreciated.

Amendment 230 would ensure that services are not caught within the charging scheme if they cannot operate due to GBR failures or actions—a case of natural justice. Does the Minister accept that the existing wording of the clause would allow GBR to profit from a cancellation of services caused by GBR’s failure to provide infra-structure? If so, will he explain how that could be a fair result?

Amendment 242 would remove the requirement for GBR to charge in relation to trains that are planned to use GBR infrastructure, but do not operate or do not operate in full. Again, that is in effect a probing amendment, or a making-a-point amendment, as it were. With that, I shall sit down.

Olly Glover (Liberal Democrat, Didcot and Wantage)

I have a few brief thoughts on what the Conservative spokesperson has said about this clause. On the Liberal Democrat Benches, we feel that a lot of the amendments ask good questions about transparency and about accountability for how the access charging regime will work. We are definitely interested to hear the Minister’s response.

A couple of the Opposition amendments perhaps go a little too far, or at least questions could be asked about them. Amendment 242, on what I am calling phantom paths, addresses an interesting phenomenon in the railway at the moment. Many freight paths are in the timetable, but seldom used; they are reserved by freight operators for a variety of reasons in case they might be used. People in the industry say that they sometimes present problems for optimum timetable development or use of capacity. It will be interesting to hear from both the Minister and, perhaps, the Conservative spokesperson as to how they feel that those phantom paths can be dealt with, absent an ability by GBR to apply access charges to trains that do not run.

Conservative amendment 83 attempts to remove GBR’s ability to charge higher than the normal rate, the likely revenue to be obtained by running train services does not vary significantly based on the type of railway and the type of service concerned. The most extreme example of that is that the typical fare yield for Manchester to Blackburn will obviously be a lot less than for London to Manchester. The concept of GBR applying differential access charges is not necessarily one that I would be inclined to oppose, but the criteria that it uses in doing so needs to be transparent. The amendments that we tabled earlier allude to that. It will be interesting to hear from the Minister how the Government intend for GBR to make that process transparent, particularly given the high judicial review bar for challenging some of those decisions. That way, hopefully, a new system can be created in which everyone might have faith.

Keir Mather (Labour, Selby)

I will briefly turn back to the debate on the previous clauses; because the Opposition spokesperson asked me to provide an example of the motion of consent in general as it relates to timetabling and I was remiss in my duty in not doing so. To give more context, the network code currently sets out the circumstances where train service timings need to be adjusted by a few minutes without requiring specific consent. GBR will follow a very similar process and that is a normal process that industry would expect us to follow.

I now turn to the amendments at hand, all of which seek to make changes to GBR’s charging scheme. I confirm to the hon. Member for South West Devon that the charging regime broadly replicates the one that is in place today. That is intentional, so that all of the charges and discounts referenced will be familiar to industry to achieve a smooth transition to the new framework.

Furthermore, given that GBR will be bound by public law duties, which require fairness, reasonableness and non-discrimination in actions and decision making, there is no reason to think that GBR will behave unreasonably. Rather, when making or amending its charging scheme, GBR will be required to balance the various duties set out in clause 18, which include promoting the interests of passengers, promoting the use of the network for carrying freight and enabling operators to plan the future of their businesses. GBR will also be required to consult with industry through the development of its charging scheme, and will be held to account via a clear route to appeal to the ORR on the scheme’s design and application.

Given that existing competition law and applicable subsidy rules will automatically apply to GBR, GBR will not be able to treat other operators unfairly or start levying excessive charges that would undermine their ability to operate successful, profit-driven services. That will be further supported by the ORR’s continued role as competition regulator for the railway. I hope that gives hon. Members some assurance to begin with.

I now turn to amendment 242, which proposes to remove the provision at clause 64(1)(b) that enables GBR to charge operators for services that do not run as planned. In today’s system, that mechanism is called a reservation charge, and the Bill replicates that for GBR. Importantly, the Bill does not mandate that a reservation charge must be issued in all instances where services do not run. Instead, GBR will have discretion regarding how and when to use it. That is particularly important for taking into consideration different industry operating models, especially freight, which is market driven and therefore has to live with less certainty over the services that it needs to run to serve its customers.

A routine and technical example of when a reservation charge is used today, and likely to be replicated in the future, is one affecting passenger services, not freight. Where a passenger service is allocated to a path that is expected to stop at eight stations but—for reasons of its own making and not GBR’s—it terminates short of its final destination and stops at only seven, it could still be charged as planned for the full service. In addition, with finite capacity on the network it is important that, when passenger operators are granted access, they provide those services they said they were going to run and are disincentivised to simply hold on to capacity.

To use a different example, if an operator consistently failed to run a service in its entirety, it would disadvantage passengers seeking to use that train and other operators that might wish to operate a passenger or freight service on an unused path. It could therefore be charged in full. As I have outlined, the purpose of the measure is to encourage operators to use the capacity that they have been allocated. Therefore, the ability to levy a reservation charge is an extremely useful tool to drive the right behaviours on the network. It ensures that best use is made of capacity and that operators remain accountable for providing the services in the timetable that they agreed to deliver.

Amendment 230 proposes that operators are not charged when services are unable to run due to disruption caused by GBR infrastructure. The Bill requires GBR to have a charging scheme and to describe how it will charge operators for services that run on its network. GBR may also charge operators for services that are planned to run, but do not, if that is because of the operator and not GBR. These charging mechanisms exist today and are being replicated for GBR to ensure consistency between the networks.

If GBR is the cause of any disruption on the network that results in another operator not being able to run its service, that operator should not be charged. Instead, as envisaged by clause 65(2), GBR would be required to compensate the operator for causing the disruption that resulted in the service being cancelled. Although the hon. Member for South West Devon has identified the correct standard procedure for when charges would or would not apply, I reassure her that this protection is already provided in the Bill as drafted.

Amendment 82 would include a requirement on GBR to provide 12 months’ notice before making any changes to its charging scheme. As the hon. Member for South West Devon is aware, the way charges are set today involves following an established process that operates on a five-year timeframe. For GBR, the charging scheme will be taken into account in the course of the new funding review period, which will be similar to today’s periodic review and will also operate on a five-year basis. Similarly to the process today, the funding process will provide stability and certainty to operators on the charges they are likely to face.

The Bill does not stipulate conditions for when GBR can make changes to its charging scheme because it is important to give GBR the flexibility to decide when changes are required. However, it requires appropriate parties to be consulted before any such changes are made. Therefore, requiring 12 months’ notice before making changes would limit GBR’s ability to respond promptly to changing and potentially unforeseen circumstances such as the covid-19 pandemic. In those circumstances, GBR being able to make charging changes swiftly would likely benefit all operators on the network.

The amendment could also prevent or delay GBR from introducing positive changes for operators, such as discounts. For example, if the amendment were a requirement today, it would have taken significantly longer for Network Rail to implement its recent discount policy, which has benefited freight operators.

Amendment 83 would remove the ability for GBR to levy charges higher than the cost directly incurred. As the hon. Member for South West Devon is aware, higher charges, or mark-ups, already exist in today’s rail system. The Bill simply reintroduces the same principle, but in UK legislative drafting style, as we move away from the current European law wording. Exactly as the principle works today, that provision will ensure that the costs of operating, maintaining and renewing the GBR network are fairly recovered from appropriate parties, without the burden being on the taxpayer alone.

However, GBR will not be able to raise charges in an unreasonable way. That is why the Bill stipulates that GBR will be able to levy charges higher than the costs directly incurred only if it is affordable to efficient operators. That provision is expected to operate in similar way to the “market can bear” test today. To be clear, there is no intention to create a test that is significantly broader than or different from the one that applies today. However, we need to move away from the language inherited from the European Union to ensure that the Bill matches the rest of the United Kingdom’s statute book.

Furthermore, GBR will develop a test in consultation with the sector, including the ORR, that will be applied before GBR can levy higher charges, similarly to how the “market can bear” test is used today. It will be published with a clear route of appeal as a further layer of protection for any operators subject to charges when using GBR infrastructure.

Amendment 84 seeks to prevent GBR from implementing any part of its charging scheme until it has been laid before Parliament for a period of three months. The charging review process will continue to be developed with industry, as it is today. It will be highly consultative, including with the ORR, across multiple phases in a way that closely resembles the charging review processes for control periods today.

The amendment adds unnecessary layers of bureaucracy to industry process. Legislation already places high-level legal requirements on GBR for what it must include and consider and stipulates clear rights to appeal. Therefore, adding parliamentary process at this stage would achieve nothing other than unnecessary delay to implementing charges, to the detriment of the sector.

For all the reasons I have set out, I urge the hon. Member for South West Devon to withdraw the amendments.

Clause 64 requires GBR to establish and publish a scheme setting out the charges that it will apply to operators that access and use its infrastructure. It will also allow GBR to levy reservation charges, otherwise known as no-show charges, if operators do not run trains as intended—for example, if a service does not arrive at all stations as planned as part of its allocated path in the timetable.

The clause will require GBR to set charges at the cost that is directly incurred by GBR simply for running the service, such as incremental wear and tear on the tracks; that does not include contribution to the additional costs of maintaining and operating the railway. Under this provision, GBR will be able to charge higher than the cost directly incurred, provided that that does not exceed the amount that an efficient operator would be able to pay. To determine that amount, GBR will develop its own test of affordability in consultation with industry. To reassure the Committee, we expect it to use principles that are similar to or the same as those used today. The provision is therefore intended to work in practice as it does now.

The clause will allow GBR to provide discounts where appropriate, in any circumstance, as is supported by the non-exhaustive list of examples in legislation. GBR will not charge its own services but, to ensure transparency and fairness, must provide sufficient information about the costs that would have been charged to its own passenger services, had they been subject to the schemes above. That is not because the costs of running those services will not be provided for—it will be, by the taxpayer—but because a track access charge transaction will not be used to cover those costs, since GBR will not have a contract with itself in the way it will with a third party. Finally, the clause allows any person aggrieved by a provision in the scheme, or any replacement or revision to it, to appeal to the ORR.

Without this clause, GBR would not be able to establish its own effective charging process or incentivise positive behaviours to deliver objectives such as encouraging traffic on lesser-used routes to reduce congestion on the network, reducing disruption, and improving connectivity and performance. I commend clause 64 to the Committee.

Matt Western (Labour, Warwick and Leamington)

Just to confirm, the Clerks have checked the point of order raised by Edward Argar about the selection and grouping, and there are no further errors. They apologise for the error.

Wera Hobhouse (Liberal Democrat, Bath)

I remind the Committee that with this we are discussing the following:

Amendment 230, in clause 64, page 36, line 7, at end insert

“, except where the services cannot operate due to a failure of the GBR infrastructure or the need for GBR to take capacity for work on the network.”

This amendment would ensure that services are not caught within the charging scheme if they cannot operate due to GBR failures or actions.

Amendment 83, in clause 64, page 36, line 11, leave out subsection (3).

This amendment would prevent GBR charging any sum it likes, rather than what is reasonable.

Amendment 82, in clause 64, page 36, line 28, leave out “at any time” and insert

“by giving no less than 12 months’ notice”.

This amendment imposes a duty on GBR to give other operators a minimum 12-month advance notice of changes to the charging scheme.

Amendment 84, in clause 64, page 36, line 34, at end insert—

“(9) Neither the Secretary of State, nor Great British Railways, may take any action to implement any part of the charging scheme until a copy of the scheme has been laid before Parliament for a period of three months.”

This amendment would provide that neither the Secretary of State nor Great British Railways could take any step to implement any part of the charging scheme until it has been laid before Parliament for three months.

Clause stand part.

Rebecca Smith (Conservative, South West Devon)

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. There is not much to say, except that the hon. Member for Didcot and Wantage raised a question about our amendments and what he called phantom paths. I think he may have been referring to ghost trains, as opposed to phantom trains—if you google “phantom trains”, all sorts of weird films come up, and they are far too scary for me to watch. He is not here to disagree with me, but I think he was alluding to the issue of trains running entirely empty through stations where people would have quite liked to get on them.

The point I think we are making with our amendments is more about where issues that it is within Great British Railways’ responsibility to fix mean that services cannot run, and about not believing that the operators, which have no responsibility for the infrastructure, should still be expected to pay a fee if they are not able to run their services. I think we would have been alluding to that, rather than where they are running empty trains. There may well be empty trains as well, but I think we were talking specifically about where GBR had the responsibility—

Keir Mather (Labour, Selby)

I thank the hon. Lady for giving me an opportunity to piggyback on her response to the Lib Dem spokesperson, the hon. Member for Didcot and Wantage. I want merely to say that, from the Government’s perspective, having one centralised body accountable for access to and use of the railway and for determining best use is a good way to avoid the phantom train scenarios she describes, such as the 7 o’clock service from Manchester Piccadilly to London. I am grateful that she has given me the opportunity to row in behind her on this point.

Rebecca Smith (Conservative, South West Devon)

I thank the Minister for that. Yes, absolutely; I believe our amendments are much more about the infrastructure that GBR has responsibility for and about operators not having to pay if they are un able to operate their services. A natural disaster is probably a bit too extreme, but if, for example, a train is running through to Dawlish and the line gets closed, I think it is fair to suggest that the operator should not have to pay the fees for that train. We will press some of these amendments to a vote for that reason, but I just wanted to clarify that point. Without further ado, I beg to ask leave to withdraw the amendment.

Edward Morello (Liberal Democrat, West Dorset)

I beg to move amendment 254, in clause 64, page 36, line 14, at end insert

“and the higher amount does not hinder progress against the Rail freight target set out in section 17.”

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss amendment 255, in clause 64, page 36, line 34, at end insert—

“(8A) Following an appeal made under subsection (8), the ORR may, if it decides that GBR has not dealt fairly with the appellant, direct GBR to revise a scheme.”

This amendment requires that any charge levied by GBR under its charging scheme does not have a detrimental impact on the freight growth target.

Edward Morello (Liberal Democrat, West Dorset)

It is a pleasure to serve under your chairship, Mrs Hobhouse. It will escape no one that, in the absence of my hon. Friend the Member for Didcot and Wantage, I have been left with my hand on the wheel. I do not think trains have a wheel, but I am not entirely sure how they work—[Interruption.] They have a stick, yes. However, given that both amendments are in his name and relate to the freight target, I can only assume that they are eminently sensible and that the Government should accept them. If not, we would apparently like to press them to a Division.

Keir Mather (Labour, Selby)

It is, once again, a pleasure to serve under your chairship, Mrs Hobhouse. Amendment 254 would require GBR, when charging above the cost directly incurred—in other words, when charging mark-ups—to consider its target to increase the use of freight. I can reassure the hon. Member for West Dorset immediately that GBR will not be able to raise charges in a way that is not compatible with its statutory duties or targets.

In practice, that means that when developing its own test of affordability, GBR is expected to establish bespoke criteria for divergent market segments operating on the railway, including freight, as Network Rail set out in its discussion document on charging. That allows GBR to design a test that can support its duties, including those under clause 18, and the targets to increase freight under clause 17.

We intend that the provision will operate in a way similar to the “market can bear” test today. GBR will develop its own test of affordability in consultation with the sector, including the Office of Rail and Road, before publishing it. However, as we move away from European law, in which the “market can bear” test is established, and to the Bill, which carries over the same principles, we must ensure that the language in the drafting is fit for purpose for UK statute. That is why the Bill stipulates that GBR will be able to levy mark-ups only if it is affordable to efficient operators. The Bill preserves that fundamental safeguard for operators, but in a form that can be applied more clearly in the UK context.

The test will be published with clear routes of appeal, as a further layer of protection for any operators, including freight, that are subject to charges when using GBR infrastructure. When hearing appeals, the ORR will consider the extent to which GBR has appropriately considered all factors before levying a mark-up. I hope I have reassured the hon. Member for West Dorset that amendment 254 is unnecessary, as the Bill already achieves its intended effect.

Amendment 255 would give the ORR an explicit power, following an appeal against the content of a charging scheme, to direct Great British Railways to revise the scheme in cases where it considers GBR has not dealt fairly with the appellant. However, the amendment is not necessary to achieve that aim. The Bill already provides clear and robust rights of appeal to the ORR in relation to the content of a charging scheme. Those rights are supported by strong and effective remedies where an appeal against GBR is successful, as set out in clause 68.

In the system set out in the Bill, where the ORR upholds an appeal on the content of a charging scheme, it has the power to remit all or part of the provision appealed against to GBR for reconsideration. That means that the ORR can require GBR to make changes to the charging scheme if it was identified during the appeal process that GBR had acted in a discriminatory manner, inconsistently with its statutory duties or in a way deemed procedurally unfair.

The ORR can also give legally binding directions to GBR, which could include setting out what it failed to take account of in the original decision and what it must do to ensure that those matters are properly assessed when reconsidering it. The amendment would therefore introduce powers that are already provided for in clause 68. For those reasons, I urge the hon. Member not to press amendments 254 and 255 to a vote.

Rebecca Smith (Conservative, South West Devon)

Amendment 254 is good in so far as it goes in relation to rail freight, but other rail operators also provide public benefit and should receive a similar level of protection. The Opposition are happy to support the amendment, but we do not think it goes nearly far enough.

Amendment 255 would give the ORR the power to order GBR to revise a charging scheme if it found, on appeal, that GBR had not dealt fairly with the appellant. With the current constraint on appeals, the amendment would make no practical difference. The Government need to go much further by providing a genuine appeals process to assess appeals on their merits, with an independent body, not a direct competitor, taking the key charging decisions.

Keir Mather (Labour, Selby)

I believe that hon. Members on both sides of the Committee have expressed all the points on these amendments, and I have nothing further to add at this stage.

Edward Morello (Liberal Democrat, West Dorset)

I heard what the Minister and the Opposition spokesperson said but, because of my long-standing and passionate support for freight targets in the context of charging regimes, I will divide the Committee on the amendment.

Clause 65 - Performance scheme

Rebecca Smith (Conservative, South West Devon)

I beg to move amendment 85, in clause 65, page 37, line 15, leave out subsection (3)(b).

This amendment would enable GBR to have to pay penalties or compensation.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 223, in clause 65, page 37, line 15, after “Railways” insert

“or any operator of a train on Great British Railways infra-structure”.

This amendment clarifies that freight operators should not face penalties for service disruption caused by factors outside their control, such as infrastructure failures or planned engineering works by Great British Railways.

Clause stand part.

Amendment 86, in clause 92, page 53, line 40, at end insert—

“(1A) Section 65 does not come into force until Great British Railways has published the performance scheme and laid it before Parliament.”

This amendment would prevent section 65 from coming into force until GBR has published the performance scheme and laid it before Parliament.

Rebecca Smith (Conservative, South West Devon)

Clause 65 requires GBR to provide and publish a performance scheme that is designed to incentivise GBR, its subsidiaries or other train operators to minimise disruption or delay to other train services or the network. Train operators may be required to pay penalties if they cause disruption, may receive compensation where disruption is caused by a different operator’s operations and may receive bonuses to reward better than planned performance. So far, so good, you might say. However, it does not permit payments by GBR that relate to disruption outside its control.

Subsection (5) allows GBR to alter or replace the performance scheme at any time, and subsection (6) requires GBR to publish the scheme and any revisions or replacements. Subsection (7) allows

“a person aggrieved by the provision contained in a scheme”,

including a revision or replacement under this section, to appeal to the ORR.

Clause 65 gives GBR significant control over the allocation of performance penalties and compensation. Because GBR will run infrastructure, operate services and design the scheme, subsection (3) lets it decide whether disruption was in its control, creating a clear incentive to rule its own failures out of scope. That is a classic conflict of interest, which must be addressed if the scheme is to be considered fair.

Subsection (4) adds further imbalance by allowing GBR to withhold compensation from operators for technical non-compliance with information requirements, while imposing no equivalent duties on itself. The combined effect is an asymmetric scheme, where operators face penalties and strict conditions, but GBR’s own accountability is weak.

The Rail Freight Group raised significant concerns in its written submission to the Transport Committee:

“The Bill requires GBR to operate a performance regime for non GBR operators which we welcome. It is important that both GBR and operators are incentivised for high performance, including investing in support of that. However, the Bill allows GBR (but not operators) to avoid payment where it is ‘not their fault’, without definition of what this means. This suggests that GBR could exclude themselves from delays caused by trespass, suicide, ill health of staff, poor weather and so on! As this is a mandatory requirement it risks undermining the effectiveness of the regime and reducing incentives to deliver improved performance.”

Amendments 85 and 223 can be seen as the alternative: either one would address the obvious unfairness in the current drafting, where GBR is excused from paying compensation for disruption outside its control, yet all other operators remain on the hook. Amendment 85 would enable GBR to have to pay penalties or compensation just like every other operator. Amendment 223 would apply the same benefit that GBR currently keeps for itself to all operators, which is to not face penalties for service disruption caused by factors outside their control, such as infrastructure failures or planned engineering works by Great British Railways.

Amendment 86 would prevent section 65 from coming into force until GBR has published the performance scheme and laid it before Parliament. However, we will not seek a Division on that amendment.

Laurence Turner (Labour, Birmingham Northfield)

It is a pleasure to serve under your chairship, Mrs Hobhouse. As in previous sessions, I draw the Committee’s attention to my membership of Unite the union. I will speak briefly on the amendments. I welcome the opportunity to talk about an area of narrowly gauged interest of long-standing, although I hesitate to call it tunnel vision: schedule 4 and schedule 8 compensation for planned and unplanned disruption on the network.

The delay attribution scheme has remained essentially unchanged since privatisation, and the clause is a welcome opportunity to look again at how it works in practice. Attention has been drawn to the fact that, under the present system, approximately 400 people are employed across the rail industry to attribute delays to either operators or Network Rail. That sometimes happens in ways that defy any common-sense interpretation of good value for money, and there have been eye-catching examples of expensive lawyers gathering in a room to argue about whether a dead pheasant or a dead peacock was a small bird or a large one, for the purpose of the scheme. Depending upon that determination, the costs may be picked up by the taxpayer or by private operators, and I think we can all agree that that is nonsense.

I am glad that the Bill, as drafted, retains some degree of compensation scheme. My attention was drawn to the need for such measures recently in my constituency, where there has been a long-standing problem with road surface conditions, including what has become known, infamously, as “Northfield’s big pothole” under the railway bridge that connects Quarry Lane and Coleys Lane. Network Rail pointed out to me that a single bridge strike from a heavy goods vehicle would incur greater compensation costs for just one hour of disruption than the entire cost of resurfacing that stretch of road. Clearly, we need some degree of accountability in the system.

However, the amounts paid out through schedule 8 compensation, which is for unplanned disruption in particular, have been enormous. In theory, these schemes should be self-financing, but for all the attention that is paid to dividend payments and profits in the current railway system, the money that leaves the public part of the railway through these compensation schemes has in some years been in excess of those payments. There is a very good case for these changes.

I am not sure that amendment 85 is entirely necessary or desirable, on the basis that there may well be circumstances in which a private operator, whether freight or open access, is responsible for delays, for example if rolling stock had not been kept in the required condition. It is sensible for there to be some attribution in the system. As subsection (7) sets out, there is a right of appeal to the ORR. This is a sensible clause, and I am not sure that the amendments are necessary.

Rebecca Smith (Conservative, South West Devon)

Does the hon. Member not think our amendments could actually improve the system for GBR? We have talked, in this Committee and in the Select Committee sessions on the Bill, about the real gap in terms of the incentives for GBR to improve its services and improve itself. There is no reason why adding GBR as a body that would have to pay penalties and compensation would not introduce an incentive, in the same way we expect for operators, to ensure that the service provided on the taxpayers’ behalf and using taxpayers’ money is improved. At the end of the day, GBR is paying itself, but our amendments would at least give it an incentive to make sure that it does not need to pay compensation in the first place.

Laurence Turner (Labour, Birmingham Northfield)

If I have understood the hon. Member’s point correctly, the key is openness and transparency. We need some degree of understanding that, if GBR itself is responsible for delays, that information should be recorded so that improvements can be made. I am not convinced that GBR paying money to itself in a legal or quasi-legal process is the best use of public resources.

That transparency is lacking under the current system. The Delay Attribution Board does not publish any records of its proceedings. Some months ago, I made a freedom of information request for the minutes of the board, and the response was that they were too commercially confidential to disclose. Given the vast amounts of public money that are spent through this process at the moment, I think that is a severe limitation of the current system. This is a real opportunity to do things better.

Edward Argar (Conservative, Melton and Syston)

I will not get into whether a peacock or a pheasant is a large or small bird—it takes me back to my days as a Health Minister, when we had a debate about whether a scotch egg is a substantial meal in the context of the regulations. However, my hon. Friend the Member for South West Devon made a very valid point: even if the money is going back to GBR, there needs to be some degree of transparency so that it can be seen where the attribution is, whether it is GBR that has caused the problem, and whether it is improving or going backwards. Does the hon. Member agree that, even if actual cash is not transferred in and out, a notional payment or a schedule of payments that would have been paid should be published to give the travelling public transparency as to where the challenges lie and give GBR an incentive to improve its game?

Laurence Turner (Labour, Birmingham Northfield)

I think I agree with at least most of what the right hon. Gentleman says. The issue is whether actual payments are made, but we questioned the noble Lord Hendy in the Transport Committee on this matter, and he agreed that there needs to be some data accountability where there are delays.

I am sorry to detain the Committee on this matter. As is sometimes said, man is born free and everywhere he is in trains—I just wanted to get that one on the record. I thank Committee members for their time.

Keir Mather (Labour, Selby)

How can I top that? I am not going to try.

This group of amendments concerns performance schemes, which, as hon. Members are aware, are designed to improve the performance of the railway network by incentivising operators and infrastructure managers to enhance punctuality, reliability and overall service quality, underpinned by compensation, bonuses and penalties. For example, performance schemes can require operators to pay penalties if their services cause unplanned disruption, or can offer bonuses for better-than-planned performance.

The performance scheme provided for by clause 65 will apply to GBR itself, both in its capacity as a service operator and as the body responsible for maintaining the infrastructure. The clause supports one of the overall goals of the Bill: to dramatically improve service performance for passengers and freight operators, and to make a railway that really works.

I thank hon. Members for their amendments, which I will speak to in turn. Amendment 85 seeks to remove the provision that protects GBR for liability for performance scheme payments or penalties where the disruption is not its fault. To be clear, that provision is not designed to prevent GBR from ever paying penalties or compensation. Clause 65(2) clearly provides for GBR to pay penalties, compensation and bonuses. Where it is at fault for disruption, there is no question but that it must compensate other operators.

GBR will have the flexibility to design a bespoke performance scheme for its network. The Bill is intentionally broad, including at clause 65(3)(b), which does not define what constitutes disruption outside GBR’s control. Instead, GBR will consult the industry on its policy on the extent to which disruption after an unplanned event has occurred, and whether it is or is not outside GBR’s control. It will consider any legal requirements before publishing all agreed terms for transparency.

Edward Argar (Conservative, Melton and Syston)

The Minister says that GBR will be able to design a bespoke performance regime, but does that not go to the heart of what my hon. Friend the Member for South West Devon highlighted, which is essentially that it will be designing a performance regime against which its own performance will be managed? It gets to set the rules, determine what the parameters are, and then decide whether it meets those criteria. Subsection (7) says:

“A person aggrieved by provision contained in a scheme…may appeal to the ORR.”

Will the ORR have binding powers to make an adjudication, and will GBR be compelled to follow it?

Keir Mather (Labour, Selby)

The right hon. Gentleman pre-empts my later comments about the role of the ORR in this process.

On the principle of whether GBR should be able to design a performance scheme for its own network, that is completely in keeping with the aspiration of the Bill to create a single uniting mind for the railway. We are cognisant of the fact that GBR has a threefold obligation in this process. First, it must create a scheme that it can use to deliver the efficiencies and operational realities of the railway in a way that suits the interests of the travelling public. Secondly, operators that use the service need to be able to ensure that they can have fair service under it. That is why consulting with the industry is so important.

Thirdly, and arguably most importantly, GBR must protect taxpayers’ interests where it is reasonable to do so. A scheme is being created that directs GBR to run the railway in a purposeful way but with robust consultation and enforcement mechanisms, which I will come to in a moment, embedded within it. I believe that strikes the right balance. We are giving GBR control over the system but not allowing it to mark its own homework in every way, as the Opposition might see it. I will go into that in more detail in a moment.

Rebecca Smith (Conservative, South West Devon)

To build on the point that my right hon. Friend the Member for Melton and Syston made, clause 65(3)(b) says that compensation may not be paid by Great British Railways

“in relation to any disruption that is outside its control.”

It strikes me that that relates to what the hon. Member for Birmingham Northfield said happens already: people have to decide what constitutes significant disruption, and what is inside its control. If I were an outside operator looking at this, I would be thinking, “Hang on a minute. Where’s the definition of what is inside GBR’s control?” There is a whole long list of options that I will not even begin to bore the Committee with for what could be said to be outside its control, but where is that conversation? It strikes me that it might be like trying to claim for a bag that was stolen on holiday on insurance—you have to literally prove that you were mugged to get reimbursed. I would be interested in a bit more information on how “outside its control” will be defined.

Keir Mather (Labour, Selby)

That is why the point about designing the scheme in close consultation with industry partners is so important. The hon. Member has read my mind, as I am about to turn to specific instances or potential demarcations with respect to what does or does not constitute being within or outwith GBR’s control.

It is probably important to briefly explain what happens if an unforeseen situation arises and operators believe it is GBR’s fault but GBR disagrees, and the role of the ORR in that process. That brings us back to the intervention from the right hon. Member for Melton and Syston. The Bill will include in the future scheme a clear route to appeal, to protect all parties in instances that are disputed, but the risks will be mitigated by requirements for GBR to clearly publish the details of the performance scheme, including criteria for when GBR would be liable to pay compensation. That goes back to the public law point about transparency and fairness. The ORR, as the independent appeals body, will have a legal obligation to review the situation impartially and advise on appropriate action where necessary. In addition to the ORR, to further mitigate the risk, operators will be able to seek other means of resolution though the Access Disputes Committee where matters relate to a contractual dispute.

We believe that the clause is important, as there is a need to balance rightly protecting operators whose services have been disrupted with protecting taxpayer interest where it is reasonable to do so. For example, in instances of trespassing, we would not expect the exclusion in clause 65(3)(b) to apply, as the disruption that it causes should be within GBR’s gift to mitigate through investment in defences, and GBR would have significant opportunity to influence how quickly services are restored. In such an instance, therefore, we expect that compensation would be payable. However, where disruption follows events in extremis that are clearly not within GBR’s ability to mitigate against or control—for example, an act of terror—we envisage that the exclusion in clause 65(3)(b) might apply.

I reiterate that formulating the scheme in consultation with industry will allow us to flesh out in far greater detail the demarcations, and make sure that private sector operators and rail freight have the surety they need that the scheme has been designed in the right way. The ORR will play a key role in the process in ensuring fairness, acting as the independent appeals body if GBR does not act in line with its duties.

Amendment 223 seeks to ensure that third party operators do not face penalties for disruption outside their control. The Bill stipulates that only GBR is protected from paying penalties or compensation for disruption outside its control, because GBR is the only party that bears responsibility for the operation, maintenance and renewal of its network. There is no responsibility for that placed on third party operators, including freight.

On that basis, we do not see how the concerns raised by the hon. Member for South West Devon that a freight operator could face penalties for, say, infrastructure failures or planned engineering works would arise in practice, other than in extremely unusual circumstances —perhaps where an operator’s faulty train had caused damage to the infrastructure. Such events could only be the responsibility of GBR, as today they are not the responsibility of the infrastructure manager or the operator, so it is GBR that would pay the penalties for such issues.

It is right, therefore, that the Bill pursues a policy that protects the rights of third parties to reasonable compensation when disruption occurs as a result of another party’s actions or inactions, while also mitigating the risk of unjustified costs to the taxpayer when disruption is not reasonably in GBR’s gift to avoid or resolve. I hope the hon. Member will be reassured that the amendment is therefore unnecessary, as we believe the Bill already achieves the intended effect.

Amendment 86 would prevent the performance scheme set out in clause 65 from becoming operational until it has been laid before Parliament. Such provisions for parliamentary scrutiny are a well-trodden path at this stage of the Committee’s proceedings, and we again believe that the amendment would add unnecessary layers of bureaucracy to what is effectively a technical industry process. In reality, the expertise about what specific incentives should be set for different operators on different routes is within the rail industry, and those experts are the ones who need to review and help GBR to develop the performance scheme.

That is why the Bill includes requirements for GBR to consult on its performance scheme and requirements for what GBR must include and consider as part of its design, with clear rights to appeal to the ORR in the event of disputes. The amendment would add little practical value. It would delay the new access regime and the benefits it will bring to passengers.

Clause 65 requires GBR to provide for and publish a performance scheme that is designed to incentivise it, its subsidiaries and other train operators to minimise disruption to other train services and to the network itself. The scheme may include provisions for GBR and other operators to be required to pay penalties for causing disruption, receive compensation for disruption caused and receive bonuses that reward better-than-planned performance. The scheme may not provide for penalties or compensation when one train service causes disruption to another but they are both operated by the same person. The clause also prevents GBR from having to pay penalties or compensation in relation to disruption outside its control.

The clause gives GBR the power to require operators to provide information necessary for the scheme to function and offers no right to compensation or bonuses for parties that do not comply with those rules. The clause allows any person aggrieved by a provision in the scheme or any replacement or revision to it to appeal to the ORR. The clause is vital to create an efficient and reliable railway. It equips GBR to design a scheme that safeguards operators, forces accountability across the network and promotes continuous improvement. I therefore commend it to the Committee.

Clause 66 - Consultation

Clause 67 - Appeals against access, charging and performance decisions

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 88, in clause 68, page 38, line 11, leave out subsection (1).

This amendment removes the requirement that appeals may only be made under Judicial Review principles.

Amendment 89, in clause 68, page 38, line 11, leave out from “must” to the end of line 15 and insert—

“determine the appeal on the facts and the law.”

This amendment would enable the ORR to determine appeals on the merits.

Amendment 90, in clause 68, page 38, line 20, leave out paragraph (a) and paragraph (b) and insert—

“(a) remit all or part of the provision appealed against to Great British Railways for reconsideration, or

(b) quash all or part of the decision appealed against and substitute its own decision, as, at its discretion, it sees fit.”

This amendment would allow the ORR, when agreeing an appeal, to remit all or part of the decision appealed against to GBR for reconsideration, or quash all or part of the decision appealed against, as at its discretion it sees fit.

Amendment 91, in clause 68, page 38, line 29, leave out from “question” to end of line 32.

This amendment would allow the ORR to substitute its own decision for that of GBR when allowing appeals, without there needing to have been an error of law.

Amendment 92, in clause 68, page 39, line 8, at end insert “(f) open access operators.”

This amendment would require the Secretary of State to consult open access operators before making regulations about steps that must be taken before an appeal can be brought, to make provision about the procedure and to set time limits and fees for the appeals brought under this Chapter.

Amendment 93, in clause 68, page 39, line 18, at end insert “(f) open access operators”

This amendment would require the ORR to consult open access operators before publishing its document on the practice and procedure for appeals under this Chapter.

Clause 68 stand part.

Keir Mather (Labour, Selby)

Clause 67 provides a route of appeal to the ORR for a person aggrieved by a GBR decision about access, capacity allocation and charging, including decisions made under those schemes. Clause 68 then sets out the principles for how appeals to the ORR will operate and empowers the ORR to issue a document setting out the detailed practice and procedure to be followed. Together the clauses establish the ORR’s reformed and independent appeals role, providing a clear, credible and accessible route of redress against GBR’s access and charging decisions.

Opposition Members have consistently raised the view that basing the appeals role on judicial review principles is not strong enough. However, the rationale for the ORR deciding appeals based on judicial review principles is simple: we do not want the ORR to opine on best use. That is GBR’s job and if the ORR could simply disagree with GBR because it had a different opinion, we would be leaving the system as it is today, with parallel decision makers and unclear accountability. We would not gain the benefits of a body that is truly in charge of rail. That is precisely how we ended up with mistakes like the recent 7 am Manchester service that was set to travel with no passengers on it. The ORR admitted it did not have the adequate information or resource needed to make an informed decision on the operation of that service. That is exactly why we need a consolidated directing mind for the industry that can take decisions confidently and with passengers and freight users at its heart.

Basing the appeals system on judicial review principles ensures that appeals are considered independently and on a recognised basis of fairness, legality and rationality, and without the fragmentation of decision making that plagues the current system. The appeals process will provide a robust accountability framework to ensure the railway delivers for passengers and freight customers. It is not judicial review principles that are weak; perhaps the hon. Member for South West Devon would suggest it is the powers available to the ORR to act on any wrongdoing that are flawed. I will turn to that next.

Edward Argar (Conservative, Melton and Syston)

Does the Minister not see the challenge that if GBR is the single directing mind, we need to ask how it is held to account for individual decisions that it makes? Where is its accountability to the public, be it through this place or others? Secondly, the Minister talks about judicial review principles. As constituency Members of Parliament, we all know just how high that judicial review bar is when people wish to challenge a planning decision, or something else. It cannot consider the individual merits of the decision, merely how it has been reached and whether due process has been followed. It is also incredibly costly. Is the Minister not concerned that in setting these principles, he is setting that bar at an unattainably high level, rather than striking the appropriate balance between being able to appeal and challenge something, but not unduly burdening the day-to-day decision making of the railways?

Keir Mather (Labour, Selby)

I thank the right hon. Member for that contribution, because he gets to the nub of the principles. GBR will be held accountable through compliance with its duties as set out in legislation, which ensures that it has to have regard to passengers, including passengers with disabilities, and regard to the need to promote rail freight. It also has public law accountability built into it, through its legal obligation to act in a manner that is transparent and fair. The right hon. Member asks a broader question about whether the JR principles threshold is too high. We would argue it is not too high, precisely because of what it unlocks if we get to the stage where an appeal is upheld.

The ORR will have strong powers to dismiss the appeal or remit the decision to GBR for reconsideration, with legally binding directions that GBR cannot ignore. It is right and it is the stated principle both of the policy and of the overall notion of nationalisation that GBR can be a directing mind for the railway and have the power to do so, but there is a strong buttress against it if it is found that it has acted incorrectly as a matter of law.

We have empowered the ORR to remit decisions to GBR for reconsideration alongside legally binding directions that GBR must follow. In the most serious scenarios, including in relation to individual decisions affecting access—it is those individual decisions that the right hon. Member for Melton and Syston mentioned—we have gone even further and empowered the ORR to substitute its own decisions in place of GBR’s. When the ORR is satisfied there has been an error of law and there is only one possible decision that GBR ought to have reached, it can take those steps. That substitution power is rightly narrow. It is intended as a targeted safeguard rather than a routine step. Overuse could lead to incoherent decision making, such as an individual decision being changed without due consideration for wider timetable impacts. Or it could require the ORR itself to take on the role of a directing mind, taking us straight back to the broken system that we all agree cannot continue.

The legally binding power of direction still ensures that the appeals role has teeth, even in situations where the bar for substitution is not met. The restrictions on the circumstances in which the ORR can substitute its decision for GBR’s is an established approach for an appellate body that follows section 31 of the Senior Courts Act 1981. What we are proposing is sensible and precedented while ensuring freight and open access have a robust appeals process.

Let me illustrate the arguments with an example in order to outline this for the Committee in full. If GBR were to not allocate certain capacity for freight use during the capacity planning stage, an affected freight operator could appeal that decision to the ORR. The ORR would assess whether GBR had acted lawfully and rationally, including whether the decision was compatible with its statutory duties, such as its clause 18 duties, which include the duty to promote rail freight.

The ORR will also consider whether the decision was consistent with GBR’s other legal obligations, such as the clause 17 duty to have regard to the freight growth target, and whether GBR had followed the process set out in its access and use policy—for example, whether it had consulted with operators at the appropriate stages and met the required deadlines. If the answer to all of those questions is yes, the decision will stand. If the answer is no—for example, if GBR has failed to apply its statutory duties or has not followed its published processes—the ORR would be able to uphold the appeal. In this circumstance, the ORR may remit the decision to GBR for reconsideration and may issue legally binding directions that GBR cannot simply ignore.

The process clearly provides protection for operators. To use the favourite analogy of the hon. Member for Broadland and Fakenham, who is not with us today, GBR is writing its homework by making the decision, and the ORR can be called on to assess that homework. In doing so, the ORR would use GBR’s legal duties, published policies and processes as its marking scheme.

Some of GBR’s decisions might be like maths homework with only one possible correct answer. In those cases, the ORR will have the ability to immediately substitute the correct answer in place of GBR’s incorrect one. But for much of GBR’s homework, there will be no single right or wrong answer, and in those cases it will be for the ORR to check GBR’s workings. Rather than substituting its own answer in those cases, the ORR should send the homework back to GBR with appropriate feedback and tell it to try again.

Rebecca Smith (Conservative, South West Devon)

Clause 66 sets out who GBR must consult before issuing, revising or replacing the access and use policy under clause 59. The ORR and the Scottish and Welsh Ministers must be consulted as well as other persons GBR considers appropriate. Subsection (2) requires GBR to consult the persons it considers appropriate before issuing the infrastructure capacity planning document under clause 60, including any revisions and replacements; before issuing a working timetable under clause 61; and before making, altering or replacing a charging scheme under clause 64 or a performance scheme under clause 65.

Subsection (3) provides that a requirement in this clause for consultation may be satisfied by a consultation before or after the commencement of the clause. There is currently no express requirement to consult existing open access operators.

Clause 67, on appeals against access, charging and performance decisions, provides that a person who is aggrieved may appeal to the ORR against a GBR decision as to their train operations’ access to and use of the infrastructure, or a decision under the charging scheme or performance scheme. That sounds okay, until we realise that it is on judicial review terms, so there is no actual right of appeal at all.

Clause 68, on the appeals procedure, sets out that the ORR, when determining appeals under this chapter, must apply the principles that the High Court would apply on an application for a judicial review, or the principles that the Court of Session would apply in exercise of its supervisory jurisdiction for appeals in Scotland.

Subsections (2) and (3) provide for the ORR to allow an appeal or dismiss it, and, if it allows an appeal, to use the following remedies. For appeals made against the GBR policies, plans, and schemes themselves—under clause 59(6), on access and use; clause 60(6), on infra-structure capacity; clause 64(8), on charging; or clause 65(7), on the performance scheme—the ORR can only require GBR to reconsider the decision.

For appeals made against a specific decision under clause 61(5) or clause 62(7), on the working timetable, or under clause 67, on GBR’s policies, plans and schemes, the ORR can quash the decision that is appealed against. Then, however, all it can do is to send it back to GBR to reconsider, or it may substitute the decision with its own if quashing the decision is on the basis of an error of law and without the error there is only one decision that GBR could have reached.

Clause 68(1) means that because appeals must be assessed using judicial review principles, operators can challenge GBR decisions only on procedural grounds and not on the substance or commercial merits. That means that GBR will be judge and jury in its decisions affecting its direct competition, which is obviously wildly unfair.

Clause 68(3)(a) sets out that even where an appeal succeeds, the ORR can only remit the matter back to GBR for reconsideration, which means that GBR can often reach the same outcome again without revising its reasoning. That offers little to no real corrective power.

Clause 68(4)(b) says that the ORR may substitute its own decision only where there is an error of law and where only one lawful outcome was possible. That is a very high bar and as a result this remedy will be rare.

These concerns have been echoed by the industry. During one of the oral evidence sessions for the Transport Committee, Maggie Simpson of the Rail Freight Group said:

“There are a number of problems with that appeal function. First, it will be incredibly hard to ever get to it. We are told that the appeal will have to meet the standards of a judicial review—illegality, irrationality or procedural unfairness—so there will be a very high bar to meet to even get there. On top of that, the law allows the Secretary of State by regulation to set out some steps you would have to take in advance of going to the ORR. We do not know what those are. There is also a fee, and we do not know what that is. Even getting to the ORR will be very much more difficult than it is today.

If we do get up there, in most cases, the ORR will be able to ask GBR to have another look at its decision. It has another look, and it reaches the same view—so what? Only in a minority of cases can it quash a decision and only if there was an error of law…Passengers are going to get a very powerful watchdog when, conversely, we feel that in freight, we are having those rights of access watered down.”

Steve Montgomery from FirstRail said:

“Considering other large public sector organisations—like GBR is going to be—you have to ask, ‘Why would you not have an independent regulator of it?’ Why is rail going to be different from other large public sector organisations where there are regulators looking at them?”

Nick Brooks from ALLRAIL said:

“A strong independent rail regulator has two roles. The ORR, by the way, is part of the European group of independent rail regulators called IRG. Ideally, those roles are to protect passengers and other parts of the sector from monopolistic behaviour, and to ensure the best use of taxpayer money. Their role is also, in other countries, to ensure competition and non-discriminatory behaviour. We are worried that that might be watered down in this country and needs to be improved still.”

That prompts some questions that I hope the Minister can answer. Why is GBR being set up in such contradiction to its European neighbours? Is there anything that we could have learned? Will the Government reconsider any element of GBR as a result?

These concerns were also set out in the Rail Freight Group’s written evidence to the Transport Committee:

“GBR will by nature be a very powerful monopoly of track and GBR trains, and the overarching changes in the Bill reduce significantly the independent oversight of ORR, leaving the Secretary of State holding GBR to account. By comparison, the ORR currently has a duty to promote the use of the rail network and thus has a track record”—

ha, ha—

“of creating growth by approving new access applications previously rejected by Network Rail. Although we welcome the provisions for freight outlined above, there is still a significant risk that GBR could act in a way which favours its own trains, restricting growth for freight. As such, we believe it is essential that non-GBR operators have an independent appeals function that is powerful, easy to use and able to take action effectively.”

It continued:

“In essence, the provisions in the Bill mean that freight operators and customers have a very limited right of independent appeal against GBR. It is also of note that GBR may replace the current Access Disputes Committee (also independent of Network Rail) who hear lower level timetabling disputes with their own internal process, albeit we do not yet have full details of this.”

I would be interested to hear the Minister’s response to that.

FirstGroup wrote in a similar vein, saying that it was concerned

“about the ORR’s responsibility for track access decisions being transferred to GBR…The Bill removes the ORR’s powers to independently adjudicate on whether applications for access best meet the needs of all railway users. Under Clause 68 the ORR is an appeals body but with no ability to uphold appeals if they are discriminatory or anticompetitive. There need to be more checks and balances to maintain confidence in fair access, independent regulatory oversight and to protect the interests of passengers…As a broader point, independent regulation is vital to all large comparable bodies—consider for example the CQC’s role in healthcare or the Civil Aviation Authority in airlines and airports.”

The pushback against this grossly unfair clause is overwhelming, and the Government can surely no longer turn a deaf ear.

Amendment 88 would remove the requirement that appeals may be made only under judicial review principles. We think that it is an obvious improvement. At the Transport Committee on 7 January, the Department for Transport’s official, Lucy Ryan, stated that the requirement is deliberate:

“The reasoning for the JR threshold is to be absolutely clear that GBR needs to remain the directing mind, able to take decisions about optimising the use of the network.”

That is an insufficient safeguard against monopolistic behaviour by GBR. Large monopolies with structural conflicts of interest need effective decision-making oversight. It cannot be done by the Secretary of State, because this is operational, so it has to be the ORR.

Amendment 89 would enable the ORR to determine appeals on the facts and the law. It builds on amendment 88, and we think it is the only way to create a fair and non-discriminatory process. Amendment 90 would allow the ORR, when agreeing an appeal, either to remit to GBR for reconsideration or to quash and/or substitute its own decision for all or part of the decision appealed against. An independent appellate body applying the rules to GBR and its decisions would not challenge the role of GBR, but make sure that it was applying its rules fairly and correctly.

Amendment 91, which I believe the hon. Member for Didcot and Wantage supports, would allow the ORR to substitute its own decision for that of GBR when allowing appeals, without there needing to have been an error of law, resulting in only one possible outcome. It would remove a ridiculously closely drafted requirement, and it is obviously fair. It is a test to see if the Government actually want a fair and level playing field.

Amendment 92 would require the Secretary of State to consult open access operators before making regulations about steps that must be taken before an appeal can be brought, to make provision about the procedure and to set time limits and fees for the appeals brought under this chapter. Operators clearly have skin in the game, and should be consulted by right.

Amendment 93 would require the ORR to consult open access operators before publishing its document on the practice and procedure for appeals under this chapter. The argument for that is very similar to the one behind amendment 92, which I just set out. Will the Minister stand up for the open access and freight sector, and support our amendments to create a fair appeals process?

Joe Robertson (Conservative, Isle of Wight East)

It is a pleasure to serve under your chairship, Mrs Hobhouse. I have a short point to make. The Minister seems to be saying that it is important to restrict an appeals process to the judicial review principles, which is a more restrictive set of criteria by which a body or company can appeal. Otherwise, that might lead to “incoherent decision making”—I think those were his words.

That sentiment and assertion undermines the entire court system of the United Kingdom—save for judicial review applications—which is based on disputes being had in, for example, the county court or the High Court, or another court making a decision, and the possibility of an appeal going upwards all the way to the Supreme Court, depending on the issue. However, nobody would suggest that that leads to an incoherent society or to incoherent contracts, family law, employment law, decision making or anything else.

For some reason, Great British Railways has this special carve-out, such that it can be challenged only through judicial review, because of some notion of incoherence. It seems to me that the entire purpose of that restriction is to prop up Great British Railways and allow it to act in a way that is not really comparable to anything else in the way we deliver public transport in this country. It gives me considerable concern.

Keir Mather (Labour, Selby)

I will respond first to the hon. Member for Isle of Wight East. The point about confusion does not pertain to confusion created through arbitration in the courts on the principles of access decisions as a matter of law. I think that that is fundamental to making sure that GBR works within the boundaries of the legislative framework we have created, as well as, via public law principles, operating in a way that is both fair and transparent. The point about confusion is having two decision-making bodies on what constitutes best use of the network and access to the network. That is where we want to avoid confusion, because that is the system we have inherited, and it does not work for passengers.

The shadow Minister raised a point about fees, and the right hon. Member for Melton and Syston mentioned costs. Any appeals will be made against JR principles and not processes. It is not that each case will be brought before the courts, with the associated costs that that would bring, so I am confident that the costs of appeal would not be a significant factor under the new system as opposed to the old one.

On the matter of European systems, the shadow Minister tests the boundaries of my knowledge of the operation of rail systems overseas. There are systems in Europe in which a body similar to the ORR has too dominant a role in having charge over access and decision making in relation to it. That is not working in the existing system, and that is what we are trying to change through the Bill.

Amendments 88 and 89 seek to remove the requirement that appeals be made on judicial review principles and replace this with a requirement that appeals are determined

“on the facts and the law.”

As I set out in my opening speech, judicial review principles will ensure that the ORR focuses on the legality and fairness of GBR’s decision making, not on retaking the decision. Replacing this with a requirement to determine appeals on the facts and the law instead would convert this to a merits-based system, which would require the ORR to rerun strategic judgments and exercises on best use of the network. That is not the role we intend for the ORR. The framework is designed to provide strong, independent oversight while preserving GBR as the single directing mind.

We have discussed repeatedly in Committee that what is wrong with the railway today is the fact that there is no one decision maker. There has to be just one, or the railway will continue to stagnate. GBR is the body with the expertise to be that decision maker, and the ORR is the body that should check that it has acted fairly and proportionately. Judicial review principles strike the right balance between accountability and effective decision making.

Amendments 90 and 91 would extend the ORR’s powers to substitute its own decision for one of GBR’s. As I have mentioned, the Bill deliberately distinguishes between types of appeals and the powers available to the ORR in each circumstance. For appeals concerning provisions within GBR’s strategic documents, such as the access and use policy, infrastructure capacity plans or its charging and performance schemes, the ORR may remit the provision appealed against to GBR for reconsideration, and may do so with binding directions, but may not substitute its own decision. That is because these are not yes or no decisions—they are not simple decisions—but rather complex and comprehensive policies that govern the railway. It is not appropriate for the ORR to rewrite strategic policy documents, and that is not what regulators are meant to do. The ORR should be checking that GBR has acted consistently with its procedures and policies, not substituting them with its own.

However, for operational decisions, for example about charges for operators or about whether someone should be included in the timetable, the ORR has stronger powers. The ORR may quash all or part of the decision and may substitute its own decision in cases where there has been an error of law and, without the error, there would have been only one decision that Great British Railways could have reached. The amendments would remove these carefully drawn distinctions, potentially allowing the ORR to step beyond its oversight role and into decision making on best use of the network. We cannot have that. The amendments would allow the ORR to make decisions on best use without decisions going back to GBR to correct, removing GBR’s ability to learn from and correct its mistakes, and adding duplication between two decision-making bodies. The Bill already provides robust remedies where an appeal is upheld, including the power to remit with binding directions, even when substitution is not available, which ensures effective redress while preserving GBR as the single directing mind.

Amendments 92 and 93 would require the Secretary of State and the ORR to consult open access operators before publishing either regulations or practice and procedures for appeals under this chapter. The Bill already sets out a clear and proportionate consultation requirement, and the current formulation is deliberate to provide flexibility for the ORR to engage industry and stakeholders, including open access operators, without creating an inflexible statutory list. It may also be helpful to emphasise that the ORR’s appeals role exists precisely to ensure fairness, transparency and lawful decision making for operators, including open access operators.

The ORR has already begun engagement on its approach to developing its appeals process and has published a discussion document setting out its emerging thinking, which is publicly available and open to comment and views from industry and other stakeholders, including open access operators. The work is intended to inform its final appeals process, and there will be a formal consultation once the Bill receives Royal Assent. Open access operators will therefore be able to provide views as part of the consultation without the need for an explicit mention in the Bill. The process already provides a clear and appropriate route for open access operators to have their views heard.

I also note that the Secretary of State regulations relate to process matters only, such as steps that must be taken before an appeal is brought, time limits, and fees. They do not determine access rights or decision making on capacity allocation or charging. It is therefore appropriate that the statutory consultation requirement focuses on bodies with system-wide responsibilities and oversight roles, rather than individual categories of operator.

As with other consultation provisions in the Bill, singling out one category of operator will create a precedent for others to request to be added to the statutory list, and we will risk making the framework overly prescriptive. The current drafting already achieves the right balance, ensuring engagement and maintaining flexibility. For those reasons, I urge the hon. Member for South West Devon not to press the amendments, and commend clauses 67 and 68 to the Committee.

Clause 68 - Appeal procedure

Edward Morello (Liberal Democrat, West Dorset)

I beg to move amendment 203, in clause 68, page 38, line 35, leave out subsections (6) and (7).

This amendment, along with Amendments 204 and 205, strengthens the role of the ORR, and reduces the role of the Secretary of State, in considering appeals against GBR access decisions.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 204, in clause 68, page 39, line 10, leave out from “Chapter” to end of line 11.

See explanatory statement for Amendment 203.

Amendment 205, in clause 68, page 39, line 15, leave out paragraphs (b) to (d).

See explanatory statement for Amendment 203.

Edward Morello (Liberal Democrat, West Dorset)

Amendments 203 to 205 were tabled by my hon. Friend the Member for Didcot and Wantage. The clause gives the Secretary of State extensive powers to intervene and, ultimately, overrule access decisions made by GBR. As I said in our previous sitting, we must remember that those powers are not just for the current Government, but for all future Governments. The Bill concentrates too much authority in the hands of the Secretary of State, with too little accountability and independent oversight. The amendments would reduce ministerial micromanagement and strengthen the role of the ORR in determining appeals on access decisions. The ORR should be an independent regulator whose job it is to make fair, evidence-based judgments. Access decisions should be governed by transparent regulation, not by political discretion. The amendments would strengthen the role of the ORR, protect the independence of GBR and prevent excessive control by the Secretary of State, especially without any accompanying accountability—something the Government have continued to refuse when the Opposition parties have tabled amendments. However, I hope we will have a sudden volte-face on amendments 203 to 205.

Rebecca Smith (Conservative, South West Devon)

I shall be brief. The amendments would strengthen the role of the ORR and reduce the role of the Secretary of State in considering appeals against GBR access decisions. Without further ado, I will say that we will support all three, should the Liberal Democrats press them to a vote.

Keir Mather (Labour, Selby)

Amendments 203 to 205 seek to do two things: to remove the Secretary of State’s ability to make regulations relating to the appeals process; and to remove the Secretary of State, Scottish Ministers and Welsh Ministers as statutory consultees on the ORR’s appeals procedure. I support the ambition to ensure that the appeals framework works independently and commands confidence across the industry. However, the amendments are not necessary or appropriate to achieve that aim.

The ORR will establish its own appeals process and engage with industry on its development. In fact, it has already published a discussion document seeking views from interested parties on its policy choices. That was published on 3 December and can be found on the ORR’s website. The Secretary of State’s regulation-making powers are intended to provide a safeguard to ensure that the appeals framework operates effectively, and are not expected to play a routine role. The powers may be used only for matters of process—for example, the setting of legally binding time limits for bringing appeals and, if appropriate, providing for the charging of fees.

The powers cannot be used to interfere with the ORR’s independence in deciding and assessing individual appeals, or used to dictate the outcome of any appeal. Other procedural arrangements will be set by the ORR as it develops its appeals process. The power ensures that the framework can be set and adjusted, if required, to maintain effective operation over time while fully preserving the ORR’s independence in determining appeals. The Secretary of State will, of course, be required to consult the ORR, GBR, Scottish and Welsh Ministers and such other persons the Secretary of State considers appropriate before making any regulations under the power.

In a similar vein, when the ORR issues, revises or replaces its appeals practice and procedure, it is important that it must consult GBR, the Secretary of State, Scottish and Welsh Ministers and such other persons it considers appropriate. That ensures coherence across the railway network, particularly where services cross borders. Removing these provisions would reduce flexibility and resilience in the appeals framework without materially strengthening the independence of the ORR’s appeals role. For those reasons, I urge the hon. Member for West Dorset to withdraw the amendment, and not to move amendments 204 and 205.

Edward Morello (Liberal Democrat, West Dorset)

I listened to the Minister’s points. I think that the Liberal Democrats have been adamant throughout scrutiny of the Bill that we want to establish clear lines between the ORR, GBR and the Secretary of State in order to limit meddling under any future Government and to protect what this Government are trying to achieve. The Bill needs clear red lines on where Secretary of State power should be, so I will push the amendments to Divisions.

Clause 69 - Access agreements

Keir Mather (Labour, Selby)

I beg to move amendment 175, in clause 69, page 39, line 25, leave out “17(1)” and insert “17”.

This amendment and amendment 176 restrict the power of the Office of Rail and Road to give directions to Great British Railways so that it will apply only to “facility to facility” access contracts.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Government amendments 176 to 183.

Clause stand part.

Clause 70 stand part.

Amendment 146, in clause 71, page 40, line 30, leave out paragraph (a).

This amendment prevents regulations allowing for the early termination of access agreements.

Clause 71 stand part.

Government amendment 186.

Keir Mather (Labour, Selby)

Amendments 175 to 183 and 186 will ensure that GBR can enter into connection contracts with adjacent infrastructure managers and facility owners. A connection contract is a formal agreement that focuses on the physical interface and upkeep of the connection between two rail networks. Connection contracts are important in enabling the smooth passage of trains from GBR’s network to others, such as the Core Valley Lines in Wales. They also allow GBR’s network to be connected to privately owned depots or ports, which will be of importance to freight operators. These technical amendments retain the existing arrangements, enabling GBR and other parties to enter into connection contracts. I therefore urge the Committee to support them.

Edward Morello (Liberal Democrat, West Dorset)

I wish to speak in support of amendment 146 tabled by my hon. Friend the Member for Didcot and Wantage. Clause 71 gives the Secretary of State the power to make regulations allowing for the early termination of access agreements. We believe that this creates unnecessary uncertainty for train operators and passengers. Access agreements are detailed, regulated contracts that set out service patterns, responsibilities and costs. They are overseen by the ORR and published on its public register. Amendment 146 would remove ministerial powers to terminate those agreements early, limiting the ability of the Secretary of State to micro- manage GBR.

While I risk sounding like a broken record, as I have said before, these are powers that apply to both the current Government and future one. While I understand the desire for the Secretary of State to have the power to terminate agreements, those powers sit better with the ORR and GBR. If we want stability, investment and reliable services, we need to signal to the market that there will not be political intervention that undermines long-term planning. I hope that the Government will see the sense of this amendment.

Rebecca Smith (Conservative, South West Devon)

Clause 69 amends the Railways Act 1993 to except GBR or a subsidiary of GBR from the sections outlining the ORR’s powers on access and its corresponding duties. That change would prevent the ORR from making access decisions on infrastructure operated by GBR. The clause removes GBR from the normal ORR supervised access regime, giving it a special exemption that no other operator has. Since GBR is both operator and infrastructure manager, we believe that this creates an uneven playing field and risks unfair treatment of competing operators. If the Government insist on the current drafting, they must come clean and admit that their intention is to treat competitors unfairly in comparison, and that they are not in favour of competition and reject private investment as a driver of innovation and improvement on the railway.

Given the destruction of the current independently managed fair and level playing field, it is no surprise that the industry has major concerns. Eurostar’s written evidence to the Transport Committee explains:

“The Railways Bill consolidates strategic and operational authority in Great British Railways. While centralising network management offers efficiency gains, it is essential that ORR’s independent regulatory function is preserved, especially for open access and international services. In future Government will have the overarching interest in the Infrastructure Concession (let to LSPH), the Maintainer Operator (Network Rail) and the largest operator on the route (SET). There needs to be an independent referee to balance these interests with those of open access operators.

ORR provides impartial oversight of track access, station allocation, depot facilities, charging, and timetabling. Its independence provides transparent decision-making and safeguards competition, while giving investors confidence in the long-term stability of services.

Decisions such as the allocation of depot access at Temple Mills demonstrate the importance of ORR in balancing competing demands for constrained resources. Without statutory protection, GBR could constrain competition and impede international service growth. In addition, it could reduce transparency in access allocation.

Eurostar recommends that the Bill explicitly preserves the ORR’s independent role in regulating access, charges, and depot allocation for international services. This statutory protection is essential to provide fair treatment for operators and give certainty for the future of UK international rail services.

In international rail terms, the ORR’s role is more important than ever before, given the recent ruling enabling a new entrant to the market to access Temple Mills depot. The regulator will need to perform a strong, independent and objective role in ruling on cost sharing, compatibility and rolling stock issues.

The ORR can also play a role in track access charges – costs for accessing the London-to-Calais stretch of rail are nine times higher per kilometre than the cost of accessing equivalent infrastructure in Belgium, France or the Netherlands.”

Written evidence to the Transport Committee from Lumo and Hull Trains outlines their concerns:

“The ORR plays an essential role in maintaining a fair, transparent, and competitive rail network. Its independence supports confidence among passengers, freight operators, and private investors. Lumo and Hull Trains believe the Railways Bill should preserve this role to help GBR succeed.

To maintain balance across the system, the ORR must retain meaningful regulatory powers to ensure decisions made by GBR on access and charging are fair, evidence-based, and consistent with the Government’s growth objectives. The current drafting of the Bill, however, limits the ORR’s capacity to intervene proactively, restricting its powers primarily to appeals after decisions have been made.

Enhancing the ORR’s decision-making and enforcement capability would help ensure that GBR’s commercial and operational decisions remain aligned with the wider interests of passengers and the market. This approach would reinforce the Government’s ambition for a collaborative, competitive, and accountable rail system. A strong regulator also provides stability for investors, ensuring that GBR operates within a framework that fosters long-term confidence and fair treatment for all market participants.

While the Government desires to create a ‘directing mind’ in GBR, coordinating rail with a whole network view, for private operators to have confidence in the system there must be appropriate protections guaranteeing fair access and charging. The ORR is well-positioned to perform that role as an essential backstop, but the correct framework must be built around it to enable it to operate as such.”

Finally, Angel Trains also provided written evidence to the Transport Committee:

“Angel Trains believes that the new access framework must provide equitable access to all parts of the railway, whether operators are GBR-led, Open Access, or freight. As a lessor of rolling stock to both GBR-led and Open Access operators we believe parity among operators is crucial and would welcome greater clarity from the Government on how access and charging decisions will be made and prioritised. As an independent regulator, the Office of Rail and Road (ORR) should be responsible for ensuring a level playing field by intervening if concerns are raised that GBR could have taken a discriminatory decision, for example, around preferential access rights and charging for GBR operators over Open Access competitors.

Beyond access arrangements, we would welcome further detail from the Government about how GBR will be held to account. In its current form, GBR possesses a high concentration of power in its role in setting both strategy and delivery. In order to provide adequate scrutiny and accountability, there must be sufficient checks and balances to ensure that financial, economic, and safety objectives are met.

Angel Trains believes that there should be clear divisions between different parts of the rail system to ensure adequate accountability…As outlined above, it is vital that there is a fully independent regulator to hold GBR to account, for which the ORR could be best-placed. Beyond acting as an arbiter on access and charging decisions, the ORR should be empowered to report on GBR’s performance and issue performance improvements notices to GBR, in addition to other regulatory duties. The ORR must maintain a regulatory function to provide fairness and stability for the rail industry, which encourages investment and ensures financial sustainability by creating a level playing field across the sector and eliminating subjectivity from decision-making.”

We therefore seek to leave out clause 69 and will vote against it. This would keep GBR under the normal access regime supervised by the ORR and ensure a fair system. We have no objections to Government amendments 175 to 183 but, as mentioned, we are less happy with clause 69 as a whole.

Clause 70 amends the 2016 regulations to exempt GBR from the provisions of those regulations that would otherwise apply to its infrastructure. The 2016 regulations will continue to apply to other infrastructure managers. We do not object to the clause.

Clause 71, on the operation of existing agreements and rights, provides the Secretary of State with the power to make regulations about pre-existing agreements to access GBR infrastructure that are in force at the date this clause comes into force, granted under the 2016 regulations. It sets out the scope of the power, and limits the use of the power to 15 years from Royal Assent. These huge new powers for the Secretary of State—the ability to amend or terminate agreements, impose new obligations, change liability, rewrite dispute-resolution rules and require future ministerial consent, all by secondary legislation—risk undermining long-term contractual certainty for operators. This is one of the most sweeping discretionary powers in the Bill and could significantly weaken confidence in the stability of existing access rights.

Page 22 of the consultation response reassured non-GBR businesses:

“Existing access rights for open access operators will be honoured by GBR until the end of current contracts.”

Clause 71 drives a coach and horses through that position. The Rail Freight Group raised concerns about the clause in its written evidence to the Transport Committee:

“Clause 71…gives a power for the Secretary of State to remove current track access rights from current agreements until they expire. Although most freight contracts expire in 2030, there would be a period of around 2 years from GBR ‘go live’ until expiry, where this clause could be used to take freight trains off the network. Although we have been assured by DfT that this is not the intention, the clause remains of concern for freight operators.”

Nick Brooks from ALLRAIL told the Transport Committee:

“I realise that according to clause 71, I believe, the Secretary of State will have the ability to alter existing access agreements and rights for 15 years. That is a bit troublesome for private investment. I think everyone here probably agrees that private investment in the supply chain is a good thing, because the taxpayer cannot fund everything. We see that not just in the UK, with the current fiscal situation, but elsewhere around the world—fiscal problems do not solely affect the United Kingdom. You need private investment. Private investors or privately owned companies—whether supply chain, operators or ticket vendors, which were being talked about earlier—need certainty, so that long-term investment is not discouraged. We need more certainty in terms of the clause 71 powers.”

When asked in the Transport Committee oral evidence session,

“do you feel the provisions in the Bill for non-GBR operators are fair and appropriate?”,

Steve Montgomery of First Rail said:

“As it stands, no. We have no confidence in that because, again, the access and use policy has not been written yet—discussions are starting. Given the inability to understand that, how do you get private investment into the industry when people do not know what part they may or may not play in the future? That will stop decision making.

We set up GBR to try to drive the industry forward, set strategy and give people certainty about the future. As it stands, FirstGroup is an open-access operator, and it has no certainty on that. As we have all stated previously, the fact that we are unable to turn round and say that we will retain contracts that we currently operate, or that there may be new contracts in the future, is very difficult. It is difficult to see that we are playing on a level playing field with the rest of the DfTO operations.”

On clause 71, FirstGroup said:

“Private sector innovation and investment have been vital for the UK’s railway over the last 28 years. As we look forward to a new era for the railway, the private sector should continue to play a role driving passenger and economic growth on the UK’s railways.”

Last year, FirstGroup invested £500 million in British-built Hitachi trains—I recall the Prime Minister claiming credit for that investment at the time—and said that they are

“ready to invest further in UK manufacturing and jobs, provided open access applications are assessed fairly and independently.”

FirstGroup went on to say:

“However, the current provisions in the Bill do not encourage further substantial investment. Clause 71, which outlines an unusual power for the Secretary of State to write regulations to amend contracts between a private sector operator and Network Rail/GBR, and Clause 72, which outlines the regulations that the Secretary of State may make about non-GBR infrastructure, facilities and services, must both be amended to create certainty for private sector investment…the regulations written under Clause 71 should not allow termination of access agreements and access rights.”

We will therefore vote against clause 71 in order to prevent the Secretary of State from changing the terms of existing open access contracts. The implications of the clause are of great concern for freight operators, and, as they have been informed, if it is not the DFT’s intention to change the terms of existing contracts, why does it need the clause at all? Briefly, amendment 146 tabled by the Liberal Democrats would prevent regulations allowing for the early termination of access agreements, which we support.

Keir Mather (Labour, Selby)

I thank the shadow Minister and others for their contributions. It is a small point, but the shadow Minister raised international obligations and treaties, and I want to reassure her that infrastructure managed and operated by parties other than GBR, including High Speed 1, will continue to be governed by the existing access and management regulation. There will therefore be no impact on international obligations and treaties. Hopefully, that will instil confidence throughout the rail supply chain as to how seriously we take those obligations.

I will speak first to clauses 69 and 70, before turning to the amendments. Clause 69 amends the Railways Act 1993 to exempt GBR from the ORR’s powers on access and its corresponding duties. In short, the clause prevents the ORR from making access decisions on infrastructure operated by GBR. Amendment of the existing provisions is vital to allow the Government to fulfil their commitment to establish GBR as the directing mind responsible and accountable for making best use of the railway. Retaining the role of the ORR as the decision maker on access is not the answer.

Under the current ORR system, decisions on the timetable are plagued by delays and disagreements between ORR and Network Rail, and require ministerial intervention for timetables to be finalised. As the regulator, the ORR does not have the ability to review the system holistically, create more routes and optimise the overall use of the network—it can only respond to the specific applications that are submitted to it.

If we keep the current system, we will continue to see disruption and delays caused by timetabling problems, and inefficient use of the network that is no one’s best interests. We will continue to see problems, such as trains running without passengers on them, purely because of the systematic issues that govern access and timetabling decisions. Retaining the ORR as the access decision maker would not lead to better performance, and would not benefit passengers. The only way to achieve the high-performing and high-quality railway that this country needs is to put one body—GBR—in charge of the railway and of granting access to it. It is only GBR—not Ministers or the ORR—that will have the level of expertise and the detailed knowledge of the whole railway system that is needed to make the right decisions for passengers, freight users and taxpayers.

Clause 70 makes technical changes to the body of law that currently governs access, to exempt GBR and make some other consequential changes, so that the existing access and management regulations will no longer apply to GBR in relation to its infrastructure. The technical amendments in the clause are necessary to enable GBR to become the single decision maker and directing mind for its infrastructure. The existing regulations will continue to apply for adjacent infrastructure managers, such as Transport for London and Core Valley Lines in south Wales.

Clause 71 provides the Secretary of State with a time-limited power to ensure that contracts can continue to operate effectively, following the establishment of Great British Railways. The Government have made the commitment that, following its establishment, the existing access rights held by operators, known as schedule 5 rights, will be honoured, as will the charges set by the ORR for the remainder of the current control period. The clause does not change those commitments. However, the power is needed to prevent contracts from becoming inoperable because they are reliant on the previous legislative framework in the Railways Act 1993, which will not be applicable once the Bill is enacted.

In a similar way to how the ORR provides notices for contracts today, the Secretary of State will, if necessary, and only as a last resort, use the power to make technical changes to existing contracts, simply to ensure smooth transition to the new access and charging regime under GBR—for example, to account for the establishment of GBR and address the changed roles of the ORR and GBR, so that contracts still operate as they should.

Without those changes, operators with access rights would potentially not be able to provide the services that they have contracts and rights to run, because the contracts will become inoperable. However, recognising the need for reassurance, and to offer certainty for third parties, the Government have also committed publicly to ensuring that operators with existing contracts in scope of needing that power will be engaged with and consulted, to identify inoperable clauses and agree on replacement wording.

Amendment 146 would take away the ability to amend or terminate contracts. However, it is necessary for the clause to be drafted widely, including with reference to termination, in case the best way to effect the technical changes to the contract is to terminate and immediately replace the contract with one that is aligned to the new legislative framework, rather than making numerous technical amendments throughout that would otherwise render the contract unusable or unwieldy. As stated earlier, that will not affect any operators’ schedule 5 rights, nor will it impede the existing charging determination set by the ORR until its natural expiry in April 2029, which the Government have confirmed both publicly and in writing. Not including that provision would be a risk to the smooth transition to the new regime, which the Government are not prepared to risk.

Given all that I have discussed, I urge hon. Members not to press the amendment to a vote.

Wera Hobhouse (Liberal Democrat, Bath)

I propose that we suspend the meeting for 10 minutes so that everybody can have a comfort break.

Clause 71 - Operation of existing agreements and rights

Clause 72 - Regulations about non-GBR infrastructure, facilities and services

Edward Morello (Liberal Democrat, West Dorset)

I beg to move amendment 256, in clause 72, page 41, line 38, at end insert—

“(3A) The regulations must not make provision for the Secretary of State to direct operational matters of customer and facility-owner freight sidings and terminals.”

This amendment ensures that the Secretary of State does not exercise powers over operational matters of customer and facility-owner freight sidings and terminals.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 221, in clause 72, page 42, line 2, leave out from “consult” to end of line and insert

“the Office of Rail and Road and affected facility owners”.

This amendment would require the Secretary of State to consult the ORR and affected facility owners before making regulations under this section.

Amendment 231, in clause 72, page 42, line 4, at end insert—

“(7) Infrastructure, facilities and services not managed by Great British Railways which are used exclusively for the carriage of goods by rail are excluded from the provisions of this section.”

This amendment clarifies that privately funded, freight-only facilities are excluded from regulation under this section.

Clause stand part.

Clause 73 stand part.

Edward Morello (Liberal Democrat, West Dorset)

I speak in support of amendment 256, tabled by my hon. Friend the Member for Didcot and Wantage. Clause 72 allows regulations that could give the Secretary of State powers over operational matters in freight sidings and terminals. Amendment 256 makes clear that those operational decisions must not be subject to ministerial direction. The amendment comes directly from the freight industry and reflects clear concerns about unnecessary political interference.

Freight sidings and terminals are operational commercial assets, and their day-to-day management should sit with operators, not with Ministers. As we said in previous sittings, the powers would apply to not just the current but future Governments. At the risk of sounding like a broken record, I should say that the Bill already gives the Secretary of State too much control and too many opportunities for micromanagement with too little accountability over too many areas. Amendment 256 draws a sensible boundary, protects freight operators from meddling, and supports a stable and efficient freight network.

Rebecca Smith (Conservative, South West Devon)

I will speak to clauses 72 and 73, and the grouped amendments. Clause 72 is another controversial clause. It sets out that the Secretary of State may make regulations about the management and operation of non-GBR infrastructure, which means any network, station or track not operated by or on behalf of GBR; about the rights to operate trains that use non-GBR infrastructure; and about competition in the market for the provision and supply of such operations.

Subsection (2)(c) allows the Secretary of State to set access terms and charges for non-GBR infrastructure, overriding commercial negotiation and bypassing the ORR. That cuts directly against the stated principle that the publicly owned operator must not regulate its competitors. It is an extraordinary clause that cuts up contract law and throws it out of the window.

The Rail Freight Group is concerned. It states:

“Clause 72 enables the Secretary of State by regulation to intervene in privately owned rail freight terminals, setting conditions of access and charges amongst other matters. Again, we understand that this is not the intention of the clause (which exists to enable GBR to take over other infrastructure such as HS1, Heathrow Branch or the Core Valley Lines) but nonetheless it is an extant risk to rail freight as presently worded, and we believe freight terminals should be explicitly out of scope for this clause.”

During the Transport Committee oral evidence session, Maggie Simpson echoed that. She said of her members:

“They want to be in the UK and investing.

Those investors are looking at this and going, ‘Can you tell me that in 10 years’ time I will be able to run the trains I want to from my port or quarry?’ I will go, ‘Well, that will depend on the playout of clauses 61 and 63, the very weakened appeal role for the regulator, whether clause 71 has any teeth, and clause 72, which gives the Secretary of State power by regulation to tell you what you can do in your own terminals.’ They will then say, ‘You know what, Dubai’s looking great—less hassle and more sun. See you.’ I am paraphrasing, but there is not enough in here for those international investors to say, ‘I am confident.’”

How can the Government be so deaf to the industry? This is no surprise—the industry has been telling them for months what the clause will do, yet the arrogance of the Government is such that they just plough ahead regardless. What does the sector have to do to be heard?

Amendment 256, tabled by the Liberal Democrats, would limit the extent of the Secretary of State’s powers over customer and facility-owner freight sidings and terminals, which is critical in our view. Amendment 221 would require the Secretary of State to consult the Office of Rail and Road and affected facility owners before making regulations under this clause, giving the industry vital assurance in the Bill. Amendment 231 would clarify that privately funded, freight-only facilities were excluded from regulation under this clause, which is a similar approach to that of amendment 256. Amendment 96 aims, according to the explanatory statement,

“to test the intention for giving GBR the powers to obtain infrastructure and services owned by non GBR entities.”

On clause 72 stand part, I will quote the words of my hon. Friend the Member for Broadland and Fakenham; this is perhaps more blunt than what I would say. “This is a stupid clause, poorly drafted and with well documented unintended consequences”—I am not sure whether he meant me to say that out loud, but it is written down here and he has not said not to. We will not be supporting clause 72 stand part.

Joe Robertson (Conservative, Isle of Wight East)

Channel your inner Jerome!

Rebecca Smith (Conservative, South West Devon)

I think he probably would have said it, to be perfectly honest.

Clause 73 marks the end of a very significant chapter in the Bill, with many poorly drafted or simply ill thought through clauses. I am sure the drafting has been done with the greatest attention to detail; it is just the “thought-through-ness” that we are struggling with. But we end on a positive note, with no objections to clause 73.

Keir Mather (Labour, Selby)

I am pleased to speak to this group of provisions, which concludes the scrutiny on the access chapters of the Bill.

Clause 72 provides the Secretary of State with the power to make regulations to amend the Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016 via the affirmative procedure. The access and management regulations are the existing body of secondary legislation that sets out the rights and obligations of infrastructure managers, train operators and the role of the ORR in relation to access, capacity allocation, access charges and performance. At present, those regulations can be amended only using powers under the Retained EU Law (Revocation and Reform) Act 2023, but those powers will expire on 23 June 2026, which means that, after that date, there will be no means other than an Act of Parliament by which those detailed and technical regulations can be amended.

Great British Railways infrastructure will not be subject to the regulations, as the Bill establishes a new access framework to enable GBR to be the directing mind, which we have discussed over the last few groups. However, alongside Great British Railways there will be a number of rail networks, such as Transport for London, London St Pancras Highspeed and the Core Valley Lines in Wales, that will continue to be subject to the access and management regulations. Those “adjacent infrastructure managers” will therefore not be part of GBR’s access regime. The purpose of the power in clause 72 is to ensure that the legislative framework governing the other infrastructure managers can be updated to address any inconsistencies between networks—to “keep pace” between the two different regulatory regimes. Without this power there may be disruption to the smooth passage of train services across different networks—which the Government have a duty to protect.

For example, the power might be used to secure alignment on the date when a new working timetable must come into effect. The access and management regulations currently stipulate a date in December, but given the risk of weather-related events, staff absences during the Christmas season and the engineering works that usually take place between Christmas and the new year, GBR will likely want to move away from that. If it did, it is not unreasonable to think that other infrastructure managers might want to follow suit to avoid being affected by the same risks and to ensure consistency in the timetable change date. To achieve that, it would be necessary to amend the regulations for the other infrastructure managers who wish to align with the date that GBR chooses in the future. The regulation-making power would enable that simple change to be made without needing an Act of Parliament.

There may also be opportunities for adjacent infrastructure managers to seek further simplifications to the current regulations in a way that meets our ambitions to reduce regulatory burden and support growth, while maintaining a sustainable and predictable framework so that businesses have confidence to plan and invest. The Government consider regulations, rather than primary legislation, as a better way in which to achieve that.

Regulations made under the clause must be subject to the affirmative procedure, ensuring full parliamentary scrutiny. Before exercising the power, the Secretary of State will consult all interested parties, ensuring full transparency, that industry has the chance to comment and that Parliament approves the regulations before any changes can be made. Amendments 256, 221 and 231 all seek to narrow that power in some way.

Amendment 256 would prevent the power from being used to direct operational matters of customer and facility owner freight sidings and terminals; amendment 231 would similarly exclude freight-only facilities. Those amendments are unnecessary, as the purpose of the power is to ensure alignment and remove inconsistencies in the regulatory regimes that will apply to GBR and non-GBR infrastructure and to enable simplifications where they align with the objectives of adjacent infrastructure managers.

Rebecca Smith (Conservative, South West Devon)

The Minister just said that the amendments are completely unnecessary, because the stated concerns are not real, effectively. That does not answer the very real concerns put forward time and again in the Transport Select Committee and in this Committee’s evidence session—the written and oral evidence—by businesses that are experts in the field. They are not reassured by the Bill as it stands. How can the Minister go back and say, “No, we’re right and you’re wrong,” to those experts in the industry?

Keir Mather (Labour, Selby)

I thank the hon. Member for that intervention. I am not arguing that stakeholders are not valid in raising concerns about the issues: they are. I am seeking to ameliorate their concerns by outlining what provisions are in the legislation to offer sufficient scrutiny and ensure that the way in which the process happens offers robust safeguards.

Constraints are built into clause 72 to ensure sufficient oversight, with the Secretary of State consulting persons considered appropriate and making changes in secondary legislation that is subject to the affirmative procedure. That means that legislation will be subject to full public consultation and subsequently debated in both Houses, which reflects the importance of the regulations in providing certainty for business.

I have already said that the Secretary of State will consult all interested parties to ensure that there is full transparency and industry comment. Amendments 256, 221 and 231 would all narrow that power in some way. Amendment 256 would prevent the power from being used to direct operational matters of customer and facility owner freight sidings, and amendment 231 would exclude freight-only facilities. I have already spoken on why some of the principles that lie behind those amendments are unnecessary.

Let us take my example of GBR changing the date when its new working timetable is to take effect. On the basis of the amendments, other infrastructure managers would forever be misaligned with that new timetable change date, even if they wished to align. The Government do not intend to use the power to direct the owners or operators of private freight facilities on operational matters.

I am happy to reassure the Committee that the power cannot be used to bring other infrastructure managers or operators of privately funded facilities into public ownership, as I know how exercised Opposition Committee members have been about that principle. In the consultation, industry broadly supported the ability to make necessary amendments, although it is of course right to raise concerns when they arise. Most sector bodies agree that it will be important to ensure that there are no regulatory barriers to passenger and freight operators crossing between different networks, and that is what the clause seeks to achieve.

Amendment 221 would make the ORR and affected facility owners statutory consultees to the power. That is unnecessary as before exercising the power to make regulations, the Secretary of State is already required to consult all persons they consider appropriate, which would include the ORR and any affected facility owners. If the Secretary of State did not consult such persons, there would be strong grounds to challenge the regulations.

Clause 73 will ensure clarity in how key terms are applied throughout the access chapter of the Bill. It defines “GBR infrastructure”, “GBR passenger service” and “working timetable”—fundamental terms to the operation of GBR. The definition of GBR infrastructure ensures that the new access arrangements developed by GBR apply only where intended. The clause also includes a power to amend the definition, which is necessary to ensure that, as GBR’s network evolves over time, it remains clear to GBR and other infrastructure managers which parts of infrastructure are GBR’s responsibility. The clause is therefore critical to provide clarity and transparency.

Given what I have set out, I hope that hon. Members will not press their amendments. I commend clauses 72 and 73 to the Committee.

Edward Morello (Liberal Democrat, West Dorset)

I have nothing further to add, but we would like to press amendment 256 to a Division.

Clause 74 - Monitoring Great British Railways

Rebecca Smith (Conservative, South West Devon)

I beg to move amendment 99, in clause 74, page 42, line 24, after “monitor” insert “and audit”.

This amendment would require the ORR to monitor and audit GBR’s statutory functions.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 100, in clause 74, page 42, line 29, after “monitoring” insert “and auditing”.

See explanatory statement for Amendment 99.

Amendment 101, in clause 74, page 42, line 30, after “monitoring” insert “and auditing”.

See explanatory statement for Amendment 99.

Amendment 97, in clause 74, page 43, line 5, at end insert—

“including, where reasonably practicable, implementation of recommendations of safety improvements and standards developed through relevant industry bodies”.

This amendment ensures that Great British Railways in furtherance of railway safety actively engages with the industry bodies such as the Rail Safety and Standards Board and implements where reasonably practicable, the cross-sector recommendations of safety improvements and standards emerging from any cross-sector work.

Amendment 222, in clause 74, page 43, line 5, at end insert—

“(d) whether, and the extent to which, Great British Railways is achieving its key performance indicators set out in section [Great British Railways: Key Performance Indicators].”

This amendment requires the Office of Rail and Road to consider Great British Railways’ performance against its KPIs, as set out in NC2. This amendment is consequential on NC2.

Clause stand part.

Rebecca Smith (Conservative, South West Devon)

Clause 74 amends the Railways Act 1993. It gives the ORR a new function to monitor GBR’s delivery of its statutory functions and carry out investigations where appropriate to fulfil that monitoring. In particular, the ORR must consider how and whether GBR is carrying out the activities listed in its approved business plan, how the cost of carrying out those activities compares with the estimates in the business plan, and whether GBR is carrying out railway activities in a way that furthers railway safety. The ORR may advise the Secretary of State in relation to that monitoring function and publish its advice.

Amendments 99 to 101

“would require the ORR to monitor and audit GBR’s statutory functions.”

The amendments address the relationship between GBR and the ORR, making it clear that the ORR remains an independent regulator with powers associated with audit, for example in relation to the release of documents. None of that applies to a woolly duty to monitor. Legally, the term “monitoring” is weak. It does not imply an ability to take action to demand improvement. That is particularly concerning when combined with clause 75, which removes the ORR’s ability to impose a financial penalty in the event of poor performance.

Amendment 97

“ensures that Great British Railways in furtherance of railway safety actively engages with the industry bodies such as the Rail Safety and Standards Board and implements where reasonably practicable, the cross-sector recommendations of safety improvements and standards emerging from any cross-sector work.”

That provides the Office of Rail and Road a clear mechanism to hold Great British Railways to account in safety matters. It also highlights an expectation of relevant industry bodies to recommend improvements to Great British Railways. We will not divide the Committee on amendment 97, but we ask the Government to think about what we are proposing in it. We all want the Bill to make the railways safer, and anything we can do to ensure that that happens will be for the good.

I think we have already debated amendment 98, but I want to put it in context we will vote on it at this point, so I want to mention why it is relevant. It

“would require the ORR to consider whether GBR procuring services from the private sector would be a more efficient use of public funds.”

That echoes previous amendments that we tabled, but we will be dividing on amendment 98 as part of this group, I believe.

Amendment 222

“requires the Office of Rail and Road to consider Great British Railways’ performance against its KPIs, as set out in”

new clause 2. As amendment 222 is consequential on new clause 2, we will not press it to a Division, given that the new clause is likely to be rejected. It is a probing amendment that we wanted on record.

We also have amendment 236, which is not part of the group, but my hon. Friend the Member for Broadland and Fakenham told me not to forget it because we will have a vote on it. Are we debating group 73?

Wera Hobhouse (Liberal Democrat, Bath)

We are debating clause 74, under group 72.

Rebecca Smith (Conservative, South West Devon)

That is fine. I knew as soon as I opened my mouth.

Wera Hobhouse (Liberal Democrat, Bath)

It is confusing; I hope the Minister is totally on top of where we are.

Keir Mather (Labour, Selby)

Me too, Mrs Hobhouse. Thank you for placing such confidence in me; we will see in due course if it is justified.

I thank the shadow Minister for speaking to amendment 222, which would require the ORR to monitor KPIs. My response will be brief, to avoid repeating myself, as the amendment is heavily linked to new clause 2, which we have already debated.

We expect GBR to have KPIs, as I have said before, but the right place for them is in GBR’s integrated business plan, alongside the detail of the activity that GBR will carry out over the five-year funding period. No sensible business would ever set its KPIs in stone, potentially for generations to come.

It is important that the ORR, in its role scrutinising GBR’s proposed business plans and monitoring its delivery of them, is able to assess whether commitments made by GBR are ambitious and realistic. As the independent expert adviser to the Secretary of State, the ORR will have a clear route to influence the formulation of GBR’s KPIs. By keeping them within the business plan, the ORR’s involvement is already ensured by legislation.

Amendment 97 would require the ORR to monitor whether GBR is implementing safety recommendations and standards set by industry bodies. I sympathise with the sentiments behind the amendment. Britain’s railways remain some of the safest in the world, which is why we are maintaining the roles of the statutory bodies in this area—the ORR and the Rail Accident Investigation Branch —and preserving the legal duty on all public bodies, including GBR, to give due regard to the investigation branch safety recommendations addressed to them.

Existing safety legislation already gives the ORR broad powers to monitor GBR’s safety management, including its implementation of investigation branch recommendations, and to take enforcement action if it finds that GBR is not managing safety effectively. The amendment risks confusing or duplicating well-understood roles and responsibilities in relation to the implementation, monitoring and enforcement of safety best practice. I hope I have reassured the hon. Member that this suggestion is already covered.

Amendments 99 to 101 would require the ORR to audit GBR’s statutory functions when undertaking its monitoring role. That is unnecessary, and would distort the clear and distinct roles set out in the Bill for both GBR and the ORR. The Bill retains the ORR’s important role as sector regulator and creates an enhanced monitoring function through which it will monitor GBR’s statutory functions and provide independent advice to the Secretary of State.

The ORR’s role as sector regulator is rightly separate to the role of an approved auditor. The annual accounts of GBR will be audited by the National Audit Office in the usual way. We do not propose to change that effective system, and cannot agree to an amendment that would layer it with unwarranted and inappropriate duplication, given that the ORR will already be monitoring GBR’s delivery of the KPIs within its business plan and GBR’s consideration of its duties when doing this.

Oversight of GBR will be proportionate, risk-based and focused on the outcomes that matter most to users of the railway, taxpayers and the wider public. The ORR will have a crucial part to play in providing this oversight, including by undertaking its enhanced monitoring role in the way it, as the independent regulator, considers appropriate. With that in mind, I urge the hon. Member not to press those amendments.

I commend clause 74 to the Committee. It will provide the ORR with enhanced monitoring powers, in line with its new role in the reformed sector. It will ensure that the ORR can effectively scrutinise GBR and provide independent expert advice for the Secretary of State for Transport and Scottish Ministers on its performance. As set out in the Bill, GBR will be required to produce an integrated business plan that demonstrates how it will deliver its priorities across the breadth of its statutory functions, including passenger services and the management of the GBR network.

Although GBR will report to the Secretary of State on the delivery of the plan, the ORR will be required to monitor the performance of GBR and independently advise the Secretary of State. The clause sets out that the ORR will monitor how GBR exercises its functions, including whether the commitments in GBR’s business plan are being met, how costs and income compare with estimates in that plan, and the extent to which GBR is ensuring safety on the railway. On an ongoing basis, the ORR will be able to escalate concerns to Ministers as it considers necessary, enabling the Secretary of State to make informed decisions in line with her responsibilities as funder of GBR. Given that the Secretary of State is democratically responsible for the billions of pounds of taxpayer subsidy invested in the railway, it is right that she has the final say on how it is used, with proper, comprehensive advice from an expert independent regulator to support her.

To fulfil its new role, the ORR must have the ability to gather information, conduct investigations, and assess whether GBR is fulfilling its statutory functions and business plan commitments. Clause 74 provides that statutory basis. It will allow the ORR, where it deems appropriate, to publish any information or advice it provides to the Secretary of State in connection with this monitoring function. That will ensure that the public can see how GBR is being held to account for its performance and how it is delivering in the interest of its customers, taxpayers and the public.

The policy rationale is clear: the Government are committed to preserving an independent expert adviser within the rail system and are providing the necessary tools for that body to operate and scrutinise GBR effectively. I commend the clause to the Committee.

Rebecca Smith (Conservative, South West Devon)

I have indicated that we want to press amendment 99 to a Division.

Clause 75 - Miscellaneous functions of ORR

Keir Mather (Labour, Selby)

I beg to move amendment 271, in clause 75, page 43, line 23, at end insert—

“(2A) In section 55 (orders for securing compliance), after subsection (7C) insert—

‘(7D) The Office of Rail and Road may not, by a final or provisional order, require the payment of a sum by Great British Railways.’”

This amendment would ensure that the ORR may not impose a fine on GBR under an order to secure compliance with conditions etc, to align with the amendment to section 57A of the Railways Act 1993 made by clause 75(3) of the Bill.

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss the following:

Amendment 212, in clause 75, page 43, line 24, leave out subsection (3).

This amendment removes the restriction on the ORR to impose fines on GBR for licence breaches.

Clause stand part.

Keir Mather (Labour, Selby)

I will first speak to Government amendment 271 and clause 75 as drafted, which is essential to ensure that the accountability arrangements for GBR reflect its status as a publicly owned body, as well as enshrining the strategic role of Ministers.

The clause will make two changes to functions of the ORR that would otherwise apply to GBR. The first is to prevent the ORR from issuing specific directions to GBR relating to providing, improving or developing railway facilities, such as stations or depots. However, we expect that the GBR licence will include a condition relating to long-term asset management to ensure that the ORR retains oversight of infrastructure in the new system. As Members are aware, GBR’s licence will be subject to formal consultation.

The direction power was originally included to ensure that improvements were made when it is was clearly in the interests of the railway generally, but a railway operator might have no commercial incentive to make them. In the new system, GBR will be incentivised to improve its own infrastructure, and the change in legislation recognises that it is for Ministers, as funders, and GBR itself—not the regulator—to set the strategic direction for GBR.

GBR should then make decisions and improvements as part of its business planning, and the ORR should be able to monitor against the agreed business plan, supported by a licence condition that ensures that it can enforce long-term asset management in case anything goes wrong. If the ORR identifies a failing that constitutes a breach of that condition, and dialogue or early intervention have not proved effective, it will be able to escalate issues to the GBR board, require GBR to create and publish improvement plans and issue an enforcement order, which is a legal instruction that would require GBR to take action to meet its responsibilities.

The second change is to remove the ORR’s power to fine GBR. Imposing financial penalties on a public body would not align with the aims of maximising the benefits of public ownership. It would simply mean recycling public funds between two public bodies, continuing the money-go-round that is pervasive in today’s system. It would also add an administrative burden with only a limited effect on incentivising the right behaviours.

Amendment 271 is a technical amendment to ensure that when the Bill removes the ORR’s power to fine, it refers to all the correct parts of the law, including section 55 of the Railways Act 1993, to achieve that aim. The ORR will retain the ability to issue fines for breaches of licence conditions by non-GBR licence holders where that is an effective tool because those organisations will not be wholly funded by Government money. GBR can still be subject to a financial penalty if it violates health and safety or competition laws, as we are not changing the safety regime that will apply to the railways, and competition law will still apply in full to GBR. I look forward to hearing from hon. Members about amendment 212.

Olly Glover (Liberal Democrat, Didcot and Wantage)

It is a pleasure to serve under your chairship once again, Mrs Hobhouse. Our amendment 212 relates to what the Minister said: it would remove the restriction on the ORR’s ability to impose fines on GBR for licence breaches. I am hoping that we can find some agreement or that the Minister can improve my understanding of the Bill. I entirely agree with him that we do not want wooden dollars—are we still allowed to say that?—sloshing around the system. We do not want fake money, fake economics or fake regulation. That has not been a strength of the rail industry under the current structure.

The Minister said that the ORR would have the powers to tell GBR to do better and to put a legally binding notice on it. Perhaps this is an extreme thought experiment, but what would happen if GBR said, “Thank you very much, ORR, for your legally binding improvement notice, but we’re not interested—we’re not doing it.”? Is the Minister saying that the ORR could then sue GBR? What would happen next? If he covers that in his summing up, I might not move my amendment—I am sure he feels very threatened given how many Divisions we have won so far.

Rebecca Smith (Conservative, South West Devon)

Clause 75 prevents the ORR from issuing directions to GBR relating to providing, improving or developing railway facilities. It also prevents the ORR from imposing a fine on GBR for licence breaches. We think those are both terrible ideas.

The Transport Committee asked Maggie Simpson of the Rail Freight Group:

“What is your view on the ORR’s downgraded power merely to ‘advise’ the Secretary of State on GBR’s performance, rather than having actual powers of enforcement?”

She said:

“I am quite worried about this.”

To the same question, Steve Montgomery from First Rail said:

“Following on from that, the independence element of it—marking your own homework—is a big concern for us. How do we ensure that we do not see a perverse behaviour where GBR looks after its own operations to the detriment of others?”

Nick Brooks from ALLRAIL said:

“I can only echo that. With GBR writing the rules, controlling capacity and being linked to the main operator in the country, there is a structural conflict of interest, unless there is a clear duty of fairness and non-discrimination. I do not know of other European countries that do not have a strong independent rail regulator, across the EU and beyond. To be the judge and the jury at the same time is somewhat worrying.”

Emma Vogelmann, the co-chief executive of Transport for All, told the Transport Committee:

“Our recommendation on the role of the ORR is to retain its independent authority. We are definitely interested to see how that transition of powers, as Ben mentioned, plays out, and how enforceability plays into that.”

For once, the Government need to stop and listen. The sector is speaking with one voice and telling them that this is the wrong approach. The clause needs to be removed in its entirety. It is common for regulators to be able to issue financial penalties to private utility companies that are in breach of their statutory duties. Why should that consumer protection not also be applied to a public body like GBR? Removing clause 75 would restore the ORR as a strong, independent economic regulator.

Government amendment 271

“would ensure that the ORR may not impose a fine on GBR under an order to secure compliance with conditions etc, to align with the amendment to section 57A of the Railways Act 1993 made by clause 75(3) of the Bill.”

The Conservatives are against the whole clause, but, to save time, we will not seek a Division specifically on this amendment—I am sure that everybody will be pleased to hear that. However, as somebody who serves on the Transport Committee and sat through a lot of those evidence sessions, one of the key things that concerned me and some other members of the Committee was the breakdown of the relationship between the ORR and GBR and the weakening of the ORR’s powers. When I heard that evidence, I certainly felt that it was a compelling argument.

Liberal Democrat amendment 212 would remove the restriction on the ORR to impose fines on GBR for licence breaches. That is okay as far as it goes, and we will support the amendment, but we think that it does not quite go far enough. As I am sure Members expect on the basis of what I have just said, we will vote against clause 75 as a whole.

Keir Mather (Labour, Selby)

I thank the hon. Member for Didcot and Wantage for his amendment, which would retain the ORR’s power to fine GBR in the event of a licence breach. He will be pleased to hear that I do not intend to repeat the arguments that I made in my opening remarks. However, as I suspect he knows, I cannot accept his amendment, because in creating the ability for the ORR to fine GBR, it would simply lead to the recycling of public funds, which he so ably outlined as being an issue.

On the subject of licence breaches, the ORR can issue an enforcement order to direct a different outcome from GBR. There is also a point to be made about accountability for GBR’s executives. That kind of relates to the penalties for Network Rail today: the ORR already recognises its public sector status and scales penalties accordingly. The chair and board of GBR will be responsible for ensuring that the CEO has in place robust performance management for senior staff, inherent to which will be not defying the ORR when it has issued legally binding directions. There will be a clear expectation that any significant failures will have a material impact on performance-related pay, and where the failure is sufficient to demand it, an individual should be at risk of dismissal. Put simply, removing the ORR’s power to fine will not cause the executive of GBR to be remiss in their duties.

Although the hon. Member asks me to speculate on potentially extreme cases where GBR could defy the ORR, I believe that, in the round, sufficient safeguards remain in place, with the ORR retaining its existing ability to issue mandatory and legally binding enforcement orders to GBR on matters within the licence; it is only the monetary aspect that is targeted here.

Clause 76 - Publication of information by ORR

Wera Hobhouse (Liberal Democrat, Bath)

With this it will be convenient to discuss clauses 77 to 79 stand part.

Keir Mather (Labour, Selby)

Clause 76 updates the Office of Rail and Road’s information duties by inserting a new section into the Railways Act 1993 under which the ORR must proactively publish documents and information about key regulatory matters, including licences, access contracts, closures and railway administration orders, in whatever manner and form it considers appropriate. At the same time, the clause removes the ORR’s duty to maintain a formal statutory register under section 72 of the 1993 Act and repurposes that section so that it better reflects modern expectations of transparency, while retaining strong safeguards so that information that would seriously and prejudicially affect individuals, businesses or the wider public interest is not disclosed. The clause is not retrospective: it does not compel the ORR to publish historical material, but it allows it to publish information already held on the existing register where that is appropriate.

The main purpose of clause 77 is to replace the Secretary of State’s duty to keep a statutory register under section 73 of the 1993 Act with a focused duty to publish information, in keeping with the Government’s commitment to ensure appropriate levels of transparency on the railways. Clauses 78 and 79 do the same but for Scottish and Welsh Ministers.

These clauses retain strong protections for individuals, businesses and the wider public interest, making it clear that material that would seriously and prejudicially affect those interests must not be published. They allow Ministers to publish material currently held on the existing register, so that there is no gap in transparency during transition. The clauses deliver a modern, proportionate and more accessible publication regime, in keeping with the Government’s ambitions for a reformed railway.

Rebecca Smith (Conservative, South West Devon)

Clauses 76 to 79 change the current duties on the ORR, the Secretary of State and Scottish and Welsh Ministers to maintain a register, in sections 72 to 73B of the Railways Act 1993, and put them under duties to publish certain information. The ORR must publish documentation relating to licences; access agreements; access contracts, other than those using GBR infrastructure, for which GBR will be responsible; experimental passenger services; closures; and railway administration orders, except where that would affect individual public or commercial interests. The Secretary of State, Scottish Ministers and Welsh Ministers must publish determinations that a closure is a minor modification, and documentation relating to the enforcement of closure restrictions. Each clause contains restrictions about publishing information that would affect individual, public or commercial interests. Each clause also allows for the publication of documentation that was previously contained in the registers.

Clause 77, which is very similar to clause 76 and, indeed, clauses 78 and 79 on the devolved Ministers, amends section 73 of the 1993 Act, on the publication of a register by the Secretary of State, so that they are under duties to publish information—in particular, determinations that a closure is a minor modification and documentation relating to the enforcement of closure restrictions. However, proposed new section 73(5) of the 1993 Act is interesting. It states:

“The Secretary of State may not publish particular information or documents under this section if it appears to the Secretary of State that publication of that information or those documents would be against the public interest or the commercial interests of any person.”

Can the Minister outline under what circumstances not being transparent is not in the public interest? What determines public interest? I would be grateful to hear the methodology in this instance. Further, the only person with commercial interests in the railway will be the guiding hand of the Secretary of State herself, as it is all public money.

I am sure that proposed new subsection (5) is standard practice in statute, but it raises an interesting point about transparency that I ask the Government to spend some time thinking about. Public trust is low—perhaps it is even lower today than it was when my hon. Friend the Member for Broadland and Fakenham wrote this speech—and any part of any Bill that allows the Secretary of State to get away with not publishing information under a perceived public good would look most suspicious indeed. I do think that, in the light of yesterday’s events, my hon. Friend will see the irony in the words that he wrote there.

Clause 77(2) allows publication of anything that was in the register before the Bill’s commencement. What is the timeline for publication, and will the Minister commit to publication? Those queries aside, Members will be pleased to hear that we have tabled no amendments at this time.

Clause 78, which relates to publication of information by Scottish Ministers, mirrors clause 77. As I mentioned, it amends the 1993 Act, and aside from my query about the ability that it provides to not publish information against a perceived public good, we have no objections to the clause—unless it falls outside the devolution settlement, but presumably the Minister can reassure the Committee that it does not.

Clause 79 relates to the powers of Welsh Ministers, which are similar to those enjoyed by Scottish Ministers. The rationale behind allowing Ministers to not publish information over a perceived public good remains interesting to me, but I see no need to revise the clause.

Keir Mather (Labour, Selby)

The intention of these changes is not to reduce transparency, but to modernise what is published and how. The new duty focuses on determinations under the Railways Act 2005 and the exercise of key enforcement and closure powers, which are among the most significant decisions the Secretary of State takes in relation to the railway. Other publication requirements—for example, on designations, directions and guidance, and the long-term rail strategy—are dealt with in other clauses, so the transparency framework should be viewed as a whole, not just through the lens of these changes to the 1993 Act.

The shadow Minister raised an important point about how commercial and public interest protections interact with freedom of information and scrutiny. The clauses preserve a carefully balanced approach that has long existed under the 1993 Act. This is not a wholesale change in how that process works. The Secretary of State must not publish material where it would be against the public interest or commercial interests, or where it would seriously and prejudicially affect individuals or particular bodies. Those protections sit alongside and do not displace the wider legal framework, including freedom of information legislation and parliamentary scrutiny, which of course continues to apply.

Written evidence reported to the House