My Lords, I will add a footnote to the excellent speech from my noble friend Lord Lansley and note in passing that the Passenger Railway Services (Public Ownership) Bill is running late, with the likelihood of hitting the target of getting to Amendment 11 at a reasonable hour becoming vanishingly small.
This group of amendments is to some extent the obverse of the group that we have just had. The focus of the previous group was on ending prematurely, before the Government would wish, services that were not running satisfactorily, whereas the thrust of this group is to enable the Government to extend beyond the date that they prefer a contract that is running satisfactorily.
In a sense, this is all about ideology. There are two potential views. One was expressed by the noble Lord, Lord Whitty, who on Second Reading said:
“I have an ideological commitment to a nationalised railway system
”.—[Official Report, 7/10/24; col. 1883.]
By contrast, in that same debate, his noble friend Lord Liddle—who, as we have heard, was formerly the opposition transport spokesman in your Lordships’ House, said:
“I do not see any ideological objection to public/private partnerships in running the railway”.
He then gave an example:
“You might have a situation where a private company was prepared to commit to electrification plans for a particular line that would not be in the public sector investment plan. My view is
that we should allow public/private partnerships on a net additionality rule. If they are going to bring more investment into the rail system, what on earth is the case for not allowing them to do so?
”. —[Official Report, 7/10/24; col. 1840.]
Again, in the debate today, the noble Lord, Lord Snape, said he was in favour of a mixed economy. I agree with that approach. If this amendment is opposed, it is because the Government have taken Lord Whitty’s view and they have an ideological commitment to nationalisation—which I thought had been abandoned some 30 years ago under Tony Blair’s leadership.
There has been an argument for flexibility. I want to develop the argument that the noble Lord, Lord Snape, developed about Chiltern Railways and Marylebone station. In the 1980s, Marylebone station was almost moribund. There were a few services to the commuter villages of Aylesbury, Amersham and Chesham, but, in the decade before privatisation, there were proposals from British Rail to close Marylebone. There were also alternative plans to turn the railway into a road. That was before privatisation. Three years after privatisation, 18 miles of single track between Princes Risborough and Bicester North had been doubled. In 2000, the brand new £4.2 million Warwick Parkway station was opened, and, by the end of the first franchise, advance plans were made to double the single-track section between Bicester North and Aynho, at a cost of £53 million. Marylebone station was then extended by adding a further two platforms, and there was an increase in line speed to Beaconsfield. In 2011, Chiltern took over the operating services on the Oxford-Bicester line from First Great Western and opened two new stations, Oxford Parkway and Bicester Village, providing services between north Oxford and Marylebone.
How confident is the Minister that all that would have happened if the line had remained with British Rail, which, 20 years earlier, was planning to close the station? Chiltern could do this because it had a 20-year franchise, which created the incentives for significant investment in rolling stock, major infrastructure and, as a result, timetable enhancements. It delivered its project on time and on budget, and self-financed nearly all the projects that I have just mentioned.
When pressed on why they were doing this, the Minister relied on, “It is in the manifesto”. Well, I hope they can provide a better argument than simply saying that. To use the expression used by the noble Lord, Lord Snape, Chiltern is to be sent prematurely to the “knacker’s yard”. Our debate takes place against a background of a Budget in a few days’ time, with enormous pressure on public expenditure. What the Government are planning to do—we will reach this in a later group of amendments—is bring on to their balance sheet all the private sector investment that has previously been borne by the private sector. Freight was mentioned, and the fact that they want to leave freight and open access operations in private hands perhaps indicates some inconsistency in their view that the private sector cannot deliver good services.
I will briefly mention two other reasons for these amendments. There is a question of the capacity of members of the Minister’s own department to manage all the new franchises that are going to come in. At the moment, they run four rail franchises; they have just two full-time staff and they rely on private consultants
to manage these four franchises on a day-to-day basis. They are planning to absorb the remaining 10 franchises, which are now in private hands. They will have to grow significantly their own capacity to manage those departments and, as I understand it, they are in the process of growing their headcount from 21 to 90 by the end of the calendar year; all this at a time when there is pressure on departments to reduce their headcount. All these new people, all the external consultants, will need time to get up to speed with their new roles and build the necessary relationships to be effective, and I think that is a major constraint on their plans.
There is one other reason, which may be a simply technical one. It is possible that the Government may wish to extend an incumbent operator’s franchise, for example due to the lack of internal capacity that I have just referred to; but it may also be that the operator may not be willing to agree to a contract extension. As I understand it, with the Bill as currently written, the Government would not be allowed to appoint an alternative operator on a temporary basis—again representing a significant risk.
So these amendments indicate the need for flexibility, to allow the Government to retain high-performing private sector operators and to continue to give passengers an excellent service while minimising costs for taxpayers. I hope that, when the Minister replies, he will not say, “This is in the manifesto”, but will give some cogent reasons for ending the arrangement that provides, in the cases of Chiltern and Greater Anglia, the two lines that we have heard about, a high-quality service, possibly higher than the public sector would be able to provide.
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