My Lords, earlier in Committee we had a debate on the value of open access and I am not proposing to repeat that. But now that the noble Lord has drawn my attention to the biblical text Getting Britain Moving—which I understand is now the Government’s plan for the railways in the country, the Williams review having been set to one side—I will draw attention to what that document has to say about open access.
It too is full of praise. It says:
“Open access has a proven track record in driving competition”—
competition in this context, at least when the Labour Party was thinking about it before the election, was seen as an attractive thing—
“and better passenger outcomes in countries whose services are run predominantly by public operators”.
We will have a service
“run predominantly by public operators”,
and the implication here is that:
“Open access has a proven track record in driving competition”
and has “better passenger outcomes”, so it must be a very good thing.
That is not the impression I get from the debate so far. I have the impression that there is a degree of resistance to open access on the part of the Government. Indeed, there is a qualification, even in this document, on that. It has to add “value and capacity” to the rail network. Who has to be persuaded that it adds value? Here the document says something that rather confuses me. It says:
“The ORR will continue to make approval decisions on open access applications”.
My understanding was that Great British Railways, not the Office of Rail and Road, was going to make decisions about who could run passenger rail services on the network. Clarity from the Minister on what the intention is in that regard would be very helpful.
If it is Great British Railways, we run into the problem that allowing this to happen will result in competition. The whole purpose of Great British Railways —like that of Lord Ashfield, to whom I referred earlier —is to eliminate what could be regarded as wasteful competition.
This contradiction that lies at the heart of the proposition causes me considerable concern. At the root of it is a rather technical question concerning what is referred to as abstraction. The assumption on the part of those who run the railways—and this has been true of the Department for Transport as well; it is not something new, but I have every reason to think it will continue—is that if somebody provides a railway service in competition with the Government, it is abstracting fares income that otherwise would accrue to the Government. So there is a cost to the Government or Great British Railways, depending on where we are in this process, in allowing open access to operate.
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This is, of course, completely contrary to everything one knows about competition. It is contrary to the experience in other countries; it has been seen that open access has actually allowed fares to come down. The European Union claims they have come down by 28% in the best case studies it has examined. I think I
referred to that at Second Reading—it may have been on Monday, but I have certainly referred to that report. There has been a 28% reduction in fares, better-quality services and the driving up of demand. Overall, it is a win for everybody, although not necessarily in all cases a win for the state operator. If the state operator is to make the decision—and this is why it is so important to know whether it will be Great British Railways or the ORR—the argument from abstraction is always going to point the dial towards “no” rather than “yes”. So the amount of open access to be allowed is likely to be very limited, despite passenger benefits in terms of fares, service and frequency that might accrue from it.
The purpose of these amendments, as I say, is not simply to sing the praises of open access—I think we did that in the debate on the previous amendment. It is to ask, very seriously, how this assessment will be made, and what warmth and encouragement will be extended to operators that wish to offer competing and supplementary services, or whether the offer of open access will in effect be made a nullity by an excessively tight application of the principles of abstraction.