Amendment proposed: 14, page 2, line 17, at end insert—

“(1BA) Every contract made in accordance with subsection (1A) shall place a duty on the public sector company to consider the needs of—

(a) passengers;

(b) residents of rural areas;

(c) residents of areas underserved by the rail network; and

(d) the wider rail network

when considering making changes to existing service levels.” —(Helen Whately.)

Question put, That the amendment be made.

The Committee proceeded to a Division.

Will the Serjeant at Arms investigate the delay in the No Lobby?

The Committee having divided: Ayes 111, Noes 362.

Question accordingly negatived.

More than four hours having elapsed since the commencement of proceedings, the proceedings were interrupted (Programme Order, 29 July).

The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Amendment proposed: 17, page 2, line 22, at end insert—

“30ZH Independent body to advise on pay and terms and conditions of employment for employees of public sector companies

(1) The Secretary of State must, within three months of the coming into force of the Passenger Railway Services (Public Ownership) Act 2024, establish an independent body with responsibility for—

(a) providing advice to Government on the—

(i) remuneration, and

(ii) terms and conditions of employment

of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A);

(b) advising the Government on value for money during the negotiation of the terms and conditions of employment of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A); and

(c) preparing an annual report to be laid before Parliament by the Secretary of State on the terms and conditions of employment of employees of the public sector companies providing passenger railway services under a contract awarded in accordance with section 30(1A).

(2) Advice provided in accordance with subsections (1)(a) and (b) shall be based on annual investigations of working practices conducted by the independent body and consider—

(a) value for money;

(b) affordability;

(c) domestic and international comparators;

(d) the future of the rail network, including the modernisation of working practices.

(3) Advice provided in accordance with subsection (1)(b) shall include advice on whether any conflicts of interest exist between any Government Minister and any union involved in the negotiation of the terms and conditions of employment, and how any such conflicts should be managed.

(4) An annual report under subsection (1)(c) shall include a comparison with the terms and conditions of employment under the franchise which provided the relevant passenger railway services prior to the awarding of a contract in accordance with section 30(1A).

(5) The first annual report under subsection (1)(c) must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A).”—(Helen Whately.)

Question put, That the amendment be made.

The Committee divided: Ayes 113, Noes 372.

Question accordingly negatived.

Amendment proposed: 21, page 3, line 32, at end insert—

“30D Annual report on ticketing effects of public service contracts

(1) The Secretary of State shall lay before Parliament an annual report on the effect of public sector contracts awarded in accordance with section 30(1A) on—

(a) ticket pricing,

(b) tap-in, tap-out options,

(c) single-leg pricing,

(d) digital season tickets,

(e) compensation for delays and cancellations,

(f) ticketing interoperability with—

(i) other train operators, and

(ii) bus and light rail system operators.

(2) The Secretary of State shall consult other franchising authorities before finalising a report under subsection (1).

(3) The first annual report under this section must be laid before Parliament within twelve months of the first award of a public sector contract in accordance with section 30(1A).

(4) Each subsequent annual report must be laid before Parliament before the end of July in each subsequent calendar year.”—(Wera Hobhouse.)

Question put, That the amendment be made.

The Committee divided: Ayes 82, Noes 360.

Question accordingly negatived.

Clauses 2 to 4 ordered to stand part of the Bill.

Schedule agreed to.

The Deputy Speaker resumed the Chair.

Bill, not amended, reported.

Bill, not amended in the Committee, considered.

Third Reading

I beg to move, That the Bill be now read the Third time.

It has been an extraordinary privilege to take this Bill through the House, as the first major piece of legislation to pass through the Commons under this Labour Government. The work to rebuild Britain and return to a politics of service started the moment we entered office. We pledged to act decisively to get our country moving and our public services working. I set out my motto for the Department for Transport—to move fast and fix things—which is why this Bill wastes no time in fulfilling one of our central manifesto commitments, calling time on the 30-year ideological privatised experiment on our railways that failed passengers, failed to modernise our railways and failed our economy. It is why this Government have begun the work of reform by bringing services back into public ownership, so that our railways will finally be run in the interests of passengers.

There will be immediate benefits. Our railways will serve the British public, be they passengers or the taxpayer, and as we bring services into public ownership, we will drive up performance. We will remove the burden of the millions of pounds squandered every year in private sector management fees. We will bring services into public hands as soon as their contracts expire, but if operators fail to deliver in line with those contracts—if they continue to let passengers down time and time again—I will not hesitate to use every tool at my disposal to drive up standards, including terminating contracts early where appropriate. In my meetings with Avanti and TransPennine and in the rail Minister’s meetings with Northern, London North Eastern Railway, East Midlands Railway and CrossCountry, as well as their Network Rail counterparts, we have been clear that we will not tolerate for any longer the poor performance that the last Government tolerated. My officials will drive improvements using the mechanisms in those contracts.

That work is already bearing fruit. Last week, LNER and ASLEF resolved their long-standing local dispute at no cost to the taxpayer, preventing 22 days of industrial action while ensuring an improved service for passengers. As a result, there were no driver cancellations over the weekend or this morning—the first time that has occurred for many years. Last month, we ended the longest strike in our railways’ history. It was a strike that cost the taxpayer hundreds of millions of pounds in lost revenue and cost the economy more than a billion pounds, and a strike that the Conservative party deliberately prolonged and provoked, at enormous cost to the taxpayer and passengers.

A passenger-centred railway needs workforce reform; I do not shy away from that fact. As we move towards Great British Railways, we will waste no time driving those reforms forward. This is an area where the party opposite totally “failed”. That is a quote from the former Conservative Rail Minister, who is no longer in this place. To his credit, unlike his colleagues, he has at least had the decency to apologise for what he put our country and our railways through.

We are under no illusion: the Bill is not a silver bullet. It is the first stop on our journey to a modern railway for a modern Britain. We will introduce separate legislation later in the Session on the wider reforms that are required. Fixing the industry’s crumbling foundations is the only way to deliver the lasting improvements that passengers expect and deserve. Providing national leadership and a single point of accountability, Great British Railways will bring track and train together. It will plan services on a whole-system basis. It will increase innovation while cutting waste. It will put an end to outdated working and management practices, and end the operational meddling of Whitehall that has characterised the industry, particularly post covid. In short, we will create a simpler, safer and more reliable rail industry, relentlessly focused on passengers and on growing our economy.

That, of course, cannot happen overnight, but as passenger in chief, I am not prepared to wait. That is why today I have made a written ministerial statement formally standing up shadow Great British Railways, in order to bring together the Department’s passenger services, Network Rail and the operator of last resort. For the first time in 30 years, the railways will begin to act as one coherent system, and there will be the political backing for decisions to be made in the public interest. Shadow Great British Railways will review performance and finances. It will begin work to modernise our railways and unblock barriers to ticket reform, and will start to make urgent improvements now for passengers and freight.

Before I finish, I thank the Under-Secretary of State for Transport, my hon. Friend Simon Lightwood, for his excellent work, support and dedication of time to getting the Bill through the House. I also thank the Clerks, Chairs and parliamentary counsel, and of course my fantastic officials, who have worked at pace and done an excellent job supporting us in our first two very short months in office. Finally, I am hugely grateful to hon. Members from all parts of the House for their scrutiny and collaborative approach. I add my congratulations to the many hon. Members who made their maiden speech during the Bill’s passage.

The Bill represents a line in the sand. It shows that the Government are willing to roll up their sleeves and do the hard work to fix what is broken and reform what does not work. Getting this right matters for people up and down the country, for whom the railways are their route to opportunity. It matters for communities that need a reliable railway to support businesses, retain talent and attract investment, and it matters for this mission-focused Government, because the railways underpin our efforts to rebuild Britain, from building economic growth to providing clean energy, and to deliver hope and opportunity to everyone, wherever they live. I commend the Bill to the House.

I call the shadow Secretary of State.

We recognise the Government’s mandate to nationalise the railways. We are not seeking to frustrate that, but simply to improve their legislation. I have heard the arguments of Government Members and the Secretary of State in support of the Bill, but I remain unconvinced and unreassured. We agree that rail needs reform, but we disagree on how to do that. I thought we agreed that passengers were the priority, but it seems that we disagree on that too, because Government Members have just voted against a simple amendment that would have ensured that public operators served the needs of passengers, including in rural and underserved areas.

I would have hoped that we could agree on the importance of controlling costs, including one of the biggest costs that the railways face, which is that of the workforce, but again we clearly disagree on that. The Government have caved into ASLEF’s pay demands with a “no strings, no modernisation” pay deal, and now Government Members have voted against our proposal for an independent pay review body, a simple mechanism to help the right hon. Lady make sure she is not steamrollered into conceding to excessive and expensive pay demands by Labour’s powerful union paymasters. However, I welcome the hint from the Minister with responsibility for local transport that the Government may be considering introducing something along those lines, and I look forward to hearing more about that.

Here we are on Third Reading of the Bill after just a few hours of debate. Rushing this Bill through makes no sense at all. Why? Are the Government throwing a bone to their Back Benchers in return for their backing cuts to the winter fuel allowance? Is it to please the unions that donated to Labour Members’ campaigns? Is it a distraction from dodgy appointments and the conduct of their Rail Minister in the other place? Or do the Government Front Benchers believe this to be a minor change, though it is not? Is that why they think so little scrutiny and parliamentary time is required?

I urge the Government to think long and hard about the amendments we have put forward. Although we do not agree with this plan, as I have said, we accept their mandate to deliver it. We are simply proposing sensible changes to protect passengers and taxpayers, and I urge them to reconsider during the Lords stages of the Bill.

Question put and agreed to.

Bill accordingly read the Third time and passed.