Baroness Harding of Winscombe (Con)

My Lords, I rise quite nervously as I am definitely not a rail expert, this group of amendments is not really about the railways and the room is full of people who are huge rail enthusiasts. There are quite a lot of amendments in this group and they all, I think, aim to do the same thing, which is to make sure that in creating Great British Railways we do not adversely affect the current competitive market for online retail ticketing services. I will speak to a series of amendments in my name, Amendments 10, 52, 53, 136 and 139, and will also speak to amendments in the name of my noble friend Lord Young, to whose Amendments 48, 117, and 211 I have added my name. I will also support some other amendments that I was just not organised enough to put my name to: Amendments 11, 31, 49, 50, 180, 181, 182, 212, and 328. If noble Lords will humour me, I will start by trying to set a bit of context for the whole group to try to explain why I think we should be worried about this and why noble Lords not as interested in digital as I am should care about the importance of this group. First, the Competition and Markets Authority has said it is worried. In April 2025, its response to the Government’s consultation on the future of the railways was very clear that this is a problem. It is concerned that the risks of actual and perceived self-preferencing are likely to be greater the more closely ticketing is integrated with GBR’s core activities. In the Bill, ticketing is very closely integrated into GBR’s activities. The CMA was very clear that it is important to send the right signals to independent retailers and investors that this would remain an open, competitive market. The CMA is worried. Secondly, experience in other networked markets shows that we should all be worried. My experience is, as I said at Second Reading, from the telecoms market, where we know that BT’s ownership of Openreach led to very clear self-preferencing for BT retail and a long consumer campaign to separate out Openreach to force clarity and transparency. Actually, retail competition in telecoms has been hugely helpful, while at the same time acknowledging the need for that single Openreach infrastructure organisation. That happened only because of very clear competition regulation overseen by Ofcom. We know that if you do not have that, you get bad behaviour from the integrated virtual network monopoly. Thirdly, the other reason why we should be worried is that this is already happening. Anyone who is used to having to use Delay Repay will notice that it has only very recently been integrated, and only partially, into the Trainline app. That is because the train operating companies refused to do it, because they wanted to keep control. Only in the last two months, GWR and Transport for Wales have both announced new ticket products that cannot be sold by third-party retailers. This is not in principle—they are much cleverer than that—but in practice. There are technical reasons why those products cannot be sold by other retailers; it is because the systems integration is not quite there or the data is not gathered. In one case, it is because the independent retailers do not capture date of birth. This is not by accident. This is what vertically integrated monopolies do: they design products that are very hard for their competitors to replicate. We should worry about this as we debate the Bill, even if we are not that interested in digital retailing. I thank the Minister for his time on this. We had a very constructive meeting yesterday, and I know that he and his team have had constructive meetings with other noble Lords. I came away from my meeting with him, as I did from his speech at Second Reading, with the impression that he agrees that competition in retail ticketing is a good thing. I think we would all welcome him putting that firmly and clearly on the record today. The question is whether there are sufficient safeguards and signals in the Bill to make that the case. I do not think that there are. Just to try to decode this quite large and complex group, I think there are three areas that the amendments are seeking to get clarity on, without which there is a real risk that what is genuine consensus—that we do not want to nationalise ticketing but to have an open, competitive market—will not happen. The first area is getting clarity in the Bill that GBR will be required to compete on the same economic terms as independent retailers. I do not think that that is currently clear, and there are a number of amendments attempting to make that clear in this group. The second area is getting clarity that the ORR will have a competition duty as it relates to enforcing the retail code of practice, so that there are real ex ante safeguards to prevent anti-competitive behaviour from GBR. The third area is that independent retailers will be able to appeal the decisions of the ORR as it relates to the retail code of conduct. If you think about it, those are the three layers of the onion. First, is GBR required to create a level playing field? Secondly, has the ORR got an obligation to oversee that level playing field? Thirdly, have independent retailers got a means of appealing if it goes wrong? Let us take each of those in turn, starting with whether there is a level playing field. My experience from telecoms is that by far the best way to do this is functional separation of the network from the competitive retail market. Having spent a decade trying to make that happen in telecoms, I am pretty certain that it is better than trying to design the regulations. I have considerable sympathy with Amendment 182 by my noble friend Lord Holmes, who is beside me, and, if you read in detail the CMA’s response to the consultation last year, I think it does too. But I appreciate that the Government and the Minister have consistently rejected that organisational solution. If the Government are going to reject that solution, we really do need hard and fast guarantees that the obvious risk of abuse of that vertically integrated power can be mitigated. Their refusal of functional separation makes it all the more important that we get into the Bill the requirements on GBR to create economic parity. As the CMA said, the less functionally separate they are, the more important it is that these rules are clear. A number of amendments in this group—Amendments 10, 11, 31, 48, 49, 50, 117 and 181—all separately try to achieve this. I accept that we do not need all those amendments; it is a function of the strength of feeling across the Committee that we have so many competing amendments attempting to do the same thing. If I had to choose, Amendment 48 in the name of my noble friend Lord Young is the most important and strongest, which would put it very clearly into GBR’s licence. However, I very much hope that we can have a constructive debate with the Minister on how we do this. I would like to ask him a few questions about this. I fear he will say that we do not need to do this because it will all be set out in the retail code of conduct, but as that has not been published, even in draft form, it is impossible to be sure. Can he confirm when the draft code of conduct will be published? Can he confirm that it will state clearly that GBR’s retail ticketing operation will be subject to the Subsidy Control Act? Can he confirm that GBR will be required to publish separate accounts for its retail operations? I understand that he has indicated it will not, but I am flabbergasted by that because, just to manage the retail operations well, GBR will surely need to know whether it is making money. Those accounts should exist; it is just a question of whether it is willing to be transparent about it. In confirming that the retail code of conduct will state clearly that GBR’s retail ticketing operation will be subject to the Subsidy Control Act, can he explain why it is better not to be clear that Parliament’s clear intention is that GBR should not adversely affect competition in retail ticketing? I cannot understand why the Government would not put one of these amendments into the Bill if—as I am sure the Minister would agree—we want to have a competitive market. In other digital areas, we have learned to our cost—we have learned it very recently in online safety—that, even when there is real cross-party support for a position, if we do not get it in the Bill, the regulator is capable of misinterpreting it. As the Minister has said himself, this is a once-in-a-generation piece of legislation. It is really important that we get the structure of this market right. That is the first point; I promise I will be quicker on the second two. The second set of amendments within this group, Amendments 136 and 139 in my name, aims to make sure that we are clear about the role of the ORR. They would make it clear that the ORR’s competition duty should apply to the enforcement of GBR’s licence condition as it relates to the retail code of practice and when the ORR assesses GBR’s performance to the extent that it concerns retail ticketing. I know the Government will say that this is not necessary, it will all be set out in the code of conduct and it is already clear that this is the ORR’s job. In that case, let us make it clear in the Bill. There are a number of reasons why we really need to be clear about this. This not the ORR’s job at the moment. It does not have the skills and experience needed in retail ticketing, and it will need encouragement to build them, especially when there is so much for it to do in its core area of expertise of running the railways. I am sure that it has the best possible intentions, but we know that running these regulators is really quite hard. We need to make sure that, as we create one of the country’s largest quangos in GBR, the ORR knows that one of its jobs is to keep GBR honest. If we do not have this in the Bill, I worry that, as the retail code of conduct is amended in five, 10 or 15 years, it will gently soften the amount of focus that the ORR needs to have on this. Before we know it, we will have another monopoly market where consumers are the ones who pay the price. It seems unnecessarily risky not to make these quite simple changes.