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1. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   The clause sets out the circumstances in which the passengers’ council must—that is “must”, not “may”—investigate matters relating to railway passenger services or station services. I could provide a long description of the clause, but I will leave that to the Minister, who I know will want to explain it to the Committee. Essentially, the Bill largely lifts the current framework into the GBR model, so I can see why no amendment would be needed, although Ministers should clarify how the national and London watchdogs will co-ordinate on cross-boundary issues. I will be grateful for an explanation of how the Minister will undertake the balancing act between GBR and the London Transport Users Committee. There is, however, a big issue with the current wording of the clause. It requires the council actively to “investigate any matter relating to the provision of railway passenger services” put to it by members of the public, as well as others. That sounds great, but from a practical perspective, there are 1.75 billion passenger journeys each year. The potential issues with the service that passengers receive will run into the tens of thousands every year, yet the drafting of the clause will impose a legal duty on the passengers’ council to investigate every single one of them, unless they are “frivolous or vexatious”. “Frivolous” and “vexatious” are legal terms. To demonstrate that something is vexatious is a very high bar for the passengers’ council: it would typically have to provide evidence of multiple previous complaints on a similar subject that came to nothing. That is what “vexatious” means, and “frivolous” is not far off it. The Minister, perhaps unwittingly, is creating an enormous a legal duty and a vast workstream for the host organisation that is becoming the passengers’ council, which has fewer than 30 members of staff.

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2. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   The hon. Member is absolutely right that there is a sequence of complaint. Before going to an external body, one would typically be expected to have exhausted the internal complaints procedure of the organisation against which one is complaining. It would be perfectly reasonable for the passenger watchdog’s first questions to be, “Have you complained to GBR? If so, what did it say?” In fact, that might be its working definition of frivolousness: going straight to the watchdog without having made a complaint. I warn the Minister that the current wording is an open chequebook. It could lead to a huge amount of work for an organisation that is not currently set up to deal with it, and which would require significant funds from somewhere to do so. What assessment of demand has been undertaken for council investigation powers? What budget has been earmarked for the huge increase in workload? Transport Focus, the host organisation, currently has fewer than 30 staff—I speak from memory and stand to be corrected, but when I visited there were something like 22 staff. To what size does the Minister anticipate expanding Transport Focus or the new passenger watchdog? Amendment 142 would make GBR the first stage of a complaint submitted, with the passenger standards council as the appellant body should the complaint not be satisfied by the response from Great British Railways. I doubt whether it needs an amendment to primary legislation, but it would be the right sequence for any complainant to exhaust the in-house complaints procedure first. Does the Minister not mean the passengers’ council to have the authority to pick and choose its investigations? If he does not, he should stick with the current wording; if he does, he should think again.

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3. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   That is all very well, but it is not the wording of the Bill. The text does not say “have regard to”; it is a mandatory requirement to investigate every single allegation. I totally understand where the Minister says he is coming from, but unfortunately his Bill does not agree with him.

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4. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   I recognise that the Minister has his line to take and that there will be lots of angry people sitting behind him at tea time if he makes any concessions. However, a simple amendment to the wording of the mandatory requirement in clause 39(1), paragraphs (a) to (e), would give the passenger watchdog the ability to pick and choose. Changing “or” to “and” at the end of paragraph (d), before “it appears to the Council that the matter is one that the Council ought to investigate”, would surely provide the flexibility that everyone probably thinks is necessary.

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5. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   In the wording of clause 39(1), at the moment paragraphs (a) to (e) are additional. If the “or” in “or…it appears to the Council” at the end of paragraph (d) were replaced with “and”, there would be a two-part test. The council would receive complaints from all the kinds of people in paragraphs (a) to (d), and the second part of the test would be that “it appears to the Council that the matter is one that the Council ought to investigate.” That would give agency to the council to monitor and choose the most important things for it to investigate.

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6. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   I was just trying to be helpful.

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7. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   I beg to move amendment 66, in clause 40, page 22, line 11, leave out subsections (5)(a) and (5)(b) and insert “the Passengers’ Council may take such action (if any) as it thinks appropriate.” This amendment would give the Passengers’ Council enforcement powers when its requests for information are not met.

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8. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   It is much easier when I start with the amendment, because then I know where I am. This clause is about the power to obtain information. I will leave it to the Minister to give a précis, but it seeks to create a sensible power for the passengers’ council to be able to require the provision of information. However, the council has no power to compel compliance—it may only refer the matter further, to the Office of Rail and Road—so we begin to get into one of the problems with the passengers’ council, which is that it has no enforcement powers at all. Any teeth that are associated with the works of the passengers’ council come only from the economic regulator, soon to be just the safety regulator: the ORR. That will lead to some serious problems. There is no proposal to require the ORR, as a regulating body with no enforcement powers, to take the preparatory work of the passengers’ council as automatically worthy of acceptance without reinvestigation. That is quite a serious point, because when an investigation undertaken by the passengers’ council comes to a roadblock that it feels requires some kind of enforcement action, it has to go to a separate body, the Office of Rail and Road, because the Government do not intend to give the council any real powers of its own. The ORR, as an independent regulator and enforcement body, then has to start the investigation de novo. It has no ability to take as read the investigation work of the passengers’ council. That will create the bizarre situation of the ORR having to reinvestigate as an enforcing body, which is a quasi-judicial function, and then come to a decision every single time the passengers’ council refers any matter to it. Surely the Minister can do better than that, with all the resources of his many civil servants and drafting professionals in the Department. That messy process will lead to delay and uncertain enforcement—hardly the stuff of empowering passengers. I fear that those on the Treasury Bench have asserted that the watchdog will be a nightwatchman, but the Department has granted it no enforcement powers or powers to compel. That will be bitterly disappointing to many rail passenger groups and advocates. When an issue arises and the council begins an investigation, it will inevitably require information. If it is unable to get that information, it must ask the ORR to step in and take over. We heard a lot about that in evidence to the Transport Committee. For example, Emma Vogelmann of Transport for All said: “In terms of the watchdog itself, I have briefly touched on this already, but we feel very much that the passengers’ council really needs to be given enforcement powers to be able to take proper action on cases that are involving accessibility breaches. In cases where things do get referred up to the ORR, we would like there to be a statutory duty on them to act on those referrals made by the passengers’ council, and to have those outcomes within a clear timeframe.” Another point she makes is that the ORR does not have to do anything. The passengers’ council can refer a matter to the ORR, but the ORR can say, “We’re busy, thank you, and we don’t think it is important.” It has no obligation to act.

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9. 3 Feb 2026·Parliament·Jerome Mayhew

   Railways Bill (Tenth sitting)

   The Minister’s argument is clearly—is it parliamentary to say nonsense? I hope it is. His argument, that the industry will be confused if the passengers’ council is able to enforce its own deliberations, is ridiculous; he just has to think about it. The ORR has its areas of competence on which it enforces, and the passengers’ council has its areas of competence; they are discrete. Where confusion might really arise is if the passengers’ council thinks it is trying to get information and is stymied by the ORR taking a different view, which is the position the Minister has put forward. I have no hesitation in pushing the amendment to a vote. Question put, That the amendment be made.

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10. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I beg to move amendment 67, in clause 42, page 23, line 7, leave out subsection (2).

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11. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    The amendments relate to clause 42, so I will explain what that clause seeks to achieve. Its title is “Representations and referrals”, and its focus is on introducing a power so that “the Passengers’ Council may make representations to such persons as it thinks appropriate for the purpose”, such as train or station operators, to resolve a matter under investigation. If the passengers’ council believes that an operator “is contravening, or likely to contravene” its licence obligations, it must either engage with the operator directly, as we will discuss further when we consider clause 47, and/or refer the matter to the ORR and notify the Secretary of State. There are various other things that clause 42 does, but those are the main things. The clause makes it clear that even after a passengers’ council investigation has identified a licence breach, the ORR retains complete discretion on whether or not to act. Once again, that will create a two-stage process in which the council must refer breaches that it cannot resolve itself, but the body receiving the referral is not obliged to act on it, or to intervene. Therefore, the watchdog investigates, but only the ORR can enforce, which it can choose not to do. That structure falls way short of the supposed strengthened passenger accountability model described by Ministers, and it serves only to risk causing prolonged delays for passengers who face ongoing harm, to the extent that a licence provision is breached, without a guaranteed remedy. Thus far, we have not seen a clear rationale as to why the Government would create a watchdog only for it not to have any enforcement powers. It prompts the question: “What’s the point?” Evidence to the Transport Committee was very clear—the passengers’ council needs to have enforcement powers of its own to do the job envisaged for it. At the very least, if the ORR is to remain the enforcement body, there should not be a weeding process between the decisions of the passengers’ council and the ORR; the ORR should at least get on and enforce. That is what amendments 67 and 68 would achieve, by requiring the ORR to take action when a contravention had been referred to it.

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12. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I am not persuaded by the Minister. There are two amendments. In order to save time, I will press the first one to a Division, and the outcome of that will determine whether or not I press the second one to a Division. Question put, That the amendment be made.

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13. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    Under clause 43, the passengers’ council can prepare, send and publish a report of its findings in an investigation, but it must obtain the Secretary of State’s consent before sending or publishing a report if the investigation was undertaken following a referral. Similar provisions exist for the Scottish and Welsh Ministers. The wording of subsection (3) makes publication discretionary even after a full investigation and subsection (4) requires ministerial consent before publishing any report arising from a referral. As the explanatory notes confirm, that structure gives Ministers an effective veto over publication. Why should the Minister have a veto over publication when the organisation being investigated is their own creation? If the state has created a toothless investigation watchdog body that, despite its lack of enforcement powers, has managed to do an investigation, write a report that is no doubt critical of the state, GBR or perhaps even the Secretary of State and the Department for Transport, the Secretary of State, or the Scottish or Welsh Minister can, for whatever reason they like, veto its publication. They can muzzle the watchdog at whim. That risks undermining the whole process—where is the transparency?—and weakens the credibility of the new watchdog. If the aim is to strengthen passenger oversight, investigation reports should be published as a matter of course, with only narrowly defined exemptions for confidentiality or commercial reasons. Transport for All explains in its written evidence to the Transport Committee how that will affect passengers: “Clauses 42-47 empower the Passengers’ Council to receive complaints, investigate issues, and identify potential breaches of licence conditions. However, the Council has no power to compel corrective action, issue penalties, or enforce compliance. If it identifies significant accessibility failings, it must refer the matter to the ORR, which retains full discretion over whether to investigate or take enforcement action. Disabled passengers already face disproportionate obstacles when raising complaints, and this indirect model appears to add another layer of bureaucracy without increasing accountability. We worry that it will create further delays, weaken enforcement, confuse passengers, and result in inconsistent redress. A watchdog without enforcement powers is fundamentally limited in its capacity to protect passengers’ rights or drive accessibility improvements.” Amendment 69 requires the passengers’ council to publish any report on a matter investigated under clause 39. That will create greater transparency and accountability in the new watchdog. Frankly, if the Government are serious about supporting the rights of passengers, rather than designing in an ability to hide embarrassing conclusions, they must support this amendment. Amendment 70 would require the passengers’ council to publish its report within six months of completing the investigation. Having in statute a specific timeframe in which a report must be published would create a sense of urgency, or at least of purpose, and a culture would develop within the organisation that placed high importance on those reports—exactly as it should. Amendments 138, tabled in the name of the Liberal Democrats—presumably the hon. Member for Didcot and Wantage—would require the passenger’s council to prepare a report of findings after an investigation and ensure that any report is laid before Parliament. It is another attempt to strengthen the reporting requirements from a different angle and should be supported because it is seeking to achieve a similar outcome to my own amendments. Amendment 140, also in the name of the hon. Member, “removes the requirement that the Passengers’ Council must obtain the Secretary of State’s consent before sending or publishing a report if the investigation resulted from a referral by the Secretary of State”. Amendment 69 is a mandatory requirement that they must publish every report. If that is not acceptable to the Government for whatever reason, then amendment 140 is a slight variation on the theme in that it takes the discretion away from the Secretary of State and leaves it where it properly lies, if there is to be discretion: with the passenger watchdog. That body, surely, having undertaken the investigation, written the report and come to a conclusion, are best placed to decide whether it is in the public interest to publish, not the owner of the nationalised industry that is being investigated.

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14. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I have nothing to add on clause 44. Clause 45 provides a duty for the passengers’ council to secure independent dispute resolution arrangements. As the Minister just said, it is anticipated—according to the explanatory notes, at least—that it will take over sponsorship of the Rail Ombudsman from the ORR in order to fulfil that duty. I want to ask the Minister what powers the dispute resolution function will have, because the Bill and the explanatory notes are entirely silent. That is the modus operandi that we have become used to during the course of these Bill proceedings: there is endless putting off, and the detail has not been thought out—or, certainly, not shared. This seems to be a similar case. New clause 46, in my name, would ensure that the Office of Rail and Road continued to publish data on complaints in the same manner as it currently does. During a significant transition such as the creation of GBR, it is crucial that data collection and publication are maintained in a manner that allows for accurate comparison—another small but important point. The new clause would achieve that objective. The alternative is to risk an inability to make like-for-like comparison, which of course would let the new organisation off the hook. Without continuity of data collection and publishing, GBR would be able to avoid comparative scrutiny.

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15. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I beg to move amendment 71, in clause 46, page 24, line 26, after “for” insert “all users and potential users of the railways including, in particular,”. This amendment allows the Passenger Council to set access standards for all users and potential users of the railway.

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16. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    Clause 46 gives the passengers’ council a power to set consumer standards for operators of rail passenger services and station services, which will be imposed on them via licence conditions. Of course, we have not seen any of those licence conditions, so we will just have to take it on faith. The clause sets out matters that the standards may cover, including passenger assistance, provision of travel information, a process for compensation if services are disrupted, and complaints about passenger services. The council must seek the Secretary of State’s and the ORR’s consent before setting new standards or varying existing ones, and it must publish them, and any variations or revocations of them, and monitor how operators are complying with them. In summary, the clause gives the passengers’ council a standard-setting role in areas such as assistance, information, compensation and complaints. What about standards on core passenger priorities, such as punctuality, reliability, crowding, staffing, cleanliness, safety and ticketing transparency? Would the Secretary of State be minded to grant consent for such standards, and if not, why not? Requiring both the Secretary of State and the ORR to consent to any new standard creates two veto points, limiting the council’s independence. The result is a standards framework far weaker than the broader watchdog model described in the consultation. As we have discussed, subsection (2)(a) makes no direct reference to general users of the railway; the only reference is to disabled people. While I understand the additional focus that disability access requires, the current wording risks a wholly unbalanced approach for the new organisation. Amendment 71 would solve that drafting imbalance and encourage the passengers’ council to set standards for all users and potential users of the railway. In drafting it, all I did was take the Government’s own words in clause 18, which, in describing the general functions, refers to all users, both able bodied and disabled. It does not seem to be an enormous stretch to require the passenger watchdog to have a similar functions scope as the organisation that it is watchdogging. Amendment 72 would require the passengers’ council to set standards relating to the reliability, safety and security, comfort, onboard experience, and affordability of railway passenger services. These are the key issues of importance to passengers. Why do the Government not allow their key champion to tackle the real problems and not just the peripheral ones? Instead of focusing on information provision and complaints processes, let us get to the nitty-gritty. Let us have a watchdog that can actually draft and implement standards, and enforce improvement on a large nationalised organisation in the interests of passengers—that is what they actually want—rather than tipping a cap towards it and saying, “Oh yes, we’ve got a watchdog but it has no enforcement powers. It can write standards, but only about what information you receive, not about the really important stuff.” If the Government really want to put “passengers at the heart of the railway”, why do they not vote for these amendments and enhance the powers of the passenger watchdog? They cannot have it both ways. At the moment, it looks like they are just pretending; they have a superficial watchdog that ticks a box but has very limited practical use for passengers. Amendment 73 would remove the passengers’ council’s need to obtain the ORR’s consent to set, vary or revoke standards. A truly effective passenger watchdog needs to have its own real powers, and the ability to set its own standards without the consent of another organisation. Why does the Minister not have faith in his own passenger watchdog to do that? If his answer is that such an objection from the ORR would relate to safety-critical functions, why does the Bill not just say that? The Government are planning on stripping most of the competences away from the ORR, save for the remaining aspect of safety, but they do not say, “If the watchdog has a standard that has an impact on the safety-critical application of the railway, it needs to get the permission of the ORR.” That would make sense. Instead, the ORR has a blanket veto. Amendment 141, in the name of the hon. Member for Didcot and Wantage, would remove the requirement for the consent of the Secretary of State and the ORR before the passengers’ council sets, varies or revokes a standard—a similar approach to that which I have put forward. I would be minded to support it, were it to be pressed to a Division. Amendment 144 comes from a similar quarter. I am sure it is unintentional, but it contains a drafting mistake. The notes to the amendment make it clear that it seeks to delete subsection (5), but the wording as it stands relates to subsection (6). I stand to be corrected, but I think that is what has happened. New clause 16, in the name of the Liberal Democrats, would require a review of the Access for All programme. It seeks to ensure that step-free access at stations is provided under the programme. The review would explain historical spending decisions and set out recommendations for future spending. I will leave new clauses 17 and 53 to the Liberal Democrat spokesman. New clause 69, in the name of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), would mandate GBR to publish an accessibility strategy every 10 years, to monitor and improve accessibility across the rail network, and to report annually on its progress against that strategy. I welcome that approach to transparency and the focus on accessibility. It deals with the Minister’s arguments about imposing onerous reporting targets on GBR. Given the number of stations involved, the requirement is limited to once a decade, which would be a reasonable compromise. Without such data, how can GBR expect to allocate resources efficiently? The Minister needs to set out how GBR will address accessibility investment without such data. I anticipate an argument that it would be imposing onerous conditions on GBR for it to have an idea as to accessibility around the country. Every now and again, it should know what its own business is up to.

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17. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I think the Minister may have misunderstood my point. I was not for a moment suggesting that the passenger watchdog should take over responsibility for safety-critical functions. I was anticipating that he might argue that the ORR needs to retain a veto right because there might be clashes with its safety-critical functions, in which case the clause could be redrafted to make it clear that that is the area of focus.

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18. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I am grateful to the Minister for his detailed assessment of the new clauses and amendments. In the interests of time, I do not propose to press amendment 71, but I do not swallow the explanations given in relation to amendment 72. We need to focus the passenger watchdog on important issues for passengers, so we will press that amendment to a Division. However, on amendment 71, I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Amendment proposed: 72, in clause 46, page 24, line 33, at end insert— “(e) passenger service reliability, including punctuality, cancellations, short-forming, delays and the reliability of key connections, (f) safety and security, including safety incidents, security incidents affecting passengers, staff presence, and delivery of safety-critical maintenance, (g) comfort and on-board experience on passenger services, including cleanliness, the functioning of heating, air-conditioning, and lighting, overcrowding, the availability and performance of any internet connection or power sockets, and toilet facilities, (h) affordability and value for money of passenger services, including fare levels, availability of discounted or flexible fares, transparency of fare information, and passenger perception of value for money.”—(Jerome Mayhew.) This amendment would require the Passengers’ Council to set standards relating to the reliability, safety and security, comfort and on-board experience and affordability of railway passenger services. Question put, That the amendment be made.

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19. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I beg to move amendment 74, in clause 47, page 25, line 23, leave out from “Council” to the end of line 32 and insert “take such action (if any) as it thinks appropriate for the purpose of remedying the contravention, or avoiding it taking place or being repeated.” This amendment would give the Passengers’ Council the power to enforce improvement plans.

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20. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    Clause 47 deals with improvement plans. It allows the passengers’ council to request improvement plans from licensed rail operators “where it judges them to be, or likely to be, non-compliant with the standards it sets and therefore, the consumer licence conditions”— not that we have seen them, and the “improvement plans would be requested from operators to allow them to explain their planned improvements before issues were referred to the ORR or potential enforcement action”— although we do not know whether they would choose to enforce either. The clause highlights—again—just how toothless the passengers’ council will be. It still has no direct enforcement powers, and the explanatory notes confirm that these plans are only a precursor to possible ORR action. If an operator ignores a plan, the council can do nothing about it at all, except refer the matter to the ORR, which may “take such action (if any) as it thinks appropriate”. This is another two-stage approach from the Government, with no guaranteed remedy, and it leaves the council structurally dependent on the ORR for all meaningful enforcement. There is no requirement for the ORR to do anything at all, when provided with a file from the passengers’ council. There is no ability for the ORR to adopt a passengers’ council investigation as its own, and any enforcement action will be required to consider the matter afresh. I accept the Minister’s earlier point that the ORR will be able to read documentation presented by the passengers’ council, but that is it. That will take time and add cost, and it will fail the consumer all the way through the process. It is not the ORR’s fault; it is how the Government are designing the system, which falls well short of the Government’s stated aim of creating a genuinely empowered passenger watchdog. Subsection (2) says: “If the person fails to take the steps set out” in the improvement plan, or does not prepare one “within a reasonable time, the Passengers’ Council must refer the matter to the ORR”. That part is mandatory, but the ORR’s response is not mandatory. Why is that? Perhaps the Minister can help us out. The new system needs to be able to stand up for passengers, with a watchdog worthy of the name. Amendment 74 would give the passengers’ council the power to enforce improvement plans, and new clause 45 sets out how that will be achieved. It would require the Secretary of State to provide the passengers’ council with enforcement powers broadly equivalent to those of the Office of Rail and Road under the 1993 Act. The Government want to put passengers at the heart of the railway, but they have created a passenger watchdog with no teeth—or power—to enforce any of its decisions. To give an advance indication, I will seek to divide on both amendment 74 and new clause 45.

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21. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I am interested in the Minister’s repeated insistence that there would be confusion if there were more than one enforcement body for rail activities. What is his proposed solution to the Competition and Markets Authority and its enforcement competency for the railways, which currently is shared with the Office of Rail and Road? Is it his plan to amend the competencies of the Competition and Markets Authority? If not, why is the argument so overwhelming to prevent the passenger watchdog from having teeth, when he allows the CMA to have teeth?

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22. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I am unpersuaded. As I previously indicated, I will press amendment 74 to a vote. Question put, That the amendment be made.

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23. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    The Minister has described the function of clause 48, the lead measure in this group, but there is one notable exception from the list of bodies that can refer to the council for advice under clause 48(1)(a) as drafted. It includes mayoral combined authorities, Transport for London and Ministers—whether the Secretary of State, Welsh or Scottish Ministers—but there is no room for local transport authorities. I am sorry that my hon. Friend the Member for South West Devon is not in her place, because she made the point powerfully in previous sittings of the Committee that some areas of the country do not have mayoral combined authorities and never will, because of their geographic or demographic set-up—that is particularly the case in the south-west. Those areas still have local transport needs, and a local transport authority, yet under the Bill as drafted, those authorities are excluded from asking the advice of the passenger body. We have heard that there are many areas that will never have an MCA but that still have rail-related concerns and issues. I seek advice from the Minister: what is the thinking of the Government, that they have deliberately excluded local transport authorities from the clause? Clause 49 deals with “Consultation about railway passenger services and station services”. Again, I have left it to the Minister to explain what the clause does, but it sets out the policies and procedures that GBR should consider consulting the passengers’ council on. It gives GBR discretion to decide whether to do so based on its assessment of the impact on passengers. That is, again, quite important. The clause creates a duty on GBR to consult the passengers’ council, but only where GBR itself decides that a policy change will significantly affect passengers. The explanatory notes confirm that that judgment is entirely for GBR. GBR, the Secretary of State and Scottish Ministers will all owe consultation duties to the council, but the Bill imposes a duty only on GBR, and even then only on GBR’s own assessment of significance. There is no parallel duty on Ministers, meaning that major ministerial decisions affecting passengers could fall entirely outside statutory consultation. The list in clause 49(2) once again seeks to sideline the passengers’ council by limiting its remit. The list does not cover the issues that “significantly affect the interests of the public in relation to…passenger services or station services”, as described in clause 49(1)(b); far from it. Amendment 75 would require GBR to consult the passengers’ council when GBR is developing or changing its procedures, with reference to the passenger-focused KPIs outlined in proposed new clause 2: “reliability, including punctuality…short-forming…key connections… safety and security…comfort and on-board experience” and “affordability and value for money”. Those are issues at the heart of the passenger experience. Let the passengers’ council do a proper job. Clause 50 gives the passengers’ council the power to publish information and advice for “users or potential users of railway passenger services”. The clause only allows the passengers’ council to publish information; it does not require it to publish information. That means the council can choose not to publish anything at all. The clause also gives no sense of what should be published, or how often. Perhaps the Minister could expand on the reasons he has not decided to require publication when it is about information and advice; that seems a bit odd. Clause 51, which is on the power to make exclusions, will be watched by many, as it is really important to rail enthusiasts. Committee members should be careful when commenting on it, because people are keenly interested in this power. Actually, on this occasion I think the Government have got it about right. The clause replicates similar provisions in the 1993 Act—specifically, sub-sections (7B) and (7C) in section 76. Clause 51 enables the Secretary of State to exclude services from one or more of the duties imposed by clauses 37 to 43, 45 and 48 through regulations, or modify those duties for particular services. However, before making changes, the Secretary of State must consult the passengers’ council and the London Transport Users Committee. There are currently two exemptions from the similar requirements in the 1993 Act in place, one of which excludes services without through-ticketing facilities and which are exempt from holding a licence. Charter and heritage railway operators fall under this exemption. The Government assert in the explanatory notes to the clause that, “it would be burdensome and unnecessary for the Passengers’ Council to be required to investigate heritage railway operators,” which only operate for tourism and recreational purposes, not for the mainline network. I agree that those potential exclusions are reasonable. The Government rightly point out that burdening heritage rail with unnecessary regulation when the hospitality and tourism sector is facing serious challenges—admittedly, because of this Government—would be disproportionate. Very few constituencies do not boast a heritage railway, so I declare an interest, Mrs Hobhouse: the Bure Valley Railway and the start—or the finish, depending on which way a person is going—of the Wells and Walsingham Light Railway run in my constituency of Broadland and Fakenham.

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24. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I am interested to hear that the hon. Gentleman has been on that railway. I would continue on that, but I have gone on long enough by saying, “and another thing—I remember”. Rail charter services are a different matter that must also be considered. Those with children may have travelled on one of the many Christmas polar expresses that are chartered services. They are very important to tourism and to the financing of the railway, as they make an economic contribution to the running of it. They sit in a unique space of quasi-open access and are a useful component of the railway. Mainline heritage rail routes, such as the Cambrian express—although the Minister of State for Rail, Lord Hendy, still needs to do some work to restore steam, rather than diesel, locomotives to that heritage route—as well as services with the Flying Scotsman, or Sir Nigel Gresley, which is the last working version of the Mallard class, the A4s, are very important, and crowds of people gather to watch them steam past. I applaud the Government for that sensible exemption. All I ask is that they continue to do what they can to facilitate and support heritage and chartered railways, and I would be grateful to hear the Government’s plans to do so, if there are any. I would propose no amendments to clause 51. Clause 52 is the interpretation chapter, and I am happy for that to continue without amendment. That leaves me solely with the pleasure of discussing new clauses 68 and 70, tabled by my hon. Friend the Member for Runnymede and Weybridge. New clause 68 would give the Secretary of State the power to direct GBR to co-operate with transport authorities to ensure the effective operation of transport networks and to reduce disruption. Network Rail is often cited as a poor neighbour, with no interest in co-operating with other transport modes, or frankly with adjacent landowners— I have had more than one letter of complaint from constituents on that—to minimise disruption not on the railway. The Opposition support the intentions behind the new clause. Culture change is needed in the successor to Network Rail, and a duty to co-operate would at least help. The Minister needs to recognise the existing problem of Network Rail’s culture being—I think it is fair to say—deeply suboptimal in relation to this, and set out his proposals for improvement. New clause 70, also in the name of my hon. Friend the Member for Runnymede and Weybridge, sets out the requirements for GBR to ensure that any planned changes to passenger services are only made with due consideration of its objectives and are fully communicated with stakeholders. I read the new clause into the record, but I do not propose to press it to a Division when the time comes.

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25. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    I have thought long and hard about this, Mrs Hobhouse, and given the time of day, we will let it pass. Question put and agreed to. Clause 48 accordingly ordered to stand part of the Bill. Clauses 49 to 52 ordered to stand part of the Bill. Clause 53 General duties of the LTUC Question proposed, That the clause stand part of the Bill.

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26. 3 Feb 2026·Parliament·Jerome Mayhew

    Railways Bill (Tenth sitting)

    We are at the final furlong—for today at least. I will keep the pace up for the last straight. I am not going to make any comments on clause 53, the general duties of the LTUC, because there is nothing to be improved. Clause 54, which amends section 252A of the Greater London Authority Act 1999, mirrors the passengers’ council in many ways. We could take the opportunity to seek to apply the same improvements to the LTUC that we have to the passengers’ council, but I have resisted that temptation given the Government’s reaction to all other proposals to date. Clause 55 designates the committee as the body to which complaints about potential infringements of retained EU law on rail passengers rights should be addressed. I see no issue with that other than in relation to the criticism we have already outlined regarding the passengers’ council. It is clear that the clause is designed to ensure consistency in London in line with the rest of the United Kingdom, so we have no amendments there. I take on board the Minister’s comments on Government amendment 173 and make no further comment. Clause 56, which is about complaints to the LTUC, again, allows the LTUC to be the official body in which complaints about retained EU law are handled. As the Minister has pointed out, that clause, like others in this group, mirrors the ability of the passengers’ council, so we have nothing else to add on that one. I make no comments on clause 57 about the publication of information and advice by the LTUC. That brings us to clause 58—restrictions on disclosure of information by the LTUC. As we come to the last clause of the London Transport Users Committee, we also come to the last amendment to the Greater London Authority Act 1999. For those keeping track of these things at home, we are now amending section 252DC. The clause outlines restrictions in a very similar fashion to that of the passengers’ council, so we consequently have no further amendments to suggest for that clause either.

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27. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    Good morning, Sir Roger and members of the Committee. As the Minister says, clauses 112 to 116 will introduce the UK’s excise duty on vaping products and set out the legal and administrative framework for its operation. Clause 112 will establish the new vaping products duty, setting a flat rate of £2.20 per 10 ml, rounded down to the nearest penny. Clause 113 sets out what counts as a vaping product; the definition is drawn deliberately widely to encompass any liquid that contains nicotine and the solvents used with it, and even liquids without nicotine if they are intended for vaporisation. That means that the apparently popular zero-nicotine shortfills used by smokers who are trying to quit or taper down will be taxed, too. I am advised that shortfills will be the hardest hit by the new duty; Vape 360 reports a 203% price increase. That raises an interesting public health question about the rationale for taxing zero-nicotine liquids in the same way as addictive nicotine-containing liquids. I am interested to hear the Minister’s response to the concern that by adopting this taxation approach we might be discouraging people from switching to less harmful or nicotine-free alternatives. Clause 114 defines when a product is regarded as produced for duty purposes, not just when liquids are mixed but when they are packaged, labelled or marketed as suitable for vapes. Clause 115 leaves it to future regulations to set out when duty becomes payable and who is liable. Clause 116, the final clause in this group, gives HMRC new powers to control vaping products before duty has been paid. The Opposition will not oppose the clauses, but we do want to probe the Government’s thinking. Vaping has become increasingly common across the UK. According to the Government’s own tax information and impact note, approximately 5 million people in the UK vape. For the first time, according to the Office for National Statistics, more over-16s in Great Britain are using vapes or e-cigarettes than are smoking cigarettes: 5.4 million adults vape, compared with 4.9 million who still smoke. The duty was first announced by the then Conservative Government in the spring Budget of March 2024. Alongside the announcement, a consultation was launched on how the duty should work in practice. The Government have since opted for a flat-rate duty rather than the three-tiered structure originally proposed, which would have varied the rate according to nicotine strength. Having read the responses to the consultation, I know that that decision clearly reflects the bulk of the evidence provided and will create a system that is simpler to administer. As the Exchequer Secretary might say, that is evidence of consultation working and the Government listening, which we are becoming very used to. The tax will raise significant amounts: £400 million in 2027-28 and £465 million in 2028-29, with revenue then increasing further. When introducing a new tax, implementation matters. The Government’s own impact note shows that HMRC expects to spend £140 million just to deliver this measure, of which £20 million will be spent on IT systems, while the other £120 million will be for staffing and compliance costs. I will be grateful if the Minister can clarify whether the headline figure includes the £32 million contract that HMRC is currently advertising to deliver the vaping duty supply contract for five years. As Border Force will also receive up to £10 million to prepare, delivering the new duty will cost about £150 million, all in. That is a pretty significant sum, so we need to be sure that it will provide proper value for money. Can the Minister give a little more clarity and break down the costs, particularly the £120 million on staffing and compliance? How many people will that involve bringing into HMRC? What exactly will they be doing? Why is the figure seemingly so high in comparison with the take? Some consultation respondents have questioned whether the new duty will actually shift behaviour. If producers simply absorb the cost, as tobacco firms once did, prices may barely change, which will undermine the public health rationale behind the policy. What consideration has the Minister given to that point? Will the duty rate remain under review if outcomes fall short of the expected impact? We can also look at the experiences of other countries such as Italy, where vape sales reportedly fell by 70% when a similar duty was introduced—not because consumers quit, but because purchases moved to the black market or unregulated online sellers. That takes us back to one of this Committee’s themes, which is about how raising taxes to a certain level drives people into the black market, and about where the sweet spot is for raising revenue without driving illegal behaviour. We will come on to the enforcement powers in some detail shortly, so I will not get into them now. This measure will play a useful role in regulating a growing sector, but the Government need to strike a balance between discouraging youth vaping, supporting smokers to quit and maintaining a workable, enforceable tax regime that does not cost the taxpayer a lot of money. I hope that the Minister will respond to the points that I have raised, and particularly the point about zero-nicotine vapes being treated in the same way as nicotine vapes.

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28. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    Clauses 117 to 120 will introduce the new vaping duty stamp scheme. The Opposition welcome the Government’s decision to move forward with a duty stamps regime for vaping products: it is, after all, a measure that can help our enforcement agencies and responsible businesses alike to distinguish legitimate duty-paid products from those that are illegitimate and being traded illicitly and illegally. We know that there is a substantial illicit market for vapes across the country; without a credible system of verification and traceability, it will continue to undercut legitimate producers, harm public health and cost the Exchequer millions of pounds in lost revenue, so we need to address it. Clause 117 will establish the legal framework for the duty stamps system. It defines when a vaping product is considered to be stamped, and it sets out that the duty stamp, whether affixed to the product or to its retail packaging, must comply with regulations made under the Bill. Importantly, the clause will enable each stamp to be digitally linked to the product that it marks, and will allow HMRC to collect specified information about those goods, marrying the physical and digital trails of compliance. That is a positive step, and I am pleased that the Government have adopted at least some of the approach for which the Opposition argued during the passage of last year’s Finance Bill when we considered the introduction of the duty stamp regime. In essence, these measures will bring to the vaping market a track and trace model that is similar to what already exists in the alcohol and tobacco sectors. Clearly, when used properly, such tools can be an effective enforcement system. They allow officers, retailers and consumers alike to verify legitimacy at a glance, building confidence in compliant businesses and exposing those who seek to cheat the system and the taxpayer. We should be clear, however, about the scale of the challenge that could be created for smaller manufacturers and importers. In implementing this approach, we should ensure that the practical burden of stamping, activating, tracking and reporting, alongside new IT infrastructure, is proportionate for the many businesses that may not previously have had to operate at such a level of compliance. We cannot allow a regime that is intended to fight the black market to end up driving responsible producers to consider joining it. Clause 118 will give HMRC the authority to issue and manage the duty stamps and to charge administrative fees. It also allows a third-party issuer to be appointed, as I referred to in my comments on the previous group of clauses. I hope that the Minister can confirm how those fees will be set. Will HMRC consult on the level of those fees? What safeguards will exist to ensure that the fees are proportionate and transparent so that businesses do not find themselves paying unpredictable charges that bear little relation to the cost of the compliance regime? Clause 119 will establish who can hold and use duty stamps: only approved stamp holders may do so, and they must operate from a fixed location within the United Kingdom. That makes sense in principle—it limits the opportunity for diversion or counterfeiting—but the practical implementation will matter greatly. Subsection (5) grants HMRC wide powers to restrict transfers, to define what counts as a fixed place and to cap the number of stamps issued to a business. If the system becomes too bureaucratic or opaque, small UK producers could find themselves struggling in the market while larger incumbents consolidate their position. The Minister referred to the logic behind clause 120 and the concept of a UK representative for overseas businesses that lack a domestic base. Clearly, there needs to be someone within UK jurisdiction who can be held responsible for compliance and any penalties that may be applied.

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29. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    I rise to speak to clauses 121 to 125, which set out the framework on forfeiture and civil penalties for the new vaping duty regime. As the Minister said, this is a very important part of the new regime, given the impact that illicit vapes could have. Clause 121 establishes a general liability to forfeiture for three categories of non-compliant goods, namely: an unstamped vaping product that should bear a duty stamp, any invalid duty stamp along with the product that it is attached to, or any unused duty stamp not affixed or returned within 12 months of issue. In plain terms, it gives HMRC the power to seize non-compliant vaping products. An invalid stamp is defined broadly, and includes any stamp that has been altered, forged or voided by HMRC. Other forfeiture triggers are linked to the wider civil and criminal offences contained elsewhere in this part of the Bill, which I am sure we will come on to. These powers are designed to allow both HMRC and local enforcement bodies to remove illicit or suspect products and counterfeit stamps from circulation. That is clearly an important deterrent against the black market in vaping products. Can the Minister assess the risk of the 12-month rule on unused stamps, and the broad definition of invalid stamps, inadvertently capturing legitimate business activity? For example, operators may over-order stamps as a contingency or make administrative errors. How will the Government ensure that, in those circumstances, genuine stock is not caught up and lost alongside contraband products? Once forfeited, what will happen to those goods? Will they simply be destroyed? It would be helpful to get clarification on that point. Crucially, what safeguards will ensure that forfeiture powers are used proportionately, and that any minor administrative mistakes by otherwise compliant firms do not result in legitimate products being seized and destroyed at the first opportunity? Clause 122 introduces a civil penalty regime for those who sell, offer for sale or deal in unstamped vaping products packaged for retail sale. The penalties set out are banded according to scale and repeat behaviour, rising to a maximum of £10,000 for 500 or more units, with escalating amounts for repeated contraventions within a rolling two-year period. It provides a strong financial penalty and a disincentive for retailers and wholesalers to stock unstamped products, and it complements the criminal provisions that follow later in this part of the Bill. Clause 123 creates penalties for approved stamp holders who lose stamps or fail to use, return or destroy them within 12 months of issue, unless they can demonstrate that they took all reasonable steps to prevent loss. In those circumstances, the penalty is set at five times the monetary value of duty per lost stamp, equating to £11 per stamp when the scheme goes live. That comes alongside the existing Finance Act 1994 penalties for altering or misusing stamps. The intention is clear: to encourage tight control of duty stamps, treating them almost as cash equivalents, and to discourage casual or insecure handling that might enable diversion or counterfeiting, which is welcome. Clause 124 introduces a broad, catch-all civil penalty for failure to comply with the vaping products duty regime using section 9 of the Finance Act 1994 as its legal framework. That is intended to ensure that HMRC can act where non-compliance occurs, but no specific penalty is written into the legislation, reinforcing the need for accurate record keeping and full compliance with operational rules. I can see why a general power may be convenient for HMRC, but for smaller businesses it could increase the risk of innocent mistakes attracting financial penalties. How will HMRC ensure that this general power is used proportionately? Will education and guidance be issued to firms?

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30. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    Clause 126 creates new criminal offences relating to the possession and transfer of unstuck duty stamps. In plain terms, it becomes an offence for anyone who is not an approved stamp holder to possess a duty stamp that has not been affixed to a vaping product, or to transfer such a stamp to someone else. As the Minister says, the Bill allows a defence where the person did not know or have reason to suspect that they were handling an unstuck stamp, and carves out sensible exemptions, such as transfers between UK representatives and overseas principals, or during commercial delivery and returns. I would be interested to know what assessment the Treasury has made of the level of abuse that it expects under this regime. HMRC and trading standards are being given a budget for enforcement. Underlying that, there is presumably some assumption about the level of abuse of this system, so it would be interesting to have a flavour of that, given that all of us will be familiar with vape shops and associated issues from our constituencies. Clause 127 creates criminal offences for possessing, transporting, displaying, selling or otherwise dealing in unstamped vaping products. It also criminalises managers of premises who “cause or permit” the sale of unstamped goods. Under the definition in subsection (4), a manager of premises “is a person who…is entitled to control their use…is entrusted with their management, or…is in charge of them.” To pick up the example raised by the hon. Member for Maidenhead, if an 18-year-old is in charge of the premises such that they are unlocking on the day and will be locking up, are they the person, the individual, who could get the fine for dealing in the product, even though they may have had no role whatever in securing the stock and are simply there, getting their minimum wage payment to look after the shop? I would be grateful if the Minister could unpack what subsection (4) means in that sense. It is right that deliberate participation in the illicit vape trade is met with serious, fierce sanctions. We must also make sure that any junior staff who are wholly innocent—who do not know anything about the matter and could not reasonably have been expected to—are not prosecuted for the actions of others. We need some clarity from the Minister on how responsibility in those cases would be apportioned, and we must again ensure that enforcement authorities are operating with clear guidance. Clause 128 will enable courts, when convicting under clause 127, to make an order prohibiting the use of premises for the sale of vaping products for up to 12 months, and will create a further offence for managers who breach such an order. The power is of course intended to shut down problem premises that are repeatedly used for illicit trading. That is a tool that local authorities and trading standards officers—and, I suspect, Members of this place and our constituents—will very much welcome. There are many examples in constituencies across the country of illegal vapes being sold, and the communities near them suffer the impact of those criminal enterprises. We support action to deter such enterprises, but we are also familiar with examples in which trading standards, HMRC or others go in and seize the illegal vapes—the police may be involved as well—and in a matter of hours, that same premises will reopen, selling more illegal vapes. It is great to have a power to shut down such premises, but how will it be enforced? Will the resources be in place to do that? Will there be clear criteria on when the powers will be used, and how a change of ownership of a premises could affect a ban? We may effectively see fake transfers of ownership to try to get around it, so it is important that HMRC and trading standards have robust systems in place. Clause 129 sets out the penalty framework. On summary conviction, in England and Wales the maximum is the general magistrates limit—imprisonment, a fine or both; in Scotland, the maximum is 12 months and a statutory fine; and in Northern Ireland, it is six months and a statutory fine. So there is a little discrepancy there. On conviction on indictment, the maximum is two years’ imprisonment, an unlimited fine or both. That clearly allows for flexibility to distinguish between serious organised criminal offending and smaller scale non-compliance with the law. Of course, in the Sentencing Act 2026, the Government are effectively legislating to abolish sentences of up to 12 months, with a presumption that those will become suspended sentences. That is still a penalty, but it will mean that people are in the community rather than in jail serving their punishment, as they should be. The reality is that most people breaking this law are unlikely to actually go to prison; they may simply get a fine. Will the sentencing guidance make clear distinctions between organised criminality and smaller-scale offenders? The final clause in the group, clause 130, deals with the issue of forfeiture. It goes beyond the general rules in clause 121 by allowing all unstuck stamps or unstamped products linked to offences under clauses 126 to 128 to be seized. In some cases, all the stock on the premises—the Minister made this point—may be forfeited if HMRC believes that it is used in a business connected with the offence. That could be a welcome measure, but we need to have some clarity about how unnecessarily broad powers could potentially be used. Will there be a clear route for traders to challenge such forfeiture of legitimate products where they consider that they have inadvertently breached the rules? Taken together, the clauses introduce serious new powers, which is why it has been worth spending a few moments considering them and how they will actually be used. I think particularly of the power to shut down a premises for 12 months; we must ensure that that is effective, and that people are prevented from seeking to get around it by pretending to sell the business or list a new owner of the business. I look forward to the Minister’s responses to the points that I have raised.

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31. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    We come to the final group of provisions on the important issue of the new vaping duty. I speak to clauses 131 to 138, which concern the general provisions underpinning the new vaping products duty regime. Clause 131 authorises HMRC to publish information about stamped vaping products, for the purposes of enabling retailers, consumers and other persons to assess whether a duty stamp has been activated in respect of a duty product. That is clearly a sane, sound aim, which gives retailers a way to distinguish between legal stamped products and illicit ones. However, that will only work if the data HMRC publishes is accurate and accessible. Mislabelling would harm legitimate firms, and if the system is cumbersome it will put people off using it. Can the Minister tell us when HMRC will make available a practical, user-friendly checking mechanism—whether that is a public database, an app or some other technology—so that retailers and consumers can verify stamps quickly and easily? What safeguards will exist to correct errors swiftly where inaccurate data risks unfairly damaging a compliant business? Clause 132 sets out a new information-sharing framework specific to the duty, letting HMRC exchange data with other bodies involved in enforcement. This is a legitimate and useful tool, but can the Minister give assurances about how the data will be logged, audited, and subject to clear internal controls? Clause 133 delegates day-to-day enforcement to local authorities and trading standards teams, which makes sense. Last year trading standards seized over a million illegal vapes inland and detained 1.2 million at ports in England. Those powers need to be properly resourced if they are going to be effective in stamping out illegal trade, as we know that trading standards is already under considerable pressure to deliver on its various legislative requirements. It is fair to say that there is patchy implementation across the country. What support will Government provide to local authorities to ensure consistent enforcement and genuine deterrence everywhere, not just in well-resourced areas? Counties, such as my county of Norfolk, have suffered as a result of the revised local government funding formula that the Government have put in place. I want to see them able to deal with the threat of illicit vapes in the same way as the metropolitan areas that benefit from the new formula that the Labour Government put in place. Clause 134 gives the Treasury wide discretion to make supplementary transitional regulations under the regime. In practice, it is a broad power to fill in the blanks. Can the Minister give some confidence that it will not lead to a complex, rapidly changing rulebook? The Minister referred to the parliamentary procedure for such regulations under clause 135. To be clear, those regulations include the ability to amend an Act of Parliament, which is a considerable power. If such measures came forward, it would clearly be right to properly consult and debate them before they took effect. Will the Minister commit to formal consultation in such cases? Clause 136 simply implements consequential amendments so that vaping products are recognised across the existing excise framework. Clause 137 deals with the definitions that determine which products fall within scope—clearly, they need to be kept up to date. Finally, clause 138 sets the commencement and transitional arrangements. As we have discussed, businesses are expected to register from 1 April, with liability beginning from October. That is an ambitious timetable, but I am pleased to hear from the Minister that the interim guidance is available on gov.uk. I was not aware of that, so I will look it up later this evening, as she suggested. We do not oppose any of these clauses, but I look forward to the Minister’s response on whether there will be formal consultation, particularly where Acts of Parliament will be changed by regulations. That is something every member of the Committee should expect.

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32. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    Yes—come visit.

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33. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    I am not clear from the Minister’s comments whether he has accepted the Valentine’s invitation, but I am sure I am not alone in not expecting a member of the Committee to corpse on CBAM, which some might say is a rather dry topic. While CBAM can play a role in ensuring a level playing field for UK manufacturers and producers, it also highlights the levies and taxes applied by the Government on energy, which means that our energy prices are much higher than our competitors. I think we all want to see that burden reduced. At the 2024 Budget, the Government confirmed the UK will introduce this new CBAM from January 2027, covering broadly the same types of highly traded carbon-intensive basic materials, and putting a carbon price on emissions embodied in certain imported goods, so that they face a comparable cost to that paid by domestic producers. Different countries clearly regulate industrial emissions to very different standards. UK manufacturers already have to follow obligations to measure, reduce and pay for their emissions, which are costs that we think need to be ameliorated. Extending that principle to imports should, in theory, help to prevent carbon leakage and ensure it results in real global emissions cuts, rather than simply offshoring production and pollution. As the Minister said, the new charge will initially apply to five sectors: aluminium, cement, fertilisers, hydrogen, and iron and steel. Fertilisers, which are one of the sectors brought within the scope of CBAM, are clearly a critical input for British agricultural producers, particularly for arable farms, where fertilisers already account for around 40% of crop-specific spending and around 12% of total farm costs. The National Farmers Union has warned about what it calls a fertiliser tax, and has said that using domestic production as the baseline for CBAM levies, despite the UK no longer producing ammonium nitrate at scale, risks a wholesale increase in fertiliser prices at a time when farm confidence, as we all know, is at rock bottom. The direction of travel is clear. Over time, both the EU and UK will raise the cost of high-carbon fertilisers, making lower-carbon alternatives more competitive as carbon prices tighten. Applying higher taxes where the UK is not a significant producer increases input costs for our British farmers. There is a risk of downstream leakage where UK farmers pay more for fertiliser due to CBAM, while competing with imported food from non-CBAM regimes that are still benefiting from cheaper, higher-carbon inputs, again undermining British producers and our food security. This all lands on top of the other provisions within the Bill, namely the family farm and family business tax, as well as the cuts and delays we have seen in the sustainable farming incentive and the land management payment schemes and, of course, the additional pressures that are coming through in the cost of employment. Will the Minister set out what specific assessment the Treasury has made of the impact of CBAM on fertiliser prices, on different farm sectors and on UK food security? How does he intend to prevent downstream carbon leakage, which simply shifts emissions from factories to fields? Some industry groups, as recently reported in the Financial Times, warn that they think the Government’s current design has flaws and could accelerate de-industrialisation rather than prevent it. A major concern is that the Government plan to apply a single sector-wide rate, based on average emissions, instead of differentiating by product type and country of origin, as I understand the EU scheme does. UK Steel, the Mineral Products Association and the Chemical Industries Association have warned that, without changes, the mechanism will leave domestic producers worse off than their overseas competitors and undermine planned investment and decarbonisation. Has the Minister modelled the impact of using a single sector-wide rate rather than a more granular approach, as well as the impact on investment, jobs and emissions in each of the covered industries? The Chartered Institute of Taxation, which has provided considerable help and input on all the provisions of the Bill, has flagged that further uncertainty will be caused by questions about the UK and EU emissions trading schemes being linked before the implementation date. The Government and the EU announced last May that they intend to link their ETSs, with mutual exemption from CBAM as part of the package, but I understand that formal negotiations have yet to begin. Perhaps the Minister can give us an update. There are also ongoing political discussions with the EU on the interaction of the two schemes, and the EU’s CBAM is undergoing some delays. That impacts on certainty for some transactions involving Northern Ireland, so I would be grateful if the Minister provided some clarity on where those discussions have got to. Clause 139 establishes CBAM as the new UK tax on emissions, where a broadly equivalent price has not already been paid overseas. That is the foundation of the new charge. Clause 140 defines CBAM as “charged on the emissions embodied in a CBAM good” when it “is imported into the United Kingdom.” Those goods are defined by reference to the detailed tariff codes set out in schedule 15. Schedule 15 focuses on the initial regime for aluminium, cement, fertiliser, iron and steel products, and hydrogen, and it gives HMRC powers to keep the schedule updated in line with tariff changes. Could the Minister elaborate on why those five sectors were chosen for inclusion from 2027, and on when the Government will set out a clear timetable and test for extending CBAM to other sectors, such as glass or ceramics? Will there be a competitive disadvantage for high-carbon sectors left outside the first tranche, as they will still be exposed to cheaper, higher-emissions imports without any corresponding border adjustment? That point has been made to me privately by some of the Minister’s colleagues who would like to see a wider scope. Has the Treasury modelled how many businesses fall just above the £50,000 annual import threshold, and is it confident that it is capturing those that have substantial business and not imposing a burden on others? Clause 141 sets out when a good is treated as imported into the UK for CBAM. It covers standard imports and goods under special customs procedures, such as warehousing and movements between Great Britain, Northern Ireland and the Isle of Man. The clause intends to dovetail CBAM with existing customs laws. In Committee, I have repeatedly highlighted the importance of practical guidance: the hands-on support that HMRC will give to smaller and medium-sized importers —I suggest that the £50,000 limit is fairly low. Clause 142 ensures that where “a CBAM good has been declared for a special customs procedure,” processed into a non-CBAM good and then imported, CBAM is still charged on those emissions. This anti-avoidance provision aims to prevent companies from avoiding CBAM by doing limited processing to move a good out of the product list before releasing it into free circulation. The provision is welcome, as it would prevent people from dodging the rules. Clause 143 places the liability for CBAM on the importer, broadly mirroring customs law by tying liability to the person in whose name the customs declaration is made, or on whose behalf it is made. That is intended to provide certainty, which is important, by aligning CBAM with established customs concepts and practices. Will HMRC give simple template wording or clear guidance so that businesses know how to declare who is responsible for CBAM and for sharing information throughout the supply chain? The Chartered Institute of Taxation has also raised an important question. As the Minister will know, some businesses operate within VAT groups. If they import goods, they hold an EORI—economic operators registration and identification—number, which anyone who lived through the Brexit negotiations and debates will be familiar with. Under HMRC guidance, one VAT group member with an EORI number can make a customs declaration on behalf of another member. However, this group of clauses does not appear to allow for the formation of a CBAM group similar to a VAT or plastic packaging tax group. It is unclear how the measures affect those liable under the clause where one VAT group member uses another’s EORI number. If the current easement does not apply to CBAM goods, each member may need its own EORI number, which would add some complexity and administrative burden. Will the Minister clarify the position and understanding on that? If an issue needs to be addressed, will the Government introduce legislation to allow for CBAM grouping to maintain the existing simplifications, as I am sure is their intention?

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34. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    We are sorry to see the Exchequer Secretary disappear. I hope that he comes back this afternoon for our further deliberations. The clause introduces schedule 16, providing for the administration and enforcement of CBAM. They hand responsibility for managing this new carbon import charge to HMRC, and set out detailed compliance rules, including registration, accounting periods, returns, assessments and appeals. The schedule runs to 27 pages of text. Under these measures, any business importing CBAM goods worth more than £50,000 in a 12-month period, or expecting to reach that threshold within 30 days, must register, report each quarter and keep detailed records potentially for up to six years. HMRC will have wide discretion to make “best judgment” assessments and to counteract any artificial separation of business activities.

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35. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    I share the hon. Member’s concerns about the £50,000 threshold. Has he considered what might be a more appropriate level, in order to reduce the impact on smaller producers?

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36. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Fifth sitting)

    We come to the final group on the carbon border adjustment mechanism. Clause 150, along with schedule 18, makes the technical but critical changes needed to fit CBAM into the UK’s existing tax and enforcement framework. These measures ensure that the new tax uses the same information gathering powers, collection mechanisms and penalties already in place. It is sensible to integrate CBAM in this way without creating a new process. Clause 151 defines what we mean by “emissions” for CBAM purposes and firmly anchors the tax in the existing climate policy framework by adopting the definition in the Climate Change Act 2008. Greenhouse gas emissions will be measured in tonnes of carbon dioxide equivalent, which is sensible. Clause 152 sets out the interpretive rules for part 5 of the Bill, working alongside clause 151 and schedule 16 to ensure that terminology throughout CBAM is coherent. Clause 153 gives the Treasury the power to adjust CBAM if the UK’s emissions trading scheme is linked to another country’s carbon pricing system. The Minister touched on this briefly, but as I mentioned in the debate on an earlier group, in May the Government and the EU formally agreed to work towards linking their emissions trading systems to align carbon markets. I do not think the Exchequer Secretary responded to me on that point before he left the Committee. I am conscious that this is not the Minister’s portfolio, but can she give an update on where the EU-UK negotiations on the linkage have got to? This is a broad delegated power that could have real implications for competitiveness, trade and treatment of foreign carbon prices. We have expressed concerns previously about the linkage with the EU ETS and the higher charges that might hit UK businesses as a result. I would be grateful for an update on where the negotiations have got to—if they have actually started—and how the Treasury will ensure that there is proper consultation and debate before using the powers.

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37. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Sixth sitting)

    I am grateful to my hon. Friend for taking us through these detailed and complex clauses. On the point about lack of consultation, does he agree that there would be merit in holding public hearings ahead of a Finance Bill’s consideration in Committee, rather than just receiving written briefings? If we had done so, our Committee could have interrogated the concerns that my hon. Friend is so ably setting out.

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38. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Sixth sitting)

    One of the points that the Chartered Institute of Taxation also raised is the difficulty of dealing with promoters who are based outside the UK. It says that 20 to 30 of the active promoters who sell mass-marketed tax avoidance schemes have some offshore presence. How will the measures address the offshore issue? I am sure that the Minister will also address the 30-day point that my hon. Friend the Member for Wyre Forest raised.

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39. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Sixth sitting)

    Clause 165, which deals with the preliminary notice, allows a 30-day period in which to make representations to HMRC. Does my hon. Friend have sympathy with the view put forward by the Chartered Institute of Taxation, which says that that period is inadequate? A 90-day period is used for similar notices, such as follower notices or accelerated payment notices.

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40. 3 Feb 2026·Parliament·James Wild

    Finance (No. 2) Bill (Sixth sitting)

    Is the Minister indicating that such people will be blocked from using the banking system in the UK if they are served with one of the notices? Where is that? I cannot see that in the clauses. Could those people simply ignore the notice and ignore any fines?

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