RFG Position Paper on ORR Appeals Function and Railways Bill 2025

Introduction
The rail freight sector is a thriving and growing part of UK railways, delivering over £2.5bn in economic value for the country each year.  At the heart of rail freight is a network of businesses from freight train operators to ports, terminals, suppliers and end customers investing to support sustainable rail based supply chains.  From new locomotives, new and upgraded wagons, terminals, interchanges, handling equipment and changing supply chains this private sector investment is essential if rail freight is to deliver its potential for the UK economy through the growth which Government wishes to see.

We know that our members want to keep investing in UK rail freight, but these are challenging times, with global volatility and a suppressed national economy making it harder to justify projects.  At the same time, plans for rail reform and the establishment of Great British Railways (GBR) in law are creating uncertainty across the railways, and particularly for those businesses who will not be an integrated part of GBR.

Why Does Freight Need an Independent Appeals Function?

RFG and its members are not opposed to rail reform; indeed, we have welcomed the progress being made towards GBR and the publication of the Railways Bill 2025.  We strongly support the provisions in the Bill which support freight, including the statutory duty to promote freight and the requirement to publish a target for rail freight growth.    However, the Bill also makes sweeping changes to the framework for allocating track capacity and charges, removing the current role of the Office of Rail and Road (ORR) and leaving GBR in charge of deciding which trains are able to run on the network, and what they should pay.  As GBR will be an integrated monopoly of track and its own trains, there is a real nervousness that, despite the legal framework, GBR could act to prioritise its own trains over those of others, and act to discourage investment and growth.

We know from our discussions across the industry that there is no intention for GBR to damage the prospects for rail freight – quite the opposite in fact.  We welcome the strong support for our sector, the consultation, discussions and meetings.  Yet we are also aware that legislation, once passed, can last for many decades through political change, economic cycles and demographic and global changes.  Our members need to be assured that the Bill is fit for purpose in any future circumstance, including those where the support for rail freight is diminished, as we have seen at times in the past.    This means we need a strong, robust and independent right of appeal for circumstances where a decision or policy of GBR acts to harm rail freight’s prospects and deter investment.

What are RFG’s concerns over the proposals in the Bill?
The Bill sets out the new proposed framework for how GBR will decide which trains get capacity on the network and what they should pay. This includes GBR being able to extinguish rights for existing services to remove them from the network.  The Government maintain that the ORR will continue to have a robust and independent role as the new appeals body for GBR’s access and charging decisions.  The Bill sets out the legal framework for this new role in Clause 68.  However, it is these specific provisions which are causing concerns for our members because

  • The bar for submitting an appeal is incredibly high, meaning that appeals cannot be taken on merit of a decision but only on legal compliance by GBR.
  • ORR will have to satisfy legal tests to determine an appeal which, due to the broad and discretionary powers within the legislation, are unlikely to be met.
  • Ministers are being given powers to add further layers of process impacting the time, cost and rules for bringing, or hearing, an appeal.
  • Industry is currently unable to determine how access and use of the network will be granted by GBR because the final policy has not been published alongside the legislation.
  • With the Bill providing sweeping new and discretionary powers to GBR and Ministers, and with GBR determining access to its own network the importance of an independent regulator and appeals process becomes of even greater importance if the industry is to continue to invest with certainty and confidence.
  • Without changes to the Bill, the ORR will become toothless and unable to challenge GBR’s decisions. As the rail regulator today, the ORR has a track record of using its powers to grow the railway whereas the Bill will rip up this role and enable GBR to mark its own homework and stymie economic growth

Legal Advice

Legal advice commissioned by the RFG describes an appeals process for which the barriers to challenge will be so high that it will be limited to the point of being rarely usable, because

  • The requirement for an appeal case to meet judicial review thresholds (clause 68(1)), and equivalents in Scotland, makes for a very high bar to satisfy. By further consideration of the new broad and discretionary powers granted to GBR and Ministers, the bar to proving that GBR has acted in a way which breaches the principles of public decision making (illegality, irrationally, not following due process or not honouring legitimate expectations) will become high and difficult to envisage.
  • The determining issue will no longer be whether the decision reached by GBR was correct but whether it has been lawfully reached.
  • Any remit for the ORR to utilise competition law will be negated by Clause 63 which grants GBR a duty to ensure current and future capacity for its own operators regardless of its duties (Clause 18(4))
  • The usual time to bring a claim under Judicial Review procedures is three months from the decision. Although this may be reasonable for specific appeals for example against a capacity decision, it will act to limit appeals against published GBR policies where our members will need to decide whether a policy could cause harm at a future date in order to meet the deadline.  It is also unclear how this timescale will work alongside any internal GBR disputes processes which we expect to be created.
  • In addition, due to the additional powers at Clause 68(6), the Secretary of State may give directions which could reduce time limits on the ORR, use fees to price out the challenge and place further barriers on an appeal being brought or heard. We understand there is no intention to use the clause for GBR inception, but it remains an extant risk for future.
  • Even if the barriers described above are overcome, the ORR is only able to substitute its own decision over that made by GBR if the decision relates to timetabling and, as described in Clause 68(4)(b), there had been an error of law and, without the error, there could only have been only one decision which Great British Railways could have reached. To take just the last barrier, considering the number of timetable options across the network, it is difficult to envisage only one timetabling determination.
  • With regard to GBR’s determinations around access and use, charging and performance, ORR cannot substitute a decision and only remit a decision for GBR to reconsider with some directions. We are yet to be assured that the framework will be sufficiently strong for GBR to act on this reconsideration, given that ORR has no further recourse if they do not.

Taken together we have serious concerns that the appeals function will be essentially unusable for rail freight operators and customers, failing to give the necessary comfort to support investment.  We compare this to the new Passenger Watchdog which will provide a strong and forceful route to appeals for passengers, based on the merits of the case not legal compliance and with a strong enforcement role through ORR.

How can it be improved?

To provide fairness, accountability and a mechanism to grow the railways, RFG is calling on Parliamentarians to make the following amendments to the Bill:

  • Remove the requirement that appeals may only be made under Judicial Review principles (Clause 68(1)). Instead allow the ORR to determine all appeals contemplated in the Bill on the merits.
  • Remove or amend the barriers to the ORR substituting a decision, (the need to demonstrate an error of law and that only one decision could be reached. (Clause 68 (4)(b))
  • Remove the broad regulations allowing Ministers to erode time limits/increase the fees/add further layers, to the appeal process or require Parliament to scrutinise. (Clause 68(6))

 

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