Rail Investment

(Limited Text - Ministerial Extracts only)

Thursday 17th February 2011 Westminster Hall

[Mrs Ellman]

The hon. Gentleman makes an interesting point. We must all recognise economic constraints, but we have to consider seriously the implications of any policy that might price people off rail.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I hope that I can give the hon. Lady some reassurance. Of course we want to see passenger numbers increase. That is important for our economic future and for our environmental policies. We have had to take a difficult decision on fares in order to deliver the vitally needed rail capacity improvements. As we are dealing with an enormous deficit that we inherited from our predecessors, we have had to ask passengers to pay a bit more to contribute towards the investment that they want to see put into the railways.

[Mrs Ellman]

I thank the right hon. Lady for her comments. I recognise the Government policy context in which these decisions are taken.

Let me now draw attention to the issue of rolling stock. If people are going to be asked to pay more for their fares, it is reasonable to ask whether the rolling stock will be adequate to ensure that people have a reasonable journey. The more people pay, the more concerned they will be if the rolling stock is not adequate. The situation is extremely confusing. The announcements made by the Department for Transport on what rolling stock is to be provided, where and when have been unclear.

When our Committee issued its report last year, we expressed deep concern at the postponement in issuing the rolling stock plan for 1,300 new carriages that were expected by 2014, and at the uncertainty and confusion the delay was causing within the industry, but we recognised that the commitment to electrification legitimised the pause in assessing exactly what rolling stock was required and when. However, since then, little real progress has been made in delivering new carriages. Instead, we recently received another announcement by the Department that 2,100 new carriages would be delivered by 2019, 1,850 of which will be net additional vehicles. As my right hon. Friend the Member for Derby South (Margaret Beckett) said, many of these are for the Crossrail and Thameslink projects, which will then lead to electric carriages on the network being cascaded to other parts of the country, including the north. If and when that happens, I hope that it will not be a matter of the north getting the cast-offs from the south. I expect the stock to be in good condition and well suited to meet the needs of the people in the north.

Given that the completion dates for both Crossrail and Thameslink have been delayed to 2018, will the Minister tell us when these much-needed carriages that the industry has been waiting for, will finally be delivered? How many of those carriages expected by 2014 will actually be delivered by that date?

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[Mr Harris]

That is undoubtedly the case, but I do not accept that that is necessarily an immovable barrier to innovation. Network Rail is the greatest purchaser and procurer in the whole of the industry and it works in the long term. Frankly, many of the manufacturing companies that rely on contracts from Network Rail want to deal in long-term investment and want a long-term reassurance that the work will be there 10 or 20 years down the line. If the will is there, innovation can happen and, as I have said, that is irrespective of whether the industry is privately or publicly owned.

I shall say a few words about High Speed 2. I have long been a supporter of the project, although not on environmental grounds. As Rod Eddington said in his 2006 report, there may well be a case for high speed on capacity grounds, but there is probably not an environmental case. In addition, there is probably not a great case in terms of connectivity, because Britain is a relatively small country and is already pretty well connected. However, there is a case for high speed on capacity grounds. When we get letters and complaints from our constituents, apart from fares, capacity is the burning issue at the moment. It has been for a number of years and will continue to be until we do something serious about capacity. HS2 will relieve capacity on the west coast main line, and I hope that it will do something for freight as well.

I worry about the debate that is developing in this country on HS2 and that supporters of it are dismissing out of hand the concerns of people who live along the line and colleagues who represent communities based along the line. I hope that we can conduct that debate in a more consensual and less provocative manner.

[Mrs Villiers]

The hon. Gentleman is too pessimistic when he says that the supporters of HS2 dismiss the concerns of local communities. As far as I know, the vast majority of supporters of HS2, including the Government, take those concerns very seriously. We believe that significant efforts need to be made to mitigate what will inevitably have some local impact on communities.

[Mr Harris]

I accept the Minister’s reassurance on that. I simply speak from the point of view of reading reports of the debate that is going on. I am not trying to separate the arguments; I am trying to bring people together. I make the point that people’s concerns are not down to nimbyism or the fact that they are selfish or somehow anti-public transport. People have valid concerns, which can be overcome. HS2 is a nationally important strategic piece of infrastructure that must go ahead for the good of the country, but we cannot sweep those concerns under the carpet. I have heard the Minister say that those concerns will not be swept under the carpet, and I therefore hope that between now and when construction starts, we can come to some kind of agreement and compromise. We need to accept that those concerns are absolutely valid and that people have a perfect right to protest and raise concerns about something that might well have an adverse impact on their local environment. I thank you for giving me the opportunity to speak, Mr Owen.

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[Andrea Leadsom (South Northamptonshire) (Con)]

I join other hon. Members in congratulating the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), on securing this debate about the priorities for rail investment. That is an important topic, as it involves the relative merits of what our money is spent on. Value for taxpayers’ money is a subject dear to my heart.

Almost a year ago, I was the unsuspecting candidate for South Northamptonshire. Suddenly, I heard Lord Adonis’s announcement about high-speed rail that was, quite literally, to change my life, and it hit me out of the blue that the line would go through the middle of South Northamptonshire. Within days, I held a public meeting that was attended by about 550 people. Of those, 400 were on two floors of a town hall in Brackley, and 150 were outside on the pavement trying to get in.

I do not want to focus on that today. Hon. Members from across the House have made accusations of nimbyism, noted that if we want to make an omelette a few eggs have to be cracked and made other helpful remarks. Therefore, I will not talk about the fact that I have had nigh on 1,000 pieces of correspondence. My right hon. Friend the Minister knows that only too well, as I am in regular correspondence with her and the Department for Transport.

There are real concerns. Some schools in my constituency may be unviable from now on because of the risk that high-speed rail will run so close to the school that in a few years’ time—within the time frame for parents to decide where to send their children to school—that school will be forced to close. If that threat exists, why would any sensible parent send their child to such a school? There are families who need to move but do not quite meet the criteria for the exceptional hardship scheme. They do not know when they will be able to move, if ever. There is a risk that the famous English battle site at Edgcote will be severely damaged by the proposed route. There are many small battles to fight in South Northamptonshire to protect ourselves in terms of mitigation. Again, I will not talk about that now, because I have been accused of nimbyism too many times. Instead, I will focus on my 23 years in banking and finance, and hope that that will give me the credibility to point out the issues about value for money and the choices that we need to make about our priorities for rail infrastructure.

We expect the High Speed 2 line from London to Birmingham to cost around £17 billion. That is largely a guess, as such major infrastructure projects often have big overruns. I know the Department for Transport is concerned about the fact that civil engineering in this country costs such a great deal. As a frequent user of the line from Euston to Milton Keynes, I accept that the west coast main line is at capacity. I have taken trains home at 8 pm, and still found myself standing shoulder to shoulder. It is a matter not of having a seat, but of having anywhere to stand. However, is that need for capacity best met through a brand new, 250 mph train line, or can we achieve something similar by providing additional capacity on existing railway lines, and using the change—a significant amount of money—to fulfil some of the other interesting and compelling projects that hon. Members have mentioned today?

As I have heard many times, because of the capacity issue there has to be a new train line, and if we are to have a new train line, it may as well be high speed. That is my first challenge. High-speed rail has massive implications in terms of engineering costs and the impact on the environment and the communities through which it passes. Does the line have to be high speed? Will it even reach 250 mph? Certain international rail consultants have challenged whether such a line in Britain—a small country with complications caused by the lie of the land, the wrong sort of leaves, the wrong sort of snow and probably the wrong sort of trespassers on the line—will actually ever reach 250 mph on a regular basis. If it does not, what on earth is the point of spending the money to go in a straight line? That is my first major question.

Secondly, I have seen evidence that suggests that a similar amount of capacity could be freed-up on the west coast main line by providing 12-coach trains, making adjustments to certain stations and carrying out other alterations that would not incur the type of disruption that we saw in previous upgrades to that line. Is this an issue of capacity, or is it a case of, “HS2 is the answer, what is the question?”? I am unconvinced that we have said, “There is £17 billion to be spent, how best can we spend it?” I did not give the Minister prior notice of that question, but I would appreciate it if she would indicate whether she will be willing to talk to me separately about it.

I am not a transport expert by any means. My favourite film as a child was “The Railway Children”, and my 15-year-old has told me excitedly about Maglev. That is the future, although not in our lifetime I have been told. Meanwhile, we are stuck with ancient 21st-century technology, and we have to look at what we can do now.

Hon. Members have spoken about the importance of the electrification of other lines. They have mentioned the northern hub and the east-west line. A number of colleagues who will not be affected at all by HS2 have said, “What about my line? My constituents want to get from the east coast to the west coast. What are we doing for them?”

[Mrs Villiers]

I hope that my hon. Friend appreciates that over the next five years, the coalition Government will be embarking on one of the most extensive upgrades of our existing network in modern history. There is no evidence to suggest that high-speed rail is going to squeeze out other important rail upgrades. Both are important, and both will be delivered on.

[Andrea Leadsom]

I am pleased and reassured to hear that; nevertheless, in this time of great financial constraint, there is no doubt that a £17 billion project will lead to other choices not being taken.

The hon. Member for Luton North (Kelvin Hopkins) made an excellent contribution—he is clearly an expert on this matter. He spoke about a dedicated freight line. I do not wish to be a nimby, but if such a line went through my constituency, I can see the obvious merits of a dedicated freight line that I cannot see having looking carefully at HS2.

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[Chris White (Warwick and Leamington) (Con)]

I add my congratulations to the Select Committee on Transport on its most excellent report. If I may say so, however, there is one area of the report that could have done with strengthening a bit—high-speed rail. I have already made my position clear: I do not support High Speed 2. As the report makes clear, the estimated cost of the London-west midlands line is about £11 billion, with the total cost rising to £69 billion for a full 1,500-mile network. High-speed rail is therefore a major part of the long-term investment in our railways, and I believe that it should be heavily scrutinised before we commit so much public money to it. I appreciate that the report mentions some of the arguments surrounding high-speed rail, but I believe that more time should have been given to it and it should have been studied in greater depth, given the potential cost to the country over the long term.

Given that in 2007 the Department for Transport broadly accepted the Eddington transport study, which concluded that high-speed-rail would be poor value for money in the UK, it is incumbent on Parliament to ask what has changed so much in the space of the last three years to reverse that conclusion.

[Mrs Villiers]

Apart from anything else, there has been a change of Government. We are taking a forward-looking approach, so as to address the transport needs of our country over the next century. We have to make this upgrade to deal with the massive growth of future years. It is the best way to deliver it in a sustainable way.

[Chris White]

I thank my right hon. Friend for her comments.

If I may pursue my argument further, there are still some questions to be asked—such as whether the assumption of background growth in demand of 133% is truly realistic; such as whether potential competition from conventional rail has been taken into consideration when calculating the returns to be generated by this investment; such as whether new developments in technology, including video conferencing, online communication and information sharing, will seriously reduce the need for travel.

Large countries such as China are considering whether there are clear benefits to high-speed rail. A report by The Economist only two weeks ago entitled “On the wrong track” highlighted the fact that many of the newly added lines are making hefty losses and are thought to be operating at under half capacity. The Chinese Academy of Sciences has asked the Chinese Government to reconsider the case for investment in high-speed rail.

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[Andrew Gwynne (Denton and Reddish) (Lab)]

I am pleased to contribute to this important debate. I congratulate the Transport Committee on its report and my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on securing this debate. I am pleased to have had the opportunity to listen to the views and concerns of right hon. and hon. Members. There has been good, thoughtful and powerful debate from all parts of the Chamber. The Select Committee report posed a number of questions about the future of the rail industry that are relevant to our deliberations today. The report might be a year old, but it is very much a case of back to the future. Many of the challenges outlined in the report are still to be answered satisfactorily or properly addressed by the Government.

The report looked at a wide range of issues facing the rail industry. There are perhaps too many to cover adequately in the time that we have left. A key issue is how we deal with severe overcrowding on services and how we realign rail investment more equally across the whole country. The report considered ways in which we could increase electrification on the network and examined rail investments that could be shared with all parts of the country.

As you are no doubt aware, Mr Owen, Labour is currently undertaking a policy review. As part of that, the transport team is looking at the ways in which we can deliver improvements in our railways. With nothing ruled in or out at this stage and with all ideas on the table for further discussion and examination, these ongoing discussions will form the basis of Labour party policy on transport for the next general election. A number of the ideas that have been raised today will be considered seriously.

[Mrs Villiers]

Does the hon. Gentleman’s party still support high-speed rail or not?

[Andrew Gwynne]

The Minister pre-empts what I will come to later in my contribution, but we are in favour of faster trains and better connectivity, and high-speed rail will certainly form part of our policy review.

Returning to the Transport Committee’s report, there are a few issues that it addressed that I would like to revisit briefly. As the report clearly identified, it is likely that there will be serious capacity issues all over the rail network in the years to come, and the Labour party remains committed to addressing both overcrowding and capacity issues on the network. However, where a Government makes future investment in the rail network is clearly important and tough decisions have to be made about the future priorities of the network.

As the report also clearly identified, investment decisions will have a huge impact on regional growth, and those decisions can help to perpetuate a vicious cycle of increasing disparity of wealth between regions. They will be all the more important in light of the abolition of the regional development agencies, which was referred to by both my hon. Friend the Member for Liverpool, Riverside and the hon. Member for Blackpool North and Cleveleys (Paul Maynard). I myself represent a constituency in the north-west of England, so it is frustrating for me to see how rail congestion is having a real economic impact in areas such as Manchester and in the wider north-west, with knock-on effects on jobs and prosperity for my constituents and others.

The report rightly identified the northern hub as the key to improving rail services across the north of England. As we have already heard, it is an ambition of the northern hub project to increase train services in the north, including to cities such as Newcastle, Liverpool, Manchester, Leeds and Sheffield, by 40% during the next 20 years. That means 700 more trains a day, making it possible for 3.5 million more passengers to travel by train every year. The estimated wider economic impact of the project is also significant, with the creation of 23,000 new jobs and a return of £4 for every £1 that is spent. Of course, it has been frustrating for the northern hub project that there are no firm commitments about when work on that worthwhile and economically beneficial project will start. I want to take this opportunity to ask the Minister if she envisages that the project will be in the next Network Rail control period.

The report also examined the benefits of electrification, both for the environment and for improving the efficiency of our rail network. As we know, a number of regional schemes were announced by the previous Labour Government, and many of them were reconfirmed by the current Government through the comprehensive spending review. As yet, we are still awaiting a final decision on whether or not the Great Western main line electrification will extend all the way to Wales. People in Wales will feel pretty upset if that decision is delayed unduly, especially when the Conservative party manifesto itself said:

“We support…the electrification of the Great Western line to South Wales.”

I am not sure whether there were any Welsh MPs in the room during the coalition negotiations, because that commitment was subsequently downgraded to a general statement of support for

“further electrification of the rail network.”

It is crucial that the economic benefits of electrification extend to south Wales, and by that I mean that electrification should extend not only to Cardiff but Swansea.

Similarly, we wait with bated breath to see whether the newly electrified lines in the north-west, when they are eventually upgraded, will actually have electrified trains running on them from day one. Rightly there is a concern that, with delays to Thameslink, the carriage cascade to the north-west will be delayed. After all the internal investment to electrify the north-west part of the network, it would be a travesty if the old, overcrowded and slower diesel units continue to be used on the newly electrified lines.

I would warmly welcome any updates on these issues that the Minister can give us today. Can she let me know when there will be a decision on electrification to Wales? Likewise, can she outline the time scales that are in place for the replacement of Thameslink rolling stock and for cascading trains to the Great Western main line and the north-west?

The Transport Committee report also identified the importance of having new rolling stock on the network. Clearly, the delaying and reprofiling of some major schemes that had been announced by Labour is disappointing, especially as train fares were hiked up last month, but new carriages remain some years away for some commuters.

It is a similar story regarding the delivery of replacement stock for the outdated inter-city fleet. Clearly, the Government have delayed their decision on the inter-city express programme, with all the knock-on effects for cascading rolling stock. It is time that the Government ended the delays and allowed that project to proceed.

[Mrs Villiers]

I will not take any lectures from the hon. Gentleman—a Labour MP—about the IEP, given that his Government made little progress on it and spent £26 million on merely trying to procure the new trains.

[Andrew Gwynne]

I would welcome an update from the Minister about where that infrastructure project has got to and when we can expect to see new inter-city trains.

After rail fares increased last month by RPI plus 1%, as we have already heard, it is disappointing for commuters that the Secretary of State keeps claiming that fare increases across the CSR period will be only 10%. Is not the truth that RPI plus 3% will deliver a cumulative increase of more than 30% on the inflation forecasts by the Office for Budget Responsibility?

The Minister’s Department confirmed to me—it seems that it has also confirmed this to my hon. Friend the Member for Luton South (Gavin Shuker) in an answer to a written question—that it expects the effect of those rises to be rail passengers opting for other forms of transport. There is a concern, which the Minister used to share, that higher fares will price people off trains. That concern exists despite what the hon. Member for Cheltenham (Martin Horwood) has said. In turn, pricing people off trains will reduce people’s access to work and force them back on to the roads, generating more congestion, increasing carbon emissions and setting back our goal of achieving a sustainable transport system.

Briefly, I want to talk about high-speed rail, which was also mentioned in the Transport Committee’s report. As I have said in response to an intervention by the Minister, the Labour transport review will look at all areas of policy in detail, including high-speed rail. Clearly it is right that we should look in detail at the best way of delivering faster journey times between our core cities while increasing capacity.

The connectivity gains of high-speed rail arise not only from faster trains but from the new route alignments that comprise the proposed Y-shaped network of lines from London to Birmingham and—eventually—north to Manchester, Leeds and beyond. However, I have a real concern about the Government’s commitment to taking the planned high-speed line to the north. They have decided not to use the forthcoming high-speed legislation to secure the legal powers that would be needed to take the line beyond Birmingham, as Labour had planned to do. We will support the Government in taking the line beyond Birmingham, if that is what they choose to do. Perhaps the Minister can provide us with assurances that the Government will look again at seeking powers to extend the route beyond Birmingham.

It is also worth briefly mentioning freight on the rail network, which was an issue referred to both in the Transport Committee’s report and by my hon. Friend the Member for Luton North (Kelvin Hopkins). Freight operations play a big part in the economy, and we should look at ways of ensuring that freight capacity can continue to play a role in the rail network. Will the Minister outline how she sees rail freight being prioritised, especially with an eye on possible structural changes to Network Rail in the coming years? Indeed, is rail freight still a Government priority?

That brings me on to the McNulty review on value for money, which will have a real bearing on the future functioning of the rail network. I welcome that review of the rail industry, which was started by Labour when we were in government. When Sir Roy McNulty publishes his final report in April, we will consider any sensible proposals that would take costs out of the industry without reducing the quality of services for passengers. Does the Minister agree that, as the cost to the Government of running the railways comes down, the cost to the public of travelling by train should come down as well? Such a reduction would go some way towards helping hard-pressed commuters up and down the country, who are facing record fare rises of more than 30% in the next few years. The initial findings of the McNulty review have suggested that savings of £1 billion can be found without cutting services. Will the Minister now commit to sharing the benefits of those savings with passengers and to rethinking some of the fare rises that are due in future years?

In conclusion, as the Transport Committee report shows, the Government need a long-term vision for rail, and we need to deliver projects to build on our ambition to have a world-class rail service in this country. Where we agree with the Government, we will support them. The previous Labour Government left the rail network in a far better condition than the one in which we found it. Rail passenger numbers increased by 40% during the last decade, punctuality and quality of service also improved steadily in that time and consumer satisfaction with services increased. However, I recognise that there is still a huge amount to do, and this Transport Committee report is a good starting point for that future work.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship, Mr Owen, and I, like everyone else, congratulate the Chairman of the Select Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), on securing this debate on such an important issue.

It has been a good debate, and we have at times been in danger of breaking out into a bit of cross-party consensus, which is extremely unusual on rail. It has been enlivened by references to Trotskyism and Leninism—the first time I have seen such elements enter into a debate on the railways. Everyone has recognised the crucial importance of our transport networks in general, and our rail network in particular, to our future economic prosperity, and to our ambition both to address environmental concerns, including those about climate change, and to deal with congestion on our roads by providing a viable alternative to the lorry and the car.

The coalition has pledged to cut the deficit and also recognises that securing growth is vital, which is why in the comprehensive spending review the Chancellor placed a priority on transport spending. As many Members, particularly the hon. Member for Luton South (Gavin Shuker), have acknowledged, transport projects can generate wider economic benefits many times their cost. I very much welcome the generous acknowledgement by my predecessor as rail Minister, the hon. Member for Glasgow South (Mr Harris), that the anxiety about a Conservative Government slashing spending on the railways has not materialised. Rail emerged from the spending review in a far stronger position than most people had expected, and that was acknowledged also by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard).

We have had to take a difficult decision on fares and I, of course, wish that that could have been avoided, but without the three years of RPI plus 3 increases, we simply would not be able to deliver the vital capacity improvements that passengers need. To make the sums add up, we had no choice but to ask passengers to pay more, but we are absolutely confident that passenger numbers will continue to grow. I was surprised that the Select Committee Chairman asked whether we were committed to new capacity and whether we expected growth to continue, because we are embarking on one of the most ambitious extra-capacity programmes in the history of the railways. That demonstrates our confidence that passenger numbers will grow, and our commitment to relieving overcrowding, which, as she rightly highlights, is a major concern.

[Mrs Ellman]

Do the right hon. Lady’s statements mean that she gives a categorical commitment to delivering the rolling stock as promised, and will she include in the conditions of future franchises a requirement to look at the health and safety implications of overcrowding?

[Mrs Villiers]

I will, in a moment, outline the Government’s commitments on extra rolling stock. Health and safety is a matter for the Office of Rail Regulation, which takes on board all such factors in its decisions on safety in the rail industry. There has been a significant improvement in safety on our railways over recent years, and we need to pay tribute to the fact that they are one of the safest forms of transport.

In response to the hon. Member for Glasgow South, we do not at the moment have any plans to reintroduce the flat cap. Affordability is the concern, but we will keep the matter under review, and see if it becomes more affordable in the future.

The improvements that we have promised are extensive, and over the next four years the Government propose to invest £30 billion in transport, £14 billion of which will support capital maintenance and investment in our railways. Major projects that we are funding include high-speed rail, Crossrail, Thameslink, Birmingham New Street and the tube upgrades. In answer to the question that the hon. Member for Liverpool, Riverside asked about carriages, we expect there to be about 2,100 new carriages on the rail network by 2019, of which about 1,850 will be additional capacity, and I shall go into a little more detail on carriages in a minute.

[Kelvin Hopkins]

Will the right hon. Lady look into the fact that more than 100 mark 3 carriages could be available immediately? We would only need to have new bogies to cope with the gauge difference with Ireland. The Irish need the money, I think.

[Mrs Villiers]

It is open to the train operators to lease additional capacity if they so wish, and they may well be interested in exploring the option that the hon. Gentleman outlines.

Substantial work is under way on the strategic freight network, and I have repeatedly paid tribute to the work done on that by the previous Administration. I emphasise that rail freight plays a really significant part in our strategy for reducing carbon emissions and relieving congestion, and that is why the coalition has prioritised investment in projects such as the Felixstowe-Nuneaton gauge clearance.

The hon. Gentleman would like to see a dedicated freight line. I know his enthusiasm for that project and am always happy to engage with him on it, but the freight industry as a whole prioritises the projects in the strategic freight network, rather than a dedicated line. If the hon. Gentleman can make the case for going ahead with something like that in the future, I and my colleagues will of course be prepared to listen.

On the regional balance, in making project funding decisions it is important to take account of the needs of different areas. Although the business case for rail investment in the south-east can often be stronger because of the sheer volumes of passengers, assessment of the business case is just one element in the decision-making process and we can, and do, have regard to other factors, including the appropriate balance of funding between different parts of the country. It is worth recognising that improvements in London and the south-east can yield benefits for the economy as a whole, but the north of England will benefit directly from a whole range of programmes that are under way, including faster journey times between Liverpool, Manchester and Leeds, additional carriages, electrification, station improvements and important upgrades on the east coast main line, as well as the extension of light rail in Manchester and Newcastle, and in the longer term the north will benefit massively from our high-speed rail plans. The tough decisions made in the spending review mean that we are able to provide more than £1.5 billion for local authority major schemes in the period up to 2014-15, and that is a larger amount than the average annual Department for Transport spend on such schemes over the past 10 years.

High-speed rail has been a big issue in the debate this afternoon, as ever. My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) spoke with her usual passion and articulacy on her concerns about high-speed rail, and I welcome the input of all colleagues on this issue as it is one of the most important parts of the coalition’s programme to improve our railways. Very soon we will start a major consultation on our strategy for a Y-shaped High Speed 2 network, and I can assure the shadow rail Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), that we are committed to taking this railway to the north of England, in two delivery phases. Opponents of HS2 say that it will not have a big impact on the north-south divide, the important response to which is that they should look at the extensive support for the project in the north of England, and also at the rest of Europe, where cities such as Lille have been transformed as a result of the connectivity that can come with a high-speed link to a capital city.

Demand for travel between our cities is expected to increase significantly, and there is an industry consensus that the west coast route will be full to capacity within little more than a decade. My hon. Friend the Member for Blackpool North and Cleveleys indicated that there was some contention about passenger growth figures, but everyone accepts that there will be significant growth on the west coast main line.

[Andrea Leadsom]

Will my right hon. Friend give way?

[Mrs Villiers]

I am afraid that I really cannot. I do apologise.

We will face severe congestion and overcrowding on those routes in years to come, unless we act now to begin the process of delivering that capacity.

On the alternatives, upgrades of an existing line, even extensive ones, could deliver only half a new line’s capacity benefit and would be more expensive. My hon. Friend the Member for South Northamptonshire asked whether 12-car trains would deliver the equivalent capacity: no, they absolutely would not. The hon. Member for Luton North asked whether new signalling would deliver it, and the answer is the same. We are already introducing new capacity on existing lines, and there comes a point at which incremental changes do not deliver the upgrade needed. Moreover, High Speed 2 will deliver the benefits of capacity released on the existing network, with major benefits for places such as Milton Keynes, Luton, Northampton and Peterborough, and also for freight operators.

I sincerely believe that careful mitigation can address many of the most serious local impacts, and I know that my hon. Friend will continue to fight hard for her constituents, who might be affected by the line. We welcome their involvement in the consultation process on which we are about to embark, to ensure that we get the right answers on high-speed rail and that we listen to the views of people affected by it.

After 20 years of discussion, Crossrail is finally going ahead. I hope that that answers those concerned that High Speed 2 will swallow up all the funding available for rail. The hon. Gentleman complained that the Hitchin flyover might not go ahead as a result of the funding pressure on high-speed rail. It is under way, or will be shortly, as it is in an investment programme to which the Government have committed. We have confirmed that the Thameslink programme will proceed in full, despite anxiety that it might not. Some 1,200 new carriages will be delivered, almost doubling the number of north-south trains through the capital at peak times.

On the Derby factory and the procurement of the Thameslink trains, the hon. Member for Glasgow South tempted me to depart from the EU’s procurement rules. I fear that I would find myself falling foul of the European Communities Act 1972 if I did, so I will not advocate failing to abide by our treaty obligations, but I can assure the House that bids from UK-based operators will be considered carefully and assessed fairly, objectively and equally.

The Government expect an additional 650 carriages in several of our major cities by 2014. We expect services to be strengthened into Leeds, Manchester, Sheffield, Liverpool, Newcastle, Birmingham, Bristol—to answer the concerns of the hon. Member for Chippenham (Duncan Hames)—London Paddington and London Waterloo. In addition, new Thameslink and Crossrail rolling stock will enable the redeployment of hundreds more existing electric carriages, strengthening the case for further electrification of our network. I hope that that responds to the concerns expressed about the quality of rolling stock in the north. The hon. Member for Bolton West (Julie Hilling) rightly raised concerns about the quality of that rolling stock and the notorious Pacer trains. We believe that our programme of new rolling stock will help address those concerns.

As the Chancellor confirmed in his Budget speech, lines between Liverpool, Manchester, Preston and Blackpool will be electrified. The redeployment of electric rolling stock to those routes will in turn free up hundreds of diesel units, which will be available for train operators to lease after 2015. In November, the Secretary of State announced that Network Rail will electrify routes on the Great Western main line from London to Didcot, Oxford and Newbury. We expect to make an announcement shortly on the further electrification of that line. We have decided to press ahead with plans to buy a new fleet of trains to replace most of the high-speed trains operating on the Great Western and east coast lines. We have narrowed down the options to two, and we hope to give the House more information in the near future.

The hon. Member for Luton South and others were concerned about stations. We are continuing with the £150 million national stations improvement programme and the £370 million access for all programme, including £2.3 million to be spent on a scheme at Luton.

[Gavin Shuker]

Will the Minister give way?

[Mrs Villiers]

I am afraid that I cannot. I have run out of time. Birmingham New Street will go ahead, hopefully delivering economic benefits of £2 billion. Improvements at Reading will address a long-standing bottleneck, benefiting people across the Great Western line.

The Chairman of the Select Committee and others are absolutely right to say that it is crucial to get better value for taxpayers’ and passengers’ funding of the railways. Reforming our railways and reducing their cost is essential. The Chairman of the Select Committee and the hon. Member for Cheltenham (Martin Horwood) rightly expressed concerns about the high cost of Network Rail compared with other operators in Europe. We recognise fully the concerns about rail fares. To answer the shadow Minister’s question, we believe that we should share the benefits of the reduction in railway running costs that we expect the McNulty review to deliver. They will be shared between fare payers and taxpayers. We are also clear that any changes suggested by the McNulty review must protect freight operators’ interests.

There is an important role for open access, as my hon. Friend the Member for Blackpool North and Cleveleys urged me to make clear, although open access is not necessarily his only hope of direct train services between Blackpool and London. No decisions have been made yet, but it is possible that that might form part of franchised operations.

We are working closely on the northern hub. I recognise that there is a lot of support for it. Dealing with the problems identified in the project would be of great benefit to the economy of the north of England. I cannot give any guarantees today, but it must be a strong candidate for funding in the next control period.

Hon. Members have supported a list of projects. On the Swindon-Kemble line, if there were any spare funding down the DFT’s sofa, as the hon. Member for Cheltenham asked, I am sure that Swindon-Kemble would be a good candidate. However, he will appreciate that our rail budgets are fully committed. He made a good point about the improvements to resilience that the project would deliver. The hon. Member for Liverpool, Riverside mentioned the midland main line. There is a strong business case for it, but again, affordability is a concern. I am always happy to talk about Kirkstall Forge, and I look forward to the revised bid, which I believe will be made in September. It is a good scheme with significant benefits, and I hope that one day it will proceed. We will have to see whether it proves affordable, given our budget constraints.

I am grateful for the time allowed me to speak in this debate.