First Great Western Rail Franchise

Tuesday 20th December 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Greg Hands.)

09:30

[Sarah Newton (Truro and Falmouth) (Con)]

It will be a great pleasure to serve under your chairmanship this morning, Sir Alan. Before I begin, I would like to thank my colleague, the hon. Member for Plymouth, Moor View (Alison Seabeck). Although I secured the debate, my hon. Friend, as I shall call her today, has worked very hard with Members across the region to co-ordinate our action to enable us to work as a team, because the rail franchise is important to everybody who lives in the south-west. I welcome the opportunity to debate the Great Western rail franchise before the public consultation begins, so that the Minister and her team at the Department for Transport—it is good to see them this morning—who will work on the draft franchise document, can listen to the views of key stakeholders and of hon. Members who represent constituents who depend on this vital service.

The rail franchise will not be the only one in the region, but it is vital. The Penzance to Paddington line, with all the branch line connections, is central to the connectivity of the south-west with the rest of the UK and international markets. The new franchise will be let in 2013. As part of the Great Western franchising process, the Government intend to issue a consultation document, which will include the opportunity for individuals and organisations to give feedback on the draft franchise specifications. It will be helpful if the Minister confirms today that she intends the consultations to start in January and conclude in April 2012.

I want to ensure that the mistakes of the previous Great Western franchise are learned. TravelWatch recently reported that the 2006 Great Western franchise proved unacceptable for all involved—passengers, politicians and the operator. After representations by concerned stakeholders, a fare strike and a top management reshuffle, significant timetable enhancements were made and additional rolling stock procured at extra cost to the taxpayer and the operator. We must avoid a repetition of that with the new franchise.

I have welcomed the fine words of the coalition agreement on reforming our railway system, and specifically on reforming the franchising process. In July, I welcomed the findings of the Government’s review into how rail franchising can be improved. There is widespread agreement that the existing system has become too prescriptive at the point of bidding and lacks flexibility once operational. Arguably, Government now exercise more control over the railways than they did in the days of British Rail.

Earlier this year, the Government set out the key principles for the new franchising process, which can be summarised as follows. The specifics of each franchise will be decided on a case-by-case basis, with bidders having a greater role in helping Government to refine and define specifications. The Government will set demanding outcomes for operators to deliver, but also give them more flexibility to decide how best to achieve those outcomes, thus giving greater space for operators to plan and run their services more commercially. Longer franchises should expand the opportunity for operators to invest in improvements, as well as enable them to strengthen their working relationships with Network Rail and other stakeholders.

There have been reviews and consultations over the past 18 months—most notably the McNulty review. As the Secretary of State said to the House last month in a written statement:

“Our railways are currently the most expensive in Europe. That is something we…must tackle. The recent review by Sir Roy McNulty found scope to cut rail costs by 30%—up to £1 billion a year. My Department is committed to working with the rail industry to develop a strategy to deliver a better value railway for the benefit of passengers, taxpayers and the wider economy.”—[Official Report, 15 November 2011; Vol. 535, c. 42WS.]

We all want to achieve that balance through the refranchising process.

The re-letting of the Great Western franchise will be one of the first of its kind to test the new process, so today, I want to share with the Minister some feedback that I have received from key stakeholders, and hon. Members will have the opportunity to give their feedback. First, I will summarise the key findings of the report published by TravelWatch in the south-west and the research undertaken by Passenger Focus. They agree with those of us who are here today that the south-west is well placed to contribute significantly to sustainable growth in the UK. Rail users and the business community see better connectivity as key to growth and the reduction of congestion, thus reducing sub-regional disparities in wealth, while accommodating the fastest growing population in England. In terms of gross value added, the south-west is projected to grow at a rate second only to that of London and the south-east. However, other parts of the UK are more productive, and that is largely due to the south-west’s poor transport links to other major parts of the UK. According to the university of Bath, productivity decreases by 6% for every 100 minutes of journey time from London.

The boom in south-west rail usage puts the industry’s planning forecasts in question. Usage has almost doubled since privatisation and virtually tripled in the Bristol travel-to-work area. Growth is not confined to the main line and the principal conurbations; branch lines throughout the south-west are the fastest growing in England, so the invitation to tender must give more priority to capacity. There is likely to be a capacity gap of about 100 million seats on mainline services over the next decade, despite the planned introduction of new inter-city express trains. The franchisee should deal with overcrowding, not by increasing fares to deter travel, but by having the right to bring in additional rolling stock without months of negotiation with Whitehall.

[Mr Adrian Sanders (Torbay) (LD)]

I congratulate the hon. Lady on securing the debate. Unfortunately, I have to leave at 10 o’clock for a Select Committee. Overcrowding goes to the nub of the issue. We recently gained extra carriages, but that has not even kept up with the increased demand on the branch line services to which they will be given. It is crucial that whoever gets the new franchise plans for additional growth to ensure that people are not put off travelling because they cannot get a seat or the train is overcrowded.

[Sarah Newton]

My hon. Friend makes an excellent point. Like Torbay, the maritime line in my constituency, between Truro and Falmouth, has been fortunate, and we are grateful to the Department for Transport and Cornwall council for contributing to extra carriages to ease some congestion. He is absolutely right; in the new franchise, it is essential that branch lines and increased capacity on them be considered alongside the main line. The south-west has suffered the lowest level of investment in its transport network and much of the system is already nearing the end of its planned life.

The region I am talking about today stretches from Wiltshire, Bristol and Gloucestershire, across the peninsula to the west, including Dorset, Somerset, Devon, Cornwall and the Isles of Scilly. The line is well over 300 miles in an east to west direction. Road and rail arteries have to travel disproportionately longer distances than those in the midlands or the north of England, because the populations are sparse and the distances between economic hubs greater. Whitehall has not understood that peninsular geography well since the post-war nationalisation of the former regional rail companies; therefore, over the years, Whitehall business case models for strategic investment have often not delivered extra investment in the south-west.

The decision to invest £5 billion in modernising the route from London to Bristol and Cardiff and to Oxford and Newbury is welcome, but the disruption caused by work on the main line and Crossrail will be felt across the franchise until the end of the decade. Without extra investment, electrification could adversely affect millions of passengers, beyond the electrified lines, such as those using the services from the south coast to Bristol and south Wales, to Weston-super-Mare and Taunton, services west of Exeter and those parallel to the M4 corridor from east Wiltshire through west Berkshire.

The Government are committed to progressive electrification of the network, which should be a priority for lines serving major employment centres, such as the Bristol travel-to-work area. It should also be a priority for diversionary routes to Bath and the far west via Westbury, and Wales via Gloucester, because that would relieve the Severn tunnel to Wales. Bidders should be encouraged to develop proposals for additional electrification schemes and to specify how they intend to meet any capacity shortfalls.

Reliable services are essential for business and for passengers. Investment should focus on eliminating bottlenecks and enhancing capacity to ensure delivery of reliable, user-friendly, clock-face timetables. The Government say that they want people to have a voice on service provision, and we all say hooray to that. The new franchise is an opportunity to give local stakeholders a say in their rail services. It may be time to explore whether the devolution of responsibility for infrastructure and operations to local partnerships might better align services to local needs.

Timetable planning must deal with existing pent-up demand and substantial latent growth. Today’s service levels barely meet demand. The franchisee should be incentivised to provide additional services where needed, particularly with the surge in demand that comes with electrification. There must be a mechanism for regular reviews of the service requirement with stakeholders. Passengers need a reliable, seven-day railway and the opportunity to travel somewhere and back in a day. Rail should do more to exploit that competitive edge by speeding up longer distance journeys to places such as Plymouth, Torbay and the far west.

The franchise’s trains are already by far the oldest main line fleet in the country. Bidders should have replacement plans for the diesel train fleet, with carriage lay-out and seating designed to accommodate the needs of the contemporary passenger. Where through-services are not practical, connections need improving. They need to be made more convenient, with adequate platform staff to assist with changing trains. Better co-ordination with the wider public transport network should be encouraged, and multi-modal and multi-operator information and ticketing should be promoted. The opening up at Old Oak Common of an interchange directly linking with Crossrail to Heathrow, High Speed 2 to the north and the proposed new link to High Speed 1 and the European high-speed rail network should be supported as providing a step change in connectivity to the south-west.

Stations can be focal points for the communities that they serve. Bidders should consider their improvement with imagination, and welcome active community involvement. The ticketing system should be made simpler and ticket purchase made easier, with greater use of electronic ticketing and a less punitive approach towards passengers who mistakenly travel on the wrong train with a restricted ticket. There is a continuing need to obtain value for money from lightly-used services if they are to be sustainable. The use of less onerous infrastructure and maintenance standards and light-weight vehicles could be appropriate without in any way jeopardising safety.

South-west lines that are run as community rail partnerships have experienced record-breaking passenger growth. The franchisee should at least match local contributions, which would therefore encourage complementary contributions from local authorities and other partners. The Government should encourage stakeholders to contribute their local insights, expectations and aspirations to the specification process.

I would like to share the feedback that I have received from some of my constituents about the rail services in my constituency, which reiterate the point made by my hon. Friend the Member for Torbay (Mr Sanders). We very much appreciate our branch lines and think that they should be included in the franchise. We are very concerned that if branch lines are not compulsory and stipulated by the Department, it would be possible for a future operator to choose not to run those services if they became financially unviable. Especially for those of us from Cornwall, it is also important that the Department stipulates the need for a sleeper service to Cornwall. We would very much like to hear a commitment to the potential upgrading of the service to include modern facilities, such as en-suite showers and toilets.

In relation to the current franchise specification, the Department for Transport could also consider improving journey times between Cornwall and London. The requirement to make stops—often for very few passengers —at all stations slows the train down. I would like the Minister to consider whether some London trains could have fewer stops, with passengers using local services to connect with larger stations such as Truro. That would dramatically reduce the journey time between Penzance and London.

Cornwall has a fantastic record of support from the local authority, local volunteers and local business. As a result, the maritime line is the fastest growing rural line in the UK. This could be an opportunity to make partnership working and localism an integral part of the new franchise by empowering the local authority with direct involvement in the specification of services. It is also very important that the franchise is realistic about growth. The number of vehicles currently operating in our west fleet is 147. The original franchise specification for 2006 said that 102 vehicles would suffice. The new franchise must start from where we are today—cuts would be absolutely unacceptable—and recognise the considerable potential for growth over its period of operation.

The fact that there is a range of hon. Members here today representing a broad range of constituencies across the south-west shows that this is a vital franchise, which will be a very good test of the Government’s new franchise regime. We want to work with the Minister to ensure that the new franchise meets the key principles that the Government have set out while, at the same time, improving the service on the Penzance to Paddington line and the many important branch lines that support it.

09:46

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I want to thank my hon. Friend the Member for Truro and Falmouth (Sarah Newton)—in Christmas spirit, I will describe her as my hon. Friend for today—for introducing the discussion. This is very much a cross-party debate, and I am pleased that she has managed to secure it. I am even more delighted that she has presented the case in an incredibly well-informed and balanced way. I hope that the Minister accepts that she made a really thoughtful contribution to what I am sure will be an excellent debate.

It is essential that those involved in preparing the franchise listen to the views of MPs from across the south-west on the priorities for our region and the importance of connectivity. They also need to listen to our individual concerns about the reliability and frequency of services to the towns and cities that we represent.

In the past six weeks, I convened a meeting of all south-west MPs to discuss connectivity across our region, particularly in respect of the rail franchise. I am therefore delighted at the timeliness of this debate. The meeting was incredibly well attended, as is today’s debate. Significant numbers of people came, which is an indication of the importance that we place on getting this right. I should also put on the record my thanks—and the thanks of other MPs—to Chris Irwin from TravelWatch SouthWest, Andrew Seedhouse from Plymouth university, Ray Bentley and Neill Mitchell for helping to ensure the debate and meeting was well-informed. They supplied briefings to all colleagues and attended in person.

My hon. Friend the Member for Truro and Falmouth has drawn attention to the common themes, and I make no apology for repeating some of them. It is essential that those involved in drawing up the franchise understand clearly that we want the new franchise to address some common concerns. As I have said, we also want full consideration to be given to issues that are specific to our constituencies.

To be honest, predating this Parliament, we as a group allowed things to slip under the radar a bit when the last franchise was being prepared and we got caught out. When the previous franchise was announced, we found that it was set significantly below the previous standard. The standard of service then was not all that good, but when the previous franchise was first proposed, it would have made things a whole lot worse—for example, we would have lost the sleeper service.

One of the key messages that we want to send out is that we need to ensure that the starting point for the franchise is at least the base line of the current service and that it should not be any lower. I will come on to this again, but, ideally, we need to keep one or two things that we currently have. It is also essential to ensure that other Departments feed into the process.

Any reduction in service would clearly impact on business and economic growth in the region, particularly in Plymouth, where we have just lost our airport. That leaves Plymouth, the 15th largest city in England, as one of only two large cities that is more than 10 miles from a motorway that does not have an airport—the other is Peterborough. I am sure colleagues will understand that, if Plymouth is to continue to be an economic driver for the region, it is vital to have reliable, affordable and fast services to other large cities—in particular, London and Birmingham—as well as to Heathrow, and I will come to that issue later.

Will the Minister explain how she intends to ensure that the wider economic benefits of the franchise are considered across Departments? I gently suggest to her that the issues specific to the franchise, on which decisions have been made in the past about additional revenue from fares, have not fully reflected the wider benefits—those not found in the fares box. Too many Government decisions on transport and the franchise have been silo based. I urge her to talk cross-Department to her colleagues in the Department for Business, Innovation and Skills and the Treasury, as well as to seek the views of local enterprise partnerships across the region, because they, too, will have a significant input into the process.

Will the Minister say—this point has already been made, but it is incredibly important to business people in my area—whether there will be a five or six-year franchise, which is the rumour, or whether there will be something practical and sensible, such as a 15-year franchise?

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

It might be sensible to answer that now. We published a notice in the official journal of the European Union expressing our intention to go for a 15-year franchise.

[Alison Seabeck]

That is very good news. I am delighted about the Minister’s confirmation, because that has been a cause of concern.

During the MPs’ meeting, it became clear from the evidence that was presented that our region’s population is growing fast. That point was made earlier, but Ministers and officials in Whitehall need to understand it. In my experience of two different Governments, I do not think that people really understand the south-west. They think that it is a green, leafy place where people go on holiday, but it is growing fast and has a huge potential that is being missed. If we do not get the right franchise, everything we have to offer will be wasted. That is an important point, and I particularly want officials to understand what the south-west has to offer.

All those issues need to be factored in, and we need to ensure that the mismatch in rail fares, which patently hits the south-west, is also addressed. I am afraid that that is the outcome of another botched privatisation, but there is a genuine issue that is well documented by TravelWatch SouthWest in its very good document. We have seen the Chancellor rectify or consider improving and correcting a mistake that was made with South West Water. I do not know whether anything can be done about rail fares, but they are clearly an important issue.

I will make a couple of key points about Plymouth and services into our city, and I am sure that the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile)—my hon. Friend for the day, too—will re-enforce them if he is lucky enough to be called to speak. First, as I have pointed out, there are serious connectivity issues relating to our city—a city of more than 250,000 people. Secondly, we need to enable people to do business with our city. That means being able to arrive early enough for morning meetings. Plymouth is one of the top 10 locations for fast growing business, but we need people to be able to reach us by 10 am, not by noon, so we would really like to see a train leaving Paddington at approximately 5.55 am.

We would like to see more three-hour journeys and greater reliability. The signalling improvements that are happening in Reading will help with that. We are also keen to have links to Heathrow, because, without an air link, good rail connections are absolutely vital for both business and tourism. We would therefore be interested in supporting the Heathrow hub link. Given the long journeys on the franchise—five to six hours for colleagues in Cornwall—it is essential that bidders consider both comfort and wi-fi provision. That would certainly help; a lot of business can be done on a train. I have not even touched on the importance of improving connectivity via community rail links, which are growing exponentially in the south-west, or the benefits of improving car parking, bus connections, walking and cycling linkages, which, although not directly issues for the franchise, deserve wider consideration.

Overcrowding, which has already been mentioned, is a huge issue throughout the system. It is a problem for the Paddington to Penzance main line, which is what we should actually call it, rather than lose it in the greater south-western service. As my hon. Friend the Member for Truro and Falmouth mentioned, First Great Western operates 147 trains—some 40 more trains than was set out by the original franchise. That should therefore be the base level for the franchise. Once rolling stock is freed up by changes in other parts of the country, my plea is that it should be diverted to the south-west and not channelled up to the midlands and the north, as has happened in the past.

Our region’s rail links have been neglected historically. They are often seen as far too difficult, but we have heard already in the Chamber today, and we will hear again, a consensual call for additional resources to come to our region for good economic reasons—there is a real cost-benefit to investment. I hope the Minister is listening and will ensure that all the issues raised today are discussed at the highest level in Government.

09:56

[Sheryll Murray (South East Cornwall) (Con)]

I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate. I think we all agree that this issue is really important to all of our constituents. It is certainly an important issue for my constituents in South East Cornwall. The First Great Western train service from London to the south-west is a vital rail link for my constituency. The loss of the airport in Plymouth, and the fact that there is such a great distance between my constituency and Newquay airport in Cornwall, means that very often the railway is the only way that people can commute. I emphasise the importance of the train service for the tourism industry, and for people visiting family and friends. I thank my right hon. Friend the Minister, who is due to visit one of my branch lines in January to see for herself what beautiful lines we have in Cornwall, but also how important they are. I am very grateful to her for visiting south-east Cornwall.

As the Member of Parliament for South East Cornwall, I use the First Great Western service from Liskeard to London frequently. There are major issues that I have noticed, which my constituents continually bring to my attention, and I will share them with the Minister. As has been referred to by my hon. Friend the Member for Truro and Falmouth and the hon. Member for Plymouth, Moor View (Alison Seabeck), rolling stock and overcrowding are big issues. Frequently, we have to change in Plymouth to carry on through to Penzance and use the small, two-carriage rolling stock, which is continually overcrowded and has luggage kept in the aisles. The amount of luggage compromises the safety of passengers on board. I recently witnessed one instance where a wheelchair user was unable to board the train in Liskeard, due to the amount of luggage on the train.

[Alison Seabeck]

I, too, have witnessed everybody trying to pile into those two carriages, because I get off at Plymouth. In the summer, when people have large surfboards—Cornwall is great for surfing—it must be almost impossible at times for people to get on, never mind somebody struggling with a wheelchair or a buggy.

[Sheryll Murray]

The hon. Lady is absolutely correct. I have been on the train when many passengers have been forced to stand. What a lot of people do not understand is that someone who buys a first-class ticket from Paddington to Penzance and has to stand on the two-carriage train is entitled to a refund. The excessive cost represented by that could be channelled into improving the rolling stock. I ask the Minister to ensure that the provision of better rolling stock is included in any future franchise.

It is bad enough for someone such as me who is only travelling across the Tamar to Liskeard, or to Bodmin Parkway station in my constituency, but the journey must be horrendous for passengers travelling through to Penzance, especially during peak times. In September, I tabled a question to the Secretary of State for Transport about whether there were any plans to introduce new rolling stock on the First Great Western main line west of Plymouth in the next four years. The Minister replied:

“The Government are committed to a less prescriptive approach to the specification of rail franchises, with decisions such as rolling stock provision devolved primarily to franchise operators.”—[Official Report, 12 September 2011; Vol. 532, c. 992W.]

She might be interested to know, however, that First Great Western has told me that it is a Government problem. I ask her to ensure that the requirements for larger and improved rolling stock are included in the franchise specifically, so that there is no question about who is responsible in any future franchise.

Finally, I also make a bid for the retention of the sleeper service, which is the only way that I can get back to my constituency, given the sitting hours of Parliament and the need to start in my constituency at 9 o’clock on a Friday morning. Without the service, we would all be at a loss. I also emphasise how much it is used: in my experience, sometimes, it cannot be booked even a fortnight ahead because it is fully subscribed. The service is not underused—in fact, we could do with more carriages, not fewer.

[Several hon. Members]

rose—

[Sir Alan Meale (in the Chair)]

We have a number of Members standing, and it is my intention to bring in the Front Benchers from 10.40 am, so can you act with a little bit of brevity?

10:02

[Duncan Hames (Chippenham) (LD)]

I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate. I share the commitment of the hon. Member for Plymouth, Moor View (Alison Seabeck) that the Members of Parliament for the region covered by First Great Western will not be caught out in the franchise renewal, because that was certainly the experience of my constituents, in particular in Melksham, albeit before my constituency was created. Under the current franchise, a popular and well used service was cut to only two trains each way a day, and those trains run at times that are totally impractical for anyone hoping to use them for a sensible commute for a humane working week. I am determined that that should not be allowed to happen under the new franchise, but that instead we will see the franchise get Wiltshire moving and help people in my constituency to use the railways to get to work.

Three key, interrelated factors make a difference to the railway experience and to the potential of the railways to serve my constituents: service frequency, capacity and connections. Connections are an important solution to the conundrum, because they create the opportunity to relieve capacity and overcrowding in capacity bottlenecks and to increase the journey options, thereby disproportionately increasing service frequency for communities. In Wiltshire, we could have a few particular opportunities under the new franchise.

The railways Minister is more than familiar with the TransWilts rail service, which I have raised with her on countless occasions in the past 18 months. I am sure that she was as pleased as I at the success over the summer of the TransWilts rail partnership trial of extra Sunday services between Westbury and Swindon via Melksham. The take-up and the feedback on the service were good, and next year the partnership hopes to extend the trial to between May and mid-September. The TransWilts campaign group has comprehensive research behind it, demonstrating not only the need for more services but their cost-effectiveness and the strong support from the business community in our area for improved services through Melksham. The franchise specification process is an ideal opportunity to build upon that work; no line in the south-west region is better prepared for an expansion in services, having enjoyed them so recently, until the current franchise.

I was encouraged by the Government’s willingness to listen to us about the problems of overcrowding in my area, and chiefly by the prospect of additional capacity on the Cardiff to Portsmouth line which runs through Bradford-on-Avon in my constituency. There was certainly progress last Monday, when First Great Western announced two extra carriages on the 07.30 from Cardiff to Portsmouth, but only as far as Bristol Temple Meads. Unfortunately, that will not benefit Bradford-on-Avon passengers, who are still frequently unable to board trains or, even when they get on a train, to get a seat. That problem is not unique to Bradford-on-Avon or to my constituency; I often travel on First Great Western on Sundays and it is astonishing that even on Sunday afternoons it is not uncommon to find that one cannot get a seat on a First Great Western service into Paddington. Demand locally has risen well above the national level of growth, and I implore the Minister to consider overcrowding once more in further franchise specifications. I would appreciate her reassurance that in the Great Western franchise renewal process, bidders’ proposed efficiency measures will not be looked upon favourably if they involve cutting carriages and reducing seats. Franchisees should be required to deal with overcrowding not by pushing down demand with increased fares but by increasing capacity. Central Government can help by simplifying the rolling stock allocation system.

I have corresponded with the Minister about the opportunities presented by the new franchise, in particular on the prospect of services between Oxford and Bristol. I welcome the Chancellor’s support in the autumn statement for services between Oxford and Bedford, which will improve connections between west and east as far as Cambridge. There is a wonderful opportunity, on existing railway infrastructure, to extend the potential of such services with an Oxford to Bristol service under the Great Western franchise. Quite aside from the benefits of linking such high value-added university economies, there is also the opportunity of the reopening of Corsham station, which would be served by trains on that route.

Moneys have been set aside under section 106 agreements for redeveloping Corsham station, but progress has been slow and a real risk is that the developments seeking to contribute to improved railway infrastructure will have happened too long ago to draw upon. A commitment on Corsham station early in the course of the new franchise would be welcome. It should be noted that the road infrastructure often benefits from section 106 agreements. Substantial development of housing and employment sites around Melksham in my constituency has included funding for distributor roads and even a small bypass but, in that time, not a penny has been contributed to the rail infrastructure on which those same homes and businesses will depend.

I want to touch on the role of local authorities in the franchise renewal process. For a Government who believe in localism, it is important to ensure that the democratic voice of local areas is heard when determining the new specifications for the franchise. Liberal Democrat councillors in Wiltshire recently tabled a motion noting the opportunities that the stakeholder consultation presents for improving the county’s rail network. They welcomed the Minister’s encouragement to the council to

“discuss the potential for a Corsham station and a new Oxford-Bristol service with all bidders for the franchise”.

Welcoming the motion, the holder of the council’s public transport portfolio noted that, traditionally, the council has had nothing to do with the railways but that it now had clear objectives to include in the new franchise a number of the local schemes which I have mentioned this morning.

We could make the improved TransWilts service permanent. The council is bidding for £5 million from the local sustainable transport fund. I hope that the Department will look favourably on the innovation of that bid, and its value in connecting three mainline services across the county and therefore dramatically improving the options for journey planning for my constituents by linking services calling at Westbury, Trowbridge, Melksham, Chippenham and Swindon on existing railway infrastructure. The council is certainly determined to support an Oxford-Bristol service, which would allow new stations at Corsham and—I am sure this will interest hon. Members from Swindon who are present—Royal Wootton Bassett, which would be more accessible for some of their constituents than existing services at Swindon.

I am encouraged by the council’s willingness to engage with the Government, and I am keen to hear from the Minister how she plans to reciprocate that willingness to engage, and what mechanisms she is considering to incorporate in the specification process the views and recommendations of local authorities, and of the hon. Members who have come to this debate. I look forward to hearing her thoughts on that.

10:11

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

It is a pleasure and a delight, Sir Alan, to serve under your chairmanship. I thank my hon. Friend the Member for Truro and Falmouth (Sarah Newton) for this debate, and congratulate her on securing it. During the debate, we will speak as a group of Members of Parliament with one voice. My constituency is the other half of Plymouth from that of my hon. Friend—for this morning—the Member for Plymouth, Moor View (Alison Seabeck).

I want to set the context for Plymouth. Around 250,000 people live in the city. We are a low-wage and a low-skills economy. We are the home of the Royal Navy, although other hon. Members may dispute that. We have a nuclear licence for our nuclear submarines, which makes Plymouth an important part of our defence. We have a brilliant, dynamic university. We have a reputation for being the global leader in marine science engineering research, and we must talk that up much more.

Members of Parliament from Devon and Cornwall make up around 19% of the coalition Government’s membership, so it is important and would be helpful if the Minister recognised that when she makes decisions. I know that, after the 2005 election, three Labour Members of Parliament worked hard to try to convince Ministers, but I suspect that they did not have the political clout to do so. We are in a unique position to ensure that we get the story right.

Plymouth feels incredibly isolated. Not only are we losing the airport—believe you me, I for one have been subject to an enormous amount of correspondence and discussion about that—but we have only one proper dual access to the peninsula, and we saw last month, when the M5 crash happened, how difficult that can be. Just last Friday, as I was driving to my constituency, I was stuck on the A38 for three hours because there had been a car accident that required the Devon air ambulance to pick someone up. It made it difficult to get there.

There is real concern about the lack of transport infrastructure, and a genuine feeling that no one is interested in hearing what happens in Devon and Cornwall, and certainly in Plymouth. Some 38% of people who work in Plymouth do so in the public sector. If we want to rebalance our economy, we desperately need to ensure that we have the necessary transport infrastructure. If we are successful in that, there will be an enormous roll-out throughout the regional economy, and we need that.

The First Great Western franchise is up for grabs again. It has decided not to put in for an extension to its current franchise, because it is keen to ensure the necessary investment in infrastructure, new trains and so on. We know that train journeys may be badly delayed during the winter, especially when the sea wall at Dawlish is flooded in a big way. We have an opportunity to ensure that we get the infrastructure right.

What do we want? We want more three-hour train journeys to and from London, and we want to make sure that we can get from London to Plymouth before 11 o’clock in the morning. If people want to do a decent job of work, they want to ensure that they can meet people at 9 or 10 o’clock. As my hon. Friend the Member for Plymouth, Moor View made clear, that is a key issue.

We need decent access to Heathrow. If we lose our airport, which, unfortunately, I think we will—I shall do everything I can to try to ensure that that does not happen—we must ensure that we have good connections to airports. Our best regional airport is Exeter, and it would be helpful if we could have a good bus link straight in to the airport, or a decent rail link so that people can get away.

We need to retain the rail sleeper service, and we need good wi-fi on trains. If business men want to work while travelling to Plymouth, they want to be able to communicate with their customers, and that needs to be not just in first class, but in second class if we are to be inclusive.

The cost of tickets is horrendous. When I travel back to London as I occasionally do on the railways on a Sunday, engineering works prohibit me from getting back in good time, and the journey can take for ever.

Another point is that electrification of the line to Plymouth is important. When Michael Ancram was deputy leader and chairman of the Conservative party he came to Plymouth, went to see Tim Smit who runs the Eden project, and asked him what was the one thing that could regenerate activity in the peninsula. Tim Smit’s reply was electrification of the line.

I pay tribute to Neil Mitchell, an independent transport consultant who has worked incredibly closely and done an incredibly good job on the matter. Our meeting the other day with all the Members of Parliament in Devon and Cornwall was incredibly helpful in ensuring that we got some of our message across.

My final point is that Plymouth is not Portsmouth. We are not 20 minutes from Bristol. Please make sure that we stop being ignored.

10:18

[George Eustice (Camborne and Redruth) (Con)]

I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing this debate, which is important to all of us in the far south-west. I want to touch on three key matters: first, the franchising system, and particularly the duration of the franchises; secondly, some of my concerns about the consequences of electrification for those of us in the far south-west; and thirdly, the sleeper service.

I welcome what the Minister said about the commitment to 15-year franchises. The matter was causing some concern in the industry because there had been speculation that the Government might be backing away from that. It is incredibly important with issues such as transport to make a long-term commitment to provide the right environment for investment. A couple of years ago I attended a speech by the former Secretary of State for Transport, Lord Adonis, who said that, although transport is invariably about long-term infrastructure investment decisions, in the past 50 years, Britain has had some 45 different Transport Secretaries. That shows how difficult it is to maintain a long-term perspective. The hon. Member for Plymouth, Moor View (Alison Seabeck) pointed out some of the problems with privatisation, and a key one was that it encouraged too much short-termism, short-term franchises and a system for sweating assets instead of investing in them for the future.

The Conservative party recognised that when in opposition, and for some years we have been committed to the idea of longer franchises. We recognise the benefits of vertical integration in which train companies are encouraged to invest for the long term. Such a step will be welcome in the industry.

As we know, the line will not be electrified all the way to Penzance in the foreseeable future, but the Government are committed to progressively electrifying the south-west line and the first phase of that will be the electrification of the line to Newbury. In order to accommodate that, I understand that the Government are considering investing in bi-mode trains that run on electric wires when they are in an electric area, and then switch to diesel when they are not. The concern, however, is that the trains currently selected for such a use do not have diesel engines that are sufficiently powerful to deal with the gradients west of Newton Abbot. When Brunel designed the track into Cornwall he came up with an interesting way of using tracks that could deal with steeper gradients, while at the same time designing trains that could work on those gradients. It would be a sorry state of affairs if after all these years we end up with trains that cannot work on such gradients.

The Government say that they will continue to use high-speed diesel trains on the Penzance line. What will happen, however, if the line is electrified to Taunton, Exeter or even Plymouth? How long will it be before people say that since the line has been electrified that far, we can no longer justify diesel trains that go all the way to Penzance? How long will it be before those of us who live in Cornwall arrive at Exeter and hear the words, “All change please, this train terminates here” before we get off and are invited to board a rickety old train that no one else in the country wants to use? It is important to think ahead, and unless the entire line is going to be electrified in the foreseeable future, we must invest in bi-mode trains that are capable of going all the way to Penzance. That will mean that, even if the line is electrified as far as Exeter, the rest of us will not have to change but can remain on the same train.

I know that the Minister used the sleeper service to Penzance while in opposition, so she will know what a crucial link it is for those of us in Cornwall. At a time when we are trying to discourage excessive flights, particularly domestic flights, the sleeper service provides a vital link for the business community. The sleeper service beats flying by a country mile and is the only service that enables someone to work in London until 11 o’clock, and then get on the train and be in Cornwall in time for an 8 o’clock meeting the following day. It is also the only service that will get someone into London from Cornwall in time for an early morning meeting. Last time the service was threatened, a vociferous and successful campaign was led by the late Sir Eddie George—I signed his petition to preserve the service. I now use the sleeper service almost every week and I would recommend it to anyone; it is the most civilised way to travel to Cornwall and the staff are superb. It would be a real failure if we were to lose it.

Last time the sleeper service was under threat, there was some suggestion that the issue was not only its financial viability, but that Network Rail wanted to do engineering work overnight and found the sleeper train rather inconvenient. It should not, however, be beyond the wit of man to deal with that issue and park the train somewhere while engineering works take place. I would like some reassurance from the Minister on that point.

We must think carefully about the type of bi-mode train in which we invest for the future, and if we cannot significantly reduce the journey time to west Cornwall in the foreseeable future—it is a five-and-a-half or six-hour train journey—we must ensure that the experience is as comfortable and enjoyable as possible. That is why we need a franchising system that encourages investment in the long term. I am concerned that, by being too prescriptive about minimum standards, the Railways Act 2005 encourages a kind of Dutch auction. We need a competitive system where companies compete to offer a better service, and where that is given more weight than the amount of money tendered. I hope that the Minister will take those points on board.

10:24

[Mr Robert Buckland (South Swindon) (Con)]

It is a pleasure to serve under your chairmanship, Sir Alan, and I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing a debate that I think most hon. Members in the Chamber have bid for at some stage. Fortunately, she got lucky just before Christmas, and I am grateful to her for that. I am also grateful to the Minister for attending the debate. We have had many discussions about rail services to and from Swindon, and she knows the passion that I and my hon. Friend the Member for North Swindon (Justin Tomlinson) feel for railways, especially considering Swindon’s unique railway heritage as the hub of the Great Western Railway. We regard Swindon as its home.

To bring things bang up to date, Swindon is a thriving town of 200,000 inhabitants, with rail services that run to the west, the east, the midlands and the south and are relied on by thousands of commuters in the town and region. Connectivity to London, Heathrow and other parts of the south is vital, and time and again that is cited as an important issue to local businesses and passengers.

The draft franchise document will be of huge significance and must meet the aspirations of rail users, both passenger services and freight. It must also be based on a correct set of specifications. In short, the mistakes that were made in the 2006 franchise must not be repeated; we must not step backwards. We must start by looking at the current service, rather than holding a Dutch auction—as my hon. Friend the Member for Camborne and Redruth (George Eustice) said—to see who can get to the bottom the fastest.

Since 2006, there has been a race to rectify some of the problems that have been created. How many of us have had to endure problems with punctuality, for example, and how glad are we that much has been done to rectify that situation? The recent Government announcement about extra capacity will provide some relief, but we are running to stand still. As I have said, those issues were not properly addressed.

[Neil Carmichael (Stroud) (Con)]

rose—

[Mr Buckland]

I do not have time to take an intervention because other Members wish to speak.

Unless the new franchise delivers a service that is punctual and has appropriate capacity and competitive ticket prices, it will have been a missed opportunity. To put it bluntly: if our passengers do not get value for money, we will have failed.

Peak fares from Swindon remain unduly high compared with those from neighbouring stations and other parts of the network. That seems to be a hangover from another time, and it is causing a competitive disadvantage. Season ticket holders who have to travel at peak hours and are captives of the service now pay in excess of £7,000 a year, yet the service that they receive does not even guarantee them a seat at certain times of the day. That is wrong, and I believe that the terms of reference and the franchise process must specifically address the needs of frequent users and season ticket holders. I accept that smart ticketing may help, but I feel strongly that more needs to be done to cater for that group, perhaps by introducing reserved seating, for example, or by offering an enhanced service that makes people feel valued.

The link between improved rail services and wider economic benefits is clear, and we should factor in such considerations to the franchising process. Just as road schemes are often justified in terms of their wider economic benefit, we must ensure that the Department for Business, Innovation and Skills and the Treasury are involved and engaged with the rail service to allow the fullest exploration of any wider economic benefits. Locally, we need strong engagement between the Department for Transport and the new Swindon and Wiltshire local enterprise partnership.

[Justin Tomlinson (North Swindon) (Con)]

rose—

[Mr Buckland]

I will give way on a local point.

[Justin Tomlinson]

Briefly, it is not only the LEP that is supportive of such an initiative. We regularly meet different business forums that highlight transport as a No. 1 priority. Swindon’s economic base has grown, owing to businesses relocating there, but the biggest barrier to that is the cost of train travel.

[Mr Buckland]

I am grateful to my hon. Friend for raising that local point, and I will develop it briefly. I have been looking at the regional significance of Swindon, and I would like to echo the points made by my hon. Friend the Member for Chippenham (Duncan Hames) about the importance of developing local services and local branch stations. For too long, obstacles have often been put in the way of the development of local services, because of the needs of the main line. Again, we need to examine the tendering process and ensure that options such as the development of a branch station just to the west of Swindon, which the Minister knows I am passionate about, will become a reality.

There is no reason not to be optimistic about rail in the south-west, because, as we have seen, the growth is exponential. More and more people are using rail services. Therefore, the franchise needs to be an optimistic one. It needs to be based on an upward projection of growth and to avoid the lamentable mistakes of five years ago. I am delighted that the Minister has listened to my protestations, among others, and that the Government have preferred a 15-year term for the franchise, rather than something shorter. My right hon. Friend has been saying yes to many of my requests recently and yes to many of the demands of the people of Swindon. I hope that she will say yes again to some of the observations that we have made about this vital process.

10:30

[Neil Parish (Tiverton and Honiton) (Con)]

I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate. I will be brief because one more Back Bencher wants to speak. I also congratulate the Government on going for a 15-year franchise, but of course with that comes the responsibility to get it right, because it is a much longer-term contract. My hon. Friend made the point that it will also give the company the chance to put in the investment that will improve services.

May I make the point that the west country does not stop at Bristol? Although Bristol is very important, much of the west country is west of Bristol. My Cornish friends are very welcome here this morning; but of course, to get to Cornwall, one has to go through Devon. I therefore make a plea for us to build on the junction at Tiverton in my constituency. We want to increase the industrial parks around Tiverton, so there is a chance to move some industrial goods by rail at Tiverton. In the future, a new station at Cullompton would also be very much welcomed.

Ours is a very important part of the country. If we consider the issue from a tourism angle, we find that people come to London first, and then if they are asked where they want to go next, they say that they want to go to the west country, particularly Devon and Cornwall of course. They quite like Somerset and they occasionally go to Wiltshire and occasionally stop off in Bristol. To be serious, we do need that business. Plymouth airport is being closed. The airport at Exeter is building up, but it is not yet big. Bristol airport is doing quite well. However, many people still come in through Heathrow, so the contacts between areas and getting to and from Heathrow and the railway are also important issues.

All those matters need to be taken into consideration. As I said, the Government are right to go for a 15-year contract, but we need to consider the relevant issues very carefully when we award that contract.

10:33

[Richard Graham (Gloucester) (Con)]

I am grateful to have the opportunity to speak towards the end of this most important debate. The tender of the First Great Western franchise is of key interest not just to my constituents in Gloucester and throughout the county of Gloucestershire, but, as we have heard, across the entire south-west region. I hugely congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing a debate that is of such importance to, I suspect, about 40 coalition MPs and a handful from the Opposition.

There are six key issues to canter through in relation to the retendering process, and I am sure that my right hon. Friend the Minister responsible for rail will be listening carefully, as she has been all morning to the points made by hon. Members. First, I agree with my hon. Friend the Member for Camborne and Redruth (George Eustice) about thinking long term. A long-term franchise must be good for the region. It requires us all to respond ambitiously in thinking 15 years ahead.

My hon. Friend the Member for Truro and Falmouth referred to growth and capacity. Certainly on the London-to-Gloucester line, it is crucial that we have more trains, both in the mornings, inevitably, and in the evenings. There is no service to Gloucestershire after 7.45 pm other than the one that leaves at 11 o’clock at night and arrives the next morning. Additional capacity is therefore very important. I appreciate that there are capacity problems getting into Paddington, but we do need more.

With regard to punctuality, it is worth noting that significant progress was made on the First Great Western service after 2005, but the recent decline or deterioration, which is possibly connected with Network Rail’s failings, needs to be examined.

On where the trains stop and the speed of the service, all First Great Western services currently stop at Gloucester, and that must continue after the redoubling of the Swindon-Kemble line, which is so important to us all. However, it is not obvious to me why every train should stop at every little station on the Cotswold part of the journey. I am thinking about the service being speeded up. It is worth noting that it is slower between Swindon and Gloucester than a car journey, except at peak traffic times.

The Minister will know how grateful we all are to have heard about the plans for electrification to go as far as Swindon on the journey that we are discussing, although not all the way to Gloucester and Cheltenham. We should definitely be considering that within the lifetime of the franchise.

A number of hon. Members mentioned difficulties with fares. The issue involves price and, almost as important, the need to rationalise the number of different fares, so that the process is simpler and easier to understand. The difference between an off-peak and a full-fare single journey between Gloucester and Paddington is the difference between £25 and £85—an enormous multiple.

I should be grateful to the Minister if she said whether the fact that there have been additional carriages on the service in the last year of the franchise will be taken into consideration during the retendering process. I think that that is important. It is also worth asking whether infrastructure at stations can be included in the tendering process. At the moment, we need a new ticket office and revenue protection barriers. Those will be going in shortly, but certainly within the lifetime of the new franchise, we also need to have a separate waiting room and ticket office. That is important for customers at Gloucester.

Overall, the crucial point that I would make, which has been made in different ways by several hon. Members, is that we all agree that train travel—rail travel—is a critical catalyst for growth and a key part of our transport infrastructure. It is true to say that in the south-west it has been rather overlooked in the past and, arguably, in the present, with all the excitement about High Speed 2. I therefore add my voice to those of hon. Members who have already spoken to ask the Minister to look favourably on ways to improve capacity, punctuality, electrification, infrastructure and fare rationalisation on this important line from Paddington to Gloucester and Cheltenham and to support the growth of rail services across Gloucestershire and our region.

[Sir Alan Meale (in the Chair)]

Before we hear from the Front Benchers, I point out that there is one hon. Member who stood but was not called. It may be appropriate if Mr Carmichael catches the eye of either one of the Front Benchers if he still wishes to speak.

10:37

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to speak under your chairmanship, Sir Alan. I begin by congratulating the hon. Member for Truro and Falmouth (Sarah Newton) on securing the debate and on setting out so clearly the needs of local people and businesses in the south-west.

The debate is very timely, given yesterday’s issuing of the invitation to tender for the Great Western rail passenger franchise. It may be a coincidence that that was published on the eve of the debate, but if not, I congratulate the hon. Lady on prompting Ministers to get at least that part of their franchise programme on track.

I am sure that the Minister has listened carefully to the concerns of hon. Members on both sides of the House who are here to represent constituencies right along the route in relation to the new franchise. I shall pick out just a few of the key points that they made. They talked about ensuring that the baseline for the new franchise is no less than the current service, the need for fares to be affordable, the need for faster services, especially for the benefit of business passengers—the south-west region depends on businesses for economic growth—the importance of a link to Heathrow airport, the vital importance of tackling overcrowding, and the retention of a sleeper service to Cornwall. I hope that the Minister will be able to provide some assurances on each of those points.

Several Members welcomed the opportunity to provide long-term investment, but that surely requires a degree of certainty. It is therefore of great concern that invitations to tender for franchises are being issued before the Government have decided what their franchising policy is. The First Great Western franchise ITT states:

“The contract will be based on the Franchise Agreement currently being revised in line with Government policy.”

It would surely have been sensible to finalise the franchising policy and the franchise agreement in time for the publication of the invitations to tender.

Unfortunately, it is not just the franchise agreement that is yet to be finalised by Ministers; the entire rail strategy is now running late. The departmental plan promised to:

“Develop and publish detailed proposals on delivering a sustainable railway including reform of Network Rail”,

but that, along with so much else, has slipped back to 2012. It seems that the Secretary of State inherited an in-tray overflowing with decisions her predecessor had sat on. Given yesterday’s determination by the Office of Rail Regulation that Network Rail is in breach of its licence because of the worsening performance on the national network, passengers are right to be frustrated that there is no sign of the promised reform.

As the process of renewing the franchises begins, we are left with more questions than answers. For example, we are no nearer knowing how committed Ministers are to rail devolution, and neither are prospective bidders. The ITT says:

“In line with the Government’s aspiration for decentralisation, the franchise may be let so as to permit future changes in the way that discrete parts of the network”—

[Mrs Villiers]

I feel obliged to correct the hon. Lady. We have not issued an ITT for First Great Western yet. The ITT comes after the consultation. If we issue the ITT before the consultation, we are unable to take on board the views of stakeholders. I am not sure what ITT the hon. Lady is reading from, but it is not First Great Western’s.

[Lilian Greenwood]

I thank the Minister for her clarification, but it is the information that was published yesterday in relation to the future franchise.

The publication the Minister produced mentions

“changes in the way that discrete parts of the network are financed, monitored and managed by organisations other than the DfT.”

The Opposition support rail devolution, which should go hand in hand with stronger transport authorities. We would like parts of the country such as the south-west, which do not currently have the benefit of integrated transport authorities, to have them. That would give the constituents of hon. Members who are here today more control and the opportunity to ensure that their needs are met. Could the Minister therefore update us on progress on rail devolution? What plans does she have for the devolution of services in the south-west? Will she confirm that devolution relates to funds and not just responsibilities? In parts of the country such as the south-west, which do not have an integrated transport authority, who, other than the DFT, does she envisage will be the relevant organisations?

The Department is similarly vague on the eventual reforms to cost and revenue risk, saying only:

“Revenue risk will be subject to a support mechanism probably linked to economic factors”,

but “probably” seems a bit vague for this stage in the process. Will the Minster therefore provide further details of how she intends to ensure that taxpayers get a fair deal from the new franchise and that we do not have a repeat of the licences to print money we have seen in recent years?

The Opposition have been highly critical of the way in which First Great Western has been able to end its 10-year franchise three years early—before the Minister jumps to her feet again, let me say that I appreciate the fact that the contract was agreed under the previous Government. I hope this Government have learned the lessons from the franchises that were signed in the years following privatisation so that contracts do not back-load premium payments while allowing a break clause. That has enabled First Great Western to avoid payments of an estimated £826 million, while, as now looks likely, bidding to run the franchise again.

There are also questions about what is to happen to the stations on the First Great Western line, and several Members have raised particular concerns. The invitation that has been issued states:

“The franchisee will be expected to take full repairing leases on some or all of the stations that it operates other than on Network Rail managed stations.”

Why is there the reference to

“some or all of the stations”

and what will happen to the others? If a private train operator takes control of stations, will that be within the 15-year franchise, or on the basis of 99-year leases, as Ministers have suggested? If it is within the 15-year franchise, what will happen at the end of the 15-year period? If the franchise changes hands in 15 years, one possibility is that there will have to be a significant payment to the outgoing train operating company, thereby skewing the refranchising in its favour, or are Ministers opening up the prospect of an operating company retaining the management of the stations even after losing the franchise to operate the trains? Potentially, we could see station access charges as well as track access charges, with yet more work for lawyers, more fragmentation and more cost to the taxpayer.

There are also questions about the trains to be used on the First Great Western line under the new franchise. The document says:

“It is currently expected that the franchise operator will take responsibility for the provision of rolling stock. From 2017 new Intercity Express Trains (‘IEP’) are anticipated to be delivered to the franchise operator”.

Will the Minister explain why it is only “expected” that the new franchise holder will be responsible for rolling stock? Will she confirm that the Department cannot force the new operator to lease the IEP trains? Given the Department’s admission that the leasing costs for the IEP trains will be greater than for the alternatives, what assurances can she provide that the IEP trains will actually be put into service? Will she give more details about the discussions First Great Western, and indeed East Coast, are reported to have had with rolling stock companies about potentially using more Pendolinos on these franchises, as opposed to the IEP trains being built by Hitachi? It is incredible that the taxpayer has spent tens of millions of pounds developing these new trains, on which jobs in the north-east depend, when responsibility for leasing trains rests with the private operators. As several Members have said, it is vital that the new franchise increases capacity to tackle overcrowding, rather than pricing passengers off the railways. The hon. Member for South East Cornwall (Sheryll Murray) graphically described the problems of overcrowding on inadequate train carriages. It is therefore vital that we know what rolling stock is to be delivered.

Potential operators of the new franchise are also having to bid without the Government’s having decided how best to address the clear need to improve links to Heathrow and High Speed 2—if the Government decide, as we hope they do, to give HS2 the green light. As the document says:

“Options for longer term enhancements of rail links to Heathrow, such as Western Access and Airtrack Lite, are being considered”.

Whether they go ahead will have a significant bearing on the franchise. Will the Minister provide an update on the Government’s thinking on the issue, particularly given that several Members, including my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and the hon. Members for Plymouth, Sutton and Devonport (Oliver Colvile) and for South East Cornwall have highlighted the loss of Plymouth airport and, therefore, the importance of establishing such connections?

As hon. Members know, the Opposition have put forward their own proposal, which would offer the south-west significant benefits in terms of access to Heathrow and HS2. Our policy review concluded that we were wrong to reject the proposal to create a major new transport hub near Heathrow linking HS2, Crossrail and the First Great Western main line. We have proposed moving the west of London stop from Old Oak Common to near Heathrow. That was previously the Conservative party’s policy, and it was backed at the time by the Minister. Indeed, some tell us—quite authoritatively—that she may still hold that view.

As the Minister will know, the creation of a Heathrow hub has several benefits. First, it has the potential to save taxpayers money, by removing the need to build an expensive spur to Heathrow during the later stages of the HS2 project and opening up the potential for greater private investment in the scheme. Secondly, it will benefit Heathrow by improving access to our major hub airport, especially from the south-west. Thirdly, it will increase the potential for more of the country to feel the benefits of HS2, not least by improving connectivity to the south, the south-west and Wales. HS2 will benefit the nation as a whole, but those living in parts of the country that are not directly served by it need to feel that those benefits are real to them. Fourthly, taking the high-speed line direct to Heathrow from the start will inevitably change the route and open up the prospect of making greater use of existing transport corridors and avoiding the widest part of the Chilterns area of outstanding natural beauty.

The debate gives the Minister a timely opportunity to provide clarification on the many questions that need answering regarding the Government’s rail franchising policy and particularly the tender for the First Great Western franchise. Passengers in the south-west need and expect a better rail service than the one they have at present. With six of the 10 most overcrowded services running out of Paddington station, there is a considerable need for the investment the Labour Government set in motion, not least for the further electrification of the First Great Western main line.

As well as investing in infrastructure, we need to improve the way passenger services are delivered. The Opposition are clear that that requires the genuine devolution of rail services and a fundamental review of the very structure of our rail industry. Given that the Government look set to maintain the existing industry model, we need, at the very least, to have tough new rules for rail franchises. We need to ensure that the often poor quality of service experienced by rail passengers in the south-west, which Members have described today, is not repeated in the future.

10:49

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

It is a pleasure to serve under your chairmanship, Sir Alan, as ever. I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate at such a timely point. Yesterday, the Government fired the starting gun on the process for selecting the new franchisee with the publication of a notice in the Official Journal of the European Union. We propose to issue a consultation in the next few days, which we expect will close at the end of March. The debate is thus well timed, and I welcome all the speeches that have been made. As my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) put it, all hon. Members spoke with one voice about the importance of the process that we are undertaking. We will consider all the representations made today and during the consultation.

[Alison Seabeck]

On that very point, will the Minister promise today that she will take a meeting of all the south-west MPs, once that consultation is under way and we have had the opportunity to look at the franchise? We will certainly have views on it.

[Mrs Villiers]

I am happy to give the hon. Lady that undertaking. It will be a good contribution to the decision-making process.

Almost every hon. Member who has spoken has emphasised the economic importance of the Great Western rail network. They included my hon. Friends the Members for South Swindon (Mr Buckland), for North Swindon (Justin Tomlinson), for Plymouth, Sutton and Devonport and for South East Cornwall (Sheryll Murray), and the hon. Member for Plymouth, Moor View (Alison Seabeck). Clearly, it has a crucial role. Rail connectivity supports jobs and growth, and is, in particular, vital for the tourism sector, which is such an important part of the economy in the area served by the Great Western franchise. In response to the point made by the hon. Member for Plymouth, Moor View, it would be positive for the Department for Business, Innovation and Skills, the Treasury, local enterprise partnerships and local authorities to be engaged in the important decision in question.

Passenger demand has grown across much of the Great Western network in recent years, as many hon. Members have acknowledged.

[Neil Carmichael]

I hope that the Minister will take on board the need to modernise the rail track as a whole, so that we can get more trains on the track. That is certainly relevant to connectivity for my constituency, and will make a big difference to the network as a whole.

[Mrs Villiers]

Improving infrastructure is an important part of the way we are seeking to improve rail services on the Great Western network.

As an example of what I was saying about demand, passenger numbers on the Falmouth to Truro line have doubled since 2006. In the process on which we now are embarking we need, as my hon. Friend the Member for South Swindon said, to learn lessons from the serious mistakes made when the current franchise was let under the previous Government. After a reduced service was specified on some routes, demand increased considerably, once the new franchise became operational. That resulted in controversial crowding, compounded by significant problems with reliability. Following on from that, a number of services were added to the franchise over and above the contracted minimum. The coalition recently agreed to fund a further 54 carriages on the network, including roughly 4,500 extra seats on the Thames valley lines. However, as my hon. Friends have said, demand continues to increase, so that crowding levels are still a live issue for the franchise.

To respond to passenger concerns about crowding and to support the economy, jobs and growth, the Government have prioritised investment in our rail network. Our programme of rail improvements is on a bigger scale than anything since the Victorian era. Some of the most ambitious and important changes will be taking place in the area served by the Great Western franchise. They include the intercity express programme to deliver a new fleet of electric and bi-mode trains and extra capacity; electrification of the lines linking Paddington, Bristol, Cardiff, Oxford and Newbury; upgrades to signalling and train operating systems; provision of an electric suburban fleet; a massive redevelopment of Reading station; Crossrail infrastructure works and rolling stock introduction; and, last but not least, the redoubling of the Swindon-Kemble line. Ultimately those will generate major benefits for passengers and for the economy of the area served by the franchise. However, delivering a programme on that scale is bound to have an impact on services during the construction and delivery phase, so franchise bidders will be expected to present robust proposals for minimising disruption during the upgrade works, with a keen focus on the needs of passengers.

As several of my hon. Friends have acknowledged, we are reforming rail franchising to give operators greater flexibility to respond to customer demand in a commercial way, but within a framework set by the franchise, which protects key outcomes, key journey opportunities for passengers, taxpayers and the economy. Our starting point in setting the specification for the franchise will be the current level of service rather than the contracted minimum. We also expect the franchise to include requirements on passenger satisfaction, for example in relation to stations, which several hon. Members have called for. As I have said, we propose a 15-year term for the new franchise. We believe that the increased certainty that that will provide will encourage private sector investment in the railways and the sort of long-term thinking called for by my hon. Friends the Members for Gloucester (Richard Graham) and for South Swindon. A longer franchise should also make it easier for the new operators to build the long-term working relationships with Network Rail and other stakeholders, such as local authorities, that are crucial to an efficient and successful railway. We will be asking bidders to consider how they would strengthen the reliability of services and improve stations and trains. Throughout the process, Passenger Focus will have a vital role to play, emphasising the huge importance that the Department places on passenger concerns. We are grateful for the useful input that Passenger Focus has already given us.

My hon. Friends the Members for Gloucester and for Truro and Falmouth and the hon. Member for Plymouth, Moor View, and others, called for faster journey times on the route. Those would in some circumstances require investment in infrastructure. That, of course, would involve a call on the taxpayer. The case for such investment can be strengthened if the wider economic benefits of improved connectivity can be properly understood and analysed. There is obviously a unified view among my hon. Friends about that, and it may be productive for hon. Members to work with local authorities, LEPs and other stakeholders in the south-west, to evaluate more formally the potential benefits of the kind of infrastructure works that would improve journey times, and such things as further electrification, which others have mentioned today. Other relevant issues might be the adoption of the model that has been used successfully in the north, on the northern hub or in relation to east-west rail, with the overall costs and benefits, and the possibility of section 106 contributions to the line, mentioned by my hon. Friend the Member for Chippenham (Duncan Hames). If faster journey times would involve taking out intermediate stops, the concerns of the communities that value those stops would need to be fully considered.

I know how important the sleeper service is in the south-west. We are at too early a stage to be able to announce all the final decisions, but we would expect bidders to consider clearly and carefully the popularity of the service when they were developing their proposals for the train services to run under the franchise. We will also be interested to hear bidders’ and other stakeholders’ proposals on additional electrification. We can see great benefits in western access to Heathrow, and are looking seriously at that in conjunction with our work on High Speed 2. If the Government go ahead with their HS2 plans, the interchange at Old Oak Common would, as my hon. Friend the Member for Truro and Falmouth said, provide important new journey opportunities for people outside the south-west.

We fully recognise the concern about rail fares and the pressure they place on family budgets, which is why the Chancellor has secured funding to cancel the proposed RPI plus 3 increase and revert to RPI plus 1 for the January fare increases. However, we recognise that it is vital to provide a longer-term solution, which means getting the cost of running the railways down, so that we can provide better value for money for passengers. We will expect the new operator for the Great Western franchise to develop close working relationships with Network Rail, as they are essential for bringing the costs of the railways down, as Sir Roy McNulty demonstrated.

We are keen to explore the scope for devolving further aspects of rail to local authorities. We plan to publish in the near future a consultation on devolution options for rail services in England. We have been discussing devolution with a range of local authorities including Devon and Cornwall, which have expressed interest. There is plenty of scope to use existing mechanisms to strengthen the input of the community and local authorities in the refranchising proposals.

I welcome the speeches that have been made today. I hope that all hon. Members will take part in the consultation and encourage their constituents to do the same.