Alison Seabeck
That work was essential. We cannot continue with a situation in which severe weather conditions completely wipe out the links to the far south-west. No Government of any complexion would ever have been forgiven for not ensuring that the signalling around Cowley bridge in particular was made more resilient.
I was about to mention some of the important pinch points highlighted by Network Rail in the region, including Cowley bridge. Others were Chipping Sodbury, Hinksey, Whiteball tunnel, Athelney, Hele and Bradninch, Flax Bourton, Patchway tunnel and the Exeter diversionary route, all of which eventually need to be progressed. I fully accept that there is a restricted funding envelope, but how that limited funding is prioritised across the country can give or take away hope from rail users and local authorities, particularly in the south-west.
The latest solution for the problem at Exeter, over and above the lifting of the cabling and signalling, and put forward by the Environment Agency, appears to have been effectively to put a barrier across the section of rail if the flooding comes back, to manage the water flow. That effectively closes the south-west off for business. Plymouth has no airport and if either the M5 or the A303, which is not yet dualled, close at the same time, as has happened more than once, financial losses in the region will be significant, running into millions of pounds.
The weather troubles of last winter showed precisely the need for improvements to infrastructure in the south-west. During that period, First Great Western’s public performance measure for trains arriving on time fell to 80%. We should acknowledge—I am sure that Government Members who use the service would do so—the work that the staff of First Great Western undertook at that time, which was well over and above their usual call of duty. That includes everybody from drivers to station managers to the man who was tweeting the problems on the line—as well as the engineers, of course, who were out in all weathers trying to mitigate and cope with the effects of landslides and flooding.
The Minister of State, Department for Transport (Mr Simon Burns)
And the emergency services.
Alison Seabeck
And, of course, the emergency services. I thank the Minister; he is absolutely right.
The rail network is our lifeline. Ministers and officials, as well as those involved through other organisations such as the Environment Agency, who clearly have a responsibility for tackling adverse weather conditions, must understand that the transport network and the environmental infrastructure network have to work together and we have to come up with solutions that work for both. We cannot have parts of the country simply being cut off.
The growth in demand for travel to the south-west for its cities and leisure activities continues to grow, and that is a really good thing. Of course, many of these travellers and visitors are expected to arrive by rail. Indeed, 24,000 people arrived at Castle Cary to go to the Glastonbury festival last weekend, including a member of my staff, who has probably just about recovered. Many businesses are keen to establish themselves in the south-west because of the quality of life there, but they voice concerns about the transport linkages.
Yet now we have had a backtracking on promises made to MPs, commuters, local authorities and rail user groups regarding the great western franchise. The visit made by the Secretary of State, with a fanfare of trumpets, was welcome. However, on almost the same day, others were being told—officials were talking to officials in local government—that the service upgrades that we had all fought for and believed we were getting were being taken away: no early-morning train to Plymouth, no extra three-hour journeys from London, no wi-fi. Improvements could happen only if a third party—a local authority or business—was willing to contribute. It was always very unlikely that First Great Western would be willing or able to take on the additional financial risk over the shortened period of the revised franchise. There was perhaps a hope that the local enterprise partnerships could step in to assist with the recommended Heseltine regional funding, but the Chancellor knocked that on the head when he reduced so drastically the amount going to the regions.
If the Government are serious about getting growth back into the economy, they must look at the transport infrastructure in all the regions and not be totally fixated with High Speed 2. How can local authorities invest when they have just learned that their budgets are going to be cut further by the Government, with another 10% having to be found? Many are asking how they can be expected to fund and support long-distance services.
The franchising and re-franchising process has, at times, been disastrous. The Transport Committee has rightly raised serious concerns and made recommendations, one of which advised the Government to look at wider policy objectives such as the promotion of sustainable end-to-end journeys, the quality of the passenger experience, and, crucially for Plymouth and the south-west, social and economic development. It is far from clear that any of these factors have been considered with any seriousness specifically in relation to the great western franchise. Where is the joined-up government in all this? The delay and uncertainty around the great western franchise is deeply damaging to the region. Other areas are now suffering because of the failure of the franchise process. Staff on the affected lines are concerned that the pressure on the companies is leading to cost-cutting and an increase in casualisation of posts, and from the companies’ perspective there is a risk to share prices and, ultimately, viability.
There are justifiable reasons—environmental, economic and social—for public subsidy of the rail network, but it is not clear that the Government are getting value for money. There should be greater transparency on where the subsidy is going. It would also be good if we could have some explanation of why the home countries of the overseas-based companies running lines in the UK—they are usually in Europe and include France, Germany, Holland—have fares that are, on average, a third lower than they are here. Are we subsidising some of those routes in Europe?
My party rightly wants to give the travelling public some hope by using funds more wisely, scrapping the costly privatisation of InterCity East Coast and reforming the ticketing process. Introducing a legal right to the cheapest ticket will help, because people are struggling to use public transport as the cost of living rises and their wages fall.
Our rail links nationally are a vital part of our infrastructure and are essential to the growth and prosperity of our regions because of their ability to move people and freight. In many parts of the country, however, they are hampered by the failure of the franchise process, the failure of the infrastructure and resilience planning and the failure of this Government.
Ben Gummer
I am giving a bit of history because it does inform our discussion of the franchise process, which is the core of the report. I am not going to start trading statistics, but over the period of Railtrack, rail safety improved and we were going up the European safety league table. The reason so much money had to be invested—very successfully with private help—was the years of underinvestment by a series of Governments, Conservative among them. I disagree with the hon. Gentleman’s intervention on that point, not least because the facts on the safety of the rail network under privatisation speak for themselves.
How do we get this franchise system to work so that rail companies can compete with their natural competitors, the motorways and the airlines? I plead with the Government to do as much as they can. I know that the advice they have had recently has been to shorten slightly the long franchises that have been planned, but the longer the franchise rail companies can get, the better their ability to invest in rolling stock, customer service and improving the capacity and punctuality of their services.
Those of my constituents who have had the misfortune of having to commute on the Ipswich to London line for a long time will say that the best improvements they have seen were under the first franchise—as I am sure my right hon. Friend the Minister will agree—which was quite long and had the loosest possible terms. It allowed the then Anglia franchisee to put maximum efforts into improving performance. The last Government did many good things in rail, but one of the bad things was to have far too tight a control over the franchises, stipulating to the dot and comma how the services should be delivered. Unsurprisingly, the bidders for those franchises went in at the lowest possible price, bidding on the specification provided by the Government, and the improvement in service flattened and, in some cases, reversed. We need as loose a franchise framework as possible, and as long as possible so that the private sector can invest as fully as possible in the services without being second-guessed by the doubtless otherwise brilliant officials at the Department for Transport.
We need to see other improvements, and I am glad that the Committee recommended them in its report. We need transparency in subsidy. The system is still not good enough at identifying where subsidy goes. I have tried to understand how much subsidy goes in to the great eastern main line. Network Rail and the Office for Rail Regulation are not good at disaggregating subsidy in sufficient granular detail. I have questioned them about control period 5, but it is almost impossible to get a decent idea of the quantity of subsidy or public investment we are likely to get in our line, which makes it very difficult for us, as public representatives, to fight for our constituents.
Transparency is also important for the way in which the franchise system develops. When privatisation was introduced, there was only one profit-making line in the UK and there are now many that turn a surplus. Effectively—and I know that the Minister disagrees with me slightly on the detail of this—fare income is transferred from one part of the country to another. Roughly £30 of the £74 standard fare ticket from Ipswich to London is paid in premium which is moved, effectively, to those parts of the country that need a subsidy. That is unfair on my constituents, especially those who are paid the same bad wages that some people in subsidised areas are paid. They rightly demand a social subsidy so that they can get their rail service for less than they would otherwise.
If a lot of our fare income is being moved to other parts of the country, it makes it difficult for us to get the investment we need. We should have more transparency about how the premiums are moved so that we can achieve some sort of parity for investment.
I turn now to a discussion of the east of England, and I know that the Minister has a constituency interest there and, therefore, a profound knowledge of the area. Only two regions of England outside London are net contributors to the UK Exchequer: the south-east and the east. Since the 19th century, the eastern region has suffered some of the worst levels of investment. Historically, there has been a poor level of investment in the main line from London to Norwich, with hand-me-down carriages and levels of service that other parts of the country have long forgotten about. The region has contributed to the UK economy in the past five or 10 years, but investment is needed for that contribution to continue. The region is not demanding new motorways or A roads, but investment is required for people to able to get from London, Ipswich and Norwich to the midlands. That would lead to growth that would make a significant contribution to the UK economy.
We are profoundly grateful for the investment that has occurred in the past few years. It was promised for many years, but not delivered. We will soon have a direct line between Felixstowe and Nuneaton, the constituency of my hon. Friend the Member for Nuneaton (Mr Jones). Thereafter, I hope we will have a direct line from Nuneaton to Coventry. I hope—the Minister will speak on this later—that there will be a new bypass loop north of the Minister’s constituency of Chelmsford, which would release capacity and improve performance between London and Norwich. All of these plans, in addition to Ely North junction, have been long promised and long talked about. They are at last being delivered, and for that we are very grateful. However, we need new trains on the new track; not now, not immediately or in the next few years, but within the new franchise that will be set in 2016. We need the new trains that have been provided to the rest of the country and have been denied to us. Whenever the rest of the country is finished with a new train, it is passed on to East Anglia. That is no longer good enough.
Ben Gummer
Well, it has been true since the 19th century. I hope that at some point we will get the new trains that will release the economic potential in Ipswich and Norwich that has so long been denied to my constituents and their forefathers.
We are making good progress. My hon. Friend the Member for Milton Keynes South (Iain Stewart) is now able to say that the railways are in a good place, something that would have been unutterable 10, 15, 20 or 30 years ago. We need investment to continue, we need to release the power of the private sector and we need to be able to continue the miracle of rail privatisation.
Lilian Greenwood (Nottingham South) (Lab)
I congratulate the Transport Select Committee on the “Rail 2020” report, which combines an informative overview of the rail industry with some acute analysis of the challenges it faces. It certainly provoked a thoughtful debate this afternoon, albeit not necessarily one that involved a high degree of consensus. I suspect that the challenges to franchising in particular have deepened since the report was published last year. If the Committee were to repeat its inquiry today, perhaps its conclusions would be even stronger.
When the McNulty report was published in 2011, it was widely acknowledged that the rail industry was in need of reform. Privatisation had left us with a fragmented and opaque system—a system that incurred massive costs and offered little accountability for the money being spent. Contrary to what the architects of privatisation had promised, subsidy had increased in real terms since the mid-1990s—
Lilian Greenwood
And passengers faced some of the highest fares in Europe, as well as often bewildering pricing structures. The Minister says, “Under your Government” from a sedentary position, but that is precisely why we commissioned McNulty to look at how to achieve efficiencies.
The Committee’s recommendations on financial transparency, fares and ticketing reform and devolution were welcome, but implementation has been delayed by a Department that seems to have been overtaken by problems of its own creation. In the past year, we have witnessed the collapse of the franchising system, which has cost the taxpayer at least £55 million. Those are the direct costs; that figure does not cover the fall in orders that is hurting the supply chain or the uncertainty that still hangs over the industry, nor does it reflect the damage that has been inflicted on the Government’s own efficiency plans—both points well highlighted by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman).
The Government intend to find £3.5 billion of industry cost reductions by 2019. An annexe to the “Rail 2020” report states that while
“Some of the savings are already in Network Rail’s plans, most of the rest have to be secured by passenger train operators and their suppliers…via the next generation of franchises.”
Does the Minister accept that analysis? If he does, what does he believe the cost to the taxpayer will be in deferred efficiencies, owing to the much extended delays to the franchising programme?
Against that background, Ministers have taken the politically motivated decision to make the privatisation of East Coast their top priority. At the same time as they are agreeing lucrative extensions for private operators, at great cost to the taxpayer—for example, it was recently reported in the trade press that the c2c contract extension came in £17 million over budget—for ideological reasons the Government are disrupting the one stable part of the network. Since the last private operator walked away, East Coast has returned £640 million to the taxpayer and invested £40 million in the service; it makes the second highest contribution of any operator to the Treasury; and it has significantly improved passenger services.
East Coast provides an interesting test of the Government’s commitment to openness. Despite Ministers’ stated intention to improve transparency, they are trying to have it both ways when it comes to East Coast. The Government cannot both laud the Office of Rail Regulation’s breakdown of the industry’s finances, as they did in the formal response to the “Rail 2020” report, and dismiss the figures that show East Coast to be most efficient operator. It is simply not credible.
The Government have even invented a new measure to bolster the comparison between Virgin Trains’ and East Coast’s premium payments while conveniently ignoring subsidy going the other way. As the net payment figures show, East Coast comfortably paid more to the Treasury over the past three years, but Ministers have tried to give the opposite impression. It is not policy led by evidence—it is just the opposite—from a Government determined to push through privatisation, which will not benefit the railways or passengers.
We have seen no progress on fares and ticketing either. The Government’s review was originally due to be published in May, but we are now told that it will be published at some point in the summer. The Minister will surely appreciate the irony when he next lectures East Coast on punctuality. I hope that the review will now bring forward serious proposals for reform, because at present passengers often find it difficult to secure the cheapest tickets, especially from automatic ticketing machines. The definition of peak and off-peak is not always obvious, and as a consequence some passengers find themselves with huge bills through no fault of their own.
Passengers also rightly feel aggrieved when they have to use a replacement bus service but are not entitled to compensation, regardless of the inconvenience to their journey. Those are the sorts of issues that the fares and ticketing review should be looking at. The Transport Committee was right to call for so-called super-peak tickets to be ruled out. They would penalise those commuters who have no choice but to travel at peak times. I urge the Minister to go further than he had done previously and rule out granting train operating companies the right to redefine peak time periods. I also ask him to give the House a categorical assurance that operators will not be given additional powers to price commuters out of peak time periods.
The Minister of State, Department for Transport (Mr Simon Burns)
I begin by adding my congratulations to the Transport Committee on its important report, which comes up with a number of important and interesting recommendations. As the hon. Member for Liverpool, Riverside (Mrs Ellman), the Committee Chair, will know, the Government have responded in full to the recommendations, and on a number of issues we have considerable sympathy and agreement with them.
Like the Select Committee’s, the Government’s vision is for a transport system that is an engine for economic growth—one that is environmentally sustainable and promotes quality of life in our communities. Rail offers commuters a safe and reliable route to work. It facilitates business and leisure travel, connects communities with their public services and workplaces and transports millions of tonnes of freight around the country, relieving congestion on our roads and bringing huge environmental benefits.
It is easy for some to criticise our railways, but as the Transport Committee itself noted:
“In many ways the railway has been a success in recent years.”
We have made tremendous progress. As hon. Members, including my hon. Friend the Member for Milton Keynes South (Iain Stewart), have said, since privatisation passenger journeys have almost doubled—from 735 million in 1994-95, to more than 1.5 billion in 2012-13. That point was made by the hon. Member for Liverpool, Riverside in her introductory comments. There are some 4,000 more services a day on our railways than in the mid-1990s. Rail freight, which the hon. Lady also mentioned, has grown by over 60%, with traffic reaching over 21.5 billion net tonne km in 2012-13.
With an ageing network built in Victorian times, coupled with underinvestment over a number of decades by successive Governments, operating today’s railway is a task of colossal proportions, but we are getting better at it. GB Railfreight has been ranked as the EU’s most improved rail network. Passenger satisfaction is up by about 10 percentage points in the past decade. Punctuality is up by about 12 percentage points, with just under 91% of trains arriving on time last year compared with just over 79% in 2002-03. That rather meets the point made by my hon. Friends the Members for Milton Keynes South and for Ipswich (Ben Gummer)—that the performance and the quality of service today is better than it was under British Rail, to which the hon. Member for Luton North (Kelvin Hopkins) is wedded, as we have now heard on at least two occasions in the past week. As other hon. Members have said, we are among the safest railways in the world.
Just running today’s railways is not an option. We have the fastest growth rate of any of the major European railways so the Government have committed over £16 billion to running and expanding the network between 2014 and 2019. We are providing capacity for an extra 140,000 commuter journeys into our major cities during the morning peak. Schemes such as Crossrail, Thameslink and the northern hub cross-Manchester link will have a transforming effect. They will increase capacity and connectivity and reduce journey times. [Interruption.] It is interesting that the hon. Member for North Durham (Mr Jones) is chuntering—I think that is the right word—from the Back Benches. He seems to be able to get away with it in a way that others cannot.
Mr Speaker
Order. The Minister will resume his seat. Let me be clear and explicit. There is a saying about pots and kettles. It is a point so obvious that I think it is within the comprehension of the Minister of State, who should now continue uninterrupted with his speech.
Mr Burns
Improved rail links to major ports and airports will support inward investment, trade and connectivity.
Electrification will provide faster, more reliable services on the midland and great western main lines and elsewhere. We have confirmed funding for the completion of electrification of over 324 route miles and added a new requirement for a further 537 route miles. That means that we are funding electrification of 11% of all route miles in England and Wales. Our programme contrasts with the approach of the previous Administration, under whom fewer than 10 miles of track was electrified during their 13 years in power. By 2020, about three quarters of passenger miles travelled in England and Wales will be on electric trains, compared with just 58% today.
We have provided a £300 million fund to improve passenger journey times. There is £200 million for stations across England, including £100 million to support accessibility. A further £200 million will build a better network for freight.
Kelvin Hopkins
I am delighted about the massive investment going into railways; I am sure we all support that. Does the Minister agree, however, that it is important to preserve the existing old corridors that could be used for rail travel in future? Will he undertake to make sure that the Woodhead tunnel in particular remains a possibility for rail travel in future?
Mr Burns
I have considerable sympathy with what the hon. Gentleman says. It is important that we consider opening new railway lines or reopening lines that have been removed but whose beds remain in place where there is demand and need for them and if the business case backs it up. Tunnels are an important and topical issue that has come across my desk and we are looking at it very carefully.
Iain Stewart
May I underline the importance of keeping old route lines open or free for potential reopening? Work on the western section of the east-west rail project has been very easy because the line is still there, but there are difficulties on the Bedford to Cambridge and East Anglia section because part of that track has been built on.
Mr Burns
My hon. Friend makes an extremely valid point. We have to learn from some of the mistakes of the past and what happened to the railways post-Beeching. I accept what my hon. Friend says.
We are well on the way to delivering a new high-speed railway for Britain, bringing extra capacity, faster journeys and better services and changing our economic geography. I am sorry that the hon. Member for North Durham is not as enthusiastic about this exciting way of improving connectivity, journey times and increasing capacity. [Interruption.] The hon. Gentleman is chuntering, but I am surprised—
Mr Speaker
Order. Actually, the hon. Gentleman was not chuntering. There are many Members who do chunter in the House, in some cases extremely noisily, and an exemplar of that approach is the right hon. Gentleman. I suggest that it would be in his own best interests, of which he is not always the most appropriate guardian, that further references to chuntering by him might seem singularly inappropriate. Continue.
Mr Burns
Well, let’s move on.
I was just saying that I am surprised and disappointed that the hon. Member for North Durham does not share the enthusiasm of his colleague the Leader of the Opposition for the new high-speed railway. I hope that he will be reassured, however, that rail is thriving. It makes a vital contribution to the UK’s economic competitiveness and the Government’s investment ensures that that will continue.
The Government recognise, however, that we need to work to make rail even better. As recent surveys have shown, although passenger satisfaction is high on average across Great Britain, it can vary significantly across franchises, and although nine out of every 10 trains are running on time, with historically high levels of performance, punctuality is not yet as good as it should be, particularly on long-distance services, but also on London, south-east and regional services. Finally, the railway still costs more than it should.
We fully understand the importance of achieving the McNulty savings, which have been mentioned by the hon. Member for Liverpool, Riverside and others. Our railways must become more efficient and financially sustainable. It is crucial that we ease the pressure of fares on hard-working families and reduce the burden on taxpayers, which is another issue of concern, not only to members of the Transport Committee, but to other hon. Members who have taken part in this debate.
That was the challenge in the Government’s rail Command Paper: how to reduce the costs of running the railway while keeping the passengers at the heart of everything we do. We are making progress. Network Rail will have delivered 40% efficiencies over 2004-2014 and the regulator recently announced a new 20% target for 2019. Further efficiencies will be made through the programme of franchising competitions and the initiatives of the Rail Delivery Group. The key message is that aligning incentives between train operators and Network Rail is one of the most important reforms to drive down costs and bring passenger benefits.
Lilian Greenwood
Will the Minister set out how that has been set back by the delays to franchising, which he seems to be glossing over? Questions have been asked about whether his Department is up to the task.
Mr Speaker
Order. The Minister of State is a slow learner, but he must try to grasp the point that it ill behoves a right hon. Gentleman who regularly shouts, hollers, chunters and accuses other people of all sorts of things from a sedentary position to make something of the fact that somebody else mutters from a sedentary position. I gently advise the Minister to raise his game and operate at the level of events. Minister of State, continue with the speech and the reading thereof.
Mr Burns
As I was saying in answer to the hon. Member for Nottingham South (Lilian Greenwood), the Secretary of State made it clear last September that what happened with regard to the west coast main line was unacceptable and apologised for it. Even more importantly, he set up the Brown inquiry and the Laidlaw inquiry. I will not rehearse what they did, but the Brown inquiry came up with recommendations to ensure that we learn from that mistake and that it never happens again. We have a new franchise timetable, in keeping with the recommendations of that report, to ensure that we minimise the opportunities for that mistake to happen again.
Mr Burns
I must make progress, because it is almost time for me to finish.
The Rail Delivery Group is showing how collaborative working across the rail industry can secure improvements in asset programme and supply chain management. We are working through our franchise programme to facilitate regional partnership working arrangements and alliances between train operators and Network Rail, as has been mentioned by a number of hon. Members.
Mr Burns
No, because I am running out of time.
Those arrangements could involve joint working to improve performance and planning for engineering works or to reducing delays and disruption for passengers. Integrated control centres can deliver smoother and more efficient network operations.
The Rail Delivery Group brings together Network Rail, freight operators and passenger train operators. It provides leadership for the industry, and offers a coherent and focused response to the investment and operational challenges laid down by the Government. Network Rail is enhancing its accountability with a new transparency scheme to publish more information and data that are of interest to the public.
Mr Burns
There is not plenty of time. I am not speaking until 7 o’clock because the hon. Member for Liverpool, Riverside would like to make a brief winding-up speech.
Network Rail has appointed a public interest director to articulate taxpayers’ views at the highest levels in the company.
Responding to the Government’s rail Command Paper, the Transport Committee published its report on “Rail 2020” in January this year. As I said earlier, we have welcomed that report and the Select Committee’s support for our strategy, which is focused on making the existing structures and responsibilities in rail work better. We are not throwing everything up in the air and starting again, given the cost and disruption that that would be likely to entail.
We are confident that our strategy can bring rail to the cutting edge of efficiency by 2019. To do so, the industry must take advantage of new technologies by looking to introduce smart ticketing and making ticket machines easier to use. The hon. Member for Nottingham South asked when that will happen. I reaffirm that it will be during the summer. Passengers will continue to be able to get help and advice from a member of staff about buying a ticket when they can currently do so. Train operators must also look at driver-only operations for trains. This is already standard practice on 30% of existing franchise services, including many commuter services in London and Glasgow.
Crucial to the debate about rail is the Department’s role in letting and managing franchises for passenger rail services. This was discussed at length by several hon. Members during the debate. The Government’s firm belief is that franchising gives us the best possible basis for doing what we want to do with rail. The most liberalised railways in Europe have seen the highest growth in the last 15 years, with the UK and Sweden first and second respectively.
The Government are committed to ensuring that we continue to have private sector innovation and experience in our railways. As hon. Members will be aware, in March we announced a new rail franchising programme, covering every rail franchise for the next eight years. It builds on much of the authoritative work undertaken by Richard Brown, as I have said. Supporting our franchising relaunch, we have now published a new guide about how franchising competitions are run. This is information that we want to be generally available and accessible to all. It will give certainty to the market and to suppliers throughout the industry and support major investment in our rail network.
To grow a railway that will support passengers and our economy, we need that railway to be financially sustainable. Our rail strategy aims to achieve that, while putting passengers at its heart.