West Coast Rail Franchise

(Limited Text - Ministerial Extracts only)

Tuesday 14th June 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

I congratulate my hon. Friend the Member for Carlisle (John Stevenson) on securing the debate and on presenting a factual and detailed set of arguments. I also commend him on the work he has done in chairing the west coast main line all-party group, ably supported by West Coast Rail 250.

As my hon. Friend knows, because he welcomed me there, I have visited Carlisle station several times. It is more cathedral than railway station, and one of the most astonishing architectural gems I have seen on the network —I speak without hyperbole. His plans to improve the car parking, access and links are incredibly good. The station even has a putting green, which is an amazing thing to see, as well as many other good services, so it is a wonderful place. I take on board the point about Borders railway, and am interested in looking into it.

I am grateful to all right hon. and hon. Members for their contributions. We heard the hon. Member for Coventry South (Mr Cunningham) talk about the importance of midlands services and local connectivity; he is a great advocate of the NUCKLE scheme, as I am. I was pleased to put the spade in the ground for and open the Bermuda Park station—a critical part of the scheme. We await further details from Network Rail.

My hon. Friend the Member for Rugby (Mark Pawsey) talked about the vital connectivity of his city and what that does for the local economy. I will add my voice to his in writing to the company about the announcement boards; people have a right to know when their trains are going, and from which platform.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) will be pleased to know that Stagecoach, one of the companies operating the franchise, is a proud Scottish company, headquartered in Perth. His points about the cross-border relevance of the franchise were absolutely spot-on. In fact, my most recent visit to Carlisle was to look at first hand at the Lamington viaduct, where, during the storms, there was a serious wash-out that flooded large parts of the constituency of my hon. Friend the Member for Carlisle. That was a serious engineering challenge, but Network Rail rose magnificently to the occasion and restored the link. It got the lines operating again, restoring not only the inter-city and cross-border services, but the vital commuter services between Carlisle, Lockerbie and other parts of the region.

I reassure the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who speaks for the Scottish National party on transport matters, and everyone else present that the Department has absolutely learned lessons on the franchising process. Clearly, there was a problem, and there were serious questions to be answered. We strongly believe—as did the previous Labour Government for 13 years—that franchising is the way to deliver improvements on the railways. I have had the pleasure of letting the east coast franchise, the Northern and TransPennine Express franchises and, most recently, the Greater Anglia franchise, which is about to be announced. In those franchises, hon. Members can see the absolute, laser-like focus on passengers and quality of service. Furthermore, in the case of the east coast franchise, the service is returning more money to taxpayers than ever happened under Directly Operated Railways.

[Drew Hendry]

On the ability of companies to bid for a franchise, the Minister says that the Department has learned lessons; does she agree that there is a place for public sector bids, and will she look at allowing Scotland to receive them?

[Claire Perry]

I am agnostic on such things, but I can see no benefit in that. I do not know who in my Department the hon. Gentleman thinks would do a better job of running the west coast railway than those who do so now. I remind him that before privatisation, 14 trains a day ran between London and Manchester; 47 brand-new trains now run, with fantastic on-board services, of which we have all availed ourselves. I cannot see why he is so obsessed with the idea of civil servants running companies. The west coast case is a good example of how the private sector has invested.

Before I move on to the bulk of my speech, I want to associate myself with the comments of the Opposition spokesperson, the hon. Member for Middlesbrough (Andy McDonald), on the tragic loss of the Clerk to the HS2 Committee. It was an absolute tragedy, and we would all want to pass on our condolences to his family, and to put on record what a wonderful job he and that Committee did in very difficult circumstances.

As my hon. Friend the Member for Carlisle said, the west coast franchise has been a real success story; for example, we have seen a big increase in passenger numbers, a big improvement in passenger satisfaction, and capacity increase by more than 2,000 seats a day. The franchise is also leading the way with automatic delay repay, so people who buy a ticket on the west coast trains website and find that their train has been delayed do not have to do anything; they automatically get a refund if the train is delayed by more than 30 minutes. That is an excellent piece of passenger-facing innovation. The franchise has also put free wi-fi into 17 stations—I will talk about wi-fi on trains in a moment—and several other obligations have been delivered, or are in the process of being delivered. To reassure Members who asked about this, the company is replacing self-service machines, improving concourse and ticket-retailing facilities, upgrading waiting rooms and loos in many stations, and putting in about 350 new cycle racks. About £20 million is being spent along the route.

[David Mowat]

The Minister mentioned the automatic repayment system for delays, which is a good thing at one level, but the risk is that it might cause defensive timetabling. Companies have no incentive to take that extra few minutes off the journey time. Will she give us some assurance that that is not happening?

[Claire Perry]

Yes, I absolutely will. When any service that is this busy tries to stretch out timetables to avoid paying compensation, it simply creates more disruption, given how complicated the routes are. The company has no incentive to monkey with the timetable in order to avoid its compensation payment obligations. Furthermore, the company, in common with all train operating companies, receives money from Network Rail in the case of a Network Rail cause of failure, so again, properly, that money should be paid out to customers.

The improvement in the conversion of rolling stock has been mentioned. The company has been taking out first-class seating to include more standard-class seats, which is important. Those services can be very crowded, particularly in the shoulders—the times around the peaks.

[David Mowat]

I thank the Minister for giving way again. Will she give an assurance that, if it were possible for whichever company wins the franchise to take five minutes off the journey time to Warrington, for example, there would be no defensive timetabling, penalties, or other disincentives to stop that? That is important to making progress.

[Claire Perry]

My hon. Friend’s point about avoiding defensive timetabling is absolutely right. I will come on to talk about how everyone can make their important proposals for the new franchise. We want the franchise due to start in 2018 to put the customers on the route absolutely at the heart of the service, continuing some of the innovation and progress that has been delivered. We know that we need more capacity on the route, better value for money, improved punctuality—it is improving, but it is not good enough—and better management of disruption. By the way, those are things we want, and are contracting for, right across the country.

[Mr Jim Cunningham]

Occasionally—I do not want to exaggerate—a hold-up between Birmingham and Euston seems to stop the whole line. I do not understand that, and we should have a better method of dealing with hold-ups. If there is an accident on the line involving an individual, there should be another way to proceed without necessarily creating hold-ups. Also, while I am on my feet, I congratulate the hon. Member for Carlisle (John Stevenson) on securing the debate—it was remiss of me not to do that earlier.

[Claire Perry]

The hon. Gentleman illustrates a point that has been made well. Part of the reason why we need HS2 so badly is that capacity is so tight on the route. If there is a hold-up, there are few places that can take the additional services. On any tight route, whether on the west coast or in other parts of the country, disruption spreads quickly—the disruption simply cannot be absorbed, because the timetabling is so tight.

The public consultation has been launched. It sets out the Government’s vision for this franchise, how they can continue to support investment in vital cities right across the UK and build on current levels of customer satisfaction, and how the operator can do more to provide better information and train services.

A very legitimate question that is asked in the consultation is causing alarm and has been raised several times. It is right to ask people, communities and local authorities what sorts of trade-offs they want. Do they want faster journey times? Do they want more connectivity? We in Horseferry Road could sit and design timetables that look perfect on paper, but unless they deliver what is required on the ground—a train service that works for those who use it and maximises the economic potential of transport, which are things that have to be pulled through locally—we will not be doing a service to the communities that we serve. Questions such as, “What would a reduced service to Coventry look like?” are genuinely questions; there is no vision or master plan. We want as many people as possible to help answer these questions, and those trade-offs are vital.

The consultation has started and is on gov.uk. We regard the Scottish and indeed Welsh Governments as vital partners in that; the service of course links very much to the north Wales service as well.

[Drew Hendry]

I am grateful to the Minister for being generous and allowing me to come back in. I take at face value her commitment to working with the Scottish Government. Will she look at the improvements made to smart ticketing through CalMac, the popular public sector winning bidder for the ferry franchise?

[Claire Perry]

I am always happy to look at things that happen on ferries, because I represent one of the most landlocked constituencies in Britain, so it is always novel to do so. I will come on to smart ticketing, which the hon. Gentleman knows is a particular passion of mine.

[Alan Brown]

I thank the Minister for giving way, especially as she was moving on to another point. I asked earlier about the commitment on journey times in the existing franchise, which was supposed to look at improving journey times in Scotland. That is clearly a massive issue, and I remind her to give us an update on that.

[Nadine Dorries in the Chair]

[Claire Perry]

It is a pleasure to serve under your chairmanship, Ms Dorries.

Absolutely, and looking at how existing commitments to journey time improvements can be met is part of the current programme.

I wanted to say to my hon. Friend the Member for Carlisle that during the public consultation, we will go out and talk to as many people as possible. We will hold a meeting at Carlisle station tomorrow from 3.30 pm until 5 o’clock. Perhaps he will encourage his constituents to come along and see some of the proposals and have a conversation with officials.

I will deal briefly with fares and on-board service. Although this franchise has some of the most reasonable fares in the country, particularly for tickets bought in advance, it also has some expensive walk-up fares. The most important thing is that we have capped fares at inflation for the duration of this Parliament, at a cost to the public purse of £750 million, which will save the average season ticket holder around £425 over the Parliament. That is absolutely right. However, we will ask the next franchise holder how fare structures could help to ease the shoulders around the peak, when trains can be very crowded. The world is changing; people are not working nine to five, five days a week the whole time. I have been keen for bidders to be asked to propose options that allow people who work part time—perhaps two or three days a week—to buy more cost-effective tickets or multi-buy discount tickets. We have specifically asked for that in franchise competitions, and we plan to do so in this one as well.

Wi-fi has come up several times. I was delighted to be the Minister to announce that all trains, with the exception of those that are being phased out, will have free on-board wi-fi by the end of 2018, and this franchise will be no exception. It already has a good wi-fi service in certain classes, but it is not free on all services, and it absolutely should be. I take on board the comments that my hon. Friend the Member for Carlisle made about improved luggage and seating arrangements, which is another thing to feed in.

[Mark Pawsey]

I understand that wi-fi requires line-side investment. Will that take place at the same time?

[Claire Perry]

That is an important question. We can have as-good-as-we-can-get connections right now, but there are troughs and blind spots, and we are working with industry, on a TOC-by-TOC basis, to improve those connections, so there are no not spots along train routes.

HS2 will clearly have a major impact on this line. It will add much-needed capacity and will have a very positive impact for customers who are looking to travel quickly between cities. It is of course a vital programme. We will look to appoint franchisees, both in this competition and in the west midlands, that can work with the HS2 operators in the run-up to HS2 opening, and we want the competitions to procure franchisees that can work with HS2 and Network Rail during the construction works. I have to say that the lessons learned from London Bridge are scarred on my ministerial portfolio.

[Andy McDonald]

Where?

[Claire Perry]

They are well concealed. No one correctly estimated quite how tough it is to do major improvement works on a very crowded and highly operational railway. Lessons have absolutely been learned, and will be applied in the works at Waterloo this summer on the south west franchise, where we are bound and determined not to make mistakes. The prize will of course be a wonderful new station, I hope with a beautiful arch somehow reinstated, and many more services. That will be a prize worth having, but we are absolutely bound and determined to avoid the disruption that we saw at London Bridge.

I slightly disagree with the view of the hon. Member for Middlesbrough that residual value mechanisms are not really relevant, because if a public company or public authority wants to invest in something, it wants to ensure that it will get a return from it on behalf of taxpayers. That is only right and proper. My hon. Friend the Member for Carlisle is right that that has been a barrier to investment in franchising. We have developed a residual value mechanism in the Department, and it has been used in the latest competitions. I accept that it is not quite what he is looking for, and I am always happy to meet him and have that discussion, but we want to use that mechanism in the upcoming west coast franchise because we want to ensure that the stations along the route and other assets, such as smart ticketing, are supported.

I want to mention smart ticketing before I conclude. It is a passion of mine to get rid of the tangerine tickets, which look like something out of the 1970s, and move to something that far better suits what customers are using today: mobile technology. People will have seen that we have put those requirements into franchising, and we will do so in this case. The adoption of smart ticketing is moving very quickly in this country.

[Andy McDonald]

I do not think that the Minister has mentioned Sir Jeremy Heywood’s review of the potential use of Euston and Old Oak Common.

--- Later in debate ---

[Claire Perry]

If the hon. Gentleman will forgive me, as that is not in my portfolio, I did not feel that it was appropriate to comment on that, but I will happily have my colleague write to him.

This is another opportunity for a big step change in the services that are provided for customers by whoever the new incumbent is. We believe in the railway as a way to drive investment across the country, but fundamentally it has to work for the customers using it. It is not a train set; it is a way of getting people to and from their workplaces and families. I assure hon. Members who have taken the time to be here today that that will be front and centre of the next franchise competition.

[Nadine Dorries (in the Chair)]

John Stevenson, do you have any further comments?