Westminster Hall

Wednesday 11th July 2018 Westminster Hall

Wednesday 11 July 2018

[Albert Owen in the Chair]

Nuclear Sector Deal

Wednesday 11th July 2018 Westminster Hall

09:30

[Trudy Harrison (Copeland) (Con)]

I beg to move,

That this House has considered the nuclear sector deal.

Thank you for your chairmanship this morning, Mr Owen. I believe this is the first time I have served under your chairmanship and it is a pleasure to do so, especially as I know you have spoken often and enthusiastically about the nuclear sector and Wylfa’s Hitachi Horizon investment, which I also look forward to. I thank the Minister for his attendance today and his continued interest in and genuine support for my work both in Copeland and here in Westminster. I thank all Members for their contributions to the debate.

My interest in nuclear is personal, professional and political. In 1976, there was much more to celebrate than the long hot summer—it was the year that I was born in a small coastal village adjacent to Sellafield. It is fair to say that in the late 1970s and early 1980s, the nuclear sector did not have the best image. My childhood was blighted by protests and anti-nuclear groups who advocated for all sites to be decommissioned and an end to civil nuclear energy generation. Growing up listening to my father’s explanations of the industry that he worked in as a commissioning engineer—I later followed—and understanding my husband’s precision skills honed over 39 years as a nuclear welder, as well as those of my brother, who works as a nuclear cyber-consultant, I know first hand how the area I proudly call home is quite rightly celebrated across the globe for nuclear excellence.

On Wednesday 17 October 1956, Queen Elizabeth II officially opened Calder Hall, the world’s first nuclear-powered electricity station, in my Copeland constituency, on what is now known as the Sellafield site. Britain’s civil nuclear sector was born. Some 62 years on, the industry has suffered decline. At an all-time low in 2003, it could have been seen off completely. This Government seem to have come to their senses and recognise the economic, environmental and social value of the nuclear industry. I have an incredible sense of pride in and optimism for the sector, and for Copeland in particular as the centre of nuclear excellence.

Of the 87,000 nuclear workers in the UK, 40%—some 27,000—live in Cumbria. Each worker gives an average £96,600 gross value added to the economy, as estimated by the Nuclear Industry Association and Oxford Economics. The Government’s nuclear sector deal fills me with a burning ambition. There is a great deal to be optimistic about, and many priorities that I have previously advocated. I am really pleased to see the potential for better collaboration between nuclear defence and nuclear civil, and many references to apprenticeships. It is a rare document, which both excites and instils pride, as this industry, which is equal to the automotive industry in economic output, is quite rightly recognised.

Moving to the content of the deal, the optimism for research and development across the industrial strategy is welcomed. The National Nuclear Laboratory is a world-leading centre in my Copeland constituency, based near Sellafield, where scientists, in collaboration with the University of Glasgow and Lynkeos Technology, have developed an innovation that uses cosmic particles to detect nuclear materials, which could revolutionise nuclear decommissioning and the storing of historical waste. It is being used to investigate the location of molten fuel within the Fukushima Daiichi plant in Japan. The technology is now being commercialised and is just one example of how Innovate UK R&D funding is being used to create commercially marketable, globally required products.

Recognition for better routes to market, retaining intellectual property and support for export and decommissioning, is long overdue. The techniques and skills for and innovative solutions to incredibly complex legacy challenges in difficult or impossible to work in environments are being met daily in and around Sellafield and the low-level waste repository. Being the world’s first to design, commission and operate, and then being the world’s first to decommission, brings unprecedented opportunities for UK plc. I want to ensure that the capability in this niche area is understood by the Government. It includes technology such as the self-climbing platform that Nuvia was involved with, created to remove each piece of concrete and steel from a 61 metre stack. The reverse engineering required to cut open the world’s oldest nuclear waste store, on which Babcock and Bechtel have collaborated alongside Sellafield, is another innovation.

Sellafield has become a visitor attraction in its own right, with scientists and engineers from across the world coming to see how nuclear excellence, safety and a local workforce have come together to deal with the most complex challenges. We are missing a huge opportunity if easy routes to commercialisation, an entrepreneurial spirit and much better support for small and medium-sized enterprises are not realised. The new framework to support the development and deployment of small modular reactors is brilliant. The concept of modular building with a pipeline and the potential to commercialise the technology offers substantial benefits, both nationally and internationally.

[David Morris (Morecambe and Lunesdale) (Con)]

I congratulate my hon. Friend on bringing this debate to Westminster Hall. Does she agree that small modular reactors are not just a more concise way of producing nuclear power but are also an easier way to build in areas that are quite inaccessible, such as in my constituency, where we are looking for a third SMR?

[Trudy Harrison]

I absolutely agree with my hon. Friend. There is huge scope for small and medium reactors in Britain. Perhaps even more importantly, there is the opportunity for us to export skills in manufacturing and the deployment of modular reactors across the globe. But SMRs alone will not keep the lights on.

To ensure that we deal with the reality of an ageing network of existing nuclear reactors, increased power requirements and ever inflating costs, it is essential to find new ways of developing and financing new nuclear. The implementation of a regulated asset base model allows the Government to redefine new nuclear for the UK. The RAB will allow the NuGen management team, which is developing the Moorside plant in Copeland with Government assurances, to create a UK entity focused on a UK solution for UK consumers.

To secure the future of the third large-scale reactor in the Generation III programme, Moorside requires the regulated asset base to be implemented as soon as possible to give certainty to investors. The sector deal aims for a 30% reduction in the cost of new build projects by 2030, alongside promoting a more competitive supply chain, with more UK companies using advanced manufacturing methods and entering domestic and export markets for nuclear goods and services than ever before.

The global nuclear new build economy is worth around £1.2 trillion. Harnessing the scientific and industrial capability within Britain across the sector while recognising the wider opportunities in the UK’s financial services and regulatory frameworks would mean that this country was geared up to take full advantage of such a huge international market. I joined the Nuclear Safeguards Bill Committee and spoke at every stage of the parliamentary process. The Nuclear Safeguards Act 2018 puts Britain in the driving seat for safeguards, security and safety, with those all under the same roof—that of the Office for Nuclear Regulation.

The many references to people in both the industrial strategy and the nuclear sector deal signifies the huge importance of continuing to develop world-class skills. With an attrition rate of around 7,000 people each year and an anticipated requirement for 100,000 nuclear workers by 2021, it is essential to deliver on the proposed investment in maths, digital and technical education.

The aim to attract a 40% female workforce by 2030 is ambitious, especially considering the long way we have to go. Today, women represent between 16% and 22% of the nuclear industry workforce across the country. HR procedures reflecting family-friendly policies will help considerably, and Women in Nuclear, an organisation in my constituency, is making significant progress in that area. Nuclear licensed sites tend, by their nature, to be coastal and rural, so all too often the essential infrastructure for working parents is seriously lacking. In my constituency, there are 4,054 under-fives, but only 1,347 childcare places. That is three children for every place. The lack of high-quality, affordable and flexible childcare is the reason why, 20 years ago, I left the nuclear industry. I want to ensure that my four daughters and their generation do not face barriers due to their gender or geography.

The nuclear sector deal gives us much hope that we can ensure effective realisation so that the nuclear companies, the UK, and communities more widely, benefit. We must consider having a body with sufficient scope and purpose, like the Nuclear Decommissioning Authority—perhaps it could be renamed the nuclear development authority—to create economic growth, accelerate the clean-up mission and meet our energy needs.

I am delighted that a representative of Britain’s Energy Coast Business Cluster is in the Chamber today. The organisation actively supports the nuclear companies in Cumbria and across the north-west arc. Its comment about our nuclear opportunities and about Cumbria demonstrates the transformation over decades:

“Cumbria, a great place to work…an even better place to live”.

Delivering on the intentions in the deal, legislating for the regulated asset-base model, expanding the role of the NDA and taking a long-term approach to the industry will put us in the best position to create maximum economic impact with job and energy security for future generations. Thank you once again for your chairmanship, Mr Owen. I thank colleagues from across the House for being here, and I look forward to their contributions.

09:42

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I thank the hon. Member for Copeland (Trudy Harrison) for securing this important debate. Nuclear jobs are good jobs, and are often located in cities and towns where good jobs in other sectors are rare. I welcome the nuclear sector deal. I believe in a mixed energy policy with a greater focus on renewables and carbon-minimising generation from nuclear.

I am a fan of new nuclear, but my constituency is home not to civil nuclear jobs but to defence jobs. Our dockyard is the sole nuclear repair and refuelling facility for the Royal Navy. Nuclear jobs are in demand, and recruiters for civil nuclear regularly try to poach the highly skilled people from our dockyard and the Royal Navy. It is right that they do so, as Devonport’s nuclear workers are among the best in the business. I pay tribute to their work, which is often overlooked but is appreciated by all those who value the contribution of our submarine service—the bombers and the hunter-killers—to our nation’s security.

Nuclear jobs are not in the heart of the capital like financial services jobs. They are in the regions—the north-west and the south-west—and rightly so. Although I do not always agree with the high strike price for new civil nuclear, there is no doubt in my mind that civil nuclear has a bright future. However, I will confine my remarks to defence nuclear, about which there is a bit more uncertainty in my part of the world.

Military nuclear matters. I welcome the, albeit brief, mention in the nuclear sector deal of greater co-operation between civil and defence nuclear. I believe we need to do much more to enhance collaboration and co-operation between those two sectors—not just in research, but in jobs, skills, training and, importantly, decommissioning. The civil nuclear decommissioning programme rightly enjoys cross-party support. The taxpayer has unlimited liability to clean up the nation’s civil nuclear legacy and the sites contaminated by our country’s exploration of civil nuclear and its mastery of nuclear energy. It is right that new nuclear has decommissioning costs built into it.

Although there has been progress on the civil side of nuclear decommissioning, that has not been the case with defence nuclear. Hon. Members may not know that the UK still has every single nuclear submarine we have ever had. It is time that the legacy of old submarines was dealt with. Devonport dockyard in my constituency has 13 laid-up nuclear submarines awaiting recycling. Rosyth in Scotland has seven, and there are more to come. In Devonport, the oldest sub in storage is HMS Valiant. She is 54 years old, and was launched in 1963 at the height of the cold war. Many have been stored for decades, including HMS Conqueror, which famously sank the Belgrano in the Falklands war.

As a proud janner and a Plymouth lad, I have grown up knowing about those subs, but far too many people do not know about them. “Don’t they just go away?” was how one person responded when I told them about the old subs. Well, no, they do not. Those nuclear submarines get stored because the UK has no funded programme to recycle them. Eight in Devonport still have nuclear fuel rods and have not been defueled yet.

Those old nuclear submarines pose no risk to local communities. It is worth stating that because, all too frequently in nuclear debates, there is a question about safety. There is no risk to our local communities, but we cannot ask Plymouth and Rosyth to look after those submarines indefinitely without a plan.

To make matters worse, time is running out. In the next five years, three more Trafalgar-class submarines will need to be stored somewhere, as they are being replaced by the Astute class, which is being built in Barrow. A decade later, the four Vanguard-class nuclear submarines—the Trident subs—will need to be stored when they are taken out of service and replaced by the new Dreadnought-class submarines. There is a pilot project under way to dismantle HMS Swiftsure—the submarine my old man served on—but after much delay the programme has been paused. Progress is not being made at the pace we need if we are to deal with the rest of the submarines.

The reason why I am taking us on this detour into military nuclear, rather than civil nuclear, which is the focus of the nuclear deal, is to make the case for greater collaboration between the defence and civil nuclear sectors. The workforce moves between the two sectors, as does the science of decommissioning, but at the moment the Government still deal with them in two distinct silos. There is efficiency in collaborating, but Ministers from all Governments—including my own in the past—have kept the two sectors apart. I say to the Minister that it is time for this generation of politicians and Ministers to grasp this issue and change it.

The need to deal with the nuclear legacy of our nation’s old nuclear submarines unites all parties. That is why I have launched a cross-party campaign with the hon. Members for Copeland and for Dunfermline and West Fife (Douglas Chapman) to deal with our nation’s military nuclear legacy. We sent a joint letter to the Prime Minister and other party leaders asking them to commit to fund a proper programme of recycling the UK’s legacy and retired Royal Navy submarines. Successive Governments have refused to act, but that is not an option anymore.

Recycling old submarines is not cost-free, and given the Ministry of Defence’s current battle with the Treasury, there seem to be more pressing priorities for the limited funding. We cannot wait any longer, so I am looking to Ministers in the Department for Business, Energy and Industrial Strategy, in particular, and the civil side to help us solve this urgent problem. We need a clear timetable for funding and dismantling, and a recycling programme. We believe that, to achieve that, we can beg, steal and borrow the principles from the civil nuclear decommissioning and waste management programme. We have called for a political consensus to recycle those old submarines and use the principles of civil nuclear decommissioning—especially the principles used by the civil Nuclear Decommissioning Authority, which should be allocated additional funding so that its work includes nuclear submarines.

The taxpayer is rightly paying to clean up old nuclear power stations around the nation, but at the moment the same funding streams and principles—the unlimited liability, set out in law—have not been extended to old nuclear submarines, and they need to be. Civil nuclear power is built in metres of foundations, and defence nuclear power is built in floating hulls, but fundamentally the principles are the same. As well as being the right thing to do, expanding the civil nuclear clean-up budget to include nuclear submarines can turn an economic problem into an economic asset. The programme of work would create new jobs in Plymouth, Rosyth, Capenhurst and west Cumbria.

Above all, this is in the national interest. Plymouth and Rosyth cannot be asked to store old nuclear submarines indefinitely. That is why we need a properly funded plan, using the same principles as civil nuclear clean-up. The submarines must be recycled safely, sustainably and securely. I think the public are genuinely surprised and concerned to hear about the existence of these submarines. I invite hon. Members to look on Google Maps at the west side of Plymouth. They will see the submarines lined up alongside each other. When they see them there, they will realise that we have to do something about them. Not knowing about them has meant that we have been able to ignore them, but we cannot ignore them any longer.

There is only one mention of submarines in the nuclear sector deal, which I appreciate was written to look in particular at the civil nuclear side. That mention was of the equipment qualification, and while I agree with the thrust of it that greater expertise and applicability, as well as agile companies in our nuclear sector, will enhance British competitiveness, there is a market at home for nuclear decommissioning work, even before we look for new markets abroad.

The Minister has agreed to meet me and the hon. Members for Copeland and for Dunfermline and West Fife to discuss this topic, and I think that there is a positive way forward. We need to acknowledge that nuclear submarines exist and need to be dealt with; there is an existing structure of principles and of funding; and, importantly, there is a cross-party basis for any future agreement about the recycling of the submarines. I ask the Minister and his officials to look carefully at how the work can be extended so that that legacy can be dealt with once and for all.

09:50

[John Stevenson (Carlisle) (Con)]

I congratulate my hon. Friend the Member for Copeland (Trudy Harrison) on securing the debate on an issue that is important nationally, regionally and of course to her constituency.

I welcome the nuclear sector deal. Clearly, it is not a panacea, but it is an important and significant deal which will undoubtedly help the sector—in many respects it is a signpost for the industry. The implications will not only be positive and raise the profile of the sector, but demonstrate to a wider audience the worth of the nuclear industry and its significance.

A key part of the Government’s industrial strategy has, without doubt, to relate to energy: energy is vital to ensure that the industrial strategy works for the country. It also relates to energy security, and importantly, to ensuring that we have a proper base supply of nuclear energy, but with the right price so that the industry can be competitive and residential users can benefit.

The central parts of the nuclear sector deal that I think are important for my constituents relate to skills, R&D and the supply chain, so I will be a little parochial and touch on Cumbria. In many respects, Cumbria has two USPs—unique selling points—tourism and the nuclear industry. They are of similar economic value to the county, at about £3 billion each. The real challenge for Cumbria is to ensure that the nuclear deal benefits not just one part but the whole of the county. That is why research and development is so important—we can be a world leader, and already have many innovations and developments in Cumbria. Sellafield is at the forefront of decommissioning, and the skills that come from that are so important, not only to Cumbria but to the wider industry. We must not forget the importance of the defence industry and BAE Systems down in Barrow, which demonstrates that Cumbria is home to the whole spectrum of the nuclear industry. The third element is new build, and we would like to see NuGen get on with developing the new power station in Cumbria, which will directly benefit the whole country as well as the county.

The nuclear sector deal must be looked at not in isolation, but in terms of its importance for the wider economy. It can influence the supply chain, and in my constituency we have a couple of examples: Bendalls Engineering, a significant supply chain enterprise for Sellafield, and Clark Doors Ltd, which innovates in door technology and has built a relationship with Sellafield and the nuclear industry. There is also the benefit of employment opportunities, which go beyond nuclear and into professional services and the supply chain. Importantly for Cumbria and the national economy, we must maximise the nuclear pound in our communities, and recognise nuclear as a catalyst for economic development and economic growth. I very much support the Government’s initiatives. Nuclear must not be looked at in isolation but as part of the wider economy, and it therefore needs to work with local enterprise partnerships, councils and, clearly, the private sector.

I have some direct questions for the Minister. Will he confirm his support for NuGen and the development of a new build in Cumbria? Will he indicate when legislation on the RAB will be introduced? My hon. Friend the Member for Copeland mentioned the RAB and its importance for nuclear development. She also highlighted the importance of changing the role of the NDA, which should be about development, not just decommissioning. Finally, I thank the Minister for agreeing to come to the second Cumbria nuclear conference, and I very much look forward to seeing him there.

[Several hon. Members rose—]

[Albert Owen (in the Chair)]

Order. I will call the Front Benchers at 10.30 am. A number of Members wish to speak, so if they speak for seven minutes each we should get everyone in.

09:55

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen, especially since in such debates as this we often refer to developments in your constituency.

I congratulate the hon. Member for Copeland (Trudy Harrison) on securing this important debate. We have heard a lot of enthusiasm for new nuclear, but I will change that, because I do not share that enthusiasm. In fact, the Government have many questions to answer on their path towards new nuclear, in particular on new developments.

The disastrous Hinkley Point C project exemplifies the Government’s regressive energy strategy and lack of a long-term plan that could cost taxpayers billions. The project at Wylfa is no different: total project costs are unclear, but have been trailed to be about £20 billion—more expensive than Hinkley’s £19.6 billion—a figure that could rise with inevitable delays. The direct investment represents a reversal of decades of opposition to investing taxpayer money in new nuclear.

The Government must fulfil the Public Accounts Committee’s recommendation of a full value-for-money assessment before signing any deals, and they must consider the National Audit Office’s report on Hinckley Point C. Consumers already face the impact of a bad deal made by the Government. Hinkley Point is set to cost consumers a fortune because of the appalling strike price deal that the UK Government made with EDF. As a result of the bad deal, consumers are set to pay at least £30 billion over the 35-year contract through their electricity bills.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

I apologise for being late, Mr Owen. I had a supply chain meeting.

I invite the hon. Gentleman to come to Hinkley C—I mean that sincerely. I will host him and I will show him around the site and what is going on at Hinkley C so that he can see on the ground what is happening there and at the National College for Nuclear. I think that it would give him a new perspective on the situation.

[Drew Hendry]

I am grateful to the hon. Gentleman for the invitation to Hinkley Point C, but seeing the construction and the rest of the work, however good the quality, would not change the fact that the deal is disastrous for the taxpayer. It is also unlikely to get any better, because we face paying for another failing nuclear project.

The strike price for the new project has been trailed at £77.50 per megawatt-hour, which is down from Hinkley Point’s £92.50 through UK Government support for capital costs. That figure, however, is still significantly more than for offshore wind at £57.50 per megawatt-hour, even including intermittency costs of about £7 per megawatt-hour. How can the Minister justify that cost to the taxpayer?

My second question concerns financial liability for nuclear power station safety. Liability for nuclear developers is capped at €1.3 billion in the event of a nuclear incident, as agreed in the Brussels and Paris conventions. An event such as the one at Fukushima, however, would cost hundreds of billions of pounds. Moreover, The Times reported that Hitachi “won’t pay” for nuclear accidents at Wylfa and that, according to Nikkei reports, some of Hitachi’s directors want

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

Hitachi has already had two serious safety breaches at its nuclear developments, one of which resulted in a $2.7 million fine by the US Government.

Decommissioning costs ate up around half the budget of the now disbanded Department of Energy and Climate Change after the liabilities for cleaning up old nuclear plants were in effect nationalised in 2004 and 2005, when British Nuclear Fuels Ltd and British Energy faced financial problems. At the moment Hinkley C’s decommissioning costs are estimated at between £5.9 billion to £7.2 billion. Dr Paul Dorfman notes that given that decommissioning costs have been consistently underrated, and the precedent set by the Government’s taking ownership of liabilities of these companies more than a decade ago, it is highly likely that the Government will be forced to shoulder further costs if Hinkley developers have a shortfall. Again, will the Minster give an urgent assurance that taxpayers will not be left liable for safety failures at the Wylfa nuclear plant? That is wrong headed, especially for Scotland.

The announcement comes at a time when the prices of offshore wind, other renewables and storage solutions have dropped dramatically. Let us remember that the UK Government made the shameful decision to pull the rug out from under their long-term carbon capture and storage scheme in Peterhead. By cancelling the £1 billion competition just six months before it was due to be awarded, after spending £100 million on it, they broke their own election manifesto promise and left Peterhead—a key candidate for support—behind. The decision left a huge and damaging legacy to investment incentives and consumer confidence in the UK. Their new idea for carbon capture and storage is not the £1 billion minimum required, but a tenth of that—£100 million—which equals what was already wasted.

While the UK Government continue to fail Scotland’s energy sector, the Scottish Government see carbon capture utilisation and storage—CCUS—as an important decarbonisation infrastructure requirement and essential climate change technology. Scotland remains the best-placed country in Europe to realise CCUS on a commercial scale. That is why the Scottish Government support the Acorn CCS project at St Fergus, which has also secured €1.9 million in funding. The Scottish Government have delivered an exceptional range of support for the oil and gas sector. They have delivered an increase of £270 million to the economy, jobs and a fair work portfolio, including an uplift of more than £194 million in the enterprise and energy budget to support entrepreneurship, construction and productivity. That additional funding contributes to investment of almost £2.4 billion in enterprise and skills through our enterprise agencies and skills bodies.

I could go on and give a lot more detail on the Scottish Government’s support, but I will welcome one thing that the UK Government did recently: introducing the transferable tax histories mechanism in the 2017 Budget. But why has that been deferred by at least a year, when it is a crucial time for industry? That incentive could have been used to realise long-life assets.

The Scottish Government are doing everything they can with a world-leading climate Bill and bold support for renewable energy. The Scottish Government’s forward-looking agenda puts Westminster’s to shame. The UK Government should do more to support oil and gas and far more to support renewables opportunities. They should not make this mistake with nuclear. It is high time that they abandoned their costly love affair with nuclear and instead focused investment that can make a real, positive difference for our environment, jobs and our economy.

[Several hon. Members rose—]

[Albert Owen (in the Chair)]

Order. If remaining Back-Bench Members speak for no longer than six minutes, there should be time for everyone to speak who wishes to.

10:03

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to speak in this important debate and I congratulate my hon. Friend the Member for Copeland (Trudy Harrison) on securing it. She made many excellent points in welcoming the deal, and I agree that Ministers and industry have taken some positive and necessary steps forward to secure sector jobs and skills, and for our national prosperity.

This is the fifth sector deal under the modern industrial strategy and I hope it will not be the last; as the Minister knows, as an MP representing the potteries I am extremely keen to see a successful sector deal for ceramics. I want to highlight the transferability of skills, knowledge and technology from across the advanced manufacturing industry, which are germane to a civil nuclear sector deal.

I also want to talk about transferability and advances in the military-use nuclear sector, especially those achieved by Goodwin International in my constituency. That firm assures me that many of its skills and technology are transferable to civil-use power generation, with much to offer if the investment environment is right and if the appropriate guarantees are in place on the development of small modular reactors—SMRs.

I am encouraged by the £44 million SMR framework, which, the deal promises on page 22, will offer “greater flexibility” in the generic design assessment process. It confirms that the SMR expert finance working group will report to Ministers very soon. We can, and indeed must, be well placed to develop first-of-a-kind small reactor projects. SMRs represent an exciting new technology that opens up more of the industry to partial manufacturing in off-site supply chains. This factory-build production line approach has the potential to reduce significantly the costs of nuclear energy generation, creating economies of scale and making nuclear a much more viable solution to our future energy demands.

It is welcome that the Government intend to pursue the development of credible commercial propositions and the viability of private investment vehicles for clean energy infrastructure projects using advanced nuclear technologies. However, wherever possible and appropriate, any up-front Government guarantees on taking the energy produced by SMR technology would be extremely helpful to de-risk, and thereby leverage, the investment the Government seek from private funds and commercial companies such as Goodwin International. If we have the domestic confidence to develop SMRs, that will lead to wider confidence in the technology, leading to opportunities for the UK to benefit from exports of SMRs to other countries.

The Government are well aware of the crossover potential from military-use nuclear technology. On page 36, the deal talks of “our new Dreadnought submarines” and the fantastic workers at Barrow who are responsible for their assembly. I would not want it to be overlooked that those submarines rely on critical supply chains across the country. Goodwin International is expert in producing the high-end nuclear-grade steel components required. The engines are developed and produced by equally fantastic workers in Stoke-on-Trent. On page 27, in a section dedicated to sector transferability, there is explicit mention of transferable

“bespoke programmes that support the transitioning and transfer of capability between civil and defence” .

I await with great interest further details on the pilot scheme on transferable skills between oil and gas, the armed forces and manufacturing, especially as that will be aligned to “regional skills priorities.”

The city of Stoke-on-Trent and our country would benefit greatly from the envisaged career champions and work experience placements, alongside the T-levels programme and apprenticeships of the engineering and manufacturing route. Engaging young people in education and training, so that they get the transferable skills they will need for careers in advanced manufacturing and world-class engineering, is a regional skills priority for us, as is export capability. I welcome the involvement of the Department for International Trade and the export ambition of £2 billion of contracts by 2030. If anything, I hope that target proves to be rather low.

This sector deal is welcome, and so is the fact that it is not an edict from above and that, although it has concrete measures, it is not cast in stone. There is a great opportunity now for the sector and the Department for Business, Energy and Industrial Strategy to keep reaching out and to get the details right, while maintaining certain flexibility in an era of uncertain, rapid technological change. I look forward to engaging with the Government to realise the benefits for my constituents of the frameworks, pilot projects and partnership building that will advance the deal further as lessons are learned.

10:09

[John Woodcock (Barrow and Furness) (Ind)]

It is a pleasure to serve with you in the Chair, Mr Owen, and to follow such a well-considered speech by the hon. Member for Stoke-on-Trent South (Jack Brereton). I thank him for what he said about Barrow, and for the components that his constituents so expertly make. I also thank him for the adept way in which he raised the need and the opportunities for deeper collaboration between the military and civil nuclear sectors. That is the only way I can excuse the hon. Member for Carlisle (John Stevenson) for what seemed like the appalling omission of Barrow shipyard from his roll-call of the fantastic components of Cumbria’s economy.

I congratulate the hon. Member for Copeland (Trudy Harrison) on securing this debate. I have worked closely with her on the collaboration between military and civil nuclear, and I associate myself with all the points that she made in her excellent speech. We want to ensure that south and west Cumbria becomes a global hub of civil and military nuclear excellence. We have world-class skills at Sellafield and Barrow shipyard, and we will have them in time with NuGen—I will say more about that in a moment. We are determined that the area should do more to promote itself as one travel-to-work area, look outwards to the world and give a joint message about what we can do together.

We need support from the Government to do that. It is great to see the Minister here, not least because the debate gives him the opportunity to answer questions that he was unable to answer last week, when he was not in the House for my urgent question on the nuclear sector deal. In that urgent question, I raised our need for support from the Department for Business, Energy and Industrial Strategy for our bid to better connect south and west Cumbria, not simply metaphorically but literally and physically. We need the support of BEIS in order to persuade the Department for Transport that the transport links in our area, notably the A595 along the Cumbria coastline, which is in an appalling state, need to be addressed.

[John Stevenson]

Does the hon. Gentleman agree that it is important to have joined-up thinking within Government in this area? Yes, this is the nuclear sector deal, but it goes beyond nuclear. We need to get the Department for Transport, the Treasury and BEIS involved, so that we address issues such as the A595, which he rightly points out is badly in need of improvement.

[John Woodcock]

The hon. Gentleman is absolutely right, and I thank him for his continued support on the campaign to get the A595 to work. The Department for Education needs to be part of that joined-up thinking, because one of our other big challenges—the deal touches on this, but it is felt particularly acutely in south and west Cumbria—is raising our school standards. We have some of the most advanced jobs it is possible to have, certainly in the large-scale manufacturing projects in Barrow shipyard, yet we have school leavers with lower than average numeracy and literacy. That cannot be right, and we all need to work together to raise those standards, so that the workers we will need in future are capable of doing the tasks we need them to do from the moment they leave school.

Finally, the Minister needs to answer vital questions about the future of the Moorside development in west Cumbria. It would be unconscionable if that development did not go ahead. What the hon. Member for Copeland said about the regulated asset base is absolutely right, but this is a perilous moment for the NuGen deal. We need to hear from the Government that they will stand by the development come what may, be it with a regulated asset base or something else, and that they will not allow Moorside to stall, given the many thousands of jobs and the energy security it would bring, which are crucial to the nation. The Minister can give that message today, and we in Cumbria need to hear it.

10:14

[Chris Green (Bolton West) (Con)]

It is a pleasure to serve under your chairmanship, Mr Owen, and to follow the hon. Member for Barrow and Furness (John Woodcock), who highlighted many important areas. He focused especially on jobs. We ought to have a good distribution of quality, secure jobs right across the country, and the energy sector in the north-west of England is vital for providing such jobs. I appreciated that on my numerous visits to the Copeland constituency during the by-election campaign—a fourth reason to visit Cumbria. The importance to the local economy of the nuclear sector jobs at Sellafield and elsewhere ought to be recognised. The high-skilled, stable, long-term jobs that the nuclear industry provides are vital not just to people in Cumbria but to many of my constituents, because Cheshire and Warrington are another centre—albeit a very different one—for the nuclear industry.

The focus on nuclear is increasing because demand for electricity will increase in the years ahead, for a variety of reasons. There is also a focus on carbon-free energy production, for a range of good reasons, including the need to control carbon emissions due to concerns about climate change, and concerns about where our oil and gas come from. There are certain parts of the world that we would rather not be dependent on for our energy—we have only to look at the problems Russia caused a few years ago by shutting down gas supplies to eastern Europe. To have security and independence of supply would hugely benefit the country. That is a reason for going nuclear.

We also need to look at our base-load supply. At certain times, such as the middle of winter and at night, solar panels and wind turbines do not provide much energy. There is a significant focus on those technologies, but we do not have the ability to store energy if we over-produce at certain times of the year, week or day. We must therefore ensure that we have a base-load supply. If that is not going to be carbon, we must look to nuclear.

On increased demand for electricity, the Secretary of State for Transport recently made a positive announcement about the next development in our focus on electric vehicles. If we are going to have more electric vehicles—whether they are charged at home, at businesses or in other places around the country—we need to look at power sources to ensure that they can be charged rapidly. We need to look not just at the production of energy, but at its distribution. I would welcome the Minister’s comments about the distribution of energy as we move into an era of more electric vehicles and other demands on the energy sector. Jobs are a key part of that, and whether we go for small modular reactors or full-scale nuclear power stations, we ultimately need cheap, affordable energy for our consumers and businesses.

10:19

[Mike Hill (Hartlepool) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Owen. I thank the hon. Member for Copeland (Trudy Harrison) for introducing the debate.

In the words of Lord Hutton of Furness, co-chairman of the Nuclear Industry Council, the UK’s civil nuclear sector

“is amongst the most advanced in the world. Our global leadership status has been earnt through a record across the entire nuclear lifecycle—from enrichment, through fuel production, generation, operation, new build, research and decommissioning—and increasingly enhanced by our world class regulatory system as the country’s new build programme takes shape.”

Hartlepool is part of that success story. Hartlepool power station, as part of the fleet of nuclear power stations that provides more than 20% of the UK’s electricity supply, has provided a low-carbon, reliable, clean energy product since 1983 and is a major provider of employment in the town.

The advanced gas-cooled reactor at Hartlepool currently provides electricity for more than 3% of the UK, with a net electrical output of 1,190 MW—enough to power 1.5 million homes. However, it is coming to the end of its life cycle, so I have written to the Secretary of State seeking support for Hartlepool as a site on which to develop new nuclear productivity around small modular reactor technology.

Hartlepool has the relevant licences, a skilled workforce, existing electricity transmission infrastructure and, more importantly, a community used to the presence of a nuclear generator. We are best placed to deliver the next generation of nuclear and meet the ambitions of the nuclear sector deal. The deal sets out pledges from both the Government and the nuclear industry for making cost reductions and initiatives to support the sector. SMRs are central to that vision, as they meet the increased demand for low-carbon solutions, produce clean, affordable energy and are much smaller than traditional nuclear reactors. Over their life cycle they could deliver £62 billion for the economy and create up to 40,000 jobs.

In an area where new energy solutions such as carbon capture and storage are being explored and developed through new technologies and industries, Hartlepool is in a prime situation to take our nuclear capability to the next level. That is why it is important that we are identified as a future site for SMRs as soon as possible. We have the potential and shared vision to develop the next generation of nuclear power and foster innovation and new technologies, and we are ready and willing to deliver this exciting agenda.

[Albert Owen (in the Chair)]

Because of the discipline of Back Benchers and the concise way in which they gave speeches, I can call the Front Benchers early. I ask them to leave some time for the sponsor of the debate to say a few words at the end.

10:22

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen. I am sure it is your stewardship that has allowed the debate to progress so well. You sit through many debates in Westminster Hall and will have seen how they often have a unifying effect, with everyone saying roughly the same thing and agreeing on the argument, so I am sure as Chair you will welcome there being two sides to the argument on the nuclear sector deal. I commend my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for providing the counter-arguments.

I commend the hon. Member for Copeland (Trudy Harrison) for securing the debate. I note that she thanked all Members for contributing at the start and end of her speech, but I wonder whether that will hold true for the contributions from my party.

I talked about there being a unifying effect, and there is no doubt that Labour and the Conservatives are singing from the same hymn sheet. In that, from our perspective there is a wee bit of a throwback to Better Together. That, again, is why I am delighted to put forward a different argument.

The hon. Member for Copeland rightly spoke about jobs and skills. I appreciate that highly skilled people work in the industry, and I commend her and all the other constituency MPs for arguing for the value of the jobs brought to their constituencies. It is only right that MPs should fight for jobs in their constituencies, but other people in Parliament have to look at the bigger picture, not just the narrow, localised effect. She spoke about her family history and involvement in the nuclear industry. In fact, my brother-in-law works at a nuclear site in Hunterston in Ayrshire. Again, I appreciate the high level of skills and value of the jobs, but that does not change my outlook on nuclear.

The hon. Lady spoke about the opening of a power station in 1956. I had a shudder, because I thought she had said 1966—it must be World cup fever—so I had to look it up, and I am glad it was not that year. She mentioned Glasgow University, where I did civil engineering. She also mentioned cosmic particles, which is when it starts to go above my pay grade and understanding as a civil engineer. That does illustrate the multitude of skills involved in the nuclear industry.

The hon. Lady spoke about new ways to finance nuclear energy. I suggest that they are just another way of UK plc being completely indebted currently and for future generations. She mentioned that 100,000 workers would be required by 2021, which for me was a sobering statistic. That is not far away, and if 100,000 skilled workers are required by then the Government are already way behind the curve on science, technology, engineering and maths, on university qualifications and on generating workers. Yet again, that illustrates the impact of Brexit, trying to control borders and not letting people in. There will be a massive shortfall, because there is no way to create 100,000 new workers by 2021.

[Trudy Harrison]

It is actually only an extra 13,000 workers. We currently have 87,000 workers in the UK and it will be taken up to 100,000 by 2021.

[Alan Brown]

I thank the hon. Lady for correcting the record. However, even 13,000 jobs by 2021 is still a big ask and a massive challenge for the Government.

The hon. Lady also mentioned the Nuclear Decommissioning Authority and how it should be renamed the nuclear development authority—a sleight of hand picked up by other hon. Members. The NDA is responsible for massive expenditure on the historical legacy and historical folly of past investment in the nuclear industry. We should not look at it as a development opportunity. We should show it for what it is, liable for cleaning up the mess of past investment.

I would suggest the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) went slightly off topic and concentrated on the military, which is understandable, given his constituency interests. He did not say how the new nuclear submarines and Trident replacement will cost £200 billion, which is another nuclear folly investment that we could do without. I agree with him on Government silos. He said we should beg, steal and borrow from the civil nuclear industry to help the military, but that is not the right approach to nuclear; that is what has got us into the mess we already see. He also said that nuclear submarines cannot be stored indefinitely. I completely agree. That is another mistake that Governments of different colours have made. It is time the Government took action to address that, rather than having subs rusting away.

The hon. Member for Carlisle (John Stevenson) spoke of how Cumbria manages to juggle tourism and the nuclear industry—both civil and military. That pays testament to the beauty of Cumbria and his constituency in being able to do that. He also spoke about a change of role for the NDA, which I have already said I do not agree with.

I agree with everything said by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey—who would have thought? When he sat down, he joked about being popular. We saw hon. Members starting to look away or tune out because they did not agree with him, but I certainly do. My hon. Friend was right to highlight the potential £20 billion of Wylfa investment, the Public Accounts Committee’s recommendations and the bad deal that is Hinkley. He correctly highlighted—let us not shy from this—that the contract for difference strike rate for offshore wind is now £57.50 per MWh, including intermittent costs. That, Mr Owen, is for only 15 years; Hinkley, at £92.50 per MWh, is a 35-year deal, so it is even more than what we are sometimes led to believe. My hon. Friend correctly highlighted Hitachi’s past failures and fines, and the decommissioning costs of Hinkley, and I will make further comments about that.

The hon. Member for Stoke-on-Trent South (Jack Brereton) spoke about the £44 million package for small modular reactors. I admire his optimism, but I suggest it is a bit naive. This unproven technology still needs to be developed, and let us not be kidded that the Government will enter into another blank cheque agreement to supply the SMRs.

The hon. Member for Barrow and Furness (John Woodcock) spoke about the world-class skills at Sellafield, and I agree with him. However, some of those world-class skills are due to the £91 billion cost of decommissioning at Sellafield—there is a legacy for the nuclear industry to be proud of. It is estimated that those decommissioning costs will be £121 billion by 2020, which again illustrates the folly of it all. The hon. Gentleman also mentioned baseload, but even National Grid now says that baseload is an outdated concept based on past assumptions.

The hon. Member for Bolton West (Chris Green) says that we should not rely on foreign countries for our energy supply, but let me ask him who is involved in Hinkley—I am pretty sure that China is classed as a foreign country, although perhaps not one we want to rely on for the security of our energy supply.

The hon. Member for Hartlepool (Mike Hill) spoke about small modular reactors, and he also mentioned carbon capture and storage—I would certainly welcome the development of CCS in his constituency and the wider Teesside area.

Hinkley was the Prime Minister’s first U-turn. When she came to power she hit pause on Hinkley Point C, which I welcomed. I thought, “Here we go. Let’s have a fresh look at this and scrap the project”, but no, there was another U-turn, and the strong and stable Prime Minister showed her will and backbone, caved in and threw money at foreign countries to allow Hinkley to go ahead.

The nuclear sector deal, at £200 million as well as the £32 million kick-start for research and development, is small beer in terms of overall Government expenditure. Hon. Members have said how good that funding is, but it is really just a signal of intent, rather than absolute hard cash. Indeed, compare that funding with the £586 million in sunk costs of three major contracts that have been cancelled at Sellafield since 2012, because the Nuclear Decommissioning Authority found more cost-effective strategies. The real hidden cost of nuclear power is the cost of decommissioning.

A National Audit Office report states that the cost of decommissioning will be £121 billion, and £6 billion is the total expected spend on major projects that are currently in design or under construction at Sellafield. Sellafield Ltd’s spend on major projects in 2017-18 was £483 million. I understand why constituency MPs welcome that spend and the jobs in their constituencies, but taxpayers across the UK are picking up the bill to support those local jobs, and we need to take a closer look at the issue. I will conclude my remarks by urging the Government to end the folly of their nuclear obsession, start reinvesting in renewables, and allow onshore wind and solar to bid for future contract for difference options. That is the future, not nuclear.

10:34

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This morning I will concentrate on the debate initiated by the hon. Member for Copeland (Trudy Harrison), which is on the nuclear sector deal, following the publication of the industrial strategy, before making a few other remarks. I congratulate her on securing this debate. She provides an example of one of the pillars of the industrial strategy, which is about place, and during her time in the House she has been a superb advocate for her place in the country in relation to nuclear programmes. Indeed, I served with her on the Nuclear Safeguards Bill Committee, and I learned a lot about the nuclear industry and its associated activities as a result of serving on that Committee and hearing her important interventions.

In her remarks the hon. Lady put the issues in this sector deal squarely on the table. It is good that we have an industrial strategy in the first place. For many years there was no such thing as an industrial strategy in Government—indeed, the Government said that having such a strategy would be a bad idea. Having an industrial strategy document and plan, followed by sector deals, is a considerable advance towards ensuring that industries and centres of industry get collective support among themselves by using their own skills and arrangements, as well as Government support to take that forward. This sector deal has been brought forward very much as a collaborative process. The Nuclear Industry Council and the Nuclear Industry Association produced an early prototype of this sector deal to bring to the Government, and the current deal shows clear signs of that collaboration.

What should we draw attention to in the sector deal? The first thing is the extent to which it highlights our skills and strengths in particular areas of our nuclear industry. As the hon. Member for Barrow and Furness (John Woodcock) said, one of those strengths is the world-beating concentration of decommissioning, research and development, and nuclear development facilities that exist in and around Sellafield and in Cumbria generally. It seems right that the sector deal should seek to strengthen and extend the work of that centre in the UK because—as hon. Members have mentioned—of the possibilities that exist for substantial world contracts, the export of skills, knowledge and knowhow, practical assistance in nuclear decommissioning, and the many other associated activities that can, do, and will stem from that part of the country. I commend the hon. Gentleman’s suggestion that the collaboration between military nuclear and civil nuclear should be extended because, among other reasons, of the crossover of skills and technologies that can result from such collaboration.

Some hon. Members might have thought that my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) made a slight diversion from our discussion this morning, and I have discussed with him for a long time the question of what to do about decommissioning nuclear submarines. That decommissioning effectively comes under a programme in the Ministry of Defence but, as my hon. Friend said, such a programme does not exist in reality. Yet if we were to join together that decommissioning with our decommissioning in Sellafield, using the skills there, we could make enormous progress on something that, as my hon. Friend mentioned, is a dreadful blot on our national landscape—it can be seen on Google. It needs to be dealt with urgently and Sellafield is the place to do it. We should ensure we do that in the not-too-distant future. I should like that included specifically in the sector deal. Perhaps when we get to version 1.2 that will happen. By the way, another enormous centre of nuclear excellence is the Culham Centre for Fusion Energy; I should mention the sector deal funding for it and the Government’s support for nuclear fusion and the work there.

Inevitably, documents have strengths and weaknesses. The weakness of the sector deal document is two-fold. Perhaps the first part of that is not a weakness but a recognition of what needs to be done in the nuclear sector in the next period. I note from the executive summary that there is to be, by agreement,

“a 30% reduction in the cost of new build projects by 2030”

and

“savings of 20% in the cost of decommissioning compared with current estimates by 2030”.

That reflects the fact that as things stand a lot of nuclear activity is just too expensive. Hon. Members have mentioned that the costs of new nuclear build and perhaps the process of bringing new builds into operation are still apparently far too high. Indeed, the national infrastructure assessment for 2018 has recently come out, and it suggests that only one new nuclear build should be signed up to before 2025, because of its analysis of the current relative costs of new nuclear and new renewables. It also suggests that, even with arrangements such as the regulated asset base that the Government are looking at in relation to new nuclear build, costs would be transferred rather than reduced. Certainly if that arrangement meant that consumers bore the same costs, but in advance of the plants coming into operation, which appears to be one mechanism of the regulated asset base arrangement, it would be an evasion of the task ahead, rather than implementation. It seems to me that the commitment in the nuclear sector deal to bring those costs down is important, and that it is an essential element of the way nuclear build would compete in the future with other forms of energy production. That is an important component of the nuclear sector deal.

Finally, I want briefly to draw attention to the advanced nuclear reactors that have been discussed here this morning—small modular nuclear reactors. There is a cost element problem attached to them, too, but they have substantial advocates, for a variety of reasons. There is a suggestion that their modular nature could bring down costs considerably. The document includes a commitment to £44 million, as the hon. Member for Copeland and others have mentioned, to underpin developments on small modular nuclear reactors. That is a bit of a surprise to me, as I recall hearing a suggestion in the 2016 Budget that there should be £250 million of support for them and, indeed, a competition to sort out the best designs. I also recall that in the following two years I did not hear any news about the competition or its outcomes, or about the expenditure of the £250 million, other than a statement by the Minister at the end of 2017 that there might be up to £100 million, not for a competition but for the development of small modular nuclear reactors. As it turned out, the Minister then made a statement that £56 million would be available.

Now, in the nuclear sector deal, the figure is £44 million. That is not to my mind exactly a great deal, from the Government end, for small modular nuclear reactors in the future, bearing in mind what was previously promised and what is in place now. I wonder if the Minister would comment on whether that is because of efficiency gains or the allocation of the money for other purposes—or perhaps because the Government are simply cooling towards the idea of supporting small modular nuclear reactors and have put a reduced sum in the nuclear sector deal. Whatever the reason, Government support for a promising and interesting development seems to have been substantially downgraded. What are the Minister’s thoughts on the appropriateness of that, and might he have further thoughts on how the support could be better deployed in future, on new deals?

10:48

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

It is a pleasure, as always, Mr Owen, to speak under your chairmanship. I would very much like to answer the shadow Minister’s points, but I am very short of time. I congratulate my hon. Friend the Member for Copeland (Trudy Harrison) on securing the debate. In fact, on a recent visit to Sellafield she knew so many people that I thought there should be a big sign in the street saying “There’s oodles of Troodles”—because she is omnipresent. She personifies the way the Government support the nuclear sector. I must disagree with the two Scottish National party speeches; there is a fundamental difference of opinion there. We believe that nuclear is an important part of the mix for this country. We do not agree that it is incompatible with building up renewables. Security of supply is the most important thing. One of our strengths is the balance that we have. I know that will continue. [Interruption.] I do not really have time to give way. I have to get on, or I cannot answer hon. Members’ questions. The Government are committed to those strengths. We must develop the technologies that will transform existing industries; that is part of our industrial strategy and the nuclear sector deal is an important part of that.

I must apologise to the hon. Member for Barrow and Furness (John Woodcock) for not being at his urgent question, but when I heard about it I was on a train from Chester to north Wales to help launch the nuclear sector deal. However, had he informed me the night before, it would of course have been my pleasure to be there. I will come on to his points in a moment.

The sector deal was launched in Trawsfynydd in north Wales, which is a fitting setting for it. It is a £200 million package with a focus on innovation, cost reduction and skills, to ensure we have the technology and expertise necessary to maintain the UK’s position as one of the world’s leaders in the nuclear sector. I congratulate Lord Hutton, the sector champion; we worked with him and with industry leads from the Nuclear Industry Council to develop the content of the deal. The basic points are, first, a 30% cost reduction in the cost of new build projects. As the shadow Minister said, it is essential for the future that the cost of nuclear comes down.

The cost of Hinkley Point was mentioned in the contributions from the Scottish National party; that was done in such a way that there is no risk to the taxpayer but huge benefits to this country. On a recent visit to Hinkley Point, I was very well hosted by the local MP, my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), and I recommend that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) takes him up on his invitation. It is an incredible site and so good for this country, with local contractors and British companies employing so many people.

The second point is to achieve savings of 20% in the cost of decommissioning compared with current estimates, and the third is hugely to increase the number of women. I was impressed by the number of women working on the site in Hinkley, particularly the apprentices.

I must rush. The hon. Member for Barrow and Furness asked me to answer a question about the transport link points and said, quite rightly, that my Department must work closely with the Department for Transport. I know that that is happening and that there is a joint committee, but, as a result of his point, I will attend the next meeting of the joint committee and personally report back to the hon. Gentleman—either by writing to him or by arranging to meet him on that subject.

NuGen Moorside, which the hon. Gentleman and my hon. Friend the Member for Carlisle (John Stevenson) mentioned, is a commercial matter between companies at the moment. The Government do not have a magic answer to that, but my hon. Friend asked me to state that we stand by to provide whatever assistance is needed, and we have shown in Wylfa, Anglesey, in which you may have an interest, Mr Owen—although I know you are interested in everything that goes on while you are in the Chair—that we will look at innovative methods of funding new nuclear developments. I understand that there are commercial negotiations going on in places such as Japan and South Korea, and we are monitoring the situation. Again, I will happily report to my hon. Friend and the hon. Member for Barrow and Furness what comes from it.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) brought up some interesting points, which I must say I was completely ignorant of, about the nuclear submarines in Devonport. I have not looked on Google Earth, because I thought that would be a bit rude under your chairmanship, Mr Owen, but I will do so straight afterwards. I know there is a joint review between the Ministry of Defence and ourselves on decommissioning, and there is a lot of work to be done, but I want to include the MOD more in everything we do. It is quite time enough, and the hon. Gentleman made a very good point, supported by some of my hon. Friends. Because the MOD is a member of the Nuclear Industry Council, it is time that that artificial distinction came to an end, and I will do my absolute best to bring that about.

My hon. Friend the Member for Carlisle and other speakers brought up points about the RAB system of funding, at which we are looking closely. There is a lot of work going on about that. Obviously, I cannot make an announcement on it because we have not yet reached that stage, but it is an innovative form of funding. It gives certainty; it has worked for the Thames tideway and is being looked at for other schemes, and I hope to report back on developments there.

The main point of the whole sector deal that I can see, which is one of the first things that I really got involved in when I took on this portfolio and which I am impressed by, is the contributions from industry and how many different companies are involved. It is not just the usual suspects, or two or three people; it is very comprehensive.

On decommissioning, I have been asked by several hon. Members, including my hon. Friend the Member for Copeland, about the role of the Nuclear Decommissioning Authority as time goes on and moving it from decommissioning to development. Its interest now is in decommissioning; it is the decommissioning authority, and we know that that is overwhelmingly its most significant purpose. However, on a visit to Sellafield, where I met and was impressed by their management, I was told that they already do about £100 million worth of export services. We are well respected throughout the world, and I think it will develop exactly in the way that my hon. Friend suggested, towards a development agency. Part of the sector deal is to transform decommissioning from where it is now, which certainly on the face of it is just a burden to the taxpayer, to an industry that employs a lot of people and supports a lot of products for this country and will be the foremost of its nature in the world. The set-up is now there to achieve that.

I will finish my comments now, Mr Owen, because you have asked me to leave time for my hon. Friend to make a few winding-up comments. I thank everybody; I am sorry I have not had time to go into more detail on some points, but I am always available to talk about them with any hon. Member here.

10:57

[Trudy Harrison]

I thank the Minister for his comments, which were both reassuring and helpful for all of us who speak positively about the nuclear industry. I will come on to the comments by my SNP colleagues, because I welcome them and the challenge of the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and for Kilmarnock and Loudoun (Alan Brown). There was quite a lot that I agreed with. I agree that we need to bring down the cost of new nuclear and also that we need to ensure that the decommissioning skills do not just take from the taxpayer but generate more. We can do that through exporting those skills, as I said in my comments.

I also agree that this is part of an energy mix. In my constituency, we have skilled engineers with transferable skills now working in the renewables sector in their spare time, because in a place such as Cumbria or, indeed, Scotland we should not face fuel poverty; we should transform it to fuel prosperity. I want to see more local communities use natural resources, whether that be wave and hydro power, biomass and anaerobic digestion, geothermal or solar. I want to see those technologies harnessed in our local communities.

However, I will just draw attention to one point: last Saturday, wind energy generated just 3.4% of the energy power requirement. I am sure we all remember that last Saturday was a critical day. If the TVs had gone off last Saturday it would have meant catastrophe for England—perhaps not so important for Scotland, but I would like to think there was support there.

I thank hon. Members for their contributions. I have found the debate helpful and I feel there is much more scope for us to work cross-party for the benefit of nuclear civil and nuclear defence, right through from research and development, SMR, advanced modular reactors, large-scale reactors and operations to decommissioning and export, to ensure that we have the skills for the future, to galvanise the nuclear industry and to secure our place once again as global leaders.

Question put and agreed to.

Resolved,

That this House has considered the nuclear sector deal.

ESA: People with Motor Neurone Disease

Wednesday 11th July 2018 Westminster Hall

10:59

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

I beg to move,

That this House has considered employment support allowance for people with motor neurone disease.

It is a great pleasure to serve under your chairmanship, Mr Owen. I begin by congratulating the Minister on his return to the Department this week. I look forward to his response to my speech. I also thank the campaigners who have pressed the Government so hard to scrap all employment and support allowance reassessments for people living with motor neurone disease. They have been in Westminster on several occasions over the past six months. I first met them in February, outside the House in Parliament square, after they had braved the beast from the east and were covered head-to-toe in snow.

I particularly thank Sandra Smith, who is in the Gallery. She is a tireless voice for people with MND and has campaigned hard on the important issue of access to benefits. I also pay tribute to the Motor Neurone Disease Association, which does a fantastic job of standing up for, and giving support to, people living with MND, their families and loved ones.

Today I remember my very good friend, Marge Carey. It was Marge who first encouraged me to get involved with the Merseyside branch of the MNDA, and I am proud to be patron of that branch. I am incredibly grateful to the branch’s committee and volunteers, who do so much to support people with MND and their families.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I congratulate my hon. Friend on securing the debate. I join him in thanking the campaigners, because the employment and support allowance application and reassessment systems just are not suitable for people with motor neurone disease. Will he join me in congratulating those who campaign locally? Torfaen lost its former mayor, Doug Davies, to MND. His son Giles, also a councillor, has been doing great work with the local MNDA branch. That local campaigning complements national campaigning. Does he agree that it is important?

[Stephen Twigg]

I absolutely concur and echo what my hon. Friend says. Local campaigning efforts—as well as the local support, fundraising and opportunities to meet—are what the MNDA and MND campaigns do so well. That local voice is absolutely crucial.

Motor neurone disease is the umbrella term for several neurodegenerative disorders that selectively affect motor neurones. Motor neurones are the voluntary muscles that control processes such as walking, talking and breathing. Eventually, the muscles become so weak that the patient loses even the most basic of motor functions, such as the ability to walk, eat or breathe unaided.

Unfortunately, little is known about what causes MND. We know that it affects about one in 100,000 people, and we know that, in about 90% of cases, the cause is completely unknown. There is also no known cure. The average life expectancy following diagnosis is between two and four years, although we know that around one in 10 go on to live for 10 years or more. Most patients eventually pass away as a result of respiratory failure.

In 2016, the ice bucket challenge became a viral sensation, with many celebrities, sports stars and even politicians throwing ice-cold water over themselves to raise awareness of MND. It was a global campaign and raised in excess of $100 million for support and research into the causes of, and potential cures for, MND. It was so successful that the additional funding helped scientists at the Massachusetts Institute of Technology in the United States to uncover a new gene that they believe may well be the cause of MND. Although we are still far from a cure, we are—hopefully—getting closer.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The hon. Gentleman is making a powerful and important speech. He mentions that MND is a terminal disease. Scotland has replaced the arbitrary definition of “terminally ill” as being likely to die within six months with the clinical judgment of a medical practitioner that someone has a terminal illness. Does he agree that that is a far more sensible way to proceed, and will give dignity to people with MND?

[Stephen Twigg]

I was not aware of that change in Scotland, which sounds an excellent way of addressing the issues I will come on to. I will also set out suggestions from the MNDA regarding Department for Work and Pensions policy.

[Rachael Maskell (York Central) (Lab/Co-op)]

My hon. Friend is making an excellent speech. I was a physiotherapist working in neurology, so I have a good understanding of motor neurone disease. It is crucial that individuals are able to live their lives to the full in the time that they have, as opposed to facing the barriers put in place by the benefits system. Does he agree that welfare should be support, rather than a battle all the way, as it currently is?

[Stephen Twigg]

My hon. Friend hits the nail on the head. It is about supporting people and their families through what are, by definition, the toughest times of their lives, and about ensuring that there are no unnecessary barriers to their living the most fulfilling life they can.

I will briefly set out the basis of ESA, which will enable me to make my argument about reassessment. ESA is a benefit for adults with long-term disabilities or medical conditions that affect their ability to work. It is conditional, so some claimants have to take part in work-related assessments to claim their benefits; and it has two tiers—the work-related activity group and the support group. The work-related activity group is for those claimants whom the Department considers capable of working again at some point in the future. People in that group typically receive less financial support than those in the support group and are expected to undertake regular work-related activities with an adviser. Roughly half a dozen people with MND are in that tier.

The second tier is the support group, which is for those whom the DWP considers to have a limited capacity to work. It includes people who have almost no prospect of working again in the future because of their disability. These claimants tend to receive a higher level of support and do not need to undertake the same work-related activities to guarantee their benefits. It is estimated that approximately 600 people with MND fall into that tier.

When applying for ESA, claimants must undergo a work capability assessment, which is used to determine which tier claimants are streamed into. Reassessments are common, to ensure that people are correctly tiered. The maximum amount of time between reassessments is two years.

[Scott Mann (North Cornwall) (Con)]

A concern of my constituents is the challenges of the benefits system for people with this illness, and how that snowballs and affects their lives. Most people receive the correct financial support after their assessment. However, there are people with this long-term condition, which will not improve. Does the hon. Gentleman agree that, once somebody with MND has been assessed, they should not be continually reassessed to see whether their condition will improve in the future?

[Stephen Twigg]

I agree entirely. In fact, he anticipates what I am about to say. It is excellent that the debate has cross-party support from Back-Bench Members, so I am grateful for that intervention. Reassessments are my point of grievance with the Government.

Last September, the Department announced that new claimants with the most severe disabilities who apply for ESA will be exempt from reassessment. That is because, as the hon. Gentleman just said, many people with the most severe disabilities have little to no chance of their condition improving. The announcement was, of course, hugely welcome. However, the exemption applies to new claimants, not to those people with long-term conditions who were already in the support group before September 2017.

People with MND—of course, this also applies to other conditions, but today’s focus is on motor neurone disease—who were already in the support group last September are required to undergo a final assessment in order to be exempt. The Government have provided assurances that the final assessment for people with MND will be mostly paper-based, but that is not guaranteed, and the paper-based system is itself not straightforward. It requires filling out a complicated 26-page form. Having to complete such a form is surely an unnecessary further stress for people living with MND. Complications or issues with the paper assessment could mean that claimants are required to attend another face-to-face assessment.

If a claimant has received a confirmed diagnosis of MND or another permanent condition that holds no prospect of recovery and they are already in the support group, there is surely no point in subjecting them to a final assessment. The nature of the claimant’s condition means that another assessment is redundant. It not only causes the claimant further stress and anxiety, but wastes public money on a needless reassessment. People with MND who are in the support group will already have undergone at least one assessment of their ability to work. Given the progressively debilitating nature of MND, their symptoms will almost certainly have got worse since that assessment.

In February, representatives of the Motor Neurone Disease Association met the Minister for Disabled People, Health and Work at the Department to discuss this specific issue. They took with them an open letter, signed by more than 8,000 people, which called on the Government to end mandatory reassessments for claimants with MND. My understanding is that the Minister committed to finding a solution that would exempt people with MND from reassessments, but she said that that would not happen until a review of the Government’s entire exemption policy had taken place. The Minister sent a letter to the MNDA following that meeting. It is welcome that the Minister has discussed a possible solution to this matter with her officials. However, the lack of reference to an imminent solution for those already in the support group is worrying and is causing further anxiety.

[Christine Jardine (Edinburgh West) (LD)]

Does the hon. Gentleman agree that the reassessment issue underlines the fact that, despite the improved understanding and awareness of motor neurone disease as a condition, there seems to be a lack of understanding in the DWP, not just of motor neurone disease, but of declining, terminal conditions generally, and that perhaps a better approach is required across the board?

[Stephen Twigg]

I agree entirely. The hon. Lady is absolutely right to say that what we are discussing affects not only motor neurone disease, but a number of other conditions. I will not take any further interventions, because I want to leave the Minister enough time to respond in this short debate.

The Government have yet to give a timeframe for a review of exemptions to take place. Until that review is complete, people with MND still risk being called for an unnecessary and wasteful reassessment at any point. Even worse, should the claimant be unable to complete the reassessment, their benefits could be taken away from them. That would be cruel and totally unacceptable.

My understanding—we will hear the Minister’s response in a moment—is that the system that the Department uses for ESA claimants is not able to differentiate between different diagnoses, so it is not possible for the Department to filter all the people in the support group who have MND or similar conditions in order to grant them an exemption from further assessment. Can the Minister shed some light on why the system has been set up in that way, and what changes the Department could make to prevent such issues from occurring again? I do not think that it would be unreasonable for the Department to apply an automatic exemption to all those claimants currently in the support group who have a certified MND diagnosis; and that should not require an additional face-to-face assessment, as there is no prospect of people with MND getting better.

Last month, the Department changed the personal independence payment system so that those with severe degenerative diseases will no longer have to undergo regular tests to prove that they remain eligible for PIP. That exemption includes people with MND as well as other conditions, such as Parkinson’s and multiple sclerosis. In practice, that means that people whose condition is lifelong and degenerative can be awarded the highest PIP amount, with only a light-touch reassessment once a decade.

I would like the Government to adopt a similar mechanism whereby people with MND can avoid an unnecessary further assessment for their ESA. The Motor Neurone Disease Association has suggested a system in which claimants with MND can send a doctor’s note to the Department to prove their condition. The Department could then use that information to move the claimant to a long-term award within the support group, which would protect them from the need for any further reassessment. The Government have cited legal and operational issues that apparently prevent that seemingly straightforward and humane system from becoming the norm. The DWP has accepted that the work capability assessment is a demanding experience, especially for those with long-term or degenerative conditions, yet it still argues that it is the best method of assessing the suitability to work of those with life-limiting conditions.

As I said, the Government have already changed their policy on new employment and support allowance claimants and their policy with regard to personal independence payment. Today’s debate provides an opportunity for the Minister, who is back in the Department, to say that it will make a similar change for this crucial group of existing ESA recipients. People living with motor neurone disease face many challenges in their lives. Removing the threat of an ESA reassessment would make a real difference to the lives of hundreds of people and their families. I urge the Minister to look again at this issue, and to do so as a matter of urgency.

[Albert Owen (in the Chair)]

In calling the Minister to respond to the debate, I welcome him to his place.

11:18

[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

Thank you, Mr Owen. It is a pleasure to serve under your chairmanship, although this has perhaps not quite been the week I was expecting.

I pay tribute to the hon. Member for Liverpool, West Derby (Stephen Twigg), who has been a tireless campaigner on this issue both in his constituency, where he has the honour of being the patron of the local branch of the MND Association, and in his work through the APPG. Over the years, he has been a really strong advocate in an area in which there is a lot of cross-party support for improvement. As a Government, we are very much listening, but I will come on to those points.

I also welcome the members of the audience, whom I briefly met outside the Chamber and who have been supporting this work and showcasing the real difference that is needed right across the system. In particular, I pay tribute to Sandra Smith, who has supported the work of the hon. Gentleman. My hon. Friend the Minister for Disabled People, Health and Work is currently undergoing a grilling by the Select Committee on Work and Pensions. I was meant to be part of that Select Committee and asking questions, so we have done a bit of a swap-over. I spoke to her at length last night, and she is incredibly passionate about this work. She is meeting the APPG next Thursday, with representatives of the national association. I hope that the hon. Gentleman will be able to join that meeting.

Nationally, the MNDA is one of the most proactive and constructive organisations for engaging with MPs of all backgrounds and across the parties and working with the Government. At the heart of many of the improvements delivered since 2010 has been the MNDA, using the real-life experiences of its members to make a real difference. There are 90 volunteer branches across the country and 3,000 volunteers. We can all lobby today, and I would like to lobby the MNDA to recognise how fantastic Heather Smith of the Swindon and Wiltshire branch is. She regularly comes to different events in my office, and I think that she should be part of the association’s head office. There we go—even a Minister can lobby.

I want to acknowledge the seriousness of motor neurone disease. While it is thankfully uncommon, it is disabling and distressing. The outlook for those diagnosed is poor, with life-expectancy significantly reduced for the vast majority. Those who are diagnosed with the condition will inevitably need significant medical support as their health deteriorates, with mobility, breathing and eating becoming progressively more difficult.

Crucially—I have seen this in the meetings I have had—we cannot underestimate the emotional and physical impact that motor neurone disease has on the families and friends of those who live with this condition, and who provide care and support 24/7 to their loved ones. They deserve our thanks and appreciation. I know, having met those carers, just how hard that is. That is one of the reasons that there is universal support for this across the House. We all know that this is something we have to take very seriously.

Since 2010, we have been listening and working constructively together across parties. We have made a number of improvements. In October 2016, it was announced that we would stop requiring people with the most severe life-long conditions to be repeatedly assessed for ESA and UC. We all welcomed that; it was a common-sense announcement. We have been working with external stakeholders and healthcare professionals to devise a new set of criteria, to switch off the reassessments for people with the most severe health conditions or disabilities. Those criteria were introduced on 29 September 2017. The MNDA was and will continue to be part of that process. The hon. Gentleman welcomed that in his speech.

That means that for those placed in the ESA support group and the UC equivalent who have the most severe and life-long health conditions or disabilities, whose level of function will always mean that they will have limited capability for work and work-related activity, and who are unlikely to ever be able to move into work, there will no longer be a routine reassessment. That is absolutely key.

We fully appreciate that some people find the work capability assessment a disruptive experience, so we have designed new guidance for healthcare professionals to ensure that the process of initially claiming or going through a reassessment is as unobtrusive as it can be. We ask claimants to complete an ESA50 or UC50 health questionnaire and provide supporting evidence. Where appropriate, we ask their GP or specialist healthcare professional for further supporting evidence. That means that in the vast majority of cases, where the severe conditions criteria would apply, we expect to be able to make a decision on the written evidence alone, without the need to undertake a face-to-face assessment, thereby reducing pressure on the individual.

We will help gather that evidence. We understand that people will be negotiating challenges at home. We will make contact with GPs and health professionals to help gather that. There has been additional training and the guidance has been rewritten. As I said, the MNDA has been involved in shaping this. The Minister is meeting it again next Thursday in order to continue to look, learn and listen.

One specific question was why not make things condition-specific. I understand that question and I have raised it myself, but not everybody fits neatly into a box with one condition only. The way health deteriorates can be different from one person to the next. Many people can have multiple conditions. That makes it very complicated. We learnt from legacy benefits that, while initially attractive—I absolutely get it—a one-size-fits-all approach too often means that people cannot access the highest rate when they are initially assessed, because it could be early in that journey of deterioration. The reassessments are often triggered automatically, to ensure they are upgraded to the highest level. We want the people who need the support to get the support. They should not be denied that. On the old legacy benefits, people were left on the lower parts, because they had too many challenges in their own lives to put it in their calendar and say, “I must go and do that.” When we get to that point, we have to make it as light touch and common sense as possible. That is why, if we can get the evidence from the GP and healthcare professional, it can be light touch, to ensure that they access the highest rate of benefit to support them as quickly as possible.

[Stephen Twigg]

I am listening carefully to the Minister. On condition-specific assessment, surely that is what the Government have done—I welcomed it—for those who are newly assessed for ESA. If it can be done for those who are newly assessed, why can it not be done for those who need a reassessment?

[Justin Tomlinson]

For those in the system, we already have all the evidence we need. We can, therefore, conduct the light-touch assessment internally. For those people on the legacy, however, that would not necessarily have been the case. That is why we would then need to get the final piece of the jigsaw, in terms of the GP and healthcare professional. The expectation is that this should be done through the written evidence provided. As I said, we will help gather that evidence, but we must ensure that everybody—whether they have MND or any other condition—who should be getting the maximum amount of support can do so as quickly as possible.

[Stephen Twigg]

The Minister said “expectation”. I encourage the Department to go beyond expectation and make that the policy, as the Motor Neurone Disease Association is saying: if there is a letter from the doctor, that is enough and there is no need for further reassessment.

[Justin Tomlinson]

That is the absolute expectation. In next week’s meeting we will look at how this is working in practice, whether there are things we need to listen to and go further on, particularly in the training, with the health professionals and assessors in there, but as we have demonstrated since 2010, there have been significant changes. Since 2010, over 100 recommendations have been made, following the independent reviews published by Professor Malcolm Harrington and Dr Paul Litchfield. That is making the assessment process more robust, reliable and sympathetic—actually understanding the multiple challenges people face. One of the most important improvements has been the speed increase, to ensure that we can get people on to the maximum support at the earliest opportunity, rather than leaving people under the old legacy system, not on the highest level of support, which they should be entitled to, recognising that people have enough challenges at home, so we need a more responsive system.

It is important to reiterate that the current assessment process provides a fast-track service for new claims for anyone with a terminal illness who has less than six months to live. Anyone with motor neurone disease who meets that criterion would be guaranteed entitlement to benefit, with claims dealt with sensitively, without a face-to-face assessment and under a fast-track process.

[Liz McInnes (Heywood and Middleton) (Lab)]

I attended the all-party parliamentary group on motor neurone disease this week. There was a doctor there who treats MND patients. He said that it was impossible to put a time limit on how long a person with MND had to live, so the six-month limit makes no sense medically whatsoever.

[Justin Tomlinson]

This is guided by medical evidence. There is continuing work looking to review this. Health professionals and medical experts helped to shape the definition. I accept that it can be difficult. That is why we continue to work with the MNDA and all the organisations who represent their members, to look at what works. Six months is traditionally what is seen. At that point, when a GP says that they believe—it is not an exact science—that that is the point, the assessment will be fast-tracked within 48 hours.

We recognise that there is more to do. We are committed to assessing people with health conditions and disabilities fairly and accurately, while taking a personalised approach, because not everybody fits neatly into a box. We consulted on the work capability assessment reform in the Green Paper published in October 2016. Although there was widespread support for reform, there was not clear consensus from the stakeholders on how it should work. That comes to the point the hon. Member for Heywood and Middleton (Liz McInnes) just made.

To ensure we get the reform right, we are currently focusing on testing new approaches to build our evidence base. We are also working with external stakeholders to give them the opportunity to inform changes and provide their priorities for future reform. That is exactly why MNDA is encouraged—it is very good at this—to work constructively and proactively with the Government as a whole, and specifically with the Minister, who is passionate about this.

In conclusion, I thank the hon. Member for Liverpool, West Derby for raising such an important topic. I thank the cross-party MPs for their support. They have taken the time to highlight their own experiences on behalf of their constituents. We recognise that this is incredibly important. It is shaping the work the Government do. As a newly-returned Minister to the DWP, I look forward to supporting future improvements.

Question put and agreed to.

11:29

Sitting suspended.

Listed Sporting Events

Wednesday 11th July 2018 Westminster Hall

[Mrs Madeleine Moon in the Chair]

16:00

Sitting suspended for a Division in the House.

16:13

[John Grogan (Keighley) (Lab)]

I beg to move,

That this House has considered listed sporting events.

We are less than three hours away from the big match live and free on ITV: England versus Croatia. The nation’s favourite commercial channel, BAFTA-winning for its sport production, is said to expect up to 30 million people to watch that match tonight. Some superstitious English fans would say that England rarely win on ITV—the statistics over the last 20 years show that they have more often won on the BBC. However, I am glad to say that this jinx was broken just a few days ago when England beat Colombia live and free on ITV, so we are safe under the gaze of Mark Pougatch, who will introduce the programme today, but I think it will go to penalties.

I can remember 1966, although you are far too young, Mrs Moon. We watched it at home. My dad had just got his first job as a headteacher at a primary school and we had moved into a new semi-detached house. I was five, and my grandma and my mum were there. My mum was not a football fan. Both my parents are long since dead, but my mum must have done a deal with my dad, because she wanted to go to the plant shop up the road to get plants for the new house. The match kicked off at 3 o’clock in those days; my dad must have said that at 10 to 5 they would go to the plant shop. But he had not reckoned on extra time, so he had to go. One of my earliest memories at five is insisting that I stayed with grandma to watch that match live and free. I remember my dad came back half an hour later, just in time for that most iconic British sports commentary, when Kenneth Wolstenholme said:

“There are people on the pitch. They think it’s all over”—

and then the fourth goal went in and he said the iconic line, “It is now.”

Since that match in 1966, many things have changed about the way that people consume football. Last night, I was at the all-party parliamentary beer group. Next to me were two Ministers of the Crown, who I will not name. I had my mobile phone with me and we watched the last five minutes of the other semi-final behind the menu, which I believe you watched in Brussels, Mrs Moon. We did what many people do these days: consume the match on a whole variety of devices. Up to 5 million people watched the last England match on the BBC through those devices.

Many things have changed, but audience sizes have not. It is not just for the England games, but the other games that have been on the BBC: Portugal versus Spain—that tremendous free kick from Ronaldo, watched by 10.4 million people; Argentina versus Nigeria, watched by 9.9 million; Germany versus Mexico, watched by 9.5 million. We enjoy a great world festival in this country.

At times, politicians have considered whether the whole World cup should be so listed, but it is great that we list it all. It means that every little bar and restaurant in the country can show the games live and free. I watched one of the games in Tommi’s Burger Joint in Marylebone, which gave a free beer every time Iceland scored—they did not score many goals in that match. In my constituency, Cougar Park will hold a mass showing for free tonight. There are many venues up and down the country; I will mention one other—Cantinho do Aziz, just near Leeds station, which is a Portuguese café, had been following not just the Portuguese games but all the games.

The tournament is a big boost to our hospitality industry and it is not an accident. It happens because we have the listed events law, which goes back to the 1950s and was updated in the 1990s, not without controversy. The late Lord Howell was particularly active from the Opposition Back Benches in those days, ensuring that the law in the 1990s was rigorous. We made that decision as a nation, but my fear is that if the World cup had been in our country—there was a World cup bid in 2018 under the last Labour Government—not all the matches would have been live and free on free-to-air channels.

The Government at the time were under tremendous pressure from FIFA, as has been documented. They made a promise to FIFA that they would basically get rid of that law if we got the World cup. Perhaps the England matches would still be live and free, and perhaps the final, but most of the matches would have gone to the highest bidder. We would have lost something. FIFA and UEFA do not like that law; they have spent hundreds of thousands of pounds on expensive lawyers to try to get it struck down in our courts, without success. I hope that if the four home nations of Wales, Scotland, Northern Ireland and England think about a bid for the World cup in 2030, the Government and the football bodies will make it clear from the outset that we do not intend to change the law in order to sweeten the pill. FIFA has reformed considerably since 2010; a signal of that reform will be that it respects the laws of countries that aspire to hold the World cup in future and does not put pressure on us to change that law.

That was the first of four points that I want to make. My second point is about which sports should be protected by being listed. That is looked at from time to time. We no longer protect the university boat race in the relevant legislation, for example. There were two reviews under the last Labour Government—the first in the 1990s and the second towards the end of that Government. Let me take a look at a couple of sports that were affected by those reviews.

Cricket is perhaps my favourite sport—Yorkshire cricket in particular. In fact, I forgot to mention that no fewer than seven members of the England football squad at the World cup are from God’s own county. One of the great attractions of the England team is that they represent the whole of England, which comes out in their interviews—but back to cricket. In the late 1990s, the Labour Government decided to take live coverage of test matches off the list. Lord MacLaurin, who then chaired the England and Wales Cricket Board, said, “We’ll always keep some live cricket on free-to-air TV.” Sports fans of any kind will remember the glorious summer of 2005, when England played Australia for the Ashes. About 9 million people watched the final test match at the Oval, where England reclaimed the Ashes. That was the last free live cricket of any substance on our television screens.

It is interesting to look at the figures published by Sport England, which tracked participation in a whole range of sports from 2005 to 2016, when it changed its methodology slightly. There was a spike in participation in cricket immediately after 2005, amid the great enthusiasm for the sport after the Ashes series was shown on Channel 4, but those numbers quickly fell away. Cricket clubs around the country tell us that it is now much harder to muster a team. According to Sport England’s figures, participation decreased by about a third over that decade. Contrast that with the 50% increase in participation in athletics, which is much more commonly available.

Towards the end of the Labour Government, the Davies review suggested putting test cricket back on the list. At the time, a gentleman called Philip French worked as a special adviser to the Labour Secretary of State. The ECB, in its wisdom, lobbied heavily against that proposal, the coalition Government came in, Philip French moved over to work for the ECB and the proposal was never implemented.

However, the ECB’s thinking has changed in the intervening years. I know from talking to ECB officials that what brought it home to them that they had a problem—it brought it home to me, too—was a poll of schoolchildren, who were given a picture of Joe Root, the England cricket captain and perhaps the finest living Yorkshireman, and a picture of a wrestler from the United States. Far more of the children recognised the wrestler than recognised Joe Root. I think at that point the cricket authorities recognised they had a problem. They do not support the re-listing of test cricket, but they have done a deal with the BBC, which means that some cricket—a new Twenty20 tournament, plus highlights of tournaments such as the world cup and test matches—will come back to the BBC. I hope the BBC is able to do for cricket what it did for the FA cup: revive it and really promote it.

Golf is another sport that suffered from coming off free-to-air TV. The only live golf on British free-to-air TV is the final two rounds of the Masters from the United States. The Open championship is now hidden away on subscription TV, and viewing figures have plummeted. Many top golfers warned the governing bodies, including the Royal and Ancient, which struggled for many years to admit women to some of its courses and is not necessarily the most progressive governing body, about that. Justin Rose, who won the Olympics golf tournament, said:

“I think having golf coverage on free channels is important to the growth of the game…You can see it through the massive support Andy Murray receives and that’s largely because Wimbledon is still on the Beeb. It resonates because everyone watches it.”

As I said, golf is suffering and fewer people are participating in it.

This is the fifth debate I have called about this subject in my chequered parliamentary career, which has been a bit on-off. Estelle Morris, a good friend of mine who is now in the Lords, was the Minister who replied to one of those debates. She said:

“Looking back, it is amazing how little the sports and events that one would assume to be the most popular have changed. My hon. Friend”—

that was me—

“mentioned the most popular sports and they are, in the main, the same ones that”

have

“bound the nation together”

for years. She continued:

“We must always bear in mind, however, the potential for changing views in sport.”—[Official Report, 31 January 2005; Vol. 430, c. 692.]

I suggest that the biggest change in the past 10 years is in women’s participation in sport—not just by watching it but by taking part. I think most Members would welcome that.

The big sporting world cups—those in cricket, rugby and football—are important to that. At the moment, some of those are on free-to-air TV. I think 3 million people watched the women’s world cup on ITV. The next world cup tournament, for which the Prime Minister says she will proudly put the flag of St George up at Downing Street every bit as much as it has been this week, will be live on the BBC. But those events are not protected at all, and I worry that as they become more popular, they will become more attractive to pay-per-view channels and we may lose them. That is the best argument for the list to be reviewed and for sports to be added to it.

My third point is about which channels qualify for showing listed events. The Government have moved on that issue, which is very technical. Basically, to qualify to show a listed event, a channel has to have 95% coverage across the nation. However, as more people do as I did last night and watch action on a phone, fewer people may have televisions. We may get to the stage where no channels qualify because less than 95% of people have televisions in their houses.

At the urging of free-to-air channels, the Government put a section in the Digital Economy Act 2017 that gives Ministers the power, should that criterion ever look dodgy, to look at other criteria. Those may include a channel’s reach—some people suggested 90% reach would be a good criterion—through whatever device. I am not expecting an announcement today, but I hope that the Government keep that under careful review in the years ahead. It would be a great pity if we lost the benefit of that law for technical reasons.

My fourth and final point is about the four-yearly listed event that the most people are aware of, perhaps alongside the World cup—the summer Olympic games. The Olympics have always been on free-to-air TV. In fact, they are listed in their entirety. Some events, such as the FA cup final and the Wimbledon men’s and women’s finals, are listed in part, but the Olympics, like the World cup, are listed in their entirety. This point is a bit complex, but the BBC has the rights to the 2020 Olympic games. The International Olympic Committee, in a break from practice, sold the 2024 rights across Europe to the Discovery channel. The BBC did a deal—I do not blame it for that—that will result in a sort of swap. It said, “As long as we can show 200 hours on two streams of the 2024 games, we will do the same in 2020 and you, Discovery-Eurosport, can show the rest of the sports.”

That is probably a matter for Ofcom, which will eventually rule on these issues, but Ofcom has indicated to me that there may be very different situations in 2020 and 2024. The BBC won the rights for 2020 and gifted some of them, through a commercial arrangement, to Discovery. That may be passable by Ofcom. However, there was no opportunity for a free-to-air channel to bid for the 2024 rights. Discovery might have interesting conversations with Ofcom about that, and I do not think it is a foregone conclusion that Ofcom will approve it.

Why does that matter? In the past three Olympic games, British television viewers and those viewing on other devices have become used to seeing all the sports—any sport they want to watch—on the red button. It has been good for minority sports. I think there will be a backlash against that change, come the next summer Olympics.

This is not the most important issue in the world—many more important things are happening—but sport brings a lot of pleasure to many people. Rich and poor, young and old, sports-lovers and non sports-lovers have all been able to enjoy not just the England matches but the whole carnival that is the World cup. I, for one, hope that may continue long into the future.

16:30

[The Minister for Digital and the Creative Industries (Margot James)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate the hon. Member for Keighley (John Grogan) on securing the debate and his incredible expertise on the subject. I listened to his speech with great interest. It is a pleasure to talk about this subject on such a day, following England’s incredible win at the weekend, and we will all want to wish the team a lot of luck for tonight.

Sport is one of the few things that has the power to bring the nation together. When the biggest sporting events are on, everything stops and the anticipation builds. For really big events like the one tonight, everyone will be talking about it the next day. Last week, 23.8 million people watched England’s game against Colombia, and 20 million people watched England’s game against Sweden. That is even more than watched the royal wedding, and of course that does not include the many who congregate around a particular viewing point.

It is not just by chance that so many people were able to tune in and see those World cup games. The efforts of past Governments, which the hon. Gentleman took us through, have ensured that key sporting events of national importance are available for all to watch on free-to-air television.

The listed events regime, one of the foundations of our broadcasting system in the UK, sets out to have the best interests of viewers at its heart. Since its creation, it has ensured that everyone can share in major British sporting triumphs. Ten million people saw Kelly Holmes win her historic gold medal in Athens, and 15 million saw Jonny Wilkinson win us the rugby world cup in 2003—I still remember that. Nobody can forget the incredible few weeks that were London 2012. Listed events, and in turn our public service broadcasters, are fundamental to broadcasting in the UK, especially as viewing habits and the media landscape change. Of course, more people—more than 80% of the UK population—are watching online than ever before, and we are increasingly watching television on our phones and laptops at different times of the day. A record number of people streamed the England-Sweden game on BBC iPlayer, and nearly 4 million people watched it solely online.

In a world where people can subscribe to Netflix, Amazon and Sky or Virgin at the same time, it is more important than ever that free-to-air public service broadcasters can make an attractive offer to viewers. There is so much choice that it can be hard to know what to subscribe to and what to dispense with. However, the pull of public service broadcasters is still powerful, with 85% of people watching one of those channels every week. Together, they command a 55% share of all television viewing, independent of sport.

Our public service broadcasters spent £515 million on sport last year,[Official Report, 11 October 2018, Vol. 647, c. 3MC.] delivering just over 3,000 hours of content; only factual programmes have more money invested in them. They contribute a huge amount to grassroots sport, with more than half a billion pounds flowing from broadcasters to national governing bodies, which helps sports to increase their grassroots appeal and gives children the opportunity to try new sports when otherwise they might not have been able to do so.

Understandably, our broadcasters can spend only so much money on buying rights to different sporting events. I very much agree with the hon. Gentleman’s sentiments on golf. My personal opinion is that the British Open is much missed from the BBC, which sadly was not able to acquire the rights. However, if other genres started to suffer because of the amount spent on sport, that would not be fair to those who are not big sports fans. It is a difficult balancing act.

Furthermore, some sporting bodies may believe that they can drive a higher price for their rights by working with pay-TV providers or even internet companies such as Amazon. There is the opportunity for sports not on the list to forge their own path. It is ultimately for the national sporting bodies to decide whether they want to try to maximise their returns or strike a balance with a potentially bigger audience. That was at the root of the cricket issue, on which the hon. Gentleman made a number of good points.

The Government’s position is to not reopen the list of events, which we believe to be working and delivering the best outcomes for the viewing public. However, the hon. Gentleman is right that the Digital Economy Act 2017 enables us to change the criteria that underpin the list. He might wish to give that further consideration.

It is desirable for sports to try their best to maximise their audience and their income. I encourage sporting bodies to do their best to adhere to the voluntary broadcast principles of the Sport and Recreation Alliance, which include trying to ensure that at least highlights are shown on free-to-air television so that, for example, we can still watch golf highlights in that way.

It would be ideal to see all major sporting events on free-to-air television, but to date that has not been possible. We have to strike the right balance, so we keep the list under review. I thank the hon. Gentleman for giving me the chance to acquaint myself with more of the detail of this important matter.

Question put and agreed to.

Increasing Choice for Rail Passengers

Wednesday 11th July 2018 Westminster Hall

16:37

[Mrs Madeleine Moon (in the Chair)]

Because of the Division, this debate will last until 5.43 pm.

[John Penrose (Weston-super-Mare) (Con)]

I beg to move,

That this House has considered increasing choice for rail passengers.

It is a pleasure to have you in charge of our proceedings, Mrs Moon. It seems that almost no one is terribly happy with how our railways are performing at the moment. Not passengers, who have to suffer delayed or cancelled trains when timetables go into meltdown, as they have done repeatedly recently, causing misery for millions. Not the unions, who have been in an on-off dispute on a variety of routes for months. Not the staff, who have to cope with angry passengers every day. Not the rail firms, who have repeatedly handed back expensive franchises to the Government because they cannot make them work, and not rail Ministers, who face continuous incoming flak, from urgent questions in Parliament to critical headlines and irate passengers who lose thousands of man-and-woman hours battling to get to and from work every day.

That is odd, because until recently Britain’s railways were quite a success story; something to be proud of. Since denationalisation, passenger rail journeys have more than doubled, and we have one of the safest railways for passengers of any major network in the EU. What has gone wrong? Why is everybody on all sides unhappy with where we are today? I argue it is because franchising has run its course. It might have worked in the past, but not any more—at least, not well enough. It has become a brittle, inflexible, fiendishly complicated, expensive old thing that causes misery and frustration for millions and which nobody loves.

The root of the problem is that franchises put train firms, rather than passengers, first, because passengers do not have any real choices when things go wrong. Why should we be at the mercy of a single train company when the timetable melts down? If a train is delayed or cancelled, we ought to be able to switch to a different firm’s service that is still running instead; franchising takes away that choice. If we do not like the service the franchise-holding firm provides—tough. Our only choices are to get in the car, which could mean traffic jams and is not very green, get on a bus, which is usually slow, or just lump it and get back on the train.

It is weird, really. We would not put up with being banned from changing to a different brand of coffee, cornflakes or broadband. We expect to be able to choose between a dizzying array of different car insurers or energy firms. But trains? No.

[Stephen Hammond (Wimbledon) (Con)]

Although I agree with my hon. Friend that franchising has severe problems and has run its course, does he agree that one of the central problems is Network Rail and its inability efficiently to allocate track access, and the money it gets for investment and upgrading, to the franchises, as it would do if there was more open access on the system?

[John Penrose]

I completely agree; Network Rail has all the wrong incentives. I plan to lay out how we might be able to improve them in future. If it had the right incentives to find and to build more capacity, it would be better for Network Rail, the travelling public and rail firms.

If franchising is bust, I will come on to what I think is an alternative in a second. Before I do so, at the risk of perhaps annoying some of my friends in the Labour party, I must pause to say that I am afraid I do not think renationalisation is a valid option as an alternative at the moment. That is not because of the staff, the ownership models or anything like that; it is because politicians, people such as us in this room, no matter whether we are from the political left or right, are generally useless managers of a complicated operation such as a rail system. We take short-term decisions based on elections rather than proper investment cycles, we meddle in details we know little about and we frequently cave in to the vested interests of management or staff at the expense of customers. Anyone who remembers the bad old days of British Rail will know it was a disaster: an uncomfortable, unreliable service with few passengers, starved of investment and with shockingly bad industrial relations. It is pretty hard to argue that it represented some long-lost golden age of rail that we ought to return to.

[John Redwood (Wokingham) (Con)]

Does my hon. Friend agree that there is a lot of misunderstanding in the debate about rail? The fact is that all the track, signals and stations are nationalised and publicly provided, and the small amount of competition is just a competition, once in a while, to run to a timetable that is state approved and controlled, and to standards that are laid down by the state. We effectively have a nationalised monopoly at the moment.

[John Penrose]

I completely agree with my right hon. Friend. I fear that renationalisation is trying to answer the wrong question when we are starting from a position where we, as taxpayers, own the track and network in the first place. It is time to stop obsessing about the failed and stale old-fashioned options of yesterday, whether franchising or nationalisation, and instead to try a new, better alternative that puts passengers first. Open access rail breaks up the franchises so passengers have a choice of different train companies on their local route. If they do not like one, they do not have to wait 10 years or more for the next franchise to be signed, because a different firm’s train will be along in a few minutes.

[John Howell (Henley) (Con)]

I wonder whether there is an opportunity to put into practice what my hon. Friend is talking about with the new Oxford-Milton Keynes-Cambridge railway, and whether what he is suggesting would provide a much better alternative to the existing model?

[John Penrose]

My hon. Friend is exactly right; it is much easier to introduce open access rail where there is no established incumbent franchise operator at all. I plan to go on and develop that idea on a broader basis along just the line he mentions, but that is a good example to get us started, if I can put it that way.

Open access rail forces train companies to raise their game; therefore, open access services are usually better. They are far less brittle, for a start, because no single company can dictate the entire timetable. Fares tend to rise more slowly. There are fewer delays and less overcrowding. This is not some unproven experiment. If we talk to local people in Hull, for example, where open access is already in place, or the Labour and Conservative MPs who represent them in that area, the verdict is cross-party and pretty unanimous: they all think it is great.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I am sympathetic to my hon. Friend’s point; he is making a good speech and I congratulate him on securing the debate. He is right to say that renationalisation of the franchises is not a panacea for improving reliability and quality. He is making some good points about open access rail improving competition, which I am not unsympathetic to, and putting the passenger first; but what about those areas where there is potentially a non-profitable railway line? Would passengers perhaps be the losers in that situation rather than the winners, and would a reduced service be the result?

[John Penrose]

That is a crucial point. The answer is that if we do any system wrong then passengers could lose out. It is perfectly possible to organise open access rail in a way that avoids the problem that my hon. Friend rightly points out could exist. If he will bear with me for a second, I plan to develop that point a little further, but he is absolutely right to point out that it is a potential difficulty if it is not properly designed in.

In principle, the reason that open access works is that it treats trains like air travel. Heathrow or Gatwick let you fly to Paris or Rome on a choice of different airlines, not just one. Why can we not do the same for our railways? Franchises would stop collapsing, because we would not need them anymore. Rail firms would experiment more creatively with new routes that passengers are not getting at the moment, and if one firm was crippled by strikes, we could still get to work on another firm’s trains.

So what is the obstacle? What is stopping us from getting on and doing that tomorrow? The answer is: not much, apart from the existing franchises, which brings us to the point that my hon. Friend the Member for Henley (John Howell) raised. Any rail firm that has paid a very large amount of money to buy itself a monopoly on a particular route will understandably be unhappy if someone suggests it ought to face competition from another operator as well. That is not what it paid for, nor is it what its contracts say. However, what happens when those existing franchises end or do not exist to begin with, when they reach their contractual end dates, or when the franchise-owner decides it cannot make them work and hands them back, as has just happened—again—on the east coast main line? What then?

At that stage, at that moment, there is an opportunity. There is no one with a vested interest in protecting an existing franchise investment, or with legal contractual franchising rights, on that route. We can change the system completely. Ask train companies about open access competition on a route where they own a franchise and, understandably, they will bridle; but ask them the same question on a route where there is no incumbent, and their reaction changes profoundly. Let us take the opportunity that every franchise end point can offer and steadily, progressively, route by route change things for the better.

We could start with the east coast main line. We should auction track slots, so Network Rail suddenly has a huge incentive to find and build more capacity on the network, as my hon. Friend the Member for Wimbledon (Stephen Hammond) said. We should let train firms try out new services, to connect places that are not linked at the moment or to run existing services more efficiently. We should bundle some slots together for peak commuter services into cities such as London or Bristol, or for less economic stations, as my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) said, and expect some to need reverse auctions, where we are minimising a subsidy rather than maximising income, as a result.

We should stop specifying which rolling stock train firms have to use in minute detail, down sometimes to the design of the fabric on the seats, and replace reams of complicated legal paperwork with a few simple, easily measured common standards of good-quality train performance, safety, overcrowding and reliability, which every train firm has to hit. That would turn open access from being a bit-part, marginal add-on to franchising into the main event—the central, mainstream way of organising and running the entire rail network. It would be simpler, less brittle, more creative and flexible, and better value for money for passengers and taxpayers alike. It would be more efficient in the way it used the network and how it invested scarce resources in track or rolling stock. Best of all, it would, at long last, put the passenger first. I look forward to the Minister’s enthusiastic response.

16:50

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I thank my hon. Friend the Member for Weston-super-Mare (John Penrose) for securing the debate.

Railways are one of the great examples of this country’s industrial and innovative spirit, which is often symbolised by the Forth rail bridge in Scotland. It was designed by Sir William Arol, who for many years resided in Ayr in my constituency. Examples of the revival of our railways in the last two decades, after half a century of almost unremitting decline, are an achievement that warrants more recognition. Since privatisation in 1995, the number of rail passengers in the United Kingdom has more than doubled—way beyond our expectations—and has surpassed all previous records. Britain is once again a nation that runs on its railways.

However, that achievement brings new challenges. We have more rail passengers, and they want and deserve a better service and seek better value for money. To achieve that, we cannot go back to the old system that saw passengers desert the railways for other means of transport. We must instead build on the progress that we have made.

The principle behind privatisation is that competition delivers more investment, better services and better value for the customer, which, to a degree, can be proven. While the situation has improved since the days of British Rail, which I remember well, there is still a shortage of genuine competition on our railways. The vast majority of rail services in this country are run by franchises—essentially time-limited monopolies granted by the Government. It is easy to see how this system limits competition, especially in Scotland, where the overwhelming majority of services are provided by one operator, Abellio ScotRail, which has a Dutch parent company. Abellio took over the ScotRail franchise in 2015, but questions already have to be asked about its performance. We could in parallel ask about Network Rail’s performance.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Gentleman support calls from the Scottish National party that responsibility for Network Rail Scotland be devolved to the Scottish Government, so that Network Rail does not answer to two different Governments?

[Bill Grant]

My simple reply to that is no, I would not support that at all. Network Rail works by being interconnected throughout the United Kingdom.

[Alan Brown]

You just criticised Network Rail Scotland.

[Bill Grant]

That is correct, and it was a fair comment. ScotRail cannot be blamed entirely, because Network Rail is a key player in the movement of rolling stock within the United Kingdom, including in Scotland.

Under the franchise, ScotRail is supposed to move towards a punctuality target of 92.5%, but in reality it is going backwards. Since August 2017, punctuality has dropped from 91.2% to just 88.7%. That is only if we count trains that are four minutes and 59 seconds late as being on time, so it may be that the figures are slightly skewed.

While getting the most out of franchise arrangements is important, fostering greater competition and giving commuters more choice is also crucial to improving the quality of service for commuters. There are already a number of open access operators, as was mentioned. Grand Central and Hull Trains are consistently at the top of the passenger satisfaction rankings, and the presence of open-access competition has led to more passenger journeys, higher revenues and lower fares, which suits commuters.

The fact is that competition works, and we should look at what we can do to enhance it, not stamp it out. I therefore call on all parties involved—the UK Government, the Scottish Government and Network Rail—to consider what action they can take to break down barriers and secure more open access operators running more services on the United Kingdom’s railways. That is not only because open access operators tend to run good services, but because, through competition and choice, they can be a wake-up call to the franchise operators.

ScotRail and the franchises across the UK could do with being kept on their toes, not only by the looming threat of the next franchise renewal but by open access challengers. Our railways have the potential to be an even greater British success story, but only if we avoid the trap of nostalgia. We should not go backwards to nationalisation but focus on what will work in the 21st century. More competition and choice will help to bring better services to commuters in all parts of the United Kingdom. Open access operators are the next phase in the successful journey of Britain’s railways.

[Mrs Madeleine Moon (in the Chair)]

Before I call the next speaker, I remind Members who have indicated a desire to speak of the usual convention of either approaching the Speaker’s Office, notifying the Member who has secured the debate or passing a note to the Chair.

16:54

[John Grogan (Keighley) (Lab)]

I stand corrected and admonished, Mrs Moon. The quality of the debate inspired me to make a contribution.

I consider myself to be a democratic socialist and also a great believer in competition, and I do not necessarily see a contradiction between the two. One good thing that came from the Railways Act 1993 and the privatisation of the railways was the creation of open access operators. I could not say that it was a bad thing, because I used to be the Member for Selby, which previously had no direct rail link to the great city of London. As we have already heard, Hull Trains established itself as the pioneer of open access. It initially ran, I think, four journeys a day to London; it is many more now. In terms of the links between Selby and the world, seeing that direct link from London King’s Cross to Doncaster and then to Selby and to Hull was like having, to reference an earlier debate, a second division football team, in the effect it had on the town’s attractiveness.

The hon. Member for Weston-super-Mare (John Penrose) is absolutely right: those who have always opposed open access operators are Governments of both colours, who have never made it easy for the operators—I think the current Government are looking at it afresh—and the franchise holders. I am delighted that the excellent shadow rail Minister, my hon. Friend the Member for York Central (Rachael Maskell), is here. The citizens of York benefit from Grand Central train services. I remember, under a Labour Government, going to the Office of the Rail Regulator and saying, “This is your chance to be heroes.” Everyone said that the rail regulator could not possibly find a path on the railway for that Grand Central service, but it stood up and said that there was space, and we therefore had Grand Central services.

I understand that, from 2021, there will be a service on the east coast main line to Scotland from London, calling at Morpeth, promising £25 fares to Edinburgh. Some lines are easier to run open access services on than others, for a variety of reasons, and even though only 3% of services across the country are run by open access operators, the east coast main line has benefited from that price competition. Any dominant provider—to be honest, it does not matter whether state or private—will become complacent and find it hard to innovate. That is as true of the current franchise holders as it was of British Rail. I fully support the Labour party’s policy of taking that franchise back into public ownership, because I am a great believer in a mixed economy. There was a moment under a Conservative Government when the state provided services on the east coast main line, and consumer satisfaction was high, but the open access providers pressed it and kept it honest.

I say gently to my party, as we develop our policy, that it may not be popular. If at the next election it looks as though we are about to form a Government, my constituents will ask whether the policy will mean the end of the Grand Central service from Bradford to London, and people in Selby will ask whether it will mean the end of the Hull Trains service to London. I hope the answer to those questions will be no. With those remarks, I sit down, admonished.

16:58

[John Redwood (Wokingham) (Con)]

I strongly support the proposition of my hon. Friend the Member for Weston-super-Mare (John Penrose)—that we could do with more competition and choice on the railways. The Hull example is great, and I am pleased that it has cross-party support. That city was not well served by the existing monopoly system. It allowed competitive challenge and granted an extra service, and everybody seems happy with it.

That example demonstrates that it is possible to introduce competitive challenge into what is effectively a nationalised monopoly system at the moment. We had rather more competition and choice in the early days of franchising, when it shook things up and improved services, but it is clearly not doing that to any great extent anymore, because successive Governments have wanted more control and authority over the detail and specification of the franchises. In the only competition that there has been, one or two bidders have bid too enthusiastically, and we have then had the embarrassment of their walking away. People rightly ask what they added and whether they were genuinely at risk if they were able to walk away. They would say, “Well, Network Rail didn’t deliver the capacity we were promised, so we weren’t able to deliver the services,” and they would say that the rest of the structure—the controls over timetabling and specification down to the kind of minutiae that my hon. Friend mentioned—made it impossible for them to achieve the changes or innovations that might have led to a profitable service for them and a better service for the customer. There is, therefore, quite a lot of common ground between the parties that the existing system needs considerable change. As my hon. Friend rightly said, we have all had experiences of broken and bad services in recent months, and our constituents have been let down all too often when they have tried to make the journey to work.

My own experience is that I often visit cities and towns around our country, because I love our country and I wish to stay in touch with more of it than just my constituency, and often when I am trying to get back to London to do the rest of my job, I book myself on a fast train and some previous service has been delayed. There may have been a driver problem with a slow train; more often, there will have been a big signalling problem earlier in the day. Then, not only is our service delayed when it arrives, but it gets progressively more delayed into London, depending on how far out we started, because it gets stuck behind stopper services that are themselves delayed, and then everyone is extremely frustrated and the businesses are in the dock for failure to deliver. That is particularly hard for the franchise company if it is indeed a Network Rail failure. It is more fitting that it should get the anger of the travellers if the issue was its own inadequacy at managing.

I therefore have a lot of sympathy with what my hon. Friend says, but I want to explore the most difficult part of his proposition. I am all in favour of open access and different competition. I agree with him that if people can offer services that the public actually want, rather than having to accept a managed best guess—probably over-managed by the Government—that would be better. I am just a bit concerned about how the network monopoly would still operate. My hon. Friend makes a very good point: he says that if there were open access to the network, presumably it would still be a public sector monopoly, but it would have an incentive to provide more capacity, because obviously the more open-access services it ran on its tracks, the more revenue it would gain. We would hope that it would behave in a positive way, even though it was a public monopoly, and would see that that was its main aim, and we presume that a Minister would instruct it that it needed to provide more capacity.

We first need to ask ourselves how we could get the extra capacity in our current system at a sensible price, whatever model of ownership and running the railways we might want, and then we need to look at how a particular model might operate. It seems to me that there are two relatively good-value and straightforward fixes for capacity that we need to do more of. I do not myself think that we can carry on with the idea that we will simply build new railway lines. The High Speed 2 expenditure is a very wasteful way of doing that and it will also do quite a lot of commercial damage to the routes that it takes on when it opens up, so we will have excess capacity on that particular set of routes and still be chronically short of capacity everywhere else. We are chronically short of capacity particularly at peak times into main cities, and the best thing the railway can do is move an awful lot of people at roughly the same time, when it has a clear advantage over the roads. We chronically lack capacity when it could do a really good job and provide an answer for people who are prepared to pay very high sums of money for a season ticket in order to carry out a job that often is not that well paid. They expect, in return for that, reliability and a seat on a train, which is a luxury that many of them do not get under the current system.

As I have said, there are two ways in which we can expand capacity more quickly. The most important, which the Government are now experimenting with—I urge them to go further and faster—is the wholesale adoption of digital signalling. According to my understanding of the technology and the expertise in the industry, it would be quite easy to get a 25% increase in capacity by introducing digital signalling. If we fly in a light aircraft over Britain at the peak time in the morning or evening, we will see completely clogged main roads into and out of the cities and largely empty railway track into and out of the cities because there is typically a 2-mile gap between the trains, for very good safety reasons. But with digital technology, it would be possible to run a really safe railway and have fewer gaps between the trains. Of course I want a very safe railway, and largely we have a very safe railway; we want to be able to take that for granted. However, given that the trains should all be going in the same direction on the same piece of track, and given that through the signalling system they should not be intersecting with one another in the way road traffic does, it should be possible to run more trains on a continuous piece of track with clear visibility, a satellite system and a digital communications system, which would act as a restraint were two trains to get into the wrong place. They would be able to see each other electronically, and there could even be automatic override, although I think drivers are quite capable of keeping the trains safe, and that is one of their main functions in such a situation.

I therefore urge the Minister to roll digital signalling out more quickly, and we may be able to go on from a 25% capacity uplift to a rather bigger capacity uplift, because the tracks remain remarkably empty when one is standing in quite a busy station, waiting for a train. It can be a very long wait, and not much else happens. We think to ourselves, “If this were a main road, I would have seen a thousand cars by now,” and we have seen two trains. We think to ourselves, “This is crazy. We have these fabulous routes. There must be a safe way of developing them.” And the great news is that there is, because digital technology, satellites in skies and the ability to know exactly where things are give us that capacity.

The other thing that I think is needed, to deal with the problem of the people going long haul needing a different pace of train on a single piece of track that also has to take stopper trains, which go much more slowly, is a bit more investment in bypasses. We do not need very long sections of track; we just need regular sections of track where we have double-tracked where there was a bit of spare land—there is quite a lot of waste and spare land around the railway system—so that the fast trains know that they have to go only another 3 or 4 miles down the track and there will be a short bit of track, with appropriate signalling, where they can get past the slow train without any problem. Then we would undo some of the damage that has been done by the timetable disruption through the absent driver, broken signal, broken rail or whatever it is that has caused the problem that day.

You will be pleased to know that this will be a short speech, Mrs Moon. In conclusion, open access, competition and choice can make a difference, but we need to tackle the capacity problem. Perhaps my hon. Friend is right to say that we can do that with a monopoly provider, or perhaps we have to look at models whereby individual dominant players on a route network with open access take responsibility for the capacity provision with the regulator, because we need to ensure what whoever holds the track not only has a theoretical incentive to provide more capacity, but actually wants to provide more capacity. We may need a market model for that, because up to this point Network Rail has been bitterly disappointing, very backward looking and slow at answering what the public want, which is a lot more peak-time capacity into our towns and cities.

17:08

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mrs Moon. Like other hon. Members, I congratulate the hon. Member for Weston-super-Mare (John Penrose) on initiating the debate and putting forward new ideas and thinking on the operation of the rail system. One thing that I think we can all agree on is that, as the hon. Gentleman said in his opening remarks, the existing franchise system is absolutely broken. There are too many direct awards, which means a lack of competition and less pressure on prices. We have had the east coast main line shambles. No matter how we dress it up, Virgin Trains East Coast has been able to walk away owing the taxpayer £2 billion. That is a £2 billion write-off of bad debt. There are also the ongoing issues with Southern Railway, and of course there are the latest timetabling issues, so there is no doubt that the franchising system as it is operating under this Government is not working; it is not fit for purpose.

The hon. Member for Weston-super-Mare stated his belief that franchises put train companies first, rather than passengers. I certainly agree that train companies—obviously—have to make profits, but I would suggest that with open access there would still be companies that would have to make profits, so they might still be driven to display the same behaviours.

[John Penrose]

Nothing says that open access has to be among profit-making companies. There could be not-for-profits and publicly owned companies, providing that they all compete with one another on a level playing field. I just want to reassure the hon. Gentleman about that.

[Alan Brown]

As a complete free marketeer, I welcome the fact that the hon. Gentleman is saying that we can have not-for-profit and public sector involvement. I agree with that sentiment.

I think, however, that the hon. Gentleman has over-simplified how this could work. It was suggested that if one train company is not operating to satisfaction, a passenger can switch to another train company, just like shopping for coffee. I have a funny feeling it will not be that simple for widespread open access. We have heard the benefits that open access can bring, but the reality is that train operators will still be bound by the same constraints of the existing network, particularly station capacity at mainline stations. There therefore might not be the flexibility to have so many train operators competing. Slot access has to be managed. We must also consider the movement of freight on the rails. There are a number of elements that need to be understood and factored in, which might restrict open access slot availability.

It was suggested that that might incentivise Network Rail to build more capacity. At the end of the day, however, if that is an incentive for Network Rail, the taxpayer still has to fund Network Rail upfront for the costs or Network Rail will have to borrow against optimistic future track rental fees. There is a risk, therefore, that it will not incentivise Network Rail to start duplicating rail networks across the UK.

It was also said that this would be comparable to the way we shop around for air services. I do not think that is comparable. The constraints on Heathrow stifle competition just now. There is not the widespread competition in air routes that everybody would like to see. Particularly for connectivity in Scotland, passengers do not have the choice that we would like. Again, it is a slightly idealistic comparison. Having said that, I welcome the suggestion. It has merits and it can work, but it will not be able to work as an entity by itself, because we will still need to protect the less-profitable routes. I suggest that it would need to be part of the mix, but I would not dismiss it out of hand.

The hon. Member for Ayr, Carrick and Cumnock (Bill Grant), in my opinion, wrongly conflated cause and effect with the end of British Rail—franchising was brought in, and suddenly passenger numbers rocketed and all the rest of it—but that was because Government constraints on investment in the rail rolling stock were lifted. There was therefore investment in the rolling stock, which the franchises were allowed to do, but that investment was still paid for by a combination of train users and the general taxpayer, because many franchises are subsidised. It was a direct consequence not of privatising British Rail and breaking up the rail network, but of allowing that investment to take place. Too often, many Conservative MPs seem to think that franchising the system created magic money. They seem to think the franchises were like the Prime Minister’s magic money tree, but they are not. It is always funded from somewhere —that is, from the general taxpayer.

[Bill Grant]

I think the hon. Gentleman is distorting what I was saying. I clearly said that passenger numbers had doubled. In life, we have to deal in facts. That was a clear fact, and I went into the details and the reasons why. The trains certainly did improve in quality. I use them on a weekly basis, going north to south. The quality of the train rolling stock is very good.

[Alan Brown]

I thank the hon. Gentleman for clarifying. I remind him, however, that he repeatedly spoke about the bad old days of British Rail. I am just reminding him that those so-called bad old days were because the Government would not allow any investment, so it was not necessarily a function of British Rail being a national rail company.

The hon. Member for Ayr, Carrick and Cumnock also mentioned the Scottish Government working with the UK Government, with which we all agree. I would point out that in terms of funding for control period 6, the UK Government just told the Scottish Government what funding they were getting. There was a big shortfall. There was no consultation on how that would happen. There has been an ongoing, constant refusal to devolve Network Rail. We have seen recent events, such as with the fisheries White Paper, on which there has been no consultation with the Scottish Government. I agree that it would be ideal if the two Governments could work better together, but I suggest that there is a clear fault line. The UK Government are imposing stuff on the Scottish Government and not consulting.

We heard a last-minute entry into the market, as it were, from the hon. Member for Keighley (John Grogan). He highlighted the benefits of competition and open access slots in his area. That is important. It was good to hear how that has benefited his constituents. Like him, I welcome the potential future Scotland-London link-up and the predicted lower rail fares. That can only be good for passengers travelling on the east coast main line. As he has a wee habit of doing, there was a slight bit of friendly fire against Labour’s policy of nationalising rail, because he is concerned about what that would mean for the open access slots for his constituents. I look forward to the shadow Minister’s response on that.

Lastly, we heard from the right hon. Member for Wokingham (John Redwood). He said towards the end that he had made a short speech, but I thought he was in danger of speaking longer than the lead sponsor of the debate. Given how long I have been speaking, however, I am maybe being a wee bit hypocritical, I admit. He highlighted the failings of Network Rail. Other hon. Members did so in interventions, too. I remind them that Network Rail is answerable to the Secretary of State, so when we talk about the failings of Network Rail, it is an admission of the failure of the UK Government and the Secretary of State for Transport. They seem to agree with Opposition Members that the Transport Secretary is not up to the job.

As I said, there is some merit in open access, but I do not think it is a one-size-fits-all solution or that it will be the panacea for a new smoothly operating Network Rail. There is no doubt that profitable routes will be cherry-picked. We need to protect non-profitable routes. I also have concerns, if it was too widespread, about what this could mean for investment in rolling stock. Rolling stock investment has a long payback period. That is what is supposed to underpin the franchise system at the moment. Franchise holders get a longer award, which allows them to borrow to invest in the rolling stock, so if there are not any longer award periods, there is a risk that there will not be that long-term investment.

On passengers’ general choices, I challenge the UK Government to speed up the connection of High Speed 2 to Scotland—at the moment, as we know, it will stop at Crewe—and to look at improved investment in the existing network north of Crewe. That is really important.

Competition is good. I welcome the fact that the hon. Member for Weston-super-Mare acknowledges that we can and should have public sector involvement. There cannot be too much open access. It cannot be massively increased while we have the existing franchise system, so the Government would need to do a complete overhaul of how the rail system operates. Given the failures of the franchise system, that overhaul is long overdue.

17:18

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I know what an interest you and other south Wales MPs have in the rail network, not least since we saw the announcement of de-electrification last summer.

I thank the hon. Member for Weston-super-Mare (John Penrose) for bringing this debate to the Chamber. There was another debate on the same subject only yesterday afternoon. It is interesting to see how many Back Benchers and members of the Conservative party now recognise that the franchising system simply is not working. We have been saying for such a long time that it is failing and has no mechanism for success.

I am glad that that recognition is there. It has been brought to the fore over the last two months with the complete meltdown of the timetable and the real pain that that has put the travelling public through. The chaos continues even today. We have a new timetable coming in this weekend. We are holding our breath to see whether that will make a difference. Quite frankly, the public has had enough and wants change. They have said that they want a nationalised railway, and I will touch on what that means for the future.

I agree with the hon. Member for Weston-super-Mare, who wrote in The Telegraph that the chaos and the franchising system are

“symptoms of a broken rail franchising system that’s so brittle and inflexible it’s causing misery for millions. Franchises put train firms first, rather than passengers”.

That cannot be the case when we are talking about a public service. I will depart from agreement with him at that point, as he might expect.

I want to pick up the point about the range of options that would be available if there was an open access system, and the thinking that if someone’s train did not arrive on time, they could simply pop on to another train. We know that does not work at the moment under open access, and in fact, there is real frustration among the travelling public that they have to buy a new train ticket or wait at the station until that operator sends another train. Open access will not solve the ills that have been described.

The fragmentation across the railway system has failed, and bringing more operators on to the system through open access would mean more fragmentation, which is the last thing that the rail system needs. The whole rail industry is clearly saying that we need to bring the rail system together. In particular, its focus has been on bringing track and train together to ensure that wheel and steel connect, so there can be a conversation about what happens on the infrastructure and between the trains that run on it. That has universal support. I agree with the Government, who have also said that that is absolutely essential. Bringing more competition and more rail operators on to the rail operating system will further fragment those relationships.

I want to pick up the challenge about the creativity of new routes. Those opportunities will exist under any system. The complexity sits in the fact that many of those routes cross traditional route lines—the main lines—so they become more complex for timetabling. We need integration, rather than fragmentation, to address those challenges.

Labour has clearly said that we would introduce a programme of nationalisation of the railway system, but I want to make it clear to all hon. Members that that is not going back; it is moving forward to a new system of nationalisation. Just as hon. Members have articulated that they want new private-market models operating on the railways, there is no one system of nationalisation. That is what we have focused on in developing our model. We have worked closely with the rail industry, rail operators—who are embracing what we are saying—and people working across the infrastructure, and we have looked at examples globally, on how best to run the railway system in the future and how to put in the challenge, opportunity, enhancements and vital long-term investment to ensure that we have a system that works best for the future.

As the hon. Member for Kilmarnock and Loudoun (Alan Brown) said, we need only remind ourselves that the fact that more people are on our rail system is because in 1997 a Labour Government came in and invested in rail services, which had been so starved of resources that British Rail was run down in its final days. It is about ensuring that resources go to the right place in the system to revitalise the railways. We will see that under a new rail structure.

So much of this is about where the money flows. We must remember that private train-operating companies do not own the trains; they lease them from the rolling stock leasing companies. They lose between 30% and 40% in the additional charging by the ROSCOs on the back of those trains. If we owned our rolling stock, we could put that investment back into the rail service, which is exactly what we need to do. A report from the industry says that 30% is lost because of the Government’s on-off decision making. I agree with the hon. Member for Weston-super-Mare that we do not want political interference in the running of our rail. The level of political interference today across the rail system is extraordinary, with the Secretary of State at the head and making decisions about which lines will be electrified.

A Labour Government would not be interested in doing that. We want the rail service to run the rail service; we do not want the state to interfere. We will set the strategy, and the nationalised company will run the railways. People who are the experts in running the railways should move forward, rather than politicians who, frankly, make political decisions about the railways, as they are today. That would not happen under the nationalised company that we will put forward to run the railways.

We would structure the railways to ensure that we get that long-term investment, because the cry from industry is that the Government changing their mind about electrification and other projects has meant that it has had to not only gain skills and put apprenticeships on to build up to a programme that the Government said was going ahead, but then lay people off. What a waste of talent, let alone resource. We want a long-term plan. The franchising system and the open access system do not serve that need. The public are demanding that we ensure that investment, so we can plan our infrastructure changes and co-ordinate them with the routes and enhancements, such as the new rails and new opportunities, that we want to bring on to the track. That is what a Labour Government will deliver when we come to power.

One thing that has not even been mentioned in the debate, although I appreciate it is about passenger choice, is that we need to ensure that the rail network is there for freight. Operators across the network also need to have good access to our tracks and the ability to move goods across our country. As we are talking about the future of our economy, it is crucial that those choices are made for the sake of our economy, and that they work.

In the future, we have to say where the investment will come from. Open access is not the answer to longer term investment in our railways. The franchising system ensures that there is a profit margin that can go to companies, although many are not receiving those profits because, quite frankly, they are failing. The amount of money that leaks out of the system is not acceptable to the taxpayer. With regard to the recent chaos, we could be talking about £1 billion of taxpayers’ money being used to pay the compensation due to that failed timetable. It failed because of franchisers putting in their different demands and everyone wanting their new routes put on to a new timetable, and the Secretary of State changing his mind about his priorities and not leaving sufficient time to put a new timetable in place. The Secretary of State’s decision making and the infighting among the railways has been so costly. That will disappear with our nationalised railway system, because we will not have the barriers that could create that.

[Mrs Madeleine Moon (in the Chair)]

Order. I hope the shadow Minister is about to wind up. We have to hear from the Minister yet.

[Rachael Maskell]

I am watching the time. I will not go over my halfway mark.

[Mrs Madeleine Moon (in the Chair)]

You have gone over your five minutes considerably.

[Rachael Maskell]

Five minutes?

[Mrs Madeleine Moon (in the Chair)]

In an hour debate, it is five minutes.

[Rachael Maskell]

No one has ever told me that before, so thank you, Mrs Moon. I will come to my conclusion.

We want to ensure that the rail system works for passengers, that it improves social mobility, that it drives our whole economy forward and that it causes modal shift, to ensure that people are not getting into their cars, as they are today, but back on to the railways. That is why Labour’s model will work, and when we get into power, we will put it in place.

17:30

[The Minister of State, Department for Transport (Joseph Johnson)]

It is a pleasure, Mrs Moon, to serve under your chairmanship.

I start by congratulating my hon. Friend the Member for Weston-super-Mare (John Penrose) on securing this import debate, which, as he is aware, follows hard on the heels of a similar debate yesterday. We wait months for a debate on open access, then two come along at once. He made a terrific and really powerful speech, and I very much look forward to addressing in my remarks some of the points that he and other right hon. and hon. Members raised.

First, I will say that I and the Government are truly grateful to all the staff on the railway network. In about 90 minutes, I am sure that many of them would want to watch England play Croatia in the World cup semi-final, but instead they will be performing sterling duties, keeping the railways running and the trains moving. I just want to register for the record how grateful I am to them for that. This is a debate about choice and competition, and those members of staff will not necessarily have that choice later on today.

The choice to be able to travel by rail at all is one of the most important things that we can offer people. Whether they travel to commute to work, to do business or to connect with friends and loved ones, we want to offer people the choice of a wide range of journeys and services, and the railway has been steadily delivering more and more of that choice. The number of passenger journeys on offer in Great Britain has increased by over a quarter since privatisation and, as my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) said earlier, passenger numbers have more than doubled.

Since 2015 alone, we have opened 21 new stations on the national rail network, including in communities such as Bradford, Midlothian and Devon. These stations offer new journey opportunities and relieve the urban congestion that slows down growth.

Having just heard the remarks of the Opposition Front-Bench spokesperson, the hon. Member for York Central (Rachael Maskell), I believe that she would do well to heed the concerns that were conveyed by the hon. Member for Keighley (John Grogan). I believe that he is absolutely right to be concerned about the loss of choice that would undoubtedly result from the policy of wholesale nationalisation of the entire railway network advocated by the Labour party.

Our commitments to go further and to make further investment will meet demands for more capacity on the network. That was a point spoken to powerfully by my right hon. Friend the Member for Wokingham (John Redwood). He was absolutely right to ask the important questions that he did about how we can deliver more capacity more efficiently, and he made important and valuable points about the need to accelerate the roll-out of digital signalling and the development of the digital railway in general, and also about the need for further investment in passing loops. I reassure him on digital signalling that we absolutely recognise the benefits that he spoke of, and that the roll-out of digital signalling across the UK is under way. Emblematic features of that roll-out are in parts of the Thameslink programme, for example, and in Crossrail.

We are also committed to giving passengers the choice of how to pay for their journey, including smart cards, contactless cards and mobile phone payments. The railway also offers passengers a range of times at which to travel and flexibility over when they want to return, all provided for through a single, joined-up ticketing system. So we are fully behind the idea of offering passengers choice and our strategic vision for rail, which was published last November, set out our plans to offer even more choice.

My hon. Friend the Member for Weston-super-Mare spoke about a further type of choice in his remarks—indeed, it was the focus of his remarks—and that is choice of operator. For many journeys, passengers have a choice of operators. However, it is not always practical or efficient to have multiple operators running on the same route. On many commuter routes, having a single operator is the best way to meet passengers’ preferences. This was recognised by the Competition and Markets Authority in its 2016 report on passenger rail competition. Passengers on these routes generally want a “turn-up-and-go” service, whereby they can get on the next train. With multiple competing, non-franchised operators, this would not be possible, because passengers’ tickets would only be valid on one operator’s services.

However—I am about to make remarks that I believe my hon. Friend will find more encouraging—I agree that there is a place for choice between operators in some specific cases. That is particularly so on inter-city lines, where travel is often more discretionary; for example, where people are visiting family and friends, or indeed many of the great tourist destinations that the UK has to offer, including, obviously, Weston-super-Mare, which is a place close to my heart. These passengers often book in advance and take a specific train, allowing them to choose a service that best suits their needs.

My hon. Friend also mentioned the east coast main line in his remarks.

[John Penrose]

Before the Minister moves on—he is being very helpful in trying to cover all the different points—may I just ask him a question? He just mentioned and celebrated the existence of this integrated ticketing system that he is talking about. Does that not rather solve the problem that he is then saying will crop up if we try to have people who cannot turn up and go using different operators on the same line?

[Joseph Johnson]

To some extent but not entirely— I think that is the answer to my hon. Friend’s question. An integrated ticketing system enables people to buy a ticket for any journey anywhere in the country; it does not necessarily enable them to buy a ticket that is fungible across operators.

My hon. Friend also mentioned the east coast main line, where there are no fewer than 11 passenger operators, including the two open access operators, Hull Trains and Grand Central, which have delivered huge benefits for the communities they serve. Alternatively, take the west coast main line, where Great North Western Railway has recently been granted rights to run open access services between London and Blackpool alongside the franchised operator. That will offer passengers a choice of operators and up to six extra direct services to Blackpool per day, on top of the franchised services already available to them.

My hon. Friend the Member for Henley (John Howell) mentioned the new east coast railway. It is right that we consider all options for that new railway, which is under development, so that we deliver the best outcome for passengers and taxpayers, but we must also deliver all types of service, which a free market on its own would not do. So unless they can make a profit, franchises can get this balance right for everyone.

I am clear that open access is an important part of the railway, and can play a greater role in offering greater choice, in the right circumstances.

[John Redwood]

One day when I was trying to get back from Birmingham to London, I had pre-booked on service A to terminus A and that service was up the spout, so service A very kindly said that I could go on service B—a different company on a different route to a different terminus—and it just honoured the ticket. So there is clearly a way of making these tickets interoperable if the companies wish.

[Joseph Johnson]

My right hon. Friend has made an important observation. We can certainly look at ways to make tickets more fungible, but the purpose of the present integrated smart ticketing system is to enable passengers to “turn up and go”, to use the latest technology and so on. As yet, it has not focused on making tickets fungible between operators, and I am sure that is something that, as the open access policy develops and as open access develops as a feature of our system, will become more prevalent.

As the CMA recommended, however, a greater role for open access requires robust reforms to create a level playing field between different types of operator. At present, as my hon. Friend the Member for Weston-super-Mare knows, open access operators do not pay towards the fixed costs of the network on which they operate, nor do they contribute towards the vital social services that the franchised operators that they compete with deliver. That distorts the incentives of operators and means that we cannot realise the full benefits of competition for passengers.

That is why we are now working closely with the Office of Rail Regulation on its proposals for reforming track access charges in the next rail control period, from 2019 to 2024. These reforms will see open access operators pay an appropriate amount towards the fixed costs of the network where they are able to. We support this move as a vital step in creating the level playing field between open access and franchised operators.

We have also consulted on a possible public service obligation levy. Such a levy would complement track access charging reform, so that open access operators would also pay towards the social services that franchises deliver to many stations. Those stations would not have the levels of service they do today if left entirely to the free market, and the Government offer greater passenger choice through the franchising system to deliver social as well as economic benefits.

[John Penrose]

The Minister is being generous with his time. I suggest to him that he can avoid quite a lot of this regulatory and bureaucratic complexity if he simply switches to auctioning track slots for these things. At that point, the market-clearing price would be discovered. He does not have to set all these other additional points at all.

[Joseph Johnson]

I just observe that the franchising system as it exists today is already a version of the auction that my hon. Friend describes, in the sense that franchise bidders bid a specification that they feel is optimal for that area and the Department then assesses their bids. It is, in effect, an auction in some ways.

A greater contribution by open access operators towards the cost of the railways and a more level playing field should lead to more opportunities for open access services, and thus potentially greater choice for passengers. However, it is crucial that we get the reforms in place first, so that we can start on the right footing. I leave my hon. Friend a moment to wind up.

17:41

[John Penrose]

I thank everybody who has contributed to this afternoon’s debate. There has not been complete cross-party unanimity—far from it—but what we do have is a clear framing of a likely political choice. I encourage the Minister, who has been helpful and encouraging, to go further and faster in this area. At that point, we will frame a very clear political choice between those who want to give passengers more choice through competition and those who want to do it in a different way. At that point, voters would at least then know what they are voting for and choosing on the day.

Question put and agreed to.

Resolved,

That this House has considered increasing choice for rail passengers.

17:42

Sitting adjourned.