Baroness Randerson (LD)
My Lords, this Statement sums up the mess our infrastructure has become under a succession of Conservative Governments. I agree with the Government on a couple of points: I welcome progress in resolving strike action, so far as it has occurred. That has been allowed to drift on for far too long and was indeed stoked by the previous Secretary of State. It has badly damaged trust in railway services just when recovery from the impact of the pandemic should have been crucial. I also agree that discussions on who owns the railways is irrelevant, because the Government have effectively nationalised them and taken responsibility. That is the important thing: the Government have taken responsibility for how the railways are run.
However, turning to the rest of the Statement, I have some major points of difference. First, awarding Avanti a six-month extension is an extraordinary decision, and I mean that in the proper sense of that term. FirstGroup has failed in this franchise and continues to fail with TransPennine Express. Other train operating companies have faced exactly the same pressures—Covid, weather, strikes—but by better management and decision-making, they have more effectively minimised the impact on customers. So my first question is: how badly does FirstGroup have to do to lose either of these franchises? Because they are truly being rewarded for failure.
The improvements that the Government cite at Avanti seem very recent and very insubstantial. My question is: there have been months of past poor service; will Avanti or its shareholders face any financial penalties for poor service, repeated cancellations, late running and systematically misleading the public and the Government about cancellation rates by cancelling late on the night before? Another question refers to the 100 extra drivers that the Government cite. Can the Minister give us a view as to whether that is enough in the Government’s eyes? How long will it take to train those drivers?
Reference is also made to a new discounted ticket scheme on some routes. What proportion of routes will have this new discounted scheme? I remind the Minister that what passengers want is to be able to book ahead, because advance fares are cheaper, and they want to be able to book ahead on all routes. When will they be able to do this? Have the Government just handed Avanti another golden cheque, or are there some useful conditions to this funding? I recall that Transport for London has very stringent conditions attached to its funding. What are the stringent conditions attached to the funding of Avanti for the next few months? While we are talking about railways, is it true, as is reported in the Daily Telegraph today, that the Government are about to announce a reduction in passenger rights to delay repay compensation? If that is true, it really is adding insult to injury.
Finally, the Statement looks vaguely at the issue of reform, which is, of course, long overdue. There is a great deal of consensus on the issue of reform, so when can we expect legislation on it? The Government have repeatedly told us that simplification of ticketing is just around the corner and that it does not need legislation, so I ask the Minister when we can expect to see it happen.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
I am grateful to the noble Baronesses, Lady Taylor and Lady Randerson, for their contributions to this Oral Statement repeat. To a certain extent I am always very sad when I do not get to read out the Oral Statement, because sometimes it helps to set the tone and remind noble Lords of what was in the Statement. There were certainly some elements that may have slipped the minds of noble Lords to date. I will go through as many of the issues as I can and, I hope, helpfully provide those bits of information that may have slipped noble Lords’ minds.
I appreciate that the noble Baroness, Lady Taylor, welcomed the news on the strikes. It is good that the RMT workers “overwhelmingly”—their word, not ours—accepted the National Rail offer by 76% on a 90% turnout, which leads one to ask why the RMT chooses not to put a very similar offer to its members around the train operating companies. We believe it would be extremely beneficial for them to do so and may well bring strikes to an end, but they, for whatever their reasons, choose not to, and that is extraordinarily disappointing. As we all know, it causes an immense amount of delay and disruption to passengers’ journeys and is something that we absolutely want to avoid.
The noble Baroness, Lady Taylor, said that Avanti “has flouted all attempts to improve services”—except that it has improved services, so I could not quite put those things together. If we look at what Avanti has done, it has increased its weekday services, in many areas back to pre-Covid levels. There has been an enormous increase, up to 40% in some areas —from 180 weekday services a day up to 264. Cancellations are now down from 25% to 4.2%. I accept that needs to go lower, but I think all noble Lords can agree that that is an improved service, which the noble Baroness was not even willing to admit has even happened. Then we know that at least 90% of services arrive within 15 minutes of their scheduled arrival time. I can confirm that today 92.5% arrived within 15 minutes of their scheduled arrival time, and there was just one partial cancellation, the 7.30, which would have already departed by now.
It is also worth noting that sometimes the train operating companies have other issues that they need to look at when it comes to the challenges that they face. For example, today—and I have noted the 92.5% of services running within 15 minutes of their planned time—the train operating company had to deal with a trespasser at Cheadle Hulme; a technical issue affecting a London Northwestern service, which caused the Avanti services to be late; a Network Rail track defect between Rugby and Hillmorton Junction; a track failure at Queen’s Park, and a safety inspection of the track between Coventry and Rugby. None of those things could reasonably be put at the door of Avanti to say, “That’s entirely your fault.” Sometimes, it is not. Sometimes we need to recognise that the Government’s plans for bringing together track and train under GBR are to try to deal with such issues. We have issues with the infrastructure, and we need the services to be within that ecosystem such that those issues are minimised as much as possible.
I accept, however, and my right honourable friend the Transport Secretary accepts it too, that this is a journey. This is a reward for recovery, which the noble Baroness was not willing to accept has happened, and not for completion of all of the issues that Avanti might have. That is why this is a recovery plan, and it is why the extension is only for six months, because we believe that further improvements are necessary. We need more reliable weekend services; we need a further reduction in cancellations, and we need improved passenger communication for planned and unplanned disruption.
The noble Baroness, Lady Taylor, then talked about TP and there being “no … excuses” for its poor performance. There are, however, some issues that it would be wise for the noble Baroness to understand, and I am very happy to help her understand them. The first is sickness. The sickness rates among train crews and those providing training at TPE are extraordinary: more than twice the level of other train operating companies. That cannot be right. Why might that be happening? I would also point the noble Baroness to the lack of rest day working, which was—simultaneously and with no warning—withdrawn. We believe that was co-ordinated by ASLEF and it meant that, all of a sudden, various train operating companies that suffered this—it was mostly Avanti and TPE—were forced to reduce their timetables. They did not want to reduce them. Train crews and drivers had been doing voluntary overtime on this basis for decades, and then all of a sudden, it was withdrawn and there was a consequent impact on service. That cannot be laid at the door of the management; it just cannot. It is up to the management to try to fix it, and that is why they are recruiting the train drivers. I am very content to reassure the noble Baroness, Lady Randerson, that we are aware of the number of train drivers who are coming through. There are almost 100—obviously there is phasing over three years—and we are reassured that those train drivers will do the trick.
The noble Baroness, Lady Randerson, asked what financial impact there would be. There is a vigorous performance evaluation system looking at operational performance, passenger experience and financial management, working with National Rail, train operating companies and their shareholders. That is how they are judged: it is independently evaluated and that is absolutely right. It is done in accordance with the contract that they signed up for. That is only fair.
I have said before that legislation will come forward when parliamentary time allows. I will not comment on speculation in the Telegraph; I have not read that newspaper today. On the discounted routes, I will have to write to the noble Baroness, but I can assure her that Avanti does not use any P-codes, so she should rest assured in that area.
What I am struck by from all this is the lack of willingness to understand that it is a very complex system; the levers that the train operating companies have are not always within their gift, and neither of the noble Baronesses who have spoken so far have offered any alternative. The only alternative that I am aware of is that the Labour Party has to date—and we are still a little way off from a general election—made £62 billion of unfunded commitments for the rail industry. We look after taxpayers’ money. It is really important that we do. We need a modern railway that works seven days a week. That is what we are aiming for and that is what I think our reforms will deliver.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, may I just ask the Minister—perhaps I missed it—about bonus payments to executives? I may have missed it, but why do we think those are paid?
Baroness Vere of Norbiton (Con)
I am very happy to discuss what I know about it. Obviously, bonus payments are a matter for the companies themselves. They are not authorised by DfT or anything like that; it is a matter for the companies. There is often this thing about—and I think the noble Baroness referred to it—dividends, and I think it was £12 million. I cannot attest as to whether that £12 million is right or not, but I know that dividends that were agreed quite some time ago relate to a period from pre-Covid. Noble Lords may or may not be aware that the independent evaluation of the different rail contracts has been published only up to September 2021. There is still some more information to come; there is always a lag. Sometimes people say, “You are rewarding for failure.” No, that would be for a period that is not the current period; it would be for a period that was quite some time ago, because we, quite rightly given the complexities of the railway system, take the time for independent people to evaluate by the different criteria that are clearly set out, the different reasons why delays happen, why cancellations happen or why a company may or may not be performing as it should. Of course, we publish those things, but there is always a delay. Therefore, the money might not match up with the period that we are currently in. That is always important to remember.
Baroness Taylor of Stevenage (Lab)
Can the Minister kindly clarify the bonus situation? If she cannot clarify it now, then I will be happy to receive her response in writing. Which period do those bonusses cover? I am sorry, I have given my speech to Hansard, but more than £4 million in bonuses was given to senior managers. I am sure that the Minister will understand that, in these very difficult times for rail passengers, for them to see senior executives in that company rewarded with very significant financial bonuses really goes against the grain. Therefore, I would be most grateful to know what period those bonuses cover.
Baroness Vere of Norbiton (Con)
I will put that in writing. I have some data here on executive bonuses. The total amount for the executive team for the financial year to 31 March 2021—a little while ago, which obviously covers a prior period—was £279,059. For the executive team, the Virgin Trains bit, it was more, at £2.5 million, but that of course related to a period a long time previously. The following year, total bonuses were £461,000.
I want to put on record that 20% of train drivers earn over £70,000 a year. I am not necessarily comparing the two, but this focus on bonuses for senior executives sometimes means that we do not look at what has happened to train drivers’ pay, which has gone up by more than the average over 10 years. As I say, 20% of them earn over £70,000 a year.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, the Statement refers to an extension to 15 October this year and says that the department is looking for improvements from Avanti over the next few months. It talks about more reliable weekend services, continued reductions in cancellations and improvements in passenger information during planned and unplanned disruption. Can the Minister say more about the measures that will be used to ensure that we get those improvements? If we are back here again in September and we have not had those improvements, where will we stand? Avanti needs to know that the Government are prepared, if need be, to take away its contract. At the moment, looking at the report, I am worried that they are not prepared to do that, and Avanti needs to hear from the Government that they are. Otherwise, there is no impetus to improve.
Baroness Vere of Norbiton (Con)
Absolutely. For the complete and utter avoidance of doubt, the Government are considering and will consider all options for both Avanti and TPE if they do not meet the required level of service. All the improvements we are talking about—to weekend services and passenger communications, and reducing cancellations—are set out in the recovery plan agreed with the Office of Rail and Road. It is content with it, and I know that the Rail Minister meets certain train operating companies weekly to go through the recovery plan. As I say, all possible options remain on the table. We have given the six-month extension to Avanti, until October. We will be making a further Statement on TPE when its contract ends towards the end of May, but it is too early to prejudge what the outcome will be.
As I say, we continue to look closely at the improvements that have been made. There have been significant improvements in the face of some challenging industrial relations, but I believe we are potentially over the worst now. I very much hope that we can bring our railway back to where I am sure all railway workers and passengers want it to be, and where our nation needs it to be.
Lord Kennedy of Southwark (Lab Co-op)
The Minister has told the House that there is a weekly meeting with the Rail Minister, and that is good to hear, but what else is happening behind the scenes? We would like to know a bit more about what is going on, because we all want to ensure a better rail service. Although I do not live in the north-east, I am conscious that many Members here do. What more is going on with the department? The Minister works with the Rail Minister every day, so what is actually happening?
Baroness Vere of Norbiton (Con)
I am struggling to understand the basis of the noble Lord’s question. What is happening is that the officials are working with the train operating companies and those companies are working with their workforces. Any contractual relationship with an organisation within the Department for Transport requires greater or lesser oversight, depending on what is happening. I cannot really add much more, other than it is government being government with one of its contractors.
Baroness Randerson (LD)
The Minister did not have time to answer all my questions. I simply ask that she review them and answer them in a letter.
Baroness Vere of Norbiton (Con)
I am happy to do so but, given that I have a tiny bit of extra time, I will knock another one on the head. On the booking window, I agree that it is very important that passengers have the confidence to book ahead. The booking window now extends to 12 June—another area where Avanti has shown real improvement. We understand that the weekend booking window is shorter, at five weeks, but that is in order to take into account engineering works. That is another example of the infrastructure side of the business impacting on the services side, and of course we want them to work closely together.
I will look at some of the noble Baroness’s other questions. I cannot see too many that I have not answered, but I will ask officials to look through Hansard and we will write accordingly.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, my apologies: maybe I am not explaining myself very well. Clearly, many Members here, and the travelling public, are frustrated by what is going on at the moment. I am trying to find out from the Minister, in addition to what is in the Statement and the weekly meetings, what work is going on between the officials and the rail companies. How do we ensure that when we get to October, we have those improvements? If there are still problems, what is happening next week, the week after and the week after that to ensure that we are not sitting here in September saying, “We’ve got another extension for six months. What we need to see is more improvements”? Currently, we still have all these problems, and it appears to the public that actually, not much is happening.
Baroness Vere of Norbiton (Con)
I dispute that it appears to the public that not much is happening. I believe that the travelling public will have noticed the significant improvement in the train services. On the point made by the noble Baroness, there are milestones in the recovery plan that need to be hit relating to driver training, recruitment and cancellations. All these things will be set out in great detail in the recovery plan, which will be scrutinised by the Rail Minister and his officials.
It should also be remembered that this is a private company and it will be managing its recovery plan from the operational side without the dead hand of government fiddling with it, because we should not—that is not our job. We are just there to provide the oversight and scrutiny to ensure that the recovery plan is going to plan.
Baroness Taylor of Stevenage (Lab)
I respectfully ask the Minister, rather than waiting until October when we might be back here having another discussion about this issue, if we could have some kind of interim update before then. Presumably, the issue of TPE will come up in May, just before the contract expires, but it would be helpful to know at some point how the improvement plan for Avanti is going, rather than waiting until October.
I agree with my noble friend Lord Kennedy that, although we heard about improvements yesterday from the Minister, when you listen to passengers—whether that is noble Lords or people outside—or look on social media, their constant concern is that lives and businesses continue to be disrupted. I am interested to know if we could have an interim update, so that we can at least know that the improvement plan is going in the right direction and that the phasing of the employment, training and so on of the 100 drivers the noble Baroness, Lady Randerson, referred to is going to plan, because presumably, that would greatly assist the situation. If we could have some kind of interim update before we are back here October, with the Government telling us whether they have decided that the contract can be awarded, that would be extremely helpful.
Baroness Vere of Norbiton (Con)
The noble Baroness is of course in an extremely privileged position in that she can table Oral Questions or ask me Parliamentary Written Questions whenever she likes. I would be happy to answer those. I am sure that over the period, we will be back in your Lordships’ House to discuss Avanti; indeed, I believe there is a topical Oral Question on Thursday. I am not expecting that I will have anything at all different to say by then, but perhaps we can have a rehash of where we are.
Every now and again I have a little look at Avanti on social media, and things are much quieter than they used to be. What I see much more of now is the disruption caused by the strikes.
Lord Kennedy of Southwark (Lab Co-op)
I would like to move on to TPE. Will the Minister confirm that when we get the report—and I accept there will be another Statement about TPE before the end of May—taking the contract off it is still one of the options on the table?