Coastguard Modernisation

Baroness Clark of Kilwinning Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Mike Penning]

A shocking thing that I found when I took over this job and visited co-ordination centres around the country was the complete lack of co-ordination. The pairs were linked but apart from that there was no national resilience at all. The whole point of doing this is to give us a 21st-century emergency service with that level of communication and skills. Training will be paramount. That will be done not only in the MOCs but across the co-ordination centres because they will be picking up calls from other areas just as the MOCs will be.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Minister clarify the position of the Clyde station given that the lease of the premises is coming to an end at the end of next year? Is that when it will close? This is of great concern given that the maritime operations centre will not be in place then, so there will be no national resilience, and that Belfast is a far smaller station than the Clyde station at the moment. Does he understand the massive concern that we are leading to a situation in which there will be very little cover on the Clyde and far fewer resources than now?

[Mike Penning]

It will not be the case that there will be little cover on the Clyde because that station is paired and the pairing will cover it no matter what. That happens today and has been the case for many years. There is no drawback at all to the front-line emergency services carrying out the rescues. Indeed, the exact opposite is the case—I am enhancing them, I am going to have more paid staff training them and there will be more safety and more cover. I am very aware that the lease on the station is running out, which is why I said in my statement that we will keep a strong footprint in the Clyde area—but it will not be at the existing station.

Oral Answers to Questions

Baroness Clark of Kilwinning Excerpts

Thursday 10th November 2011 Commons Chamber

The Secretary of State was asked—

[Katy Clark (North Ayrshire and Arran) (Lab)]

1. What the outcome was of the meeting of the European Aviation Safety Agency’s advisory group of national authorities on 25 and 26 October 2011; and if she will make a statement

[The Secretary of State for Transport (Justine Greening)]

The meeting of the advisory group of national authorities provided an opportunity for representatives of EASA and European Union member states to exchange views on a number of safety rules currently under development. The discussion will help inform EASA’s development of the rules in that area.

[Katy Clark]

I thank the Secretary of State for that answer. A recent survey of pilots has shown that 43% said that they had at some point fallen asleep in the cockpit, and 31% said that when they had woken up the other pilot was also sleeping. Does she agree that the proposals to increase the time pilots work to up to 13 hours, with fewer rest periods, represent a threat to public safety?

[Justine Greening]

First, I should say that the Civil Aviation Authority has received no reports of pilots falling asleep under the mandatory occurrence reporting scheme, but obviously we will always be guided by its views on safety, for which it has an outstanding reputation around the world. The Government have expressed our concerns about the proposed changes and continue to make them known. We will work with other countries to ensure that the final rules reflect those concerns.

Oral Answers to Questions

Baroness Clark of Kilwinning Excerpts

Thursday 23rd June 2011 Commons Chamber

[Norman Baker]

I am delighted to say that I wrote to the Confederation of Passenger Transport, which represents the main bus operators, on 23 May, to give exactly that nudge.

[Katy Clark (North Ayrshire and Arran) (Lab)]

11. What recent assessment he has made of the effects on household budgets of changes in rail fares.

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

A distributional analysis of the impact of rail fare increases was conducted during the spending review and used to inform Department for Transport and Treasury decisions on spending review outcomes.

[Katy Clark]

I thank the Minister for that answer. Is she aware of research by Passenger Focus that shows that people who buy their tickets from ticket machines pay far more expensive fares than if they used one of the staffed ticket offices? The McNulty report calls for the closure of half of all our staffed railway offices. Will she decide to reject those proposals to ensure, among many other reasons, that people get the cheapest fares they can?

[Mrs Villiers]

The industry needs to do a lot better on its ticket machines and to ensure that passengers are properly informed about the ticket choices available. We will continue to challenge the industry to do that through our fares review and the White Paper on the future of the rail industry which we intend to publish in November.

Greenock Coastguard Station

Baroness Clark of Kilwinning Excerpts

Wednesday 8th June 2011 Commons Chamber

[Katy Clark (North Ayrshire and Arran) (Lab)]

I am very pleased to have secured this debate today on a topic of concern to many in my coastal constituency who rely on the service provided by the Clyde coastguard service at Greenock. Of course, the debate takes place in the context of the consultation on the future of the Maritime and Coastguard Agency, which was announced to the House in a written ministerial statement on 16 December 2010. The consultation proposes the closure of more than half the current coastguard stations and the loss of approximately 248 jobs.

A number of my constituents work at Clyde coastguard station at Greenock, and many of the points that I shall put to the Minister today, and the questions that I will ask him, come directly from them. The House will be aware that coastguards have recently been prevented from giving evidence directly to the Select Committee on Transport. Operations room staff at the Clyde coastguard station have, however, authored a response to the consultation, which was submitted on 5 May. I hope that the Minister will look at that submission and ensure that it is considered constructively. It makes many detailed points in support of retaining a coastguard station at Greenock.

[Iain Stewart (Milton Keynes South) (Con)]

I congratulate the hon. Lady on securing this important debate. I am a member of the Transport Committee and, as she rightly says, we are conducting an inquiry into the future of coastguard stations. Although we were not able to take evidence formally from the staff at Greenock, we visited the station and met the staff informally as part of our inquiry. I pay tribute to the officers. The views they expressed were noted, and will be helpful in formulating the response to our inquiry.

[Katy Clark]

I am grateful for that intervention. I hope that the views expressed by coastguards at Greenock and other coastguard stations are listened to by the Government, and I strongly welcome the fact that coastguards were able to speak informally to the Committee. They have made many technical points which it is helpful for Members of Parliament to listen to.

[Bill Esterson (Sefton Central) (Lab)]

I add my congratulations to my hon. Friend on securing this important debate on the future of Greenock. Does she know whether staff or former staff at Greenock were involved in drawing up the proposals that inform the consultation? That is a concern that has been raised with me by staff at the Crosby coastguard station, which is also under threat in this review.

[Katy Clark]

The constituents of mine who work at Greenock and other members of staff—I have spoken to them on several occasions over the years—were not involved in any way with the proposals, and that is one of the concerns that has been expressed up and down the country. The proposals do not seem to be based on the experiences of those who have been actively involved in providing the service.

If the proposed closure of the Clyde and Forth coastguard stations goes ahead, it will leave the central belt of Scotland without a coastguard station. Indeed, if the proposals go ahead as originally announced in December last year, there will be no coastguard stations south of Aberdeen or north of Bridlington in Yorkshire. My constituents are concerned that it is far from clear what criteria were used to develop these proposals, so it is not clear why Clyde has been proposed as one of the stations that will close. That is also far from clear to my constituents who rely on the service provided by Clyde coastguard station. I hope that in the reply to this debate we will get more information on that point, so that we can try to rebut some of the arguments.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I, too, congratulate my hon. Friend on securing this debate. Does she agree that one of the characteristics of this debate in so far as it affects Greenock—and the constituents of mine who sometimes work out of the Clyde station and other coastguard stations—is that strong and reasoned arguments have been made against closure, but similar arguments have not been made by those who propose closure? That is why it is important that the whole process should be rethought.

[Katy Clark]

I agree with my hon. Friend, and I commend the work that he has undertaken in relation to the Forth coastguard station. In this debate I will be asking a number of questions specifically about why Clyde has been proposed for closure, but hon. Members on both sides of the House have questions about many of the other coastguard stations. As I look around the Chamber, I see the familiar faces of hon. Members who have been campaigning on behalf of their constituents and the coastguard stations on which they rely. I hope that answers will be forthcoming from the Minister. This debate concerns the Greenock site, and he might be unable to reply today to some of my points. If not, I would hope to get written responses later.

Clyde coastguard station is the busiest station in Scotland and, depending on how the figures are read, it is also one of the busiest in the United Kingdom. My figures have been provided by those who work at Clyde coastguard station. They have used their knowledge to provide those figures, although one of the problems is that it has not been easy to get much of the information. According to the figures I have been given, Clyde coastguard station seems to be the top coastguard station in Britain for urgency calls; second behind Falmouth for distress calls; third for search and rescue hours; and fifth for incident numbers in the United Kingdom. Whichever way we look at it, it seems to be one of the busier stations in the United Kingdom.

The station has the largest coastline to look after, because of the number of islands and the length of the sea lochs in the area for which it has responsibility. The station has 41 coastguard rescue teams under its control, and has more ferry routes—28, including four in my constituency—than any other district coastguard station. In many ways, the seas for which it is responsible are getting busier, despite a significant reduction in the number of fishing vessels owing to the seas in the part of the world in which I live having been fished out. There are more fish farm support vessels, and there will be an increasing number of vessels for offshore renewable projects as well as a considerable number of cruise vessels, Navy vessels, submarines, including nuclear submarines, and a significant increase in the number of small leisure craft.

We have heard a lot about local knowledge in the debate about the future of the coastguard service. I believe that Clyde, as one of the largest stations, must have developed a significant amount of local knowledge about the huge terrain for which it provides a service. I cannot see any sense in closing such a large station and losing staff with so much local knowledge, and having other stations take on the work. The economic reality is that Greenock staff are unlikely to be able to transfer from low-cost areas such as Inverclyde or north Ayrshire to high-cost areas such as Aberdeen and the south of England, which have comparatively expensive house prices. When stations such as Greenock close—if that is allowed to happen—such knowledge is lost. It will not move with them.

As I said, many aspects of this matter do not seem to have been given proper consideration. In particular, as far as we can tell, the costs involved in the different coastguard stations do not seem to have been given detailed consideration. The relevant figures, however, many of which are quoted in the response of the operational staff to which I referred the Minister, suggest that Clyde is a cheaper station, because it is situated in a low-cost area with cheaper property prices. The figures also show that there is a large number of applicants whenever posts are advertised there, because it is an area with high unemployment and few quality available jobs. Furthermore, when people get those jobs, they tend to stay, so the retention rate is far higher than in other stations. As I say, detailed work has been done on that—work to which I refer the Minister. However, I would also ask him to say whether that issue was taken into account before December, when the proposals were made.

[Bill Esterson]

My hon. Friend talked about whether staff would relocate. I have heard no indication in the comments made to me of a significant relocation package for staff. Does she have any information from staff who have approached her about whether that has been offered or mentioned, or does she know whether it is part of the consultation process?

[Katy Clark]

I thank my hon. Friend for that intervention. The terms of the civil service relocation package do not necessarily make relocation an attractive option, particularly for those living in areas where accommodation is comparatively cheap and for whom the available options are probably not attractive.

[Mark Lazarowicz]

Given the age profile, will not many of those working in such stations have done so for many years and often have family commitments and other connections? They cannot simply uproot and move 200, 300, 400 or 500 miles away. They will not go, and that expertise will be lost and they will be unemployed.

[Katy Clark]

My hon. Friend is obviously correct that, often, not just one individual working in a household will be affected. Relationships will be complicated, and frankly, many people will simply not be in a position to move. Indeed, I suspect that that will probably more often be the case at coastguard stations with experienced long-term staff. We also need to be aware that coastguards are already on very low incomes.

The Minister will be aware that Inverclyde and North Ayrshire are areas of high unemployment and deprivation. Have the economic impacts of the proposals been considered, in particular on Clyde and the wider community? The decision to close Clyde, but keep open the other large coastguard station in Scotland at Aberdeen, seems to be based on current leasing arrangements rather than on operational reasons—or, indeed, on the ongoing running costs of each station. The lease for the Clyde station comes to an end in 2012, with the Aberdeen lease coming to an end in 2020. It has been put to me repeatedly that this seems to have been a major consideration in the proposal to close Clyde. Will the Minister confirm whether that was a factor in coming forward with the proposals, and if it was, will he say how large a factor it was? Has any work been done on the comparative costs of the various options of keeping one coastguard station open as opposed to another?

[Mark Lazarowicz]

I am grateful to my hon. Friend for giving way, and I assure her that this is my last intervention. On the question of having one or two coastguard stations, just to make it clear, I am sure that she does not mean to suggest that we want the Aberdeen station to close instead Greenock. The whole point is that we do not want the entire coastline of Scotland and parts of the north of England to be served by just one station, which is clearly not a practical solution.

[Katy Clark]

I agree with my hon. Friend. I am trying to get the Minister to provide more detail on the reasoning behind the proposals. I am strongly of the view that we need a geographical spread of coastguard stations and that we need more than one in Scotland. I have not necessarily looked at the detail of every coastguard station, but I suspect that some hon. Members in the Chamber have.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Perhaps the hon. Lady’s concern about stations on all parts of the coastline echoes her comments about the transferability of staff. Does she agree that local knowledge is critical to the successful operation of coastguard services?

[Katy Clark]

I agree with the hon. Lady. I am in no way trying to set one coastguard station against another; what I am trying to do is put points on behalf of the Clyde coastguard station that I do not believe will be put in any other forum. There is huge frustration about the fact that it has not been possible to make those points, and we know that very few reasons were given for the proposals.

In every debate about the issue that has taken place in the House, members of all political parties have strongly made the case for local knowledge. There is a considerable distance between the constituency of the hon. Member for Banff and Buchan (Dr Whiteford) and mine. At present that local knowledge is held in the Clyde coastguard station, and if Aberdeen were to take on the work, the acquisition of such knowledge would take a number of years. That point has been made to the Minister a number of times.

[Bill Esterson]

My hon. Friend made the same point about local knowledge when speaking about the growth of shipping in the Clyde estuary. It is a crucial factor. While the technology on the larger ships will enable them to make the most of the new technology that the MCA is proposing to introduce, many smaller vessels—including fishing vessels and, in particular, pleasure craft—will not. It is particularly important to retain local knowledge in areas such as the Clyde, where there will be much more shipping than there is at present.

[Katy Clark]

I thank my hon. Friend for his helpful intervention. In my constituency, a number of marinas have opened in recent years. We have the largest marina in Scotland in Largs. There has been a huge increase in the use of our seas for pleasure activities and sailing of all types, but with that come many inexperienced users, with whom coastguard station staff will find it more difficult to deal.

Submissions put together by the Clyde staff, with the assistance of Inverclyde council, contain costings for a site at Greenock. The lease at Greenock will expire in 2012, and a number of other local options have been costed. I should be grateful if the Minister would confirm that they will be considered. The Driving Standards Agency recently decided not to close its Cardiff office after the Public and Commercial Services Union was able to make proposals for a cheaper site, and I wonder whether a similarly open-minded approach will be adopted in this instance. Will the Minister ensure that the submissions from Clyde staff and Inverclyde council are given proper and careful consideration?

As I have said, it is far from clear what criteria were used for the proposals that were announced on 16 December. I hope the Minister agrees that it is only fair for there to be a transparent process, and for proper responses to be provided to questions such as those that I have asked today. The Clyde coastguard station has provided an excellent service, and I hope that once the Government have an opportunity to consider the issues in detail, they will decide to reconsider the proposals and keep it open.

--- Later in debate ---

[Mike Penning]

Thank you, Mr Speaker. I am sure that we understand exactly what my hon. Friend is trying to say to the House.

It is very important that we understand exactly what the Government’s position has been from day one. Of course I am going to be accused of doing U-turns, cartwheels and so on, but I said, and the Secretary of State said, that these proposals were not set in stone and that the consultation is a proper one. We said that we wanted everybody to be fully involved in the future of the coastguard service. I said from day one that what comes out the other end of this consultation process will not be what we go in with, but that we cannot end up with the status quo. The service has to modernise, it has to have proper resilience and it must be fit for the 21st century.

[Katy Clark]

I asked a number of questions about the criteria that were used. The Minister might not be able to give a response today, but will a response be given at the end of this process outlining the basis on which decisions are being made? It is not at all clear to those working in the coastguard service why particular stations have been chosen and others have not, so will the criteria be made publicly available?

[Mike Penning]

Of course. I was still responding to the intervention made by my hon. Friend the Member for Truro and Falmouth and when I have finished dealing with it, I will discuss the points that the hon. Lady has raised. In that intervention, I was asked specifically what will happen later in the process. We will announce our proposals once we have taken into consideration the Select Committee’s report. That means that I will have to reopen the consultation, but I stress that that will be just to allow that report to be taken into consideration. If I did not do so, I would be insulting the Select Committee and there is no way I intend to do that. The Government will announce their conclusions before the summer recess—as we have said all the way through, they are likely to be different—and then I will reopen the consultation. That is the right and proper way to proceed if we want to work with the public, with the service and with Members of this House. It is different from the way in which a lot of consultations have historically been carried out over the years, but I do not think this will be a one-off; I think that the Government will take this approach on a regular basis. I recall a consultation on my local general hospital in which 85% of respondents said they did not want the hospital to close, yet it was closed in any case. No consideration was given to people’s concerns. Does this approach mean that everybody is going to be happy? No, of course it does not. However, proper consultation will take place again once we put forward our proposals.

McNulty Report and West Coast Rail

Baroness Clark of Kilwinning Excerpts

Thursday 19th May 2011 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend for his question. As I mentioned earlier, an announcement was made recently about additional rolling stock for services into Leeds. I had it in my mind that that covered the route in question, but he is testing the extreme edges of my memory now, so it would be better for me to write to him with the specific answer to that question.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Surely the Secretary of State must accept that fragmentation costs more. For example, I understand that Network Rail employs about 600 legal staff to negotiate with the train operating companies, and no doubt each operating company also employs significant numbers of such staff. Surely we should be looking at integration, as it will save us money.

[Mr Hammond]

The hon. Lady has obviously read the RMT press release from this morning. Of course there are additional frictional costs—interfaces—in the operation of the railway that we currently have, with franchisees and an overall network operator. However, there are also a lot of unnecessary costs that are caused by the adversarial relationship between Network Rail and the train operators. As I said earlier, I do not believe that the answer is some massive revolution that requires primary legislation and will take the rest of this Parliament to deliver. Instead, this is about getting people working together differently. Let us get to a railway that is different from the one that we have now. In the railway that we have now, the brightest and the best people in all train operating companies are the ones who spend their lives allocating responsibility for failure and collecting money from each other. Hundreds of people are literally spending their days trying to decide whether each delayed train is the responsibility of Network Rail or of this or that operator. That is not productive. Getting the industry to work together, looking at industry-wide costs and focusing on solving the problems, rather than allocating blame for them, is the way forward.

Oral Answers to Questions

Baroness Clark of Kilwinning Excerpts

Thursday 10th March 2011 Commons Chamber

[Mike Penning]

It is an extension for the receipt of submissions on the consultation. The visits will be as they were, and we should visit most of the stations. I am conscious that I have had to cancel a meeting with my hon. Friend’s constituents and the working group there, so I shall do my level best to visit Falmouth as soon as I can.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Does the Minister not accept that if we close more than half of the coastguard stations and lose 226 of the 600 current staff, local knowledge will be lost?

Coastguard Service

Baroness Clark of Kilwinning Excerpts

Wednesday 2nd February 2011 Westminster Hall

[Katy Clark (North Ayrshire and Arran) (Lab)]

It is a pleasure to see you in the Chair today, Mr Hancock. I will try to adhere to your request to keep contributions brief to enable other hon. Members to speak, because a considerable number of hon. Members are interested in this debate.

Of course, the announcement about the coastguard was made not in an oral statement to Parliament but by way of a written statement, and this is hon. Members’ first opportunity to debate the issue. One of the things that I will be asking the Minister for today is that we do not just have this Adjournment debate and that hon. Members have a fuller opportunity to debate this issue, because there are serious concerns about the implications of these proposals for the coastguard service, if they go ahead.

I speak as someone who represents a coastal constituency. Indeed, a considerable number of my constituents work in the coastguard service. My experience—I believe that others have also experienced this—is that the coastguard service has been treated differently from other emergency services for many years, not least regarding pay. Many hon. Members will be aware that coastguard officers often earn only in the region of £13,500 per year, despite the fact that they have not only responsible positions but positions that require a great deal of expertise developed over many years.

The proposals that we are discussing today will probably lead to more than 200 coastguard officers losing their jobs. In many areas of the country, particularly in Clyde, it is unlikely that any officers losing their jobs will be relocated within the coastguard service. The coastguard service at Greenock is in an area of high unemployment and deprivation. The reality is that the relocation schemes that are available to civil servants will not make relocation for individuals—for example, to Aberdeen, which is an area of high cost, or to the south of England—a reasonable prospect. Indeed, I have constituents who are in that position. They know that if they lose their job at Clyde when the coastguard station there closes—if that closure is allowed to go ahead—other opportunities will not be available.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I have been in another Committee, which is why I was not here earlier. This issue is important to my constituents and to the constituents of many hon. Members who are here in Westminster Hall today. Of course, my concern is particularly about the Forth coastguard station, which is on the other side of Scotland to my hon. Friend’s constituency. The Forth station is also proposed for closure. There is also a sub-centre that covers my constituency’s shoreline.

In the firth of Forth, we have three major oil and liquid gas terminals. We also have a new bridge and a number of anchorages, and a new wind farm is being built. Does my hon. Friend agree that the firth of Forth is another area where safety means that closure should not go ahead and that having one coastguard station for the whole of Scotland is not acceptable?

[Mr Mike Hancock (in the Chair)]

Order. I think that you are pushing your luck there with that one. That intervention was more like a speech.

[Katy Clark]

It is far from clear what criteria have been used to develop these proposals. I hope that, when the Minister responds to the debate, he will address that issue. It has been suggested that the Clyde coastguard station has been proposed as one of the stations that will close, because its lease is due to expire in the next few months and it is therefore cheaper to close that particular station than, for example, the station in Aberdeen, where the costs of closure would be extensive.

[Mr MacNeil]

The hon. Lady has made an important point. The principles that are pushing this process are not the principles that should be pushing it. The considerations are not marine considerations, but real estate considerations. The Aberdeen situation is particularly interesting, because the MCA has problems with the leases on the Aberdeen building. In addition, the MCA has not considered the high turnover of staff in Aberdeen in comparison with other stations.

[Katy Clark]

Indeed. The hon. Gentleman has made some powerful points.

People who have not visited a coastguard station might be surprised to learn about the role of coastguards. The reality is that the way in which a station operates is that the operative who takes an emergency call usually stays in charge of that incident throughout the whole process, which hopefully leads to the person who called being rescued. That operative has to liaise with a range of other agencies, and they have to call on their own experience as a coastguard and on the knowledge that they have developed of the terrain in which they are operating. In the west of Scotland in particular, there is a huge amount of concern that if there is only one coastguard station in Scotland, much of the expertise and local knowledge that individuals have developed over many years would be lost.

The Clyde coastguard station’s area of responsibility is the largest coastguard area in the UK, and the station has 41 coastguard rescue teams under its control. There are 26 ferry operations to island communities in the area, including to Arran and Cumbrae in my own constituency, as well as a number of other ferry operations to other islands off the west coast of Scotland. If we include the sea lochs, which are part of the terrain in the area, there are 1,900 miles of coastline. I have always been told by those who work in the coastguard service that a huge amount of local knowledge acquired over many years is essential for the role of coastguard.

[Bill Esterson]

A similar point has been made to me by the staff at Crosby coastguard station in my constituency, which is listed as “Liverpool”. They say that in Liverpool bay and throughout the Irish sea there are many creeks, gullies, mudbanks and sandbanks. That local knowledge, from many decades of experience, is vital in shortening the time taken to get search and rescue to the right place.

[Katy Clark]

My hon. Friend has made an incredibly important point. In the west coast of Scotland coastguard area, there are, I think, eight Tarbets, so when someone on a leisure craft phones the coastguards and tries to describe where they are, expertise and local knowledge are required to assist the distressed vessel.

The proposals seem to be based on the view that it will be possible for much of the slack to be taken up, and much of the work to be undertaken, by volunteers, who form a huge part of the coastguard service. Coastguards rely on their local knowledge to assist people in difficulties, but more than that they have to rely on the coastguard rescue teams, and it is surely wrong for more pressure to be put on those teams. As we develop the service, we should try to ensure that we do not have to rely on individuals who have work commitments of their own, and that we do not put them in a position in which they might be pressurised and get involved in incidents, because it is not possible for the paid structure to provide the service. The way in which we operate our coastguard system in this country is perhaps a cheap way of doing so, in that we rely on volunteers.

There are particular concerns about the west of Scotland, both because of the terrain and, increasingly, because of the number of vessels—including leisure vessels—with the extension of marinas and of sailing on that coast. Will the Minister indicate the criteria that have been used to come forward with the proposals? Given the great concern among hon. Members, will he ensure that there are further opportunities to debate these issues?

[Several hon. Members]

rose—

Railway Industry

Baroness Clark of Kilwinning Excerpts

Tuesday 19th October 2010 Westminster Hall

[Katy Clark (North Ayrshire and Arran) (Lab)]

It is a pleasure to see you in the Chair, Mr Dobbin, and to have this opportunity to debate the future of the railways.

I want to set this debate in the context of the economic situation that we face and express the concern felt in many quarters that the policies we believe that the Government may pursue could make things worse. I hope that colleagues will join me in welcoming the thousands of trade unionists who are coming to the House today as part of the TUC lobby of Parliament. They include many rail workers. I hope that we will listen to what they say before tomorrow’s comprehensive spending review.

I pay tribute to the rail workers who work in all conditions to keep Britain moving. It is important that their voice is heard in this debate; I hope to discuss their concerns and those of service users. I declare an interest as a member of various parliamentary trade union groups organised by the railway trade unions. I have also worked closely on the issues with the National Union of Rail, Maritime and Transport Workers, the Transport Salaried Staffs Association and ASLEF.

It is important to remind ourselves of the three policy areas under consideration that involve the future of the railways. First, the previous Government, after the 2009 pre-Budget report, established a value-for-money review of our railways. According to the Government, the review, headed by Sir Roy McNulty, has no no-go areas; everything is up for grabs. The new Government have asked that the review be expedited. We understand that it will be published in March, but the Secretary of State has already been given the interim findings, which I am told are likely to be published in November. I also understand that Sir Roy told the Secretary of State that his interim report was not at a stage to be used to inform any decisions made in the comprehensive spending review, but will the Minister confirm that?

The second major policy context for this debate is the comprehensive spending review. Like other Departments, the Department for Transport will, we believe, be asked to make big cuts. There are understandable concerns that if we make cuts to our railways, we will damage the infrastructure needed to drive economic recovery and growth as well as to meet the ambitious targets that we set ourselves in the Climate Change Act 2008. There is also concern that the comprehensive spending review will punish UK passengers with even higher fares, although ours are already the highest in Europe.

The third major policy area is the Government’s review of rail franchising, which has generated headlines saying that the train operating companies are clubbing together to demand that the Government hand over longer franchises. The companies are also demanding more say in—and, we believe, eventual control over—our railways, including track, signals and stations. The suggestion seems to be that we should re-create the big, private, regional rail companies that the Labour Government eliminated in 1945 when we nationalised the railways.

Given those policy areas, I will use this debate to highlight some concerns raised by passengers and rail workers. We have read reports in the press that the protection afforded by regulated fares might be weakened, and that UK fares—already the most expensive in Europe—could rise by 30% or more. Passengers will find that hard to stomach, particularly as they know that senior directors of the big five transport companies that control most of the railways are still paying themselves salaries that most people, frankly, consider obscene. We know that the railways depend almost entirely on annual public subsidies and the revenues generated by fares. In effect, by awarding themselves such large salaries, railway executives are forcing taxpayers and fare payers to subsidise their excess.

The trade union RMT has researched the matter and provided me with some shocking figures. RMT says that Moir Lockhead—recently of FirstGroup, which runs First Capital Connect, First Great Western, Hull Trains, First TransPennine and ScotRail—was paid more than £500,000 last year, as was Ray O’Toole, recently of National Express, which runs c2c Railways. David Martin of Arriva, the highest-paid director, was paid almost £750,000, and Brian Souter of Stagecoach Group is paid more than that for running South West Trains and East Midlands Trains, but top of the tree is Keith Ludeman of Go-Ahead Group, who was paid a salary of £916,000 last year and whose salary has since increased by 35% to £1.2 million.

Will the Minister comment on those salaries and join me in agreeing that passengers, who face big fare increases and are likely to suffer the consequences of cuts in the subsidies provided to our railways, will find such salaries unacceptable? Those salaries are paid, in effect, by the taxpayer and fare payer. I hope that she will agree that transport bosses should be exercising pay restraint, particularly at a time when the Government are asking everybody else to tighten their belts. I also hope that she will agree to write to the transport companies asking them to exercise restraint.

My second point is about the behaviour of the privatised transport companies and the profits that they have made from privatisation. Over the past 10 years, the biggest five transport companies have paid dividends of more than £2 billion to shareholders. Over the past seven years, the three rolling stock leasing companies that own the trains have paid dividends of more than £1 billion. Professor Jean Shaoul of Manchester university estimates that since privatisation, dividends of more than £10 billion have been paid.

As colleagues will know, windfall taxes on utilities have been levied successfully in the past. The Government are also considering a levy on bankers. Will the Minister agree to consider imposing a windfall tax on the profits of the privatised railway system instead of penalising passengers with fare increases? At the very least, does she agree that instead of paying huge dividends, railway companies should be helping protect passengers and taxpayers at this time by agreeing to freeze dividend payments and invest all profits back into our railways instead?

Will the Minister consider the work of Richard Murphy of the Tax Justice Network? He undertook a study, a copy of which has been submitted to the value-for- money review, that considered the available sets of accounts for the six railway operating companies and three railway leasing companies operating in the UK between 2002 and 2006. He found that during that period alone, those companies owed £1.3 billion in unpaid tax that the Government had not chased. Will she read a copy of that study and examine its conclusions?

My third point relates to the future of Network Rail. The Minister will be aware from the McNulty review of the railways that the same companies paying their top directors such handsome salaries and making massive profits now hope also to profit by taking over the tracks and signals currently owned and operated by Network Rail. Although Network Rail is a private company, it is a not-for-dividend company. That means the £4 billion or £5 billion annual subsidy does not leak out of the industry in dividend payment; instead, any profits are reinvested in the railways. Whatever faults Network Rail may have, taking railway maintenance back in-house has clearly had the effect of reintegrating much of our railways. Indeed, I believe that that has been responsible for the significant improvements in punctuality since the Hatfield disaster.

[Hugh Bayley (York Central) (Lab)]

I congratulate my hon. Friend on securing this important and timely debate. When the track renewals company Jarvis went belly up earlier this year, some 1,200 employees were made redundant and only about a quarter of them have so far got another job in the railway industry. Does my hon. Friend agree that the Government will need the skills of skilled track-laying workers, if they build the new north-south high-speed railway that will run from London to Birmingham and on to Yorkshire and the north-west? I regret that I must attend another meeting at 10.30 am, but will my hon. Friend press the Minister on what the Government can do to secure jobs for those redundant workers who have not yet got jobs themselves, so that their skills can be retained in the railway industry and used to build new railways?

[Katy Clark]

My hon. Friend makes some powerful points, to which I will return later in my contribution. The privatised rail companies propose to threaten the progress that has been made in the railways in recent years. They want their companies to take over the infrastructure, perhaps on leases that would coincide with the length of the franchises. There is talk of trialling such arrangements in Merseyside or Scotland. The train operating companies have promised that that will incentivise them to invest in the railways, but they have provided absolutely no evidence to support that submission. Indeed, the evidence of the past and of their tenure with the railway passenger services shows that they simply seek to maximise profit and boardroom pay, as I have already mentioned. In fact, the Government’s own consultation document, “Reforming Rail Franchising,” states:

“European procurement law makes clear that contracts over 15 years require significant investment to be provided by the franchisee. Therefore, our starting proposition is that 12 - 15 years should be the standard length of franchises”.

That seems to say that we should extend franchises to the maximum length at which franchise holders have no legal obligation to invest significantly and leave investment completely at the discretion of the franchise holder.

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

I assure the hon. Lady that, whatever the length of the franchise, we will be pressing for the best deal for the taxpayer, including investment with longer franchises—whether they are for 10, 15 or 22.5 years.

[Katy Clark]

I am very pleased to hear the Minister say that. However, if we are going for franchises of approximately 12 to 15 years, there will not be that legal obligation, which must have a consequence for the decision that companies make.

[Mrs Villiers]

I am sure that the hon. Lady will appreciate that franchise documents impose significant legal obligations, and we expect those to include investment in the railways, particularly where a longer franchise is granted.

[Katy Clark]

I am pleased to hear the Minister say that. If the Government decide to go down the path of franchises of such a length, we will be actively scrutinising the situation to ensure that the contracts in place not only are legally binding but are enforced and deliver for the taxpayer and those who use the railways.

We know that the train operating companies are demanding further fragmentation and privatisation of our national railway structure. The former Network Rail chief executive talked about simply sweating the assets of the railway infrastructure. If franchises were coming to an end and existing operators were either not going to bid again or were not shortlisted for replacement, there is a great deal of concern that there would be little pressure on them to invest.

I also ask the Minister to consider carefully concerns that breaking up Network Rail would have a negative impact on rail freight. There is a real fear that passenger operators will be tempted to fill any spaces in the timetable with their own revenue-raising services, which would push freight to one side. Freight trains are often heavier than their transport equivalents and can do much damage to the track, which raises the possibility that the private operator could limit free access or leverage high track access charges on the movement of freight. That would force freight from the railway to the road, which would have a series of unhelpful environmental consequences.

Many people in the industry and in the rail trade unions are also concerned about the arguments of those who are making the case for breaking up Network Rail. In particular, they are concerned about the report of the Office of Rail Regulation, which is quoted again and again as stating that, compared with other European railways, Network Rail is up to 40% less efficient. I say to the Minister that hon. Members may make such points today because they have read articles in the press, but many in the industry, the RMT and the other railway unions have a great deal of concern about that report’s methodology. They believe it is flawed and that it has cherry-picked different aspects of rail infrastructure efficiency from abroad to paint our railways in a more unfavourable light. The report does not seem to take into account factors that determine efficiency, such as adequate investment over long periods, the need for a unified command structure and, most importantly, the continued fragmentation of our infrastructure compared with European railways.

We need to consider the benefits of having an integrated, publicly owned railway. I therefore hope that the Minister will ensure that those conducting the rail review—and the Government themselves—do not just look at the issue on an ideological basis, but consider the comparisons with other European railways. There has been some concern about the ORR’s report and I suggest to the Minister that she should be willing to receive more detailed representation from those who are concerned about that issue. It is obviously vital that we make the right choices for our railways.

In June, the Secretary of State said:

“Passengers and taxpayers will rightly ask why it is that our railways in the UK are so much more expensive than those in the rest of Europe.”

I believe that the answer is already there for him to see. For example, the 2009 European Commission report into the rail market made it clear that the structure of UK railways is radically different from that of railways in the rest of Europe. In terms of passenger operation and infrastructure, most of the railways in Europe are publicly owned and accountable, whereas in the UK they are not.

Compared with other railways in Europe, the organisation and structure of our railways is horrifically complex—they are fragmented and have numerous interfaces. We have 24 operating companies, three freight operators, three rolling stock leasing companies, two infrastructure controllers—Network Rail and Eurotunnel —and seven major infrastructure renewal companies. That must lead to huge inefficiencies. There is a duplication of function and a loss of economy of scale. In addition, the fact that there are so many individual companies means that there are increased profit margins and transaction costs—even the legal and consultancy fees are duplicated again and again. Skilled personnel validate and monitor contracts instead of getting on with the job and, perhaps most damaging, there has been a loss of a rail culture that focused on getting the job done, with one company and one stakeholder blaming the other when things go wrong. I understand that the rail review has already indicated that the railways could save hundreds of millions of pounds a year by reducing that fragmentation and the number of different organisations involved with them.

I hope that the Minister will look at what is happening to railways across Europe, which are overwhelmingly publicly owned and far more integrated than those in the UK. I believe that that would provide a better service and cheaper fares for the public, that it would be better for the environment and that it would lead to more high-speed rail and more electrification. Will she give an undertaking that there will be a transparent consideration of an integrated and publicly owned railway and that the methodology used to consider those matters will be made public?

I pay tribute to those who work on the railways. My hon. Friend the Member for York Central (Hugh Bayley) mentioned the Jarvis workers who have already lost their jobs. Thousands of Network Rail workers have been asked to make efficiency savings and many have already lost their jobs. I hope that we are now moving towards a period of stability and consolidation. We know, as he indicated, that many of the Jarvis workers are still without work and have lost their pensions. Given his comments, I suggest that it would be helpful if the Minister met me, him and other interested colleagues to discuss the plight of those workers and whether the Government can do more to ensure that alternative employment is available for them in these difficult economic times. Thousands of jobs have already been lost on our railways, on both the passenger and freight sides, and we are also seeing a gradual attack on train guards as companies try to introduce driver-only operations, which will reduce staffing levels even further and, I believe, raise significant safety concerns.

In Scotland, the Scottish National party Administration have taken advantage of the clause included in all railway franchises that allows railway companies to ask the Government to make good the loss of revenue caused by strike action. The Labour party in Scotland says that it will remove that clause from ScotRail franchises if it is successful in next year’s elections. Does the Minister agree that the current review of railway franchises should look at that matter and remove that provision from all franchises?

Many people who work in ticket offices are losing their jobs, with implications not only for them but for safety. We know that there is some protection for ticket offices, as train operators are required to consult passengers and Passenger Focus if they wish to shut offices or change their opening hours. Does the Minister agree that those protections must remain in place and should not be removed as a result of the review? Thousands of jobs are under threat in London Underground, many in ticket offices, as a result of the Mayor’s decision to renege on his election promise on staffing levels. Cuts will also fall elsewhere, including safety-critical railway maintenance jobs. As a result, there has been strike action on the Underground, as the Minister is aware. Indeed, the workers who were hailed as heroes after the London bombings in 2005 are now often vilified in the press as enemies of the state. I hope that there is a negotiated settlement to the dispute, and I pay tribute to those members of the RMT and the Transport Salaried Staffs Association who are taking a stand on behalf of passengers and rail safety.

I have put several questions to the Minister and am most anxious that she respond to them either today or, if she is unable to do so, in writing at a later date. I will mention those questions again, because they can often be lost in Adjournment debates. Will she clarify whether the McNulty review will inform the transport decisions in the comprehensive spending review set out tomorrow? Will she write to the executives of the big transport companies and ask that they practise pay restraint in the boardroom? Will she agree to a levy on the profits of the privatised rail industry or, at the very least, tell the companies to freeze their profits and invest them back into the railways? Will she meet me and other interested parties to discuss the continuing plight of the former Jarvis workers? Will she ensure that the franchising review results in the removal of clauses that allow taxpayers’ money to be used to indemnify train operating companies against losses incurred during industrial action? Will she ensure that the Government transparently consider the benefits of an integrated and publicly owned railway network and publish the methodology that they will use to consider the matter?

--- Later in debate ---

[Mrs Villiers]

I certainly recognise that the previous Government invested in the railways, and we would expect investment to continue under the current Government, given the huge importance of the railways to our economy and to our climate change ambitions. I covered the fares issue briefly in response to the shadow Minister, but I shall repeat my comments on it. The coalition is committed to fairness in rail fares, but the reality is that the crisis in the public finances means that we might have to take some difficult decisions on fares, as in other areas. As I have said, I am unable to give further details on the fares formula until it is announced for the coming years in the CSR on Wednesday.

There has been much discussion about the McNulty process, which is focused on trying to understand why the cost of the railways is higher in this country than in other parts of Europe, and I am sure that today’s discussion will contribute to and inform that process. It is important that a range of options be considered, and as part of our drive to deliver high-quality rail services at an affordable cost we need to consider how we reform Network Rail. Not even the levels of taxpayer support over recent years have succeeded in turning the company into the customer-oriented organisation that train and freight operators want. That fact was driven home when the rail regulator published the figures, to which the hon. Member for North Ayrshire and Arran referred: the potential 40% efficiency gap between Network Rail and European comparators. I acknowledge that there are always problems comparing Network Rail precisely with different railways in the rest of Europe, but these things should sound a warning bell that there is an issue to be addressed. If we are to be fair to passengers and the taxpayer, we need to find a way to make Network Rail more efficient.

[Katy Clark]

I think that it is accepted on all sides that there are issues to be addressed; indeed, that was why the previous Government set up the review in the first place. However, the Minister will have listened to what I said about the concern about the methodology used in the ORR report. Is she willing to hear further representations about that from those in the industry who have concerns? Given the publicity that the issue has had in the press, there is clearly a view that the Government will listen to the ORR report rather than taking a more forensic look at how other European railways operate.

[Mrs Villiers]

Of course I would be happy to accept further representations. One reason why we have continued with the McNulty study, which was set up by our predecessors, is precisely to find the true picture of the cost of Network Rail. The work done by the ORR is valuable, but it is just one point of view. Sir Roy is drawing on views and research from across the rail industry, including internationally, to find out what the facts really are.

Whatever reform we ultimately select, we will need to stress-test it in relation to the interests of freight operators. It is vital that we get the right balance between the interests of the railways’ passengers and freight customers.

In looking at the options for reforming Network Rail, it is interesting to look at what has been done north of the border. Network Rail has decentralised its Scottish operations, and accounting separation has been introduced. We need to look carefully at whether such decentralisation might improve Network Rail efficiency in other parts of the UK.

My officials are working with Merseytravel, the passenger transport executive for Merseyside, to explore whether to devolve the running of the track used by the Merseyrail franchise so that it is wholly governed by local decision making. That project could help to provide an important benchmark against which to measure Network Rail’s performance.

Another key issue is whether further contestability could be introduced for some of the work now carried out exclusively by Network Rail. Again, there is a Scottish example that is worth considering. In 2006, for example, Transport Scotland opened up about £20 million of rail funding for smaller-scale enhancements at stations and asked for offers from Network Rail and the train operators. By the end of the bidding process—if I recall correctly, this was under the Labour Administration— £19 million of the £20 million available was allocated directly to the passenger operators because their bids were judged to be better than Network Rail’s. A similar approach has been used for the national stations improvement plan in England.

The hon. Member for North Ayrshire and Arran talked at length about franchise reform, which is the second limb of our work to improve the railways’ performance for passengers and to get better value for money. The Department for Transport has recently concluded a consultation, and we are considering the responses. As I assured the hon. Lady during her speech, we want to encourage greater private sector investment in return for potentially longer franchises. We would continue to impose legally binding contractual obligations in franchises, including on the scale of the investment promised. We hope and believe that longer franchises will help us to deliver the investment and improvements that passengers want, including better stations. Longer franchises should also make it easier for train operators to invest in long-term relationships with Network Rail and their work force, which are crucial to running the railways efficiently.

We want to move to a system in which franchises are less heavily specified. In response to the shadow Minister’s questions, however, I can assure him that we will continue to set demanding outcomes for train operators to achieve in terms of the quality of service that they deliver. We will have demanding and legally binding requirements to protect the interests of the passenger and the taxpayer. The difference is that in setting those outcomes, we propose to give the people running the railway more flexibility over how they deliver them.

[Katy Clark]

The Minister will recall that, in my initial contribution, I quoted the Government’s consultation document, which said that European procurement law referred to 15 years and that that was why a starting point of 12 to 15 years should be the standard length of franchises. Does she not accept that that rings alarm bells? Will she explain why there is a link between European procurement law and her starting point?

[Mrs Villiers]

Obviously, the UK Government are bound by European procurement law to procure public contracts in a fair and objective way. In the context of rail franchises, it sets a top limit of 22 and a half years for contracts that involve investment. The reference to European procurement law was included in the consultation document because it governs the maximum that we can deliver in terms of rail franchises. Throughout the process of negotiating franchises, however, we will look to secure the best deal possible for the taxpayer, and we will ensure that we continue to protect the passenger interest. Train operators that do not comply with the obligations we impose on them will face sanctions, which, in extreme cases, could include removing the franchise.

In the few minutes that I have available, I want to talk a little about the inter-city express programme in response to the hon. Member for Angus (Mr Weir). I can assure him that we have no plans to scrap through services to destinations such as Aberdeen and Inverness, which he mentioned. As he said, the report produced by Sir Andrew Foster referred to one of the alternative strategies for the IEP, which involved ending those through services. As I said, however, we have no plans to do that. We recognise the economic value of such services, and we have certainly received strong representations from the Scottish Government and Scottish colleagues about the importance of retaining them.

Oral Answers to Questions

Baroness Clark of Kilwinning Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Philip Hammond]

The High Speed 2 project will introduce a massive increase in capacity. These will be huge trains, with 1,100 seats each, and they will run at a very high frequency. Simple demand-and-supply economics should help to keep travel affordable. At the same time, after 2012, aviation will come within the European emissions trading scheme, and the carbon costs of aviation will start to be reflected in the cost of flying.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Minister rule out reclassifying Network Rail as a public company, which would be a Railtrack mark 2, and commit to a not-for-dividend organisation?

[Mrs Villiers]

We are looking at the options for reform of Network Rail. We believe that the status quo is not acceptable, because Network Rail is not accountable enough to its customers or the passengers whom they serve. As for its balance sheet status, we believe that this is a matter for national statisticians. We will make decisions on the future of Network Rail based on what is best for passengers and the taxpayer, and not—as the previous Government did—on the basis of tortuous calculations about whether things are on or off the balance sheet.

--- Later in debate ---

[Lynne Featherstone]

It is nice that my hon. Friend and I are together again after our time on the Greater London assembly, along with many Opposition Members.

The work relating to our commitment is still at an early stage. It is important for us to build on existing programmes. Some Whitehall Departments already run internships in the summer development programme. The Cabinet Office is examining current practice and future options, and I look forward to working with it in due course to ensure that the practice is extended to all Departments.

[Katy Clark (North Ayrshire and Arran) (Lab)]

This year’s Budget cut the budget of the Equality and Human Rights Commission by 15%, and further cuts are expected. Does the Minister believe that the commission will be able to continue to carry out its statutory duties, and can she tell us what impact the cut will have on the initiatives to which she has referred?

[Lynne Featherstone]

There have been cuts in all budgets. The EHRC will probably concentrate on its core functions, and I expect its budget to be sufficient to enable it to deliver the equality that we all require from it.