High Speed Rail (London – West Midlands) Bill

Debate between Jonathan Reynolds and Robert Goodwill

Wednesday 23rd March 2016 Commons Chamber

[Mr Goodwill]

Indeed, I look forward to being in Doncaster soon with the right hon. Member for Doncaster Central (Dame Rosie Winterton), the Opposition Chief Whip, to cut the first sod in that project. It is important that we look at skills across the board. The college’s hub and spoke arrangement will enable other educational establishments to engage fully and will allow for other qualifications.

Similarly, I welcome amendment 15 from the Opposition. It relates to clause 48, the purpose of which is to ensure that the regeneration opportunities presented by HS2 are maximised in a timely manner. It is a backstop power and we expect that local authorities will lead such opportunities using their existing powers, but in the event that development is impeded we will have the ability to step in to ensure that development progresses. It is important that such development takes into account relevant development plans. I am grateful that the hon. Member for Nottingham South (Lilian Greenwood) tabled the amendment, and I urge all hon. and right hon. Members to support it.

Turning to the other proposed changes, my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) has proposed several new clauses and amendments. She has been a tireless advocate for her constituents affected by HS2. However, all her points have been considered before, at length, through the Select Committee process, parliamentary debates, and the many parliamentary questions she has asked my Department. The process has delivered clear benefits to her constituency, including a 2.6 km tunnel extension, meaning that almost 86% of the route in her constituency is tunnelled, with the rest in a cutting. Her constituency has also benefited from the removal of an area of sustainable placement at Hunts Green and more noise barriers along that cutting. I acknowledge the points made but do not believe that new clauses 1 to 4 should be added to the Bill.

New clause 20 deals with the nationalisation of rail services, an area of ideological difference between the Government and the Opposition. I am therefore unlikely to convince them on it, and, I suspect, vice versa. It is clear to the Government that the franchising process delivers better services, better value for money and a better railway. Since privatisation, the rail industry has been transformed, with the number of passenger journeys more than doubling over the past 20 years. We believe this remains the right approach overall for Britain’s railway.

In any case, the new clause is unnecessary, as under the existing legislative framework it is possible for the state to operate rail services, as happened temporarily on the east coast main line. It is possible, and indeed quite likely, that the state might run HS2 initially, to prove certainty on operation and passenger numbers, but for the long-term successful future of HS2 a privately operated franchise is the best way forward.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The Minister is giving a pretty fair assessment of how he sees this proceeding. The new clause provides for a permissive power, meaning that it would simply be available going forward. The proposal has been mirrored in previous legislation, such as that dealing with Crossrail, so what is the Government’s objection to a permissive clause of this kind?

[Mr Goodwill]

I thought I just said that this power is already available and therefore this is a superfluous new clause and we do not need it to give us these powers. I very much doubt Opposition Members will agree with my view that nationalisation of the railways is not the way forward, so stuck as they seem to be in the 1970s, but I hope I may have provided sufficient explanation as to why this power is not required.

We have given consideration to the other proposed new clauses and amendments. Although I understand the importance of some of the issues raised, I do not believe they belong in the Bill, as they have already been considered during the Select Committee process. To conclude, in order not to take up any more time than is necessary, I hope that right hon. and hon. Members will be able to support the inclusion of new clause 19 and amendment 15, but I urge them to not to press the other proposals, which I do not believe are required.

Cabin Air Safety/Aerotoxic Syndrome

Debate between Jonathan Reynolds and Robert Goodwill

Thursday 17th March 2016 Westminster Hall

[Mr Goodwill]

I am going to come on to the frequency of fume events. I think none of the toxicologists or other scientists involved in the projects consider that there is a risk in the normal background level of chemicals in an aircraft cabin. As I have said, those are similar to the levels found in any other setting in the UK. The fume events are what we need to look at, and I will be discussing a little more evidence that I have been given about the frequency of those events.

As a toxic mechanism could not be categorically ruled out as the cause of the symptoms, the Committee concluded that more research would be beneficial. It stated, however, that it would be necessary to balance the likelihood that the further research will usefully inform further management of the problem against the costs of undertaking the research. There are various aspects of the issue to take into consideration, including the results of the research that has been undertaken and the unpredictability and rarity of the fume events. I said I would have some information on that. The Civil Aviation Authority operates a mandatory occurrence-reporting scheme and, contrary to what we may have heard during the debate, the CAA is determined that every type of occurrence should be reported. Indeed, if airlines do not report instances, questions are asked about whether their culture is a good one.

When I was a member of the Select Committee on Transport we visited the CAA and were given a list of the sorts of reports that came forward, which included things that people might not see as relevant, such as both pilots eating the same sandwich. That would be an issue if there were a food poisoning incident. Even what might seem trivial and unimportant incidents must be reported, and there is a culture of reporting in the airline industry, not least in the case of fume events, which people are well aware of.

[Jonathan Reynolds]

The Minister is being very generous. How does the CAA envisage the compulsory reporting of incidents being carried out, when there is not the monitoring available to find out whether one has occurred or not?

[Mr Goodwill]

I am advised that if a fume event occurs it is apparent to everyone on the aircraft. The smell of the oil is absolutely apparent to people. As I mentioned, there is a culture of reporting in the CAA and the aviation industry—which, incidentally, we would like to spread to the health service, where near misses and potential accidents are often not reported. Its reporting culture ensures that the aviation industry is one of the safest in the world.

High Speed Rail (London - West Midlands) Bill (Fifth sitting)

Debate between Jonathan Reynolds and Robert Goodwill

Tuesday 8th March 2016 Public Bill Committees

[Jonathan Reynolds]

I did not intend to speak, but as the debate is so interesting I cannot resist the chance to say a few things. In my experience, this debate always reflects pre-existing ideological positions and, frankly, does not often tend to delve into the intricacies of what is best for running a railway. That can be seen in all parts of the House of Commons whenever this debate comes up.

For Government Members there are some difficult facts about our present system that need to be addressed. The existing railway in the UK could not strictly be described as a privatised system. It is a hybrid system; the way that it was initially privatised secured that. A true privatised system would perhaps have been to bring back the Big Four railway companies and have them compete against each other, but that is not what we have at the moment.

There has to be acknowledgment that the system depends on public subsidy. A railway system for a country such as ours would always need a large amount of subsidy. The way that we do that now is to give the subsidy to Network Rail for the infrastructure. When we talk about the francishees paying premiums to the taxpayer, it is because we set the access charges according to the subsidy that we give. It is still a system that requires a net contribution from the taxpayer.

We also have to reflect on the fact that the existing hybrid system is as it is because the initial privatisation simply could not cope with the liabilities. Railtrack simply could not deliver on what was promised, even in the initial honeymoon period. There has to be a reflection that East Coast did work extremely well, even if it was initially intended for a limited period. In effect, many of our railway operations are publicly owned; they are just publicly owned by foreign Governments. Their subsidiary companies operate our system. In addition, our ticketing system is bizarre and complex, and much more expensive than in comparable European countries.

The Opposition and those who traditionally push a nationalised position have to reflect that British Rail was a poor service. We cannot look back to any golden era; I have never pretended that that existed. Equally, when we talk about East Coast we have to reflect that that operated within an overall system of incentives and penalties; that is the privatised operations system that we have.

Fundamentally, we have to recognise that franchises are contracts. Contracts can be good; they can be bad. Some of our initial franchise agreements on the railway were frankly abysmal in the system they operated. Others that have been let more recently have been more effective.

I will vote for the new clause for two reasons: integration and flexibility. Railway systems around the world tend to be more successful with a higher degree of integration between infrastructure and operations. Our existing system causes real problems, and many of the problems for passengers come from that lack of integration.

As the right hon. Member for Chelmsford said, flexibility is the key issue. He mentioned the additional operations from Scarborough being run by Virgin. Although that is welcome, flexibility is the crucial problem with the franchise system. Northern has had huge demand in terms of passenger numbers—it has happened in my constituency. The economy has fundamentally changed and there is huge demand for rail services—in many ways it is a golden era for the railway. However, the franchise agreement could not respond to that demand. It was let on the assumption of zero growth, and I would not have complaints about the people and the process for doing that. Yet we have all the problems of a bureaucratic, nationalised system and none of the attractions of a market system, which would respond to a price signal from the market. That is why we have problems of overcrowding, poor services and inability to meet demand.

There are many examples of successful, publicly-owned railways around the world. I recently got back from Hong Kong, which is not renowned as a socialist utopia—it is a dynamic, capitalist part of the world economy, with a publicly-owned railway. We can always look to examples from that country; indeed, we need to look around the world for best practice in running a railway. I am comfortable with the new clause, because we need to look at how best we can integrate our railway, to deliver the best deal for passengers. It should be permissive: we always need to leave the door open for a more integrated system, even if we have our existing hybrid system at the moment, which—based on the length of those franchise agreements—will be with us for a considerable time. This conversation needs to be focused more on the best way to run a railway and less on pre-existing ideological positions.

[Mr Goodwill]

The intention of the proposed new clause is to require passenger services operating on whole or part of the high speed line to be provided by a publicly-owned railway company, essentially nationalising HS2 train services. I regularly travel on the east coast main line—indeed, the hon. Member for Middlesbrough and I travelled on the same train on Monday morning, on the Grand Central service, which was set up by buccaneering free market innovator Tom Clift, who is sadly no longer with us, and his team. That successful open-access operator has been taken over by Deutsche Bahn. It regularly tops the league in passenger satisfaction and punctuality. Most of the staff come from Sunderland and they are a model of the customer service that we expect on our railways.

The proposed clause would restrict the operating structure of HS2 at this early stage—essentially seeking to nationalise the HS2 rail service, which is against the broader principles of how successful rail services in the UK are currently operating. My right hon. Friend the Member for Chelmsford has done my job for me in making the case to reject this new clause.

With regard to the commercial operation of phase 1 of HS2, it is imperative that we keep our options open. With the line not due to open until 2026, decisions on the commercial model to operate HS2 are some time away. Whatever those decisions might be, they will be made to seek the best value. This is about delivering the best service at the best price for the passenger and the taxpayer, not pandering to outdated 1970s socialist dogma. The rail franchising system is designed to deliver benefits for passengers and taxpayers, which are realised through competition. Since privatisation the rail industry has been transformed, with passenger journeys more than doubling over the past 20 years, from 750 million to around 1.6 billion. We believe that this remains the right approach overall in delivering the best value for the country and tax and fare payers.

The model that is being delivered in the UK is being emulated around Europe: for example, National Express is operating two franchises in Germany. As we have heard, the east coast main line is extending new services to Middlesbrough and Sunderland, and we have heard this week that a direct service to Scarborough is being considered. If one needed an image that encapsulates what is wrong with British Rail, it would be the pacer train, which was built by British Rail under a nationalised British Leyland. It was an infinitely unpopular train, and when this Government came to power we gave a pledge to phase it out.

[Jonathan Reynolds]

The Minister and I have had this exchange about the pacer train before. Has the longevity of the pacer train not been due in part to the fact that they are very cheap to run? Under the franchised model, it has been very hard to get rid of them, unless there has been an explicit overruling of the market system by Ministers. The private operations—the market—cannot get rid of the pacer trains; it has to be a political decision.

[Mr Goodwill]

The pacer train was the offspring of the position that a state-run railway can often find itself in, faced with other demands on public sector finances, not least the health service. Built on the cheap, with single-axle units without bogies and the correct suspension, the pacer trains were never going to be fit for purpose and were very unpopular. I am delighted that the Government are going to phase them out.

[Jonathan Reynolds]

Surely the Minister recognises that he, or certainly his Secretary of State, has had explicitly to overrule the civil service—by ministerial direction—to get rid of the pacer trains. There has had to be an explicit political decision, because the market alone would not have got rid of it.

[Mr Goodwill]

Another factor in our ability to phase out the pacer is the fact that with new rolling stock coming in in so many areas, we have other rolling stock cascading down to replace the pacers. This is a direct result of the investment in the rolling stock. On the east coast main line we look forward very much to the IEP trains built by Hitachi in the north-east, which, I think, will be a phenomenal improvement to that service and free up rolling stock for some of the new services that will be provided on the non-electrified part of the network.

Section 24 of the Railways Act 1993 states that the appropriate designating authority—in the case of HS2, the Secretary of State—may by order grant exemption from designation of a service to require a franchise under section 23(1) of that Act. Therefore, if so decided, the HS2 service will not require a franchise. However, as I have already stressed, the commercial model to operate the HS2 infrastructure and train service are yet to be determined. To speculate, it may well involve some sort of transitional phase in the early years.

With the ability to exempt a service from the franchise requirement set out in the Railways Act 1993, I do not believe it is necessary to include the proposed new clause in the Bill. With that explanation, I hope the hon. Member will withdraw his proposed new clause, although I am not too optimistic that he will.

High Speed Rail (London - West Midlands) Bill (Third sitting)

Debate between Jonathan Reynolds and Robert Goodwill

Thursday 3rd March 2016 Public Bill Committees

[Mr Goodwill]

I get the impression that we are now into territory that is not as consensual as it was, although we would all agree that it is important to get the best possible value when assets owned by the state are transferred to a buyer or via a share issue to the general public. It is absolutely right that if someone is selling off what some people might call the family silver they get a fair value, although that perhaps would not apply to the family gold under the Brown Government—in hindsight, that was not such a good deal.

I will not speculate too much on some of the issues that the hon. Gentleman raised, such as Royal Mail, but the process of privatisation has been successful. British Airways is now an international group. Engineering companies such as Rolls-Royce, and others such as BT and British Gas were all state owned, and all have gone on to become international companies unfettered by the restrictions that the state can often impose.

Clause 45 allows the Secretary of State to make schemes to transfer property rights and/or liabilities from HS2 to another person, which includes the Secretary of State. This power also allows the transfer to take place mid-delivery should it be required. Subsection (3) introduces schedule 30, which makes further provision about transfer schemes made under the clause.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I am listening to the Minister very carefully and I agree that there are many good examples of British industries that have performed very well in the private sector from the ‘70s and ‘80s. But he would surely separate that out conceptually from ensuring that a fair price for the taxpayer is raised at the initial point of issue of those shares in the private sector? If he reflects, he will admit that in various high-profile cases, particularly under this Government and the coalition Government, there was a feeling out there that state assets were undersold to increase the gain as quickly as possible for the people buying them. Those two issues are surely separate.

[Mr Goodwill]

Well, yes, often hindsight is a marvellous thing and markets move in different directions. It has always been the Government’s intention to ensure that we get best value, but also to ensure that share issues are taken up. There is a difficult balance between pitching a price at such a level that the shares are taken up and pitching a price that achieves best value. However, the track record of this Government shows that we have been stalwart custodians of the public purse. We have not wasted money. We have borne down on the deficit. We have got sound money back again in our economy and there is confidence around the world that we are sound managers of public finances. Indeed, in the Budget later this month, we will see more examples of that being delivered to the House.

High Speed Rail (London - West Midlands) Bill (Fourth sitting)

Debate between Jonathan Reynolds and Robert Goodwill

Thursday 3rd March 2016 Public Bill Committees

[Mr Goodwill]

As we have just heard, clause 48 refers to compulsory acquisition of land for regeneration or relocation. It enables the Secretary of State to promote a compulsory purchase order if he considers that the construction or operation of phase 1 of HS2 gives rise to an opportunity for regeneration or development of that land. The clause further enables the Secretary of State to promote a compulsory purchase order to acquire land to relocate all or part of an undertaking where, as a result of the exercise of powers under the Bill, the former site is no longer reasonably capable of being used for the undertaking. Subsection (4) provides that the normal process relating to compulsory orders is to apply.

The power is included in the Bill because Ministers wish to maximise the potential economic benefits from phase 1 of HS2 to ensure that local areas make the most of the opportunities that the railway will provide and to support relocation of businesses. It is considered that phase 1 of HS2 will give rise to significant opportunities to promote or facilitate regeneration development. However, assembling a coherent and developable site is an essential part of bringing forward such development and that would not be possible without the ability to have recourse to the powers of compulsory purchase.

As we say in information paper C11, we see this as a backstop power. It would normally be for local landowners and local authorities to come together to assemble land to bring forward regeneration. However, that may not be possible in some cases and regeneration opportunities could be lost. Ebbsfleet is a good example because development, although now under way, has been much delayed and such powers could have enabled more effective land assembly earlier.

Of course, all that does not mean that phase 1 of HS2 will be able to take land wherever it wants. All the measure does is enable the Secretary of State to promote a compulsory order when the construction or operation of phase 1 creates regeneration or development opportunities. Such an order would then need to go through the normal process, including a local inquiry, if there were objections.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I think I get the gist of what the Minister is saying. When a regeneration project, perhaps in Manchester or on another part of the line, is connected to the benefits that HS2 will bring, does he expect the normal process of land accumulation and scheme formation to occur? Is this measure a reserved power should there be a legal problem in assembling the site? “Backstop power” was the phrase he used. Does he envisage that the normal process would apply for regeneration work to occur in a local area?

[Mr Goodwill]

The hon. Gentleman is right. The owners of land close to HS2 stations or areas where HS2 will have an economic benefit will be grasping such opportunities with both hands. The land will have achieved an uplift in value and the opportunities will be fantastic. Problems might include a particular landowner not wanting to co-operate or another acquisition problem. This is not just about land development, but about the relocation of businesses, and I can think of one or two such examples. We need to be sure that we can bring forward viable opportunities for businesses to be relocated, which will protect those particular jobs.

To promote a compulsory purchase order successfully, the Secretary of State would need to demonstrate three things. First, that a private purchase is not possible, so the land should be taken compulsorily. Secondly, that there is a reasonable prospect of the proposed development coming forward—in other words, that there is no obvious reason why planning permission would not be granted if has not been already. Thirdly, that there is a compelling public-interest need for the land. Taking an individual’s land interferes with their fundamental human rights, so it is only right that significant protections should be in place. The power does not change those protections at all. Although it extends beyond the construction period into operation, checks and balances will continue to be in place.

Although local authorities already have the power to make compulsory purchase orders, it does not always happen. The power is there to ensure that development does happen, and we would expect local authorities to take the opportunity to lead development in their areas. However, in certain circumstances local authorities might be unable to do so, either because regeneration opportunities straddle local authority boundaries or because a local authority does not have the specialist resource to undertake the compulsory purchase order process. In such circumstances, if development is not coming forward in a timeframe that maximises the opportunity, the Government will be able to use this power to accelerate the process, following consultation with the relevant local authority.

Of course, there are safeguards to protect landowners. Planning permission for any developments would need to be obtained in the usual way, and the compulsory purchase order would be made only if there was a reasonable prospect of obtaining planning permission and the compulsory acquisition could be justified as being in the public interest.

I turn to the amendments. The purpose of clause 48(1) is to ensure that the development and regeneration opportunities that HS2 presents are maximised in a timely manner. However, it is a backstop power. We expect local authorities or landowners to be able to capitalise on any opportunities. Indeed, that is already happening. For example, Birmingham City Council has already published its plans for the development of the Curzon Street area, and we support it on that. However, in the event that there are issues that impede development, such as effective land packaging, regeneration areas straddling different local authority boundaries and so on, we will have the ability to step in and to help the development progress. Any such developments that require land outside the Bill limits would require the promotion of a compulsory purchase order and, as I have explained, the rules are tightly drawn and must be adhered to.

High Speed Rail (London - West Midlands) Bill (First sitting)

Debate between Jonathan Reynolds and Robert Goodwill

Tuesday 1st March 2016 Public Bill Committees

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I am delighted to be here in Committee. I have served on Bill Committees that have been likened to being on a long train journey in the same carriage with the same people for several weeks. However, at two weeks, this is a high-speed Committee.

I am a supporter of HS2 and have been a supporter of investment in our rail network for some time. HS2 is a very good project for my constituency and for Greater Manchester. That is widely recognised, and the justification is capacity. Even when a lot of publicity was initially given to the speed of the journey time, for me the project was always about capacity. The figures bear that out. Anyone who has caught a train at a particular time from Euston to Manchester Piccadilly will be familiar with our capacity problems. It is extremely clear when we look at the alternatives that patching the existing network or building a new line that is not a high-speed line will not meet the capacity need. The evidence is that we need a project such as this. We have support for the project from both sides of the House of Commons and we should proceed as soon as possible.

The consensus on the merits of the project means that we have to be particularly diligent in Committee to make sure that the powers granted to the Government in the Bill are proportionate and effective. As has been said, the High Speed Rail (Preparation) Bill went through an extremely good process and garnered more support for the project as it proceeded. I read clause 4, as my hon. Friend the Member for Middlesbrough did, as a wide-ranging and permissive set of powers, particularly subsection (4). My reading of it makes it, in legal terms, the same as a compulsory purchase order. There will be understandable concerns that it will weaken accountability and the scrutiny that we gave the provision in the High Speed Rail (Preparation) Bill. We need to be careful that we do not lose some of the good will that we have garnered so far in this process. I hope that the Minister will make clear why the clause is drafted as widely as it is. Will he tell us the benefits of the clause over the reasonable amendment tabled by my hon. Friend the Member for Middlesbrough?

[Mr Goodwill]

As we have already discussed, clause 4 refers to powers to acquire land compulsorily. Compulsory powers are needed because they are a tried and tested method of delivering major infrastructure projects. We have provided safeguards for property owners that go beyond the statutory requirements under normal compulsory purchase rules. For example, we have introduced the voluntary purchase scheme for properties between 60 and 120 metres from the centre of the railway and the need-to-sell scheme for those who have suffered perceived blight due to the railway. The latter has no geographical limit.

The detail of the modifications is set out in the schedule. The hon. Member for Stalybridge and Hyde talked about the importance of capacity. We need to be clear that when we talk about capacity, we are talking about people standing on trains. On most weekday mornings about 4,000 or 5,000 people are standing on trains into Euston and a smaller but still significant number are standing on trains into Birmingham New Street.

The hon. Member for Middlesbrough mentioned clause 65(c). This does not seek to purchase land specifically for phase 2; it relates only to land within limits and does not give a general power to acquire land. While I am not against the flow of what the hon. Gentleman is saying, I believe that we have already addressed his fears in the way we have drafted the Bill. Indeed, clause 4(1) contains the power to acquire all land required for the scheme. The Bill divides that land into different categories. The main category is land within the limits of deviation for the work set out in schedule 1. Other land needed for construction and ancillary purposes is specified and identified in schedules 5, 7, 8, 11, 12 and 16, together with the purpose for which that land is required. There is, therefore, no land within clause 4(1) that is not specifically authorised for compulsory purchase.