Rail Investment

Lord Hammond of Runnymede Excerpts

Thursday 25th November 2010 Commons Chamber

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I should like to make a statement on the Government’s plans for investment in rail infrastructure and rolling stock.

These plans build on the announcement by my right hon. Friend the Chancellor of the Exchequer of the outcome of the spending review. As we have consistently said, tackling the deficit is our top priority, and by taking the tough decisions on current spending we are able to secure our future growth by making vital infrastructure investments. Over the next four years, we will provide £14 billion of funding to Network Rail to support capital maintenance and infrastructure investment, and £750 million for high-speed rail. We will also fund the Crossrail project, the tube upgrade programme and light rail projects in Birmingham, Tyneside, Nottingham and Sheffield, and provide additional funding to franchisees for extra rolling stock.

I can also confirm today that we will fund and deliver the Thameslink programme in its entirety, virtually doubling the number of north-south trains running through central London at peak times. This huge investment will link Sussex, Kent and Surrey, through central London, with Hertfordshire, Bedfordshire and Cambridgeshire. But the original programme for the rebuilding of London Bridge station to increase through-running as part of this project was always ambitious, with substantial risks in respect of delivery and operation of existing services during construction. To reduce these risks, we have re-profiled the delivery of the programme to achieve completion in 2018. This will enable Network Rail to make the further efficiencies in the design and delivery of the programme that we require to ensure value for money. Passengers will start to benefit from incremental improvements on the Thameslink routes from the end of 2011. As part of the Thameslink programme, we will procure a new fleet of trains—up to 1,200 new carriages. That is in addition to about 600 new carriages that will be provided for the Crossrail project.

Together with the tube upgrades, these projects represent a step change in rail capacity in London, providing a significant boost to economic growth potential in the capital. New Thameslink and Crossrail rolling stock will enable the redeployment of hundreds of serviceable electric carriages currently used on Thameslink services. These carriages belong to rolling stock leasing companies, but we expect they will be available at competitive leasing prices for re-use elsewhere, thus justifying further electrification of our network.

As a first step, I can announce today that Network Rail will electrify the commuter services on the great western main line from London to Didcot, Oxford and Newbury over the next six years. Electric trains will speed up journeys, improve reliability and reduce the impact on the environment on these busy routes.

The Chancellor also announced on 20 October the electrification of the lines between Liverpool, Manchester, Preston and Blackpool, representing an investment of up to £300 million. I expect work in the north-west to begin next year and to be completed at about the same time as work on the Thames valley commuter lines, in 2016. Some sections will be completed well ahead of this, notably Manchester to Newton-le-Willows in late-2013, allowing new electric trains to operate from Manchester to Scotland. As with Thameslink, we will require Network Rail to keep a tight rein on costs. The redeployment of electric rolling stock to these routes will, in turn, free up hundreds of diesel units, which will be available to train operators to lease as they become available in the period after 2015.

This will all be welcome news to passengers. The Public Accounts Committee recently found that many services are unacceptably overcrowded, and I understand the frustrations of rail travellers who have to travel on packed trains. More investment is clearly needed. That is why I argued for additional rail investment in the spending review, and it is also why I have taken the difficult decision to allow regulated fares to rise by 3% above inflation for the three years from 2012, to help us pay for these investments.

In January 2008, the previous Government published a plan to bring 1,300 additional carriages into service by March 2014. That plan was never deliverable. In total, only 206 of the 1,300 carriages had entered service by May this year. My predecessors quoted a grand total of rail carriages, but never referred publicly to the fact that delivery of that total was subject to so many caveats and qualifications as to render it effectively meaningless. According to their published plan, the 1,300 was not fixed and subject to

“value for money, affordability…linkages with other interventions or with other rail projects…infrastructure constraints…supply chain constraints”

and “credibility”. The document went on to say that

“the final outcome could well be different”.

In other words, it was not so much a plan as a press release.

So let me set the record straight. I can today confirm that an additional 650 carriages will have been delivered to the network between 6 May 2010 and March 2014. That is in addition to the Thameslink and Crossrail carriages I have already mentioned.

But it is not just about rolling stock. Network Rail has already started work on station improvements, with funding confirmed for developments at Reading, Birmingham, London King’s Cross and Gatwick airport. Investments on the east coast main line and midland main line and improvements in Yorkshire, on trans-Pennine routes, around Manchester and in south Wales will improve line speed, reliability and capacity of services.

Beyond these investments, there are far-reaching decisions to be made about inter-city services. In February 2009 the intercity express programme, launched by the previous Government, identified the Agility Trains consortium as preferred bidder to build a new fleet of inter-city trains. Then, this February, my predecessor invited Sir Andrew Foster, former head of the Audit Commission, to provide an independent assessment of the programme. Sir Andrew presented his report to me at the end of June, recommending further work on the Agility Trains proposal and a detailed study of the alternatives. I can now tell the House that we have narrowed down the options, from the four Sir Andrew identified to two. I have ruled out the option of requiring passengers to change from electric to diesel trains at a point in their journeys, recognising the value to passengers of preserving through-journeys. I have also ruled out the option of a wholesale refurbishment of the existing diesel InterCity 125 fleet, some of which dates back to the 1970s.

The remaining options are, on the one hand, a revised, lower cost proposal from Agility Trains envisaging a mixed fleet of some all-electric trains and some electric trains equipped with under-floor diesel generators, and on the other hand, a fleet of new all-electric trains which could be coupled to new diesel locomotives where the overhead electric power lines end. Both of these options would allow us to preserve through-journeys between London and parts of the rail network which are not electrified. Both of them would deliver faster journey times too. For example, we expect to see time savings of at least 15 minutes for the journey between Cardiff and London, bringing it below 2 hours. This is a major decision that will affect inter-city rail travel for decades to come, and we must get it right.

To address the outstanding issues on choice of train type and further electrification on the great western main line, additional work will be required within the Department, with Agility Trains, and with the Welsh Assembly Government on the business case for electrification into Wales. When this work, and discussions with the Welsh Assembly Government and my right hon. Friend the Secretary of State for Wales, has concluded, I expect to announce a final decision on the IEP and on further great western electrification in the new year.

The package I have confirmed today has been possible only because this Government have been prepared to take the tough decisions to protect investment in Britain’s future. This is a commitment to our railways that will benefit Britain for generations to come, and I commend the statement to the House.

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the right hon. Gentleman for early sight of his much-delayed statement. We first read the details of the statement in the Sunday papers three weeks ago, we read them again two weeks ago and we saw much more detail in the press this morning. I know that he tabled this statement as a written ministerial statement today so that he could get away with spinning it on the “Today” programme, but his whole handling of this announcement is an insult to this House, which should be the first to hear about major Government policy decisions, not the last.

Despite all the spin and the re-announcing of decisions taken by the previous Government, many passengers will be bitterly disappointed by the right hon. Gentleman’s announcement today, because it amounts to delaying investment but bringing forward massive fare hikes. The real losers of today’s statement are commuters, who already suffer some of the highest fares in Europe and the worst overcrowding. Because of the cuts he has had to make to his budget, their fares will rise by 3% above inflation from next year and they now face waits of up to a decade for the new trains that will ease overcrowding and speed up journeys.

The statement delays the completion of Thameslink by two years to 2018, following the right hon. Gentleman’s previous decision to delay the completion of Crossrail by a year. His Department is already missing its targets for extra spaces by 15% at peak time in London and 33% in other major cities. Does he not understand the frustration there will be at his decision to delay the delivery of the new carriages that are vital to addressing this overcrowding?

On new carriages, the right hon. Gentleman tries to claim that the plans that Labour announced in government for 1,300 carriages were somehow a work of fiction. Perhaps I could remind him that his permanent secretary told the Public Accounts Committee in September that

“it was a commitment of the previous Government to deliver 1,300 carriages, for which they had a £1.2 billion budget.”

He made it clear that

“we had plans—clear plans—that we could evidence to the National Audit Office…to have acquired around 950 carriages and spent around £900 million.”

He also said that he had plans in place that

“would enable us to get to probably around 1,300 carriages and to develop the full capacity, using the full budget of £1.2 billion.”

Will the right hon. Gentleman now accept that he has cut the number of new carriages that we planned to be delivered in this spending review period, and that he must stop spinning? Why are commuters going to face overcrowding, which will not be substantially alleviated for almost 10 years, when the fares hikes that he says are to end overcrowding start this January?

People in Wales will feel most betrayed by the right hon. Gentleman’s announcement, following his decision to delay giving the green light to electrification of the great western line beyond Bristol. His manifesto was very clear on this, so let me remind him that it said:

“We support…the electrification of the Great Western line to South Wales.”

Perhaps no Welsh MP was in the room during the coalition negotiations, because that commitment was subsequently downgraded to a general statement of support for

“further electrification of the rail network.”

Today, we see why: it was because there was clearly never a commitment to Wales.

We are told that the Secretary of State for Wales is threatening to resign if high-speed rail goes through her English constituency. She does not seem to be threatening to resign over the fact that Wales, whose interests she represents in the Cabinet and is supposed to champion, is to remain the only European country other than Albania and Moldova with not a single metre of electrified track. Will the right hon. Gentleman reconsider his decision not to approve the electrification of the great western main line to Swansea, as was planned by the previous Labour Government?

The right hon. Gentleman has also today ducked giving the green light to the intercity express programme. We are used to this Government going back on things they promised to do in their manifesto, but today’s statement sees him going back even on what he promised in his Department’s comprehensive spending review statement this October. I remind him that he said:

“Because aspects of Thameslink and HLOS rolling stock programmes, as well as projects to electrify the Great Western Mainline, and the rail routes around Manchester and Liverpool, are interdependent with the IEP decision, a full announcement on all these programmes will be made at the same time.”

Will he tell the House what has changed? Will he now tell us the real story behind the repeated delays to today’s statement and the real reason he has had to push so many of his decisions into next year? Is it true, as some believe, that by changing the specification of the IEP carriages after a preferred bidder was announced he now risks a legal challenge from other bidders?

Finally, does the right hon. Gentleman understand the anger felt by passengers up and down the country at his decision to allow rail fares to rise by such a large amount? His coalition agreement said:

“We are committed to fair pricing for rail travel”.

Can he tell hard-pressed commuters up and down the country why he thinks that allowing rail fares to rise by 3% above inflation after next year demonstrates his commitment to fair pricing? How does driving people off the railways and back into their cars help either our economy or the environment? Does he accept, as his Department has admitted, the very big impact on road congestion that is likely to be caused by his decision?

Is not the reality that he has come to the House today only because he said in his departmental plan that he would do so by the end of November 2010 and because his repeated briefings to the media have created an expectation that a statement was imminent? Does he not accept that his departmental plan commits him not to a statement, but to decisions? Has he today not just missed the first of his own targets in the departmental plan, which was supposed to be the Prime Minister’s way of keeping Secretaries of State on track to deliver Government promises?

Is not the reality of today’s statement that beyond re-announcing a whole series of investment decisions taken by the previous Labour Government and put on hold by him after the election, he has delayed the completion of Crossrail by a year, delayed the completion of Thameslink by two years to 2018, delayed giving the green light to electrification of the great western line beyond Bristol—that is a real betrayal of people in Wales—delayed giving any indication of when electrification of the midland main line will take place and delayed giving the green light to the intercity express programme? His statement pushes the delivery of projects into the next spending review period and ducks decisions on some of the country’s most vital transport infrastructure projects. His delayed statement is itself nothing more than one long series of delays.

[Mr Hammond]

In her second response to me at the Dispatch Box, the hon. Lady adopts a rather churlish tone. She talks about wanting decisions to be made. She will get decisions from this Government, but they will be properly thought through decisions based on value-for-money cases and proper consideration of all the matters that need to be dealt with; they will not be press releases made up on the spur of the moment by a Government who have gone on a regional junket and need something to announce to keep the regional press happy.

The hon. Lady complains that we issued a written ministerial statement this morning, but she ought to be able to understand that the content of this statement, because it touches, in particular, on the procurement of the intercity express programme, is market sensitive, so it was essential that we made a statement this morning before the markets opened.

The hon. Lady talks about fares, and I readily acknowledge that nobody in the commuter fraternity will welcome the increase in the cap on regulated fares that we have proposed for 2012 to 2015. But that is one of the tough decisions that we have had to take to protect the programme of investment in our railways. I have to say to her that I see no sign that anybody on the Opposition Front Bench is prepared to take tough decisions or to understand that without the ability and the willingness to do so they will simply have no credibility in the difficult debates on how we prioritise limited public expenditure.

The hon. Lady criticises the delay in delivering the complete Thameslink project—the 24 trains an hour in both directions. I do not apologise to her or to the House for taking a decision that the programme, as originally set out, contained too many risks—there were risks of cost overruns and risks to existing commuter services into London Bridge station. With Network Rail, we have revised the schedule to create a lower-risk alternative that is both less costly and less disruptive to existing commuter services.

The hon. Lady talks about the midland main line—she seems to have discovered it this morning. There was not a word about the electrification of the midland main line during the 13 years for which the Opposition were in government, but today she wants to bring it up as though it were some Labour priority we are abandoning. For the record, the case for electrification of the midland main line remains strong and we will consider it as a project for control period 5, which begins in 2014.

The hon. Lady attacks me for describing the 1,300 rail carriages to which her predecessors apparently committed as a work of fiction. She is new to the job, I understand, and these are difficult numbers—[Interruption.] I am quite new to this, too, and I can tell the House that they are difficult numbers. If she drills down and has a look, she will see that the figure of 1,300 was maintained early this year only by the inclusion of 400 of the 1,200 Thameslink carriages in the total—a complete and ongoing fabrication to avoid abandoning a number that was never sustainable. The Opposition could not have delivered them because they are not prepared to support any of the decisions that have allowed capital investment to continue. They do not support the fare increase, they do not support cuts in welfare expenditure and they do not support cuts in public expenditure to allow prioritisation of capital investment.

The hon. Lady has the audacity to raise the issue of Wales, but, as she says, Wales has not one metre of electrified railway—after 13 years of a Labour Government. We will take no lectures from her on electrification in Wales.

[Several hon. Members]

rose—

[Sir Alan Haselhurst (Saffron Walden) (Con)]

Will my right hon. Friend assure me that he will ensure that the design of the new franchise for Greater Anglia will maximise the incentive to the successful bidder to contribute to investment in track so that passengers on the West Anglia line and the Great Eastern line will get the advantages from such investment as he has outlined in his statement today?

[Mr Hammond]

I can assure my right hon. Friend that in re-designing the franchise arrangements, as we have committed to do, we will want to consider the opportunities for train operators to contribute to infrastructure improvements and to work more closely with Network Rail. We will also ensure that train operators’ financial interests are clearly aligned with passengers’ interests so that, under new franchises, when we have an overcrowding problem it will be in the train operator’s interest to deal with that problem with its own money rather than, as under the current system, having to come to the Government cap in hand to ask us to solve the problem.

[Huw Irranca-Davies (Ogmore) (Lab)]

I have a direct question for the right hon. Gentleman. Will the outcome of the further long-grass review that he is considering for south Wales, Bristol and the whole line to London deliver rail electrification all the way to Swansea—not to Bristol, but to Swansea? In the run-up to the election in May, all parties stood on a platform of delivering rail electrification all the way to Swansea. The Secretary of State for Wales, the right hon. Member for Chesham and Amersham (Mrs Gillan), has made a principled point on behalf of her constituents, saying that it is a resigning matter if a different link goes through her constituency. Will she apply the same principle if she fails to deliver rail electrification into Wales?

[Mr Hammond]

I can answer the hon. Gentleman’s question to me, but I cannot answer for my right hon. Friend the Secretary of State for Wales; he will have to address his question to her in person. There has to be a business case for electrification. We will work with the Welsh Assembly Government to strengthen and build that business case over the next few weeks and I shall make an announcement to the House as soon as we have made a decision on the IEP procurement that will cover both IEP and further electrification on the great western main line.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I welcome the Secretary of State’s announcement that what was originally called Thameslink 2000 by the previous Government will at last be delivered by this Government. Will the Secretary of State also direct those responsible to ensure not only that we have the new London Bridge station in my constituency, and all that goes with it, but that the maximum number of commuter lines are continued in south London? That is obviously of interest to people who live in London as well as those who live further afield.

[Mr Hammond]

I thank my hon. Friend for that question. He is quite right to observe that we must get the balance right between building large new infrastructure projects and maintaining existing services. I have been out this morning to the site of the Blackfriars station development and seen just how incredibly difficult it is to build such a major project on a running railway line with trains passing backwards and forwards. It is very complex, and allowing a little extra time will ensure that we do not have catastrophic disruption during the programme.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I welcome the news of investment in rail, although I am concerned about the three-year delay in the electrification of the Liverpool-Manchester-Blackpool line as well as the uncertainties on electrification of the great western line. Will the Secretary of State explain the percentage growth in rail that he is planning within these figures so that rail can grow without overcrowding and without the overpricing that drives people off the railways?

[Mr Hammond]

I do not know where the hon. Lady gets the idea about three years’ delay with north-west electrification. As I said, the Manchester to Newton-le-Willows section will be completed in 2013. Work will start next year. The team that is doing the work will then roll on to complete the electrification of the Liverpool-Manchester section and finally the Preston-Blackpool section. It will all be completed by 2016.

Let me explain the time scale. Electrification will allow the electric carriages released by the delivery of the new Thameslink carriages to be deployed. There is no point completing that electrification, except for the section from Manchester to Newton-le-Willows, until those electric carriages are available. The timetabling is perfectly logical and the early completion of Manchester to Newton-le-Willows will allow brand-new electric trains to be operated on the Manchester to Scotland routes.

The hon. Lady asked about capacity. The total announcements on Crossrail, Thameslink and the additional 650 carriages to be delivered before 2015 will amount to a 17% increase in the capacity of the network.

[Henry Smith (Crawley) (Con)]

Commuters in my constituency, particularly those who use Three Bridges and Gatwick stations, will greatly welcome—as do I—the announcement about increased rolling stock through Thameslink. Will my right hon. Friend assure my commuters and constituents that the rolling stock will be of the highest available quality to ensure greater comfort and convenience?

[Mr Hammond]

The trains deployed on the Thameslink route will be brand-new trains with 1,200 brand-new carriages.

[Mr Mike Weir (Angus) (SNP)]

The Secretary of State’s statement is the fourth time that the desperately needed new trains for the east coast line have been delayed. Will he tell us what he means by “in the new year”? What time scale is he talking about? Will he go for the dual-fuel trains?

[Mr Hammond]

The bi-mode trains are one option that we will consider. Let me explain again the reasons for the complexity and the delay. We have a preferred bidder, selected by the previous Government. That preferred bidder, Agility Trains, has come back to us with a revised proposal that is significantly more attractive than the original proposal. We have been asked by Sir Andrew Foster’s review to reappraise the Agility Trains bid and to consider specific alternatives. We are carrying out that work. There are technical complexities and legal complexities, because of the procurement process. Of course, we must build a value-for-money case and compare the two options. I hope that it will be possible to make an announcement in January, and I expect it to be made early in the new year.

[Steve Baker (Wycombe) (Con)]

I welcome the Government’s sincere commitment to the economic renewal of the north, but what does my right hon. Friend say to people in Buckinghamshire who challenge both the route and the national interest case for high-speed rail?

[Mr Hammond]

I say to them that they will have an opportunity to make their case when we go to consultation on a preferred route in the new year.

[Chris Bryant (Rhondda) (Lab)]

Every analysis of the south Wales economy and its competitiveness shows that the single most important thing that could be done to improve the competitiveness not only of Cardiff, Swansea and Newport but all the valleys communities is the electrification of the line all the way to Swansea. Is there not therefore a strong business case, if one really believes in growth in the economy, for making sure that electrification goes ahead as soon as possible?

[Mr Hammond]

That is precisely what we will be looking at working with the Welsh Assembly Government to achieve—a strong business case. The hon. Gentleman might reflect on what he did in the years that he sat on the Government Front Bench when not a single metre of railway line was electrified in Wales.

[Stuart Andrew (Pudsey) (Con)]

I welcome this announcement and I thank my right hon. Friend for delivering an honest assessment of what is achievable. Will he confirm that improvements to Yorkshire and trans-Pennine routes will include upgrades to carriages and increased numbers to improve the journeys of the hard-pressed commuters who have suffered badly thanks to the neglect of the Labour party?

[Mr Hammond]

We expect that additional carriages will be delivered to the northern and trans-Pennine franchises, but my hon. Friend will understand that these are commercial matters and that we have to enter negotiations with the franchisees as single-tender actions. We have to negotiate with them on the reimbursements they envisage for operating those additional carriages, so it is not possible to give him a precise number today because that would remove our negotiating power in the franchise discussions.

[Kelvin Hopkins (Luton North) (Lab)]

Thousands of my constituents travel every day by Thameslink, as do I. The Secretary of State has disappointingly delayed this scheme by two years, euphemistically describing the delay as “reprofiling”. He has specifically mentioned London Bridge, but what about Blackfriars, which he and I have visited? Will he at least confirm that the Blackfriars interchange with the Circle line will be completed on time and will not be delayed?

[Mr Hammond]

My understanding is that, yes, the station’s new interchange with the Circle line will be completed by the end of next year and that 12-car train-running through Blackfriars will begin at that time. His constituents will see the first tangible benefits from the Thameslink project at that time.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

I welcome the encouraging implications of the Secretary of State’s statement for the maintenance of through-direct links from the north of Scotland to the London metropolis, particularly for the Highland Chieftain—his Department accepted the well-backed petition of The Inverness Courier on that. What is his prognosis for overnight services—the sleeping-car rolling stock—between the Scottish cities, plus Fort William, and London? They are long overdue and much needed.

[Mr Hammond]

It is for train operators to decide which specific services to offer on those routes, but the decision we take on IEP will define the type of rolling stock that is available to operate those services. I would be happy to discuss off-wire services north of Edinburgh with him if that would help.

[Julie Hilling (Bolton West) (Lab)]

When will electrification of the Manchester-Chorley-Preston part of the line, which runs right through my constituency, take place? It seems to be missing each time there is a statement.

[Mr Hammond]

The hon. Lady tests my geography of the north-west. If she is referring to the cord that passes from Manchester to Newton-le-Willows, rejoining the west coast main line, that will be in 2013. The rest of the electrification programme will be rolled out between 2013 and 2016.

[Mr Robert Buckland (South Swindon) (Con)]

I welcome the Secretary of State’s whittling down of the options for the great western railway, but we in Swindon are waiting anxiously on the platform for a final decision on the electrification of the main line. May I urge him to make a decision that will benefit Swindon and the west country—in favour of electrification—and hold him to his promise to make a decision early in the new year?

[Mr Hammond]

As I have already said, that is my expectation, but, as hon. Members will understand, when complex legal, technical and commercial decisions are to be taken, we have to do the homework before we make the announcement—unlike the previous Government.

[Fiona Mactaggart (Slough) (Lab)]

I recognise that future investment plans depend on economic growth and I represent one of the most productive towns in the country on the most old-fashioned railway line—the great western main line. Will the Secretary of State agree to meet me and a group of companies from Slough that are anxious about the impact of other lines between Slough and Paddington, about the effect of Crossrail on the frequency of trains and about the lack of any connection from the west into Heathrow? Will he meet us to discuss his plans?

[Mr Hammond]

I should have thought that the hon. Lady welcomed the electrification of great western main line commuter services and the benefits that her constituency will see from Crossrail. I also have a great interest in the Airtrack project as my constituency is just south of Heathrow. I would be delighted to meet her to discuss these issues.

[Mark Lancaster (Milton Keynes North) (Con)]

One benefit of High Speed 2 will be a release of capacity on the commuter section of the west coast main line from Euston to Milton Keynes. Will the Secretary of State confirm that as a result of today’s statement, rolling stock formerly used on Thameslink might be released to ease congestion on that line?

[Mr Hammond]

The release of rolling stock from Thameslink will provoke a cascade through the system so that Thameslink vehicles will be available for use on other lines. In some cases they will displace diesel units that will become available for use on still further lines. At the bottom of the pile, some old rolling stock is likely to be retired. By releasing large numbers of carriages into the pool we expect to change the market dynamics for leasing rolling stock, making it cheaper and therefore more affordable for the taxpayer and passenger alike.

[Phil Wilson (Sedgefield) (Lab)]

The Secretary of State knows that if the Agility train project goes ahead it will create thousands of jobs in north-east England, including hundreds in my constituency where the trains will be built. If that does not happen and the door is slammed on north-east England—if the other option is chosen—will the contract have to go out to retender, thereby causing further delays while the tendering process takes place and delaying the intercity express programme further?

[Mr Hammond]

As I have said, there are complex legal and commercial issues to consider. The hon. Gentleman will understand as well as anyone the process of negotiating with Agility trains as the preferred bidder and that everything we do has to be within the constraints of the European procurement directive.

[Julian Sturdy (York Outer) (Con)]

I, too, welcome the Secretary of State’s announcement. Will he outline in more detail the benefit that will come from the 650 new carriages that he has announced for 2010 to 2014 and how the investment in Network Rail will benefit the east coast main line?

[Mr Hammond]

Network Rail is making significant investments on the east coast main line, which explains to some extent the less than exceptional service performance on the line in the past few months as that work has been carried out. It will bring benefits in due course in terms of greater line speed and reliability. The 650 additional carriages will be distributed across the network. Some of them have already been contracted with individual franchisees and some of them will be the subject of further negotiations, which we will now commence, but there will be benefits for all parts of the country.

[Mr Ben Bradshaw (Exeter) (Lab)]

There will be bitter disappointment not just in Wales but in the south-west of England about the Secretary of State’s decision to shelve the previous Labour Government’s plans for the electrification of the great western line. Will he agree to publish in full the criteria that have informed his decision?

[Mr Hammond]

Yes. In accordance with our transparency agenda, we have made it clear—I made it clear in my previous announcement on roads—that we will in due course publish the business case analysis that informs decisions about projects that go ahead and projects that do not.

[Duncan Hames (Chippenham) (LD)]

There is a pressing need for additional carriages on the Cardiff to Portsmouth line—indeed, a literally pressing need around Bristol, and on trains serving Bradford-on-Avon. Will it be need and overcrowding, or the commercial positions of franchisees, that drive the allocation of the 650 new carriages?

[Mr Hammond]

This is not about the commercial position of franchisees; it is about the economic benefits. We are not just looking at costs and revenue. If revenues were able to justify the costs, franchisees would be able to do the work on their own, without Government support. We are looking typically at situations where the revenue from fares does not cover the costs, but the wider economic benefits justify the investment of public money.

[Clive Efford (Eltham) (Lab)]

My constituents are served by Southeastern and face the highest fare increases in the south-east network. They also suffer from pixies on the line—or rather, PIXCs: passengers in excess of capacity—at peak times, and there is a plan to deliver 12-car trains at peak times on that section of the network. Do the Government still intend to deliver those 12-car trains and relieve the congestion on the line?

[Mr Hammond]

That is part of the Thameslink project—12-car trains running with Southeastern—and it will go ahead.

[Mrs Anne Main (St Albans) (Con)]

I hugely welcome the proposed new fleet, but, given the delays that Bombardier caused for First Capital Connect by the late delivery of trains, what discussions will the Secretary of State have with those who are to build the trains, to ensure that they deliver the rolling stock on time?

[Mr Hammond]

When we contract for, or enter into arrangements to support the contracting of, rolling stock, we will look to see that there are effective penalty arrangements to make it extremely costly for anybody to fail to deliver on time what they are supposed to deliver.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Secretary of State has made it clear that he has drilled down hard on the numbers and taken an objective and exigent view of the returns that he expects from the investment. Can we expect a similar approach to HS 2? In the consultation, about which he was very open on the “Today” programme this morning, but has been less so with the House so far, will it be possible to look at alternative routes, not just geographically but in order to run HS 2 down existing lines?

[Mr Hammond]

I am delighted to hear from the hon. Gentleman. Not many people who have addressed me on HS 2 have asked me to alter the line so that it runs through their constituency, as I think he has. I am grateful for his enthusiastic support for the project. The HS 2 consultation will include the detail of the route from London to Birmingham, the wider strategic principles of the high-speed rail network and the selected route corridors, so his constituents, his local authority, and indeed he himself, will have an opportunity to make that point.

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

My right hon. Friend is correct to assess carefully the different options for the intercity express programme, but when does he expect the first IEP trains to enter service?

[Mr Hammond]

At this point I cannot give my hon. Friend an answer; it will depend on which option is selected. Of the two remaining options, one is for a novel technology—the Agility Trains proposal for a bi-modal train, which is an innovation—and the other is for a standard high-speed electric train set with a diesel coupling at the end of the wires. Clearly the latter option could be delivered more quickly, but our decision must be based on the best long-term interests of the UK’s railway.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Secretary of State will acknowledge that, in my constituency certainly, there will be huge disappointment that midland main line electrification did not merit even a mention in his statement. Some of my constituents could be forgiven for thinking that he has something of a grudge against the east midlands, although I am sure—and we all hope—that that is not the case. When will the decisions on control period 5 be taken, so that we might at least have the prospect of that much-needed investment?

[Mr Hammond]

No, I will not acknowledge that there will be huge disappointment. Only a few months ago people were telling me, and relevant publications were saying, that all this investment would have to be cancelled because of the squeeze on public spending. We should rejoice in the fact that we have managed to focus on and prioritise public capital infrastructure investment that will support economic growth in this country. I am a little disappointed that the hon. Gentleman does not sing the praises of the decision to support and invest in the Nottingham tramway, but I will say one thing for him: I cannot blame him for the actions of the previous Government, because he was not in it.

[Mr Rob Wilson (Reading East) (Con)]

I welcome my right hon. Friend’s statement, and thank him for his personal interest in the developments at Reading station. He knows, however, that there is particular overcrowding on the route from Reading to Paddington, so will he spell out the improvements that his announcement will make to commuting from Reading to Paddington?

[Mr Hammond]

The decision to electrify the line as far as Didcot will mean that services to Reading are more reliable and faster. It will also enable them to be more frequent, and they will have more passenger capacity. Put together, those factors will deliver a step change in the service that my hon. Friend’s constituents experience.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the light rail improvements in Sheffield, which I think I am going to welcome, include not merely the four extra trams but the nationally significant tram-train pilot? The lack of electrification of the midland main line is a disappointment, but will the track improvements go ahead and include the extra £23 million requested, so that we can significantly reduce travel times to London, to less than two hours for the first train, and reduce times for the second train, too?

[Mr Hammond]

There are two separate projects in that context, at least as far as the Department is concerned: the additional vehicles for the supertram, about which we have already made an announcement; and a further proposal, for which—the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) tells me—there is a submission on my desk as we speak. I shall be happy to look at it and let the hon. Gentleman know how we can take it forward.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I welcome the decision to continue running through-trains to Aberdeen and Inverness, and the fact that that uncertainty has now gone. In choosing the rolling stock that takes those journeys, will the Secretary of State ensure that we can maximise the journey improvements north of Edinburgh on the unelectrified part of the line?

[Mr Hammond]

Judging by the technical information that I have seen so far, I believe that both options would deliver almost exactly the same journey time, so I do not think that our choice of IEP mode will affect the journey time to Aberdeen or Inverness.

[Alison McGovern (Wirral South) (Lab)]

Wirral businesses have worked hard to build our local economy, and they expect me to ask questions of the Secretary of State. He says that he expects work in the north-west to begin in the next year, but given the delays that we have seen, will he return to the House to confirm absolutely that the work he has set out today will in fact go ahead?

[Mr Hammond]

I can save myself a trip by confirming now that work will begin next year and be completed in 2016—barring some completely unforeseen catastrophe. That is in the programme agreed with Network Rail.

[Sarah Newton (Truro and Falmouth) (Con)]

I welcome today’s announcement of an extra 650 carriages for rail franchises outside London, as it could really help the vital London to Penzance service and the maritime line in my constituency. What assurance can the Minister provide that he is working with First Great Western to ensure that people in Cornwall benefit from the investments announced today?

[Mr Hammond]

First Great Western was first off the blocks today to welcome the statement, and we will continue to work with it. We expect additional carriages for First Great Western to be contracted as part of the 650-carriage programme, and of course, when decisions are made on the IEP and on further electrification of the great western main line, the company will ultimately be a significant beneficiary.

[Lilian Greenwood (Nottingham South) (Lab)]

The Minister knows that I am delighted with the extensions to our tram network, but unfortunately we cannot travel to London on it. Electrification of the midland main line would make it possible to reduce the travel time from Nottingham to London to an hour and a half. The Minister acknowledged that the economic case for electrification is strong—I would say “overwhelming”. Can he assure me that the Government have a strategy to achieve “Nottingham in 90”, pending the development of High Speed 2?

[Mr Hammond]

The hon. Lady will have noted that the last Government failed to deal with the issue of the electrification of the midland main line. I thought for a minute that I was going to get a bid for a tramway extension to London; to be honest with the hon. Lady, I prefer the option of midland main line electrification. There is a strong business case for electrifying the midland main line. The Government strongly support electrification, but we have, of course, to work within the envelope of affordability. We will be looking at projects for the next Network Rail investment control period, which begins in 2014. Midland main line electrification will have a strong case for inclusion in that programme.

[Gavin Barwell (Croydon Central) (Con)]

I warmly welcome the decision to proceed with the entire Thameslink programme, including the vital redevelopment of London Bridge—and the news that that will be done in a way that does not disrupt commuter services in south London. There is also the additional rolling stock for Thameslink, which should have a knock-on benefit for Southern passengers. It would be greedy to ask for more in this control period, but may I ask my right hon. Friend to consider improving the west London line in the next control period, so that south London, Gatwick, Surrey and Sussex have access to the High Speed 2 route?

[Mr Hammond]

I do not think I said that there would not be any disruption to commuter services during the massive reconstruction of London Bridge station; I certainly hope that I did not. I said that the reprofiling we have done will reduce the risk of serious disruption during that period. However, it will be a very major reconstruction project, and some disruption is inevitable. On west London services, of course we will examine proposals over the next couple of years as we prepare for the next Network Rail investment control period. Furthermore, the Mayor of London has an input into rail investment decisions for London commuter services.

[Heidi Alexander (Lewisham East) (Lab)]

I would like to return to the issue raised by my hon. Friend the Member for Eltham (Clive Efford). I think I heard the Secretary of State say that the additional Thameslink carriages would facilitate the lengthening of the overcrowded trains that run through our constituencies to 12 cars. Will he just confirm that?

[Mr Hammond]

I thought that the hon. Member for Eltham (Clive Efford) was referring to Thameslink services that will run out to the south-east. If I have misunderstood that, I shall look carefully at the question that he asked, and will write to both him and the hon. Lady.

[Mr John Leech (Manchester, Withington) (LD)]

I too welcome the news on new carriages, particularly given the broken promises of the previous Government. The Secretary of State has recognised the need for additional carriages on the Northern Rail franchise, but I remind him of the need to deliver those sooner rather than later.

[Mr Hammond]

The hon. Gentleman is right to refer to the broken promises of the previous Government. He will know that they promised 182 new carriages on the Northern Rail franchise, ordered 18, and delivered none. I hope that we will be able to do better than that for him.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

I welcome the statement because I represent a constituency that needs support from the Government. I also have an interest in the matter as a former railway employee. The First Great Western railways in my constituency are generally very overcrowded. I think the Secretary of State knows the geography of the area, which is not far from his own constituency; if he does not, I will invite him to my constituency so that he can see the overcrowding. Can any extra resources be put in through First Great Western, so that there can be extra carriages to enable people to travel freely and comfortably?

[Mr Hammond]

I do know the geography of the hon. Gentleman’s constituency; I enjoyed going there to campaign against him when he was elected at a by-election. [Laughter.]

The good news for the hon. Gentleman is that Crossrail will draw away some of the traffic that is using the services on which his constituents rely, and the electrification of the First Great Western main line commuter services will also provide them with additional capacity, faster services and greater reliability.

[Ben Gummer (Ipswich) (Con)]

From his own experience, the Secretary of State will know that the London-Ipswich-Norwich line could qualify as a heritage line; it has hand-me-downs that are not deemed fit for the west coast main line. To be fair, I must add that that situation has obtained for 150 years. Would it be good for us to be included within the IEP, so that for once we would get new rolling stock—fresh, not second hand?

[Mr Hammond]

The question of brand-new rolling stock versus cascaded rolling stock depends ultimately on the business case that can be made. It is expected that some brand-new rolling stock will be deployed on the Greater Anglia franchise. I cannot tell my hon. Friend that that will necessarily be used on the London-Ipswich-Norwich line, but it is expected that there will be some new rolling stock in that franchise.

[John McDonnell (Hayes and Harlington) (Lab)]

I associate myself with the statements made by my hon. Friend the Member for Ealing, Southall (Mr Sharma). On the High Speed 2 consultation, will the Government be expressing a preference about the Heathrow link based on their acceptance of the Mawhinney report? While the Secretary of State is at the Dispatch Box, will he say when the interim McNulty report will be published?

[Mr Hammond]

Sir Roy McNulty’s interim report will be published shortly. I intend to make a statement to the House in the near future about how we intend to take that process forward, looking at the structure and affordability of the railways. I should make it perfectly clear that the consultation on HS 2 will be around a preferred route. It will be open to other parties to suggest alternative routes, but the Government will put forward one preferred route.

[James Wharton (Stockton South) (Con)]

I welcome my right hon. Friend’s commitment to ensuring value for money from the Government’s investment in British railways. He is well aware of the importance, or potential importance, to the north-east economy of the Agility Trains bid for intercity express. Will he continue to accept representations from hon. Members from all parties who represent north-east constituencies and would like the investment to come to our region?

[Mr Hammond]

I shall be very happy to accept such representations. I talk regularly to the hon. Member for Sedgefield (Phil Wilson) about these things. I was in the north-east last week and met some representatives of local authorities there. However, my hon. Friend will understand that the European procurement directive imposes a framework of rules around what we can and cannot do in a procurement such as this.

[Roger Williams (Brecon and Radnorshire) (LD)]

The Secretary of State may be interested to know that journey times between Cardiff and London Paddington actually increased during the 13 years of Labour Governments. I am pleased that my right hon. Friend is working closely with the Welsh Assembly to build a business case for the electrification of the main line. Will he also meet Welsh Members of Parliament and Welsh Assembly Members so that they can help him with his homework before he comes to a conclusion about this important decision for the Welsh economy?

[Mr Hammond]

I shall be very happy to do so. I assure the hon. Gentleman that whichever of the two options under consideration is chosen, quite independently of the question of electrification, that will deliver a saving on the journey time to Cardiff that will get us back firmly below two hours.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the Secretary of State’s statement. Commuters in my constituency were hit very hard by the previous Government. Fares went up by 10.3%; furthermore, RPI plus 3 for Kent was introduced in 2006, while trains to Victoria and Cannon Street were cut. May I ask for special consideration for commuters in the south-east in terms of both resources and fares?

[Mr Hammond]

As my hon. Friend knows, the Southeastern franchise fare formula was set on the basis of the need to contribute to and justify the huge investment in Javelin trains providing a super-fast service from Kent to London St Pancras. An objective analysis would say that commuters in the south-east have had a fair crack of the announcement today. Some 1,200 new railcars are to be delivered to the Thameslink service and some of the 650 additional cars to be delivered by 2014 will go to areas of south-east commuterland. There is also the commitment to proceeding with Crossrail. All those things will add massively to rail capacity into and around London.

[Jane Ellison (Battersea) (Con)]

I very much welcome the Secretary of State’s statement, and the fact that stations were not overlooked. Clapham Junction in my constituency is one of the two busiest interchanges in the country. To make the railways really work, we need great modern interchanges. Although Clapham Junction never made it in any of the three previous control periods, will he join me in hoping that it will be closely considered by Network Rail for the next control period?

[Mr Hammond]

Network Rail is considering the section of line from Clapham Junction into Waterloo, and I will discuss its plans with it over the coming months and years. My hon. Friend might like to know that I have been told this morning that when the work at Farringdon is completed, Farringdon will overtake Clapham Junction in terms of train movements.

[Gordon Birtwistle (Burnley) (LD)]

Like many north-west MPs, I travel on the Glasgow to Euston Virgin Pendolino trains, which are heavily overcrowded during the main journey times. I understand that new rolling stock has been delivered for these trains, but Virgin Trains is not allowed to use it until the Government give it permission to do so. Will the Minister give Virgin permission to use those extra carriages, which are in stock, to alleviate the overcrowding on that line?

[Mr Hammond]

There seems to be a little bit of misunderstanding about this. The new Pendolino carriages have not been delivered. An acceptance test train will be delivered—in 2011, I believe—and acceptance trials will be required for certification of the additional train carriages. Virgin Trains Ltd is contracted to integrate those carriages into the Pendolino train sets, independent of what happens at the termination of the Virgin franchise on the west coast, so that work will go ahead.

[Justin Tomlinson (North Swindon) (Con)]

I echo the calls to electrify the great western line fully, but I would press the Minister at least to secure the new fleet of all-electric trains with dual diesel use, to deliver much-needed faster journeys and greater capacity for my Swindon residents.

[Mr Hammond]

I have noted my hon. Friend’s point, and will take his comments into consideration.

[Mr Matthew Offord (Hendon) (Con)]

I welcome the statement on behalf of my constituents who use Thameslink. However, can the Minister advise me whether he will ensure that the Government’s investment is not undermined by the unions? Under the previous Government, First Capital Connect staff worked to rule and Ministers refused to intervene, because many of them were dependent on RMT and other union funding.

[Mr Hammond]

I must say that I have been disappointed by the reaction of the unions to this morning’s announcement. Far from welcoming this huge additional investment in the railway and this statement of confidence in its future, they have picked away at it much as the hon. Member for Garston and Halewood (Maria Eagle) has done. We need to restructure the way in which franchises are let to give the train operators proper incentives to work with all their stakeholders, including the unions, to find long-term solutions to the challenges on the railway. We have to get the cost of the railway down, and make it more reliable, affordable and sustainable for fare payers and taxpayers alike in future.

[Nicky Morgan (Loughborough) (Con)]

I congratulate the Secretary of State and his team on announcing such a significant amount of investment despite the economic legacy left to them by the previous Government. I also welcome his clear comments about midland main line electrification; I appreciate that we shall have to wait for that. His statement did, however, mention the midland main line—a fact that seems to be lost on Opposition Members. Could he enlighten the House about the improvements that will be made to the midland main line in the current period?

[Mr Hammond]

In Network Rail’s current control period, there is a programme of capital improvements to the midland main line that will deliver enhanced line speeds, and thus an improved service.

[Mr Marcus Jones (Nuneaton) (Con)]

I welcome the Secretary of State’s statement and the substantial investment in our rail network, but will he explain how much smaller projects such as the important Coventry to Nuneaton rail upgrade will be assessed for future funding?

[Mr Hammond]

My hon. Friend has on a previous occasion asked me to meet him and Opposition Members representing the area. I have agreed to do so, and I look forward to having a meeting with him in due course.

[Jenny Willott (Cardiff Central) (LD)]

I welcome the news that travel times from London to Cardiff will be reduced by 15 minutes; as has been mentioned, that will take us back to the travel times of about 15 years ago. When making a final decision on electrification of the great western main line all the way through to south Wales, will the Secretary of State take into account the extremely strong view of businesses, politicians and commuters across south Wales that electrification is absolutely critical to the future prosperity of the region?

[Mr Hammond]

Of course we will take into account the views of the business community, in particular, but we will also look at the evidence. I now want to work with the Welsh Assembly Government on building that evidence.

[Andrew Percy (Brigg and Goole) (Con)]

For 13 years, Yorkshire and northern Lincolnshire received the fluffy end of the lollipop when it came to transport policy. I therefore welcome the announcements on the trans-Pennine express and the east coast main line, which my two Yorkshire colleagues got to mention first. However, we also have in northern Lincolnshire some exciting open access proposals, including a line from Cleethorpes through Scunthorpe and direct to London. Will the Secretary of State work with those open access providers, and have his officials work with them, to help to bring those new services to our region?

[Mr Hammond]

We are always happy to see additional services being provided, but decisions on open access applications are for the rail regulator, not for the Secretary of State.

[Stephen Williams (Bristol West) (LD)]

I welcome the certainty that electrification out of Paddington will continue as far as Didcot. However, does the Secretary of State agree that it is a reasonable economic assumption that a continuous project of rolling out electrification through to Swindon, Bristol Temple Meads, Bristol Parkway and through the Severn tunnel is likely to provide better value for money than a piecemeal project where engineering teams, recruitment contracts and so on have to be reassembled?

[Mr Hammond]

The hon. Gentleman makes a fair point. I should make it clear that we will make the decision on the total extent of electrification of the great western main line long before the physical work begins.

[Martin Horwood (Cheltenham) (LD)]

I welcome this statement, which is clearly overwhelmingly good news for rail customers and for the environment. However, may I also press for full electrification to Wales and the west country, and ask for the Department of Energy and Climate Change’s new methodology for calculating the future cost of carbon to be fully factored into the Department’s necessarily careful evaluation of the business case?

[Mr Hammond]

My hon. Friend makes a fair point. We have made a commitment to changing the formula that we use to assess transport projects to reflect the latest values of carbon.

[Simon Wright (Norwich South) (LD)]

Is the Secretary of State aware of the research published by the East of England Development Agency about the £3.7 billion of potential economic benefit that greater investment in the great eastern main line would bring? Will he take that into the strongest consideration in his discussions with the franchisee?

[Mr Hammond]

There is not a franchisee on the east coast main line—[Hon. Members: “The great eastern!”] I am sorry, yes, the great eastern main line. Of course we will take into account all the evidence of economic benefits when we consider the future of this franchise.

[Mr Deputy Speaker (Mr Nigel Evans)]

Last, but certainly not least, I call John Pugh.

[Dr John Pugh (Southport) (LD)]

On a final jarring note, there is an impression that capital investment in rail usually means rail investment in the capital. What can the Minister do to disabuse me of my prejudice, perhaps by publishing per-region figures?

[Mr Hammond]

I thank my hon. Friend for his question. It is of course true that two huge rail projects are going ahead in the capital—Thameslink and Crossrail. The good news is that because both projects will between them deliver 1,800 new rail carriages, they will release large numbers of perfectly serviceable electric rail cars, which themselves make the case for further electrification of commuter lines in the north-west and on the great western main line. There are benefits for everybody, not merely for London and the south-east, deriving from the Crossrail and Thameslink investments.