Lord McLoughlin
Main Page: Lord McLoughlin (Conservative - Life peer)Department Debates - View all Lord McLoughlin's debates with the Department for Transport
(12 years, 3 months ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
Before I address the motion, I would just like to tell the House what a great honour and privilege it is to return to the Dispatch Box in a proper speaking role after some 18 years, although I have to say to the hon. Member for Garston and Halewood (Maria Eagle) that I had not expected to be making my first speech as Transport Secretary quite so soon. When the Opposition Chief Whip informed me on Monday evening that there was to be a transport debate today, I thought that this would be either an opportunity or a great problem. I shall not decide which until I have sat down. I thank the hon. Lady for her warm welcome. I shall certainly consider some of the points that she raised in her speech, but I might need to take a little more time to do that, rather than responding to them all immediately this afternoon.
Chris Bryant
I, too, congratulate the right hon. Gentleman on his new post. As he knows, I have always thought of him as the General von Klinkerhoffen of the Government—but only in that he is much nicer than his party allegiance. May I add one thing to the list of things he should worry about? It is that we often think of commuters as wealthy people going from the commuter districts outside London to their jobs in banks, yet many in my constituency are people who are on the minimum wage. For them, the £5.10 or £5.20 a day that it would cost them to go to work can sometimes be prohibitive. Will he work closely with the Department for Work and Pensions to ensure that such people have a real opportunity to work?
Mr McLoughlin
I thank the hon. Gentleman for his intervention. I well accept that a lot of people who commute are on very low wages, and that their transport costs account for a very large part of their income. We do need to bear that in mind. The hon. Gentleman is, however, supporting a motion today that would remove the flexibility of the rail companies to adjust rail fares, which is something that the Welsh Assembly—which his own party runs—is not prepared to do.
Sir Tony Baldry
May I too congratulate my right hon. Friend and welcome him to his new post? He was a much-respected Chief Whip, and I am sure that he will perform this task very well. Was he not surprised that the hon. Member for Garston and Halewood (Maria Eagle) managed to get through her whole speech without making a single reference to Sir Roy McNulty’s report? It was as though his review had never taken place. An important part of the equation is surely the cost of the railway system, and Sir Roy’s independent report found that the system that we inherited from the last Government was so inefficient and expensive that we would have to reduce its costs by 40% to run a service comparable to those in France, Germany and Holland that the hon. Lady seemed to be disparaging.
Mr McLoughlin
I am grateful to my hon. Friend. I intend to come to that point later in my speech, as he can well imagine.
It is a great privilege to serve as a Secretary of State in this Government, and it is a task that I am incredibly proud to perform. I should like to take this opportunity to pay tribute to the diligence and skill of my predecessor, my right hon. Friend the Member for Putney (Justine Greening). She gave the go-ahead for the high-speed rail link—a new national rail network that will be crucial for keeping Britain moving and vital for growing our economy.
As a regular rail user myself, I know how concerned people are about rail fares. That is a fact that I fully understand and take seriously, but to do justice to this debate, it is vital to grasp the wider challenges that the Government face if we are to make our railways more efficient, more effective and more affordable. From day one in office, our priority has been to tackle the fiscal deficit that we inherited, and to put in place measures to rebalance our economy, get people back to work and boost growth.
The railways have, and will continue to have, a crucial role to play in that process. Not only do they provide the arteries through which the lifeblood of commerce flows, connecting key cities and markets, and linking communities with jobs but they receive a significant amount of funding from the state—more than £3 billion a year. It was absolutely clear when the coalition came to power in 2010 that the level of taxpayer and fare payer support for the railways had soared under the last Government, yet passengers had seen little reward for that investment. In short, the railways were providing poor value for money. We did not inherit just a budget deficit; we also inherited an infrastructure deficit—one that, left unaddressed, would mean a long-term drag on our economy. This infrastructure deficit was particularly acute on the railways.
Mark Lazarowicz
The Secretary of State mentioned that he was a regular rail user—I presume on the west coast main line, with which he will be familiar in any event. He said that the money invested by the last Labour Government did not lead to any obvious benefits for passengers. How does he think the investment in the west coast main line was paid for?
Mr McLoughlin
I am talking about the overall structure. My train service is East Midlands Trains, not the west coast main line. I look forward to gaining more knowledge of many more railway lines in due course.
Mr McLoughlin
I shall come on to some of the things we are going to do to improve the railway line that I use, which were announced before I became Secretary of State. I am very pleased about them, one of which is electrification. The last Government had a particularly poor record on that. There was a change in the franchise owners during the period of the last Government and certain changes were made to the service on that line.
Soaring demand meant that our ageing rail network was struggling to cope. There are now many more people travelling on the railways than at any time since 1929, but on a much smaller system. What does that mean? It means more overcrowding, more standing on trains, and rail consumers demanding a better service. We had to find a way to invest in the railway to support the economic recovery and to deliver the quality of service that passengers have the right to expect. That was the reality we faced, and we are meeting it head on by investing in the biggest rail modernisation programme since the Victorian era, while at the same time reforming the railways and reducing costs.
Maria Eagle
Does the right hon. Gentleman accept that during this Parliament and this spending review period, his Government have cut investment in the rail industry? Yes, they have announced a lot of investment for the next Parliament, in control period 5, which will go ahead some time in the future, but in this Parliament investment and infrastructure have been cut.
Mr McLoughlin
I was just coming on to say that this July, we announced £16 billion of public support for the existing rail network between 2014 and 2019—I expect 2014 to be during this particular Parliament—which will support over £9 billion of enhancements, meaning more services, more seats and more capacity, especially for commuters to our largest cities. The tap cannot simply be turned on as far as the rail industry is concerned. Passengers will also benefit from the completion of the northern hub in Manchester, £240 million of investment in capacity and connection improvements on the east coast main line, and a further £300 million for high-value, small-scale schemes in other parts of the country.
We are delivering a rolling programme of rail electrification on the Great Western main line to Swansea, on the valley lines into Cardiff and on the trans-Pennine route connecting Liverpool, Manchester, Leeds and York. We are creating a new “electric spine” for freight and passenger services stretching from the south coast to the east and west midlands and south Yorkshire.
Dr Huppert
I congratulate the Secretary of State on his new post. How confident is he that during this Parliament this Government will be able to electrify more of the railways than the nine miles that were managed in three previous Parliaments?
Mr McLoughlin
The hon. Gentleman must not underestimate the achievements of the last Government. He said that they electrified nine miles, but he is wrong; they electrified 13 miles, and I shall come to that a little later in my speech. I shall also come on to announce the electrification that we intend to carry out.
Mrs Main
I offer many congratulations to my right hon. Friend on his new and challenging post. Does he share my amazement that Labour Members ignore the fact that Thameslink 2000, which serves my constituency, was kept on the buffers for seven years while they dithered, thereby denying the infrastructure improvements of extended platforms and longer trains, which would have made a huge difference to commuters yet have gone ahead only recently?
Mr McLoughlin
My hon. Friend is a tremendous advocate for the many commuters in her constituency who rely on this service. I hope they have already seen some improvements and will see further improvements as time goes on.
Electrification will not only deliver new fleets of cleaner and more environmentally friendly trains but will reduce the long-term costs of running the railways. The hon. Member for Cambridge (Dr Huppert) was just a little ahead in the timing of his question; the next part of my speech will put the record straight. I always try to be accurate. While in 13 years the previous Government electrified just 10 miles of railway—I got the figure wrong, too!—between Crewe and Kidsgrove, which is an important part of the railway network but not too widespread, we have set out plans for over 850 miles of electrification and investment of over £1 billion. It does not stop there, as we have approved a £4.5 billion contract to build a new generation of inter-city trains at a purpose-built factory in County Durham, creating 730 skilled jobs and a further 200 during construction. We are procuring around 1,200 new railway carriages for the Thameslink line and, with Transport for London, we are working on the procurement of new trains for Crossrail.
There is a lot more to do, but let me be clear. We are able to fund this massive programme to build a railway fit for the 21st century only because we have taken tough but correct decisions to cut spending elsewhere, redirecting our resources to boost growth and to get our economy moving. Of course, when it comes to resources, when we invest in our rail network, fare revenues are crucial in helping to fund the massive upgrade programme we are delivering. In fact, the previous Government set out plans to increase the share of rail funding paid by passengers. The alternative for us in 2010 would have been to slash investment. This would have been the wrong answer for the long-term economic future of this country and, indeed, for rail users themselves.
Julie Hilling (Bolton West) (Lab)
I join others in welcoming the right hon. Gentleman to his post. He talks about the passenger paying, but I could have a week in Benidorm with £80 spending money for the cost of my return travel between Wigan and Euston. One of the right hon. Gentleman’s predecessors, the right hon. Member for Runnymede and Weybridge (Mr Hammond), said he thought that the railways were already a rich man’s toy. Does the Secretary of State agree with that? If not, how is he going to enable ordinary people to use the railways—or should they just go to Benidorm instead?
Mr McLoughlin
It sounds as if the hon. Lady knows more about Benidorm than I do. I think there are a number of anomalies in ticket fares. I see them on the train service I use, in that it can cost £170 to use one train, but a train 20 minutes later is a lot cheaper. We need seriously to try to address a number of these problems and to look at how the fares and fare structures used by the rail industry are implemented. I do not accept that everything is fine and fair. In certain areas, consumers have strong cases to make; we should look at them, and I will do so.
Iain Stewart (Milton Keynes South) (Con)
Will my right hon. Friend give way?
Iain Stewart
I, too, congratulate my right hon. Friend. He makes an important point about reviewing the whole ticketing strategy. His predecessor announced a consultation on reviewing ticketing, and one proposal that will directly benefit my constituents is a plan to introduce a discounted ticket for passengers who travel frequently but not often enough to warrant a season ticket. There are proposals like this that will cut the cost of using the railways for many of our constituents.
Mr McLoughlin
I look forward to working closely with my hon. Friend and to discussing that issue with him.
Tracey Crouch (Chatham and Aylesford) (Con)
I am sure that I shall like my right hon. Friend better in his new role than in his last.
The shadow Secretary of State was kind enough to quote accurately comments that I made to my local newspaper reflecting my constituents’ concern about rail fare increases. I said that I would continue to make representations on the matter. Rather than succumbing to the political opportunism displayed by the Opposition, who imposed RPI plus 3% uniquely on Southeastern commuters, will my right hon. Friend meet me, and fellow Kent Members, to engage in a substantive conversation about rail fares and services for our constituents?
Mr McLoughlin
I should be delighted to meet my hon. Friend and the colleagues whom she wishes to bring to see me. As I have said, a huge number of people rely on commuting, particularly in areas such as Kent, and that is very expensive for them. I shall be more than happy to arrange a meeting in the not-too-distant future.
Mr McLoughlin
There is a first time for everything. In fact, I think the hon. Gentleman has already apologised, but perhaps he now wants to say something else.
Mr Sheerman
I wanted to apologise for suggesting earlier that the Secretary of State was a Yorkshireman, but may I also make a serious point? People in my constituency of Huddersfield, and in west Yorkshire generally, are finding it increasingly difficult to afford the fares for journeys to this city, where much of their business lies.
Mr Sheerman
Business people in Yorkshire have to come here to do business, but the rate at which the fares are increasing is making it very difficult for them to afford to do so.
Mr McLoughlin
I think I have already acknowledged that several times in my speech, but I do want to look into it, although the amount that we are investing in the railways should also be borne in mind. We need to address people’s concerns, but there is no easy answer. If we had inherited the economic scenario that the last Government inherited, many of the changes and difficult decisions that we are having to make in trying to rebalance the economy would not have been necessary. What the hon. Gentleman has said comes ill from a member of the party that spent all the money, when the present Government are trying to restore the economy to its previous state and balance the books.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Will the Secretary of State give way?
Mr Brown
I congratulate the Secretary of State on his appointment. Some passengers undoubtedly enjoy the benefits of a railcard, but what does he think about train operating companies that are seeking to tighten the restrictions, thereby preventing people from travelling early in the day or late in the afternoon?
Mr McLoughlin
We are considering that whole question in our fares and ticketing review. When there are announcements to be made, we will make them in the House, and we will be answerable for them in the House if they are our responsibility. However, I think that the situation in Scotland has quite a bit to do with the Scottish Government.
Jim McGovern (Dundee West) (Lab)
I welcome the Secretary of State to his new position. He said that he would try to iron out some of the anomalies, and I hope that he will deal with this one. If I want to travel from my constituency in Dundee to Glasgow, it is cheaper for me to buy a ticket from Dundee to Perth and another from Perth to Glasgow than to buy one from Dundee to Glasgow, and I do not need to get off the train at any point.
Mr McLoughlin
I do not think that we have changed the position in the last few years, and I do not know what the last Government did in 13 years. Again, I think that the issue raised by the hon. Gentleman has more to do with the Scottish Government than with us, but we will look at it nevertheless.
As previous Governments have shown, simply spending more on the railways does not necessarily bring value for money. For far too long the railways have relied on ever-increasing public subsidy and ever-rising rail fares. Enough is enough. If we are to invest in rail, we must ensure that we are getting value for money. That echoes the point made earlier by my hon. Friend the Member for Banbury (Sir Tony Baldry).
We have set out a comprehensive programme of rail reform to tackle costs and waste. That principle was at the heart of the Command Paper that my predecessor published last March, in which we explained how we wanted the industry to tackle the £3.5 billion annual efficiency gap identified by Sir Roy McNulty in his study of value for money on the railways.
Mr McLoughlin
I should like to make a bit of progress first.
The best way of securing long-term value for money is to ensure that the rail industry plays its part in delivering lower costs and sustainable railways. That will require all those who are responsible for track and trains to work more closely together. It will require a more responsible approach to pay and modern ways of working among all who are employed in the industry, from the platform to the boardroom. It will require longer franchises, providing greater flexibility, longer contracts and a sharper focus on cost, and it will require smart technology to reduce the cost of selling tickets. We are challenging the industry to deliver efficiencies that will put our railways on a par with the best in the world, and we will pursue the delivery of those savings with the Rail Delivery Group, train operators and others. Let me address the main point made in the motion by saying that our relentless focus on efficiency will help us to put an end to above-inflation increases at the earliest opportunity.
Caroline Lucas
I congratulate the Secretary of State on his new post. I wonder what he would say to one of my constituents who told me a few days ago that he had had to give up his job in London because he could no longer afford the rail fare. How is the Government’s policy of encouraging people to look further afield for jobs consistent with pricing them off the railways that could enable them to do so?
Mr McLoughlin
More people are using the railways now than at any time since 1929, on a lesser network. However, the hon. Lady is right to express concern. I too am concerned about people who are having to spend such a large proportion of their income on transport. I hope that we shall be able to look at that, and that in due course we shall see improvements in some areas.
Mrs Main
One thing that has not been mentioned so far is the cost of parking. Many people feel that the cost of their rail journeys has been rising in a reasonable fashion, in the sense that the increases are predictable, but the cost of car parking at railway stations has leapt, and the time for off-peak parking has been pushed back to as late as four or five o’clock. The fact that the cost of parking at stations has not been addressed constitutes a flaw in the debate.
Mr McLoughlin
I am told that that is a matter for the rail companies, but I understand the concern about car parking, which, I believe, can be extremely expensive in certain areas.
The hon. Member for Garston and Halewood has asked specifically for an opportunity to address the cap on regulated fares, and the way in which train operators use what are known as flex fares, which the motion describes as “that strict limit”. As I said earlier, I do not believe that the current fares structure—which we inherited—is perfect, and that is why we are conducting a fares and ticketing review. The key issue today is the “flex” policy, which was introduced by the last Labour Government. The cap on regulated fares is implemented by train operators as an average across a “basket” of different fares. That flexibility allows some fares to be increased by up to 5% more than the average, provided that other price increases are kept below the average. It means that operators can manage demand more effectively and efficiently, which should achieve better value for money for fare payers and taxpayers overall. It also allows operators to keep fares in a logical structure and to address anomalies over time.
Let me stress again that when operators increase some fares by the maximum permitted, other fares must increase by much less or even be held flat to comply with the regulated average. As I have said, the system was introduced by the last Government.
Heidi Alexander (Lewisham East) (Lab)
Will the Secretary of State give way?
Heidi Alexander
I congratulate the Secretary of State on his new post. One of the anomalies to which he has referred is the fact that fares in my constituency in south-east London are not fully integrated with the Transport for London price structure, and people pay more for a journey on the rail network than they would pay for a comparable journey on the TfL network. What are his views on that issue, and how does he plan to resolve it?
Mr McLoughlin
I look forward to reading the letter that I shall no doubt receive from the hon. Lady, and I will give a considered response then, as I will have had an opportunity to examine the background of these matters.
Alison McGovern (Wirral South) (Lab)
I welcome the new Secretary of State to his position. When he is familiarising himself with his new brief, may I ask him to take a look at the Wrexham to Bidston line? I raised that project with his predecessor on a number of occasions, and I think he will find it a fascinating subject.
Mr McLoughlin
Members will have plenty of opportunities to question me over the coming months, and after the hon. Lady has no doubt written to me about this line, I will perhaps have a little more to say about it—and I refer her to the very good line between Derby and Matlock.
We are building a modern railway network in Britain —one that plays its full part in connecting our communities, supporting our economy and safeguarding our environment. We are delivering this crucial work against the backdrop of an inherited debt and the most testing economic times for a generation. But investment by investment, upgrade by upgrade, project by project, we are making real and lasting progress. As we do, at the forefront of our thinking and the centre of our plans are the people and businesses that use, depend on and fund this country’s railways.
I am acutely aware of the concerns that passengers have about fares. That is why we are committed to ending above-inflation increases as soon as we can—once savings are achieved and the wider fiscal situation improves. It is also why we continue to keep the regulated caps under review. Every choice we make and every decision we take is about giving passengers the best railways and getting passengers the best deal. That is what the Government intend to do, and we are undertaking that task.