Rail Franchising

Lord McLoughlin Excerpts

Thursday 31st January 2013 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

When I cancelled the competition for the intercity west coast franchise last October, I also put on hold the live competitions for three other rail franchises. Having carefully considered the options for these three competitions, including the recommendations of the independent review by Richard Brown, chairman of Eurostar, I have this morning informed the stock market of my decisions about these three competitions. I am also today publishing Mr Brown’s advice about these competitions, having previously redacted it from his report in view of its potential stock market sensitivity.

In summary, Mr Brown recommended that the Government should look to continue the existing competitions for Essex Thameside and for the combined Thameslink, Southern and Great Northern franchise. But in the light of his wider advice about franchising policy, he also recommended that the current proposition for the Great Western franchise was not the right one. I accept those recommendations, and accordingly:

the competition for the Essex Thameside franchise will be resumed, with a revised invitation to tender being issued to the existing short-listed bidders over the summer. This will allow the Government to address important issues raised by Mr Brown, for example about capital requirements and the bid evaluation process, while avoiding unnecessary delay. The new franchise will have a contract term of 15 years, as announced at the start of the current competition;

the competition for the Thameslink, Southern and Great Northern franchise will also be resumed, with an invitation to tender being issued to the existing short-listed bidders. This will be for a seven-year contract term, again as previously announced. Consistent with Mr Brown’s recommendation, I expect this to be more of a management-style contract. This different approach will require more time to develop and test the proposition with the market, and I will set out the timetable for this competition in the spring;

having considered the options for the Great Western franchise very carefully, and taken account of Mr Brown’s advice, I have decided to terminate this competition. This is to allow for a more fundamental review of the franchise proposition, recognising that this is a large and complex franchise which will need to manage service delivery whilst the route is electrified and new rolling stock is introduced.

In keeping with the relevant invitations to tender, which made clear that bidders are responsible for their own costs, I do not believe it would be appropriate to reimburse the bidders.

The existing franchises for these services will expire before new long-term contracts can be put in place, so interim arrangements will be required to ensure continuity of rail services. My Department has exercised its contractual right to extend the current franchise agreement with First Great Western for a further period of 28 weeks, and I intend to do the same in respect of First Capital Connect.

I have also instructed my Department to commence negotiations with the existing train operators—First Great Western, First Capital Connect and c2c—with a view to entering into new interim franchise agreements with them. For Essex Thameside and Thameslink, the period of these interim agreements will be determined by the time needed to complete the competitions for the longer-term franchises, and will not exceed two years. For Great Western, I intend to negotiate an interim agreement for two years and will set out longer-term proposals in the spring.

The Government continue with their multi-billion pound programme of investment in the rail network regardless of the delay to the franchising programme, and my Department will seek to ensure wherever possible that the benefits for passengers previously sought in new substantive franchise agreements are not delayed.

I am mindful of my statutory duty to ensure the continuity of rail services and so, in parallel with my Department entering into negotiations with the incumbent train operators, I will also be instructing Directly Operated Railways, a Government-owned company, to undertake the minimum preparatory measures necessary to operate train services in circumstances where I am unable to agree the terms of an interim agreement with the existing train operator.

I am also today publishing for consultation a proposed new statement under section 26 of the Railways Act 1993. This statement indicates when passenger rail services are likely to be procured through an open competition, and when they might be procured by other means.

As I made clear when I published Mr Brown’s report, I will set out a full timetable for the future rail franchising programme in the spring, alongside a statement of franchising policy in light of both Mr Brown’s recommendations and the Transport Select Committee’s “Rail 2020” report.

High Speed Rail

Lord McLoughlin Excerpts

Monday 28th January 2013 Commons Chamber

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

With permission, Mr Speaker, I would like to make a statement about our railways.

Investing in transport infrastructure is not a choice. To create jobs and to rebalance our economy we need better roads, better airports and better trains—and High Speed 2 is a central part of that investment. It will be an engine for growth throughout the country, which is why I am today announcing our initial preferred route north from Birmingham to Leeds and Manchester.

These new services will reach eight out of 10 of our largest cities: Birmingham, Liverpool and Manchester, as well as Leeds, Sheffield, Newcastle, Glasgow and Edinburgh. In all, 18 cities and many more towns, too, will be served by HS2 services. It will be completely integrated with the existing rail network; it will bring people and businesses together; it will create an estimated 100,000 jobs; and it has the backing of businesses and cities across Britain. We will introduce legislation for the first phase in this Parliament and legislate for the second in the next one. Construction is set to begin in 2017 and the first trains will run in 2026. The second phase will be open fully by 2033.

I would like to make three further points. The first is about the need for the line. HS2 will be the first main line to be built north of London for almost 120 years. Some say we do not need another, but the truth is that we are already good at squeezing the most out of our present Victorian railway network—and yes, we will get even more out of it in the coming years with the massive investment we have already announced. We are electrifying 800 miles of track, and building Crossrail and the northern hub upgrade. These will help to keep us going for the next decade or two, but what then?

Rail passenger numbers have doubled over the last 15 years, and demand will keep growing. The west coast main line is filling up. There is not enough space for all the commuters, freight trains and inter-city trains that need to use it. That is why, after very careful consideration, I am publishing my initial preferences for phase 2 of HS2. The case for going ahead rests on the capacity it will provide and on the new connections it will create. It is not just about faster trains to London, but about changing the way in which our great cities work and work with each other, providing easy links on journeys that are difficult today, giving muscle to the economies of the cities beyond London and producing an estimated £2 in economic benefit for every £1 spent.

Frequently, colleagues in this House call for better services to their local stations—they are right to ask for them—and High Speed 2 is part of the solution. Creating free space on existing routes will allow better services to places such as Milton Keynes, and more trains for commuters in areas such as Staffordshire, Leeds and Manchester. I am determined to ensure that the benefits of HS2 run much wider than the places directly served by the new line.

Let me turn to my second point. The detail of the route I am announcing today follows the Government’s announcements last year about phase 1 between London and Birmingham. On the western leg from Birmingham to Manchester, I propose two new high-speed stations. The first will be in the heart of Manchester, alongside the existing station at Manchester Piccadilly, allowing easy connections to places such as Salford, Stockport and Bolton and a journey time to London of just one hour eight minutes, down from over two hours today. The second station will be at Manchester airport, giving direct access to the wider Cheshire area.

HS2 will also serve Crewe via a dedicated link, and high-speed trains will continue on the existing railway to Liverpool, Warrington and Runcorn, which will also benefit greatly from reduced journey times. Further north, near Wigan, HS2 will connect with the west coast main line. High-speed trains can then continue at regular speeds to places such as Preston, Carlisle, Glasgow and Edinburgh. I am working with counterparts in Scotland on their aspirations for high-speed rail. I have already set out a long-term ambition to get journeys to Scotland below three hours.

Turning to the eastern leg, we will construct three new stations to bring people and businesses in the east midlands and Yorkshire closer to Birmingham, the north-east and London. The east midlands station will be located between Nottingham and Derby at Toton, and links will be upgraded to provide fast access to both. The second station will be at Sheffield Meadowhall, which already has good connections that can be improved further, allowing it to serve all of Sheffield and south Yorkshire.

The third station will be located in the centre of Leeds alongside the South Bank area. As with the western leg, there will be a connection from HS2 on to the existing rail network. A connection to the east coast main line, just nine miles from York, will allow the north-east to benefit, too, with London to York taking just one hour 23 minutes and London to Newcastle just two hours 18 minutes.

Finally, a decision on how best to serve Heathrow will be taken after the outcome of the Airports Commission has been considered by the Government. From day one, however, HS2 will provide far faster journeys than now via a major new interchange at Old Oak Common, linking to the Great Western main line, Crossrail and the Heathrow express.

The third point I want to make today is about design and help for those most affected. Many hon. Members want the Government to take that extremely seriously, and we do. Although the line will benefit the country as a whole, it will also create great anxiety among those close to the proposed route. We will therefore consult properly, design carefully and compensate fairly. Let me stress that today I am announcing an initial preferred route: this is the start of the process, not the end. We are ready to listen, and ready to improve. I want this line to create jobs and prosperity, not harm them. Where businesses may be affected, we will work with them to find a solution. We will now begin a period of informal consultation on phase 2 that will inform the official public consultation, which was originally planned for 2014 but which, I can announce, will be brought forward to this year. The aim is to reach a firm decision on the route of phase 2 in 2014.

I understand how such proposals can affect property markets. Compensation will therefore be as generous as on the first phase, and more generous than when we built the motorways. Today I am launching a public consultation on the exceptional hardship scheme for those who must sell but cannot do so because of HS2. Under this scheme we will pay the full price, valued as if there were no HS2. That will be followed by the next stage of our property compensation scheme once the final route is confirmed.

There are not many issues on which political parties in the House agree, but this is one of them. Regardless of the nature of the Government when the first trains run in 13 years’ time, what matters are the jobs, the rebalancing of the economy, and our country’s future prosperity. I commend this statement to the House.

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

I thank the Secretary of State for providing a copy of his statement in advance.

As the Secretary of State was generous enough to say in his foreword to the Government’s Command Paper, which was published today, HS2 is a project that was started by the last Government. Having successfully built HS1, Britain’s first new railway line for more than 100 years, we were determined that the rest of the country, not just the south-east, should benefit from vital investment to increase capacity and reduce journey times on our railway.

I assure the Secretary of State and the House that we are 100% behind this project. We want to see the line built, and we will continue to offer cross-party support, which will include helping to ensure that the necessary legislation reaches the statute book. I know that the Secretary of State faces considerable challenges in securing the support of colleagues on his side of the House. I have spent much of today defending the project in interviews opposite Conservative Members. I hope and assume that the right hon. Gentleman’s lengthy experience as Chief Whip will come in handy when it comes to quelling the rebellions.

The reason why we need to build this new high-speed railway line is clear: capacity. Our existing three main routes between north and south are congested, and in the case of the west coast line, nearly full. If we do not act now, we will face even worse overcrowding. Doing nothing is not an option. Continuing to patch and mend our existing lines is no longer good enough, and will not bring us the major reductions in journey times that HS2 will deliver.

Given the importance of the scheme, I wonder whether the Secretary of State appreciates the level of frustration at the slow progress made so far in the current Parliament. The consultation on the first phase has been botched, not by him, but in his Department. Submissions have been lost, and the Government now face defeat in the courts, which has the potential to take us back to square one on the consultation. The draft route for the second phase was finally set out only today, two and a half years after the election. No legislation has been published. Today’s Command Paper suggests that Royal Assent to the Secretary of State’s first hybrid Bill will not be achieved until some point in 2015, not by the time of the next election as was previously intended. This scheme is too important to be subject either to further delays or to incompetence in the Department for Transport. I hope that the Secretary of State will now do all that he can both to speed up progress and to avoid any further errors.

On the judicial review, will the Secretary of State update the House on when he expects to receive a judgment, and on the impact that a ruling against his Department would have on the plans that he has set out today?

Let me now turn to the specific details of the route announced by the Secretary of State. First, will the right hon. Gentleman think again about his decision to commit himself only to introducing legislation covering the first phase of the line from London to Birmingham in the current Parliament? Of course it is true that a single Bill would need to await completion of the consultation on the second phase of the route, but by introducing the Bill later in this Parliament and carrying it over to the next—as we did with the legislation for the building of Crossrail—we would secure Parliament’s approval for the whole route earlier than we would under the Government’s plans. That would open up the possibility of beginning construction in the north as well as the south, which is something that the Transport Committee has urged the Government to consider.

Secondly, will the Secretary of State look again at the issue of connectivity between HS1 and HS2, which many, including his own party’s Mayor of London and also Transport for London, believe to be totally inadequate? The proposal to make use of an existing part of the North London line looks like a back-of-an-envelope fix that is not focused on the long-term potential for international rail travel. Surely we need to build a dedicated, purpose-built link between HS1 and HS2. I urge him to look at this again.

Thirdly, will the Secretary of State listen carefully to the concerns that he will have heard today about the decision not to connect HS2 with our major city centres in some instances? I appreciate the difficulty, not least in terms of engineering and cost, of taking a new rail line into an existing major rail station and enabling through services, yet the consequences of not doing so are potentially economically to disadvantage city centres and encourage out-of-town development; and passengers losing much of the journey time savings achieved by using the new line as they transfer to get to their city centre destination. I know that there are differing views on this from city to city, and there is no single right answer, but the Secretary of State’s proposals today make it clear that the recommendations are just “initial” recommendations and I hope that that indicates a willingness to continue a dialogue on these issues, not least with the cities themselves.

Finally, will the Secretary of State accept that today’s decision to kick into the long grass how HS2 will connect to Heathrow is a major error? As he knows, our preference, as a result of our policy review, is to take the line direct via Heathrow. That was the Conservative party’s position before the last election and I am sorry that it no longer supports it. However, the Government’s compromise of a spur was at least a recognition of the need to provide a direct link to Heathrow from HS2. Abandoning that today sets back the potential for HS2 to deliver transfer traffic to our hub airport via high-speed rail rather than short-haul flights, an approach that has the potential to free up valuable slots that could be used for new long-haul flights to serve emerging markets.

The Secretary of State says that that decision has been taken because the Davies commission on aviation will not report back before 2015. Surely the answer is not to delay decisions on HS2 but to speed them up on aviation. Will the Government finally accept that 2015 is far too late to have an answer to our longer-term aviation capacity needs? Will he agree to our call for the commission to produce its final report way in advance of 2015, enabling cross-party talks on a way forward that can be put to people at the next election? That would deliver the certainty needed not just for aviation, but on the route for HS2.

I hope that the Secretary of State will consider those four issues in the spirit in which they are raised. We seek to improve the Government’s proposals, because it is vital that we get this right if all the benefits we all seek are to be realised.

[Mr McLoughlin]

May I start by thanking the hon. Lady for the support that she gives, in principle, to the project? I fully accept that HS1 was finished by the previous Government, but if we needed to get into a debating argument, I could say that it was started by the previous Conservative Government, who had the foresight to say how important it would be. Anyone who uses St Pancras station will have seen what a vast difference has been made to that station since HS1. It used to be a station that nobody wanted to go to, but now it is a destination in itself. I wanted to make that particular point first.

The hon. Lady raised a number of points. She said that I will have certain strong voices against me on this side of the House, but I dare say—I know this from some of the letters I have received from Labour Members—there will be some vocal opponents on her side of the House too. We will see how the debate goes, but that is the case. She also asked me to speculate on what might happen in the judicial review. I may have been in the Whips Office for 17 years, but I am not prepared to start speculating from the Dispatch Box on what the courts may or may not say. We will wait to hear what is said, because a judicial review has taken place. I believe that the Government have acted properly in the way this has gone forward, but we will wait to see what happens on that.

The hon. Lady talked about how some cities are disappointed not to have stations directly in the city centre. As I said in my statement, this is the start of the process and not the end of it, but I say to her that HS2 is not just about serving cities; it is about serving the regions, and so this goes a lot wider than just the cities. Some cities will have a station in them, because of the way in which things have been constructed and the way in which we can engineer into them. In certain other areas the engineering is much more difficult and a lot more expensive, but as I have said, we will of course listen. I have engaged with the city leaders—I know that some of them will be disappointed that I have not been able to say to those cities exactly where the route has gone until today—and so that process is there.

The hon. Lady talks about having a greater link between HS1 and HS2, and I am certainly prepared—I have received representations from the right hon. Member for East Ham (Stephen Timms), who is sitting directly behind her—to look at how that can be done. However, it is true to say that, even as presently announced, HS2 will be able to serve areas of the continent direct if there is a demand and need for that.

The hon. Lady made the point about Heathrow. The Government have set up a commission to try to get a consensus. We have a welcome consensus on HS2—cross-party consensus on big infrastructure projects is a tremendous advantage because of the time that such projects naturally take. However, it is right to see what the Davies commission says.

The hon. Lady’s final point was to ask whether we could hold the project off and bring the measures together in one Bill. That would lead to a tremendous delay. There would not just be a delay while we consulted, but a delay while the environmental assessment was conducted and consulted on. Far from making the process quicker, it would be delayed; I estimate that it would mean we probably could not have a Bill ready until 2018. I want a Bill to begin its progress in this Parliament. Of course, how the Bill progresses is up to Parliament.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

Today, Mr Speaker, thousands of people will be faced with the blight and uncertainty that you and I are familiar with, because our constituents across Buckinghamshire have suffered it for nearly four years. If the Government are determined to have HS2 and to force it through, and as the Secretary of State has stressed that the economic need is greater in the north, why not really reconsider and start HS2 in the north so that the benefits are more immediate and the connectivity to the south-east and on to global markets through the as yet undecided hub airport can be better guaranteed and integrated? Would not that make more common sense?

[Mr McLoughlin]

I know how my right hon. Friend feels on this subject, and I appreciate how Members whose constituencies have the line going through them have strong representations to make in the House. However, starting the route in the north, on which, up until today, work had not been done, would not be a better way of getting greater connectivity and connections. We should bear in mind that the routes I have said are overcrowded are even more overcrowded when they come into London, which is where we need the extra capacity in the first instance.

[Frank Dobson (Holborn and St Pancras) (Lab)]

The Secretary of State has said that he will ensure that people are compensated fairly. In December 2010, his predecessor said exactly the same thing about the people in my constituency who are affected by the first phase. However, at a meeting on Thursday in my constituency, officials from HS2 Ltd and the Department for Transport made it crystal clear to many people living near Euston station, including some of those who had exercised their right to buy their council flats, that they would not be fully compensated, and that others, including people whose businesses will be totally destroyed, will not be compensated at all. Can we rely on the Secretary of State to ensure that, when he says one thing in the House of Commons, his officials do not set it aside in the country?

[Mr McLoughlin]

I believe the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), gave the right hon. Gentleman an assurance on that point last Friday. I am certainly prepared to meet the right hon. Gentleman to discuss these matters and to try and clear up what confusion there seems to be.

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

In view of the continued drift from north to south, which has been a characteristic of this country for many decades, and which places enormous pressure on services and facilities in constituencies such as mine, should not HS2 be hailed as the most dramatic attempt yet to correct that national imbalance to the advantage of the country as a whole?

[Mr McLoughlin]

When HS2 is fully up and built, it will have a major impact on the north and will help dramatically to rebalance the economy, which is so desperately needed. I am grateful for my right hon. Friend’s support.

[Helen Jones (Warrington North) (Lab)]

Is the Secretary of State aware that there is great concern in Warrington because it will not get an HS2 station? Warrington has developed its economy based on its good transport links, but we are unsure whether trains running on the existing line from Crewe will be sufficient. There is also concern that the line that will join the west coast main line at Wigan goes through parts of my constituency along a linear park, so we get the disruption without the benefits. Will he undertake to work with Warrington borough council and other interested parties to consider alternatives so that Warrington can benefit from HS2?

[Mr McLoughlin]

Of course, I am prepared to do that and I am sure that Warrington council will want to take part in the consultation I announced today. Warrington will be served in the same way as Liverpool and other areas, such as Wigan, but of course I will consider the hon. Lady’s representations. I want to make it clear that today is the start of the process, not the end. It is, however, the start of a very important and beneficial process for the United Kingdom.

[Mr Alan Reid (Argyll and Bute) (LD)]

Liberal Democrats very much welcome the announcement today that journey times to Leeds, Manchester, Glasgow and Edinburgh will be reduced by almost an hour. I also welcome the Secretary of State’s aspiration to reduce the journey time to Scotland to three hours. How are his discussions with the Scottish Government about that aspiration going?

[Mr McLoughlin]

I am grateful to my hon. Friend. I announced my proposals for Scotland last October, but I have been concentrating on the proposals I have set out today for the moment. However, my right hon. Friend the Minister of State spoke to members of the Scottish Government about the scheme and they are keen to be involved.

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

I welcome today’s statement, which represents important investment for the future, but will the Secretary of State confirm that that will be part of investment in an integrated national rail system so that areas that are not on the high-speed line will benefit, too?

--- Later in debate ---

[Mr McLoughlin]

Indeed I can. I am grateful to the Chairman of the Select Committee on Transport, who I know will probably want to carry out a detailed inquiry into this matter. Although it is true that some areas are not covered by high-speed rail at the moment, it will go up to Birmingham in the first instance and then to Manchester, and journeys will be able to carry on from there, as they do in Kent on the line that goes down to Ashford.

[Sir Roger Gale (North Thanet) (Con)]

Thank you, Mr Speaker; your calling me was timely. My right hon. Friend is to be congratulated on having the courage and conviction to seek to drive through investment in this country’s infrastructure future. The hon. Member for Garston and Halewood (Maria Eagle) sought to take the credit for High Speed 1, but the problem with that is that it is not finished at all. Will my right hon. Friend, while he is doing all this, ensure that HS1 runs through from Ashford to Thanet?

[Mr McLoughlin]

My hon. Friend sees the advantage of high-speed rail down to certain parts of Kent and wants to extend it. I am sure that he will carry on making that case, but at the moment I hope he will forgive me for saying that I want to try to concentrate on the plans I have announced today, although we are always looking to improve services across the country.

[Paul Blomfield (Sheffield Central) (Lab)]

The Secretary of State is right: what matters are the jobs. An independent study conducted for South Yorkshire passenger transport executive and Sheffield city council shows that a station in the city centre would bring up to £5 billion more into the local economy than a station at Meadowhall and would create 6,500 more jobs. Will the Secretary of State commit to keeping an open mind on that option?

[Mr McLoughlin]

I said at the beginning of my statement that I would keep an open mind. I accept the points about Sheffield and I know that there will be disappointment that HS2 is not going directly into the city centre. We have tried to ensure that we serve the whole of the region through the Meadowhall station, but as I have said, today is the start of the process and we will enter into discussions, as I have told the leader of Sheffield city council, with all the prominent leaders in the area.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

I warmly endorse the proposed station at Manchester airport, but may I also stress the importance of the point that compensation for those living close to the route should be not only generous but creative in ensuring that we can move as quickly as possible towards realising the new high-speed rail route?

[Mr McLoughlin]

I am grateful to my hon. Friend for that question. We are consulting on compensation, and at the moment we are part of the way through that consultation. He makes an extremely important point, and I am glad that he welcomes the fact that we will serve Manchester airport as well as Manchester.

[Mr Dennis Skinner (Bolsover) (Lab)]

Would it not make a lot more sense for the Secretary of State to tell the Chancellor that he ought to be spending £33 billion straight away on capital projects—housing and all the rest? As for Derbyshire, why is it that the preferred route seems to travel to the heavily populated eastern side of Derbyshire? I do not think it touches Derbyshire Dales at all. How many homes will be blighted as a result?

[Mr McLoughlin]

Many things can change—people in the Whips Office can become Ministers—but one thing is certain: the hon. Member for Bolsover (Mr Skinner) will come out with the same arguments against any proposals. [Interruption.] He wants us to spend money now. We are spending money now. We have had massive investment in the railways and we have announced massive investment in the railways. He points out that the route does not go through my constituency. I am well aware of that, but I can assure him that I took very careful advice and followed the recommendations. The sustainability summary goes into great detail about why that particular part of the route was chosen. There are many people who would have liked it to go to Derby.

[Andrew Bridgen (North West Leicestershire) (Con)]

I declare an interest. Plans unveiled this morning suggest that the preferred route of HS2 will pass within 100 feet of my family’s home in North West Leicestershire. Can my right hon. Friend confirm the level of consultation already undertaken by those planning the HS2 route? East Midlands airport in my constituency was unaware until this morning’s announcement that a tunnel was planned under its site, and a developer of an area north of the airport looking to produce a rail freight interface was equally not consulted. The route puts in jeopardy a potential £450 million private sector investment now in my constituency, and the creation of up to 7,000 new jobs.

[Mr McLoughlin]

There is always a dilemma for us as to who we talk to and consult. It would have been wrong of me to start telling people where the route was going before I had laid the documents before Parliament this morning. We will start that consultation. If my hon. Friend has had a chance to look at the sustainability summary that goes with the document I published today, he will have seen on page 70 that the area he is talking about is marked for tunnelling under East Midlands airport, and the east midlands gateway rail freight interchange development site is clearly marked. We will obviously work with developers to minimise the impact wherever we can.

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

The decision to delay the recommendations on the Heathrow spur until the Howard Davies commission has reported means that my constituents face at least another two years of uncertainty. Is not one solution to bring forward the Davies report, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) suggested? Even if the Davies commission’s interim report this year dealt with the matter, we would have more certainty about the connection with Heathrow.

[Mr McLoughlin]

I hear what the hon. Gentleman says. I have made clear the Government’s position as to why we have done what we have done. We think it is a sensible way to go but I am sure he will make those representations in the consultation process.

[Michael Fabricant (Lichfield) (Con)]

Although I accept the need for an additional line to relieve capacity on the rail network, this route plunges through rural Britain, and rural Staffordshire, and should use existing transport corridors. It blights the environment, homes and lives. Does my right hon. Friend understand that what my constituents and all our constituents need is certainty, so that they understand the impact the line will have, what vibrations it will produce and what the visual impact will be? Most important of all, they need certainty about what compensation they will receive.

[Mr McLoughlin]

Part of the reason for bringing forward the consultation period from next year to this year is to help my hon. Friend’s constituents, but I fully accept that where the line is going is inconvenient to some people. We cannot build a brand-new railway line and not upset anybody. We believe that it is very much in the national interest and in the interests of the United Kingdom.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

It was a great pleasure to see the Secretary of State and the Prime Minister on platform 6 at Leeds station this morning. He knows the benefits of HS2 to areas such as Leeds and Bradford. This is a long-term project and there are two projects in the short term that will help both Leeds and Bradford—the links to the airport so that it can expand and the Wortley curve between Leeds and Bradford. Will he look at those projects as well?

[Mr McLoughlin]

It was a pleasure also to see the hon. Gentleman this morning. I hope that as a result of having announced in this way where the route will go, improvements can be achieved in the interim period in some of these areas. I have talked to Leeds city council about the site that we have earmarked, and it is, as I understand it, content with it.

[Andrea Leadsom (South Northamptonshire) (Con)]

The consultation on compensation for phase 1 ends this week. First, I urge my right hon. Friend not to take the word of his departmental officials but to look himself at the impact of the exceptional hardship scheme on many constituents whose lives have been utterly destroyed by incompetent and completely inconsistent panels. Secondly, I urge him to reconsider a property bond. Although officials have said there is no evidence that that works, it would be the one way to ensure that the blight that extends for miles in my constituency is removed. Finally, I urge him to look at the fairness of compensation between phase 1 and phase 2.

[Mr McLoughlin]

As my hon. Friend correctly said, the consultation period on the compensation scheme ends at the end of this week. I know that she has put her own representations into that consultation, and of course I will consider them among many of the other representations we have received.

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

I welcome the Secretary of State’s announcement of an HS2 station in Sheffield. There is an argument for having it in the city centre, but I understand why he has chosen Meadowhall on grounds of cost and time. In particular, it should be a station for the whole city region. Will he therefore give an assurance that his Department will work closely with local councils and South Yorkshire passenger transport executive to make sure that there is real connectivity in the whole Sheffield city region so that everyone can get to the station at Meadowhall easily?

[Mr McLoughlin]

I am grateful to the hon. Gentleman. He is a former leader of Sheffield city council and therefore speaks with authority on this matter, as he does in his role as Chairman of the Communities and Local Government Committee, so I will obviously look at those matters. He is right that there is a balance to be struck. He will see that in the document we address why we have arrived at the conclusions and recommendations that we have, but I am of course prepared to listen to any further representations.

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

I warmly welcome the Secretary of State’s announcement, particularly the decision to have an additional station at Manchester airport. However, there will be some anxiety among people in south Manchester about the proposal to have a deep tunnel under homes there. What assurances can he give that they will not face years of disruption?

[Mr McLoughlin]

When carrying out these big projects, there will always be the problem of inconvenience caused during the period of construction, and I hear what the hon. Gentleman says. We will work with local communities to try to ensure that we minimise the impact. I am glad that the area he mentions is to be tunnelled; a lot of colleagues would wish that more of the route was tunnelled.

[Ann Coffey (Stockport) (Lab)]

I support this announcement, but it is estimated that it could take up to 20 years to build the line to Manchester. Will the Secretary of State assure me that in the meantime priority is given to making sure that the west coast main line gets the investment needed to improve the current line from London to Manchester, including upgrading Stockport station?

[Mr McLoughlin]

The hon. Lady is consistent, if nothing else can be said about the points that she makes; I had already anticipated the question before she had finished asking it. Yes, money is continuing to be spent on the west coast main line. I will look into the position with her local station, as I promised to last time she asked me a question. I failed to write to her then, and I will certainly do so this time.

[Richard Harrington (Watford) (Con)]

I commend the Secretary of State and the Government on this courageous and very significant announcement on HS2. It is particularly of interest to the cities with new stations, but what does he think the effect will be on my constituents in a place that will not be directly affected but is suffering from very poor capacity and a very poor service from London Midland?

[Mr McLoughlin]

My hon. Friend hits on one of the fundamental reasons why we need to build HS2. It is not just a matter of journey times but capacity. Freeing up capacity will allow us to have more services from areas such as my hon. Friend’s, as is so desperately needed.

[Stewart Hosie (Dundee East) (SNP)]

I welcome the statement, thank the Secretary of State for advanced notice of it and recognise the Government’s ambitions for reduced journey times to Scotland. However, reducing journey times to Glasgow and Edinburgh, and further along the east coast to Dundee and Aberdeen, would require HS2 to go beyond Manchester and Leeds. I know that the Secretary of State is doing this in a phased way, but when will he be in a position to tell the House the time scale for the completion of HS2, so that every major city on the island will be able to benefit from it?

[Mr McLoughlin]

I face a dilemma because some people want us to go a lot faster while others among my colleagues do not want us to go at all. We will have to bear that in mind, but I hope that we will have fuller plans before any decision is made about independence. That depends, however, on whether the hon. Gentleman can let me know the date of the referendum.

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

I welcome my right hon. Friend’s statement, particularly how it has highlighted the benefits of the network to my constituents in Milton Keynes. On the issue of city centre against parkway stations, may I draw his attention to the evidence from the continent that both can work and that the critical point is having good connectivity across the region? May I also urge him to continue to work with local authorities and local businesses to make sure that this delivers?

[Mr McLoughlin]

I thank my hon. Friend for his support and, indeed, for his work on the Transport Committee. I agree entirely with his point. Setting out our plans now and confirming them, I hope, by early next year will enable us to look at connectivity between stations in the period between our plans being outlined and the actual development.

[Graham Stringer (Blackley and Broughton) (Lab)]

There is tremendous support for this project in Manchester and the north of England, but, having heard from the right hon. Member for Chesham and Amersham (Mrs Gillan) that, surprisingly, she supports building HS2 from the north of England, will the Secretary of State reconsider what he said earlier and put both phases of HS2 into one hybrid Bill and consider building them from the north of England? In doing so, he would unite the House in an even bigger way than it is united at present.

[Mr McLoughlin]

The hon. Gentleman says that that would unite the House in a more cohesive way, but it is fairly united for such a controversial subject, as has been clear from the exchanges so far. As I have said, the proposals to go from north to south would mean further delay, and I point out that the first part of the route was actually published by the previous Government, who also thought that the right way to go was from London to Birmingham in the first instance.

[Jeremy Lefroy (Stafford) (Con)]

I thank the Secretary of State for his announcement. It is vital that the best possible mitigation, including some realignment, is offered to those of my constituents who will be affected by the route. If HS2 is to bring jobs and prosperity, as he desires, to the wider west midlands region, a stop on the route is required in Staffordshire. May I ask him to take that fully into account?

[Mr McLoughlin]

I certainly will. My hon. Friend makes a valid point. The route goes substantially through his constituency and areas that are not near motorway corridors or the like, and I will certainly look at his representations.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

On behalf of Manchester, I strongly welcome the proposals that the Secretary of State has laid before Parliament today, not, as others have said, as a panacea to stop the north-south divide, but to build on 15 years of urban renaissance started by the Labour council and Labour Government. The redevelopment opportunities presented in my constituency in and around Manchester Piccadilly station are also exciting. May I echo the comments of other colleagues and ask the Secretary of State to consider introducing a hybrid Bill, so that we can maximise those opportunities here and now, not several years in the future?

[Mr McLoughlin]

I welcome the hon. Lady to the House and to the Transport Committee, where she will no doubt want to return to this topic on many occasions. I was slightly chastised earlier by the hon. Member for Garston and Halewood (Maria Eagle) on what the courts may or may not say about HS2. If I followed the route suggested by the hon. Member for Manchester Central (Lucy Powell), I know that I would find myself on the wrong side of judicial reviews.

[John Stevenson (Carlisle) (Con)]

I welcome the announcement on the developments on HS2 and the substantial investment in our rail network. However, will the Secretary of State confirm that the existing west coast line will continue to receive the investment that it requires? In particular, will signalling upgrades be more than just like-for-like and bring capacity improvements?

[Mr McLoughlin]

I can assure my hon. Friend of that. Over the new year, I saw the upgrading work at Shugborough tunnel. That is the sort of investment that no one normally sees. Until that work was done, trains could go through the tunnel at only 50 mph. They can now go through it at 125 mph. I fully accept the need for continued investment. My hon. Friend’s constituents will benefit from High Speed 2 up to Manchester and will be able to pick up the normal lines beyond that.

[Stephen Pound (Ealing North) (Lab)]

May I strongly endorse what the hon. Member for South Northampton- shire (Andrea Leadsom) said about property bonds? The Secretary of State is speaking about phase 2, but he has mentioned Old Oak Common. Although I am extremely grateful to the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns) for his engagement with the local community, fear still stalks the streets of Greenford, Northolt and Perivale. Will the Secretary of State say whether it is his preference for that section of the line to be tunnelled? If so, it will be a great relief to many long-suffering constituents of mine.

--- Later in debate ---

[Mr McLoughlin]

The hon. Gentleman is making a representation to me that he has made before to the Minister of State. We will consider that representation and when we are in a position to make an announcement, we will do so.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on his excellent statement. Does he agree that this investment should be seen alongside the other major rail announcements for the north that have been made recently, such as those on the northern hub and the TransPennine Express electrification project? Together, those projects will transform the experience of rail in the north.

[Mr McLoughlin]

I agree completely with my hon. Friend. Those announcements show the Government’s commitment to the rail industry and to the railway services that we all want in our constituencies.

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the Secretary of State say how major cities such as Coventry will benefit from this project, bearing in mind the representations that I made to him some weeks ago on that matter? Secondly, and more importantly, there will inevitably be people who fall outside the compensation formula. What does he intend to do about that, because I know of cases in Coventry and Warwickshire?

[Mr McLoughlin]

I am willing to listen to any representations, but a line has to be drawn somewhere on such developments. I think that Coventry will be served by the large station at the Birmingham International exchange before the line goes into Birmingham Curzon Street. It is up to Coventry to work with the Department to work out the best possible routes to link in with the line so that people in Coventry have the advantage of HS2.

[Nigel Mills (Amber Valley) (Con)]

I warmly welcome the announcement and especially the fact that the route will miss my constituency off to the east. Will the Secretary of State confirm that there will be good links not only to Nottingham and Derby, but to smaller local stations, such as the three in my constituency?

[Mr McLoughlin]

I am grateful to my hon. Friend and constituency neighbour. As I have said, capacity is one of the key reasons for building the new route. It will be the first railway line to be built north of London in 120 years. We need extra capacity. By freeing up capacity, the line will enable there to be better services elsewhere.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I, too, welcome the proposed station at Manchester airport, which will help to sustain many new jobs across the city region and particularly within airport city and other parts of the Manchester enterprise zone in my constituency. Will the Secretary of State ensure that those who are responsible for HS2 continue to work closely with the local authorities and the airport so that these different initiatives are properly linked together and bring the maximum possible benefit to local communities?

[Mr McLoughlin]

I thank the right hon. Gentleman for his support and for his attendance at last week’s meeting of the all-party parliamentary group on high speed rail. I can give him that assurance. As I said earlier, this is the start of the process, not the end. We want to get the maximum possible value out of the investment.

[Andrew Selous (South West Bedfordshire) (Con)]

On a number of recent occasions, trains pulling into Leighton Buzzard station have been so full that no passenger has been able to get from the platform on to the train. Will HS2 help them?

[Mr McLoughlin]

I very much hope so. My hon. Friend makes a point about the important need for greater capacity, and I will look in great detail at how the issue may affect his constituents.

[Mr David Anderson (Blaydon) (Lab)]

Without any three-lane motorway north of north Yorkshire, and with a dual carriageway that ends just north of Newcastle, the north-east has the worst road system in the country. We are now being told that we will also have a second-rate railway system. Does the Secretary of State agree that the best we are going to get in the north-east is HS1.5?

[Mr McLoughlin]

I am sorry that the hon. Gentleman feels that way. We have just announced a major investment in dualling the A1 up to Newcastle, and I will look at other schemes in due course.

[Mr Adrian Sanders (Torbay) (LD)]

May I lodge with the Secretary of State some very real concerns from the far south-west in Devon and Cornwall? The area already suffers from the slowest rail speeds and most expensive fares, yet billions of pounds are being invested elsewhere. What message can he give the people of Devon and Cornwall that they will benefit directly from that investment?

[Mr McLoughlin]

I very much recognise the position faced by the hon. Gentleman’s constituents as far as the great western line is concerned, and I have organised a special briefing for Members of Parliament from Network Rail about that section of the rail network. As a new member of the Transport Committee, the hon. Gentleman will want to keep that under guard.

[Stephen Timms (East Ham) (Lab)]

May I press the Secretary of State on the concern raised by my hon. Friend the Member for Garston and Halewood (Maria Eagle) about the HS2-HS1 interconnection? As I understand, under current proposals it will be limited to, at most, three trains per hour. As I am sure the Secretary of State will want trains from new HS2 destinations to run beyond London and across the channel, will we not have to do better than that with the interconnection?

[Mr McLoughlin]

I think I tried to address that in an earlier answer. Of course I want to look at how the connection works, and it will be possible to run some services from Old Oak Common direct to the continent if there is demand for that. We will certainly look at the issue, and at how the whole London interconnection works.

[David Mowat (Warrington South) (Con)]

This project is very important to the wider economy in the north and north-west. Given that the revised business case remains considerably better than, for example, the Crossrail business case, will the Secretary of State do what he can to deliver this project before 2033?

[Mr McLoughlin]

I take that as a request to get a move on and get building a lot quicker. We will see what progress we can make.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Although the Secretary of State’s comments about Staffordshire provide some crumbs of comfort, may I impress on him that unless we have a station in the north Staffordshire area the damage that will be done to our economy will be huge? Conversely, if we get one, the benefits will be equally massive.

[Mr McLoughlin]

As I said at the beginning of my statement, and as I shall now reiterate, these are our initial proposals. We have considered the issue, and I hope the hon. Gentleman will look at the early part of the sustainability study, particularly page 10, which shows the work that went in to try and model this. However, I hear what he says, and what my hon. Friends the Members for Stafford (Jeremy Lefroy) and for Lichfield (Michael Fabricant) are calling for.

[David Rutley (Macclesfield) (Con)]

This is positive news for the north-west. What assessment has my right hon. Friend made of the impact that HS2 will have on existing west coast main line services and, not to put too fine a point on it, services to and from Macclesfield station?

[Mr McLoughlin]

As I have said—I hope I am not becoming boring by being repetitious—we are hoping for greater capacity not only so that my hon. Friend’s constituents are served, but so that we see some movement of freight from road to rail.

[Hugh Bayley (York Central) (Lab)]

I welcome the statement and especially the wise and logical decision to connect the High Speed 2 line with the east coast main line at York. Does the Secretary of State realise that next to York station is the biggest city centre development site anywhere in western Europe—the York Central site? It is important for his officials to safeguard land on that site for additional platforms to get maximum connectivity with conventional rail services, and for local government Ministers to work with York city council to ensure that the area is developed as a business site to benefit from the new railway.

[Mr McLoughlin]

I am very pleased that the hon. Gentleman is so welcoming of the development. High Speed 2 will stop just short of York, but it will obviously be served by it. One of the things that we want to look at with this project is how we get regeneration in areas. This should open up huge potential, especially around station sites, for the north to benefit from connections with the rest of the country.

[Christopher Pincher (Tamworth) (Con)]

I became aware that the proposed Leeds alignment will run just a few hundred yards from Wilnecote and Stoneydelph in my constituency when I looked at the HS2 website this morning. Will my right hon. Friend agree to meet me to discuss mitigations in the Tamworth area if his initial preferred alignment becomes his final preferred alignment? More particularly, can we discuss other, better alternatives?

[Mr McLoughlin]

I am certainly prepared to meet my hon. Friend and discuss alternatives that he may wish to put forward. I hope that he will realise that in deciding on the route through his constituency we have tried to follow an existing major road network. Of course, I will meet him and listen carefully to any representations he has to make.

[Ian Austin (Dudley North) (Lab)]

I strongly support High Speed 2 and very much welcome today’s announcement. The Secretary of State will no doubt have followed the debate about the arrangements between Birmingham International and the city centre. May I suggest that a way of dealing with that controversy and its unpopularity in certain areas would be to take the route along the existing line north of the city and, instead of having the link in the city centre, have it close to the M5/M6 junction in the black country, alongside the M6 at Walsall? There is a huge railway yard there already, and it would have much better links across the black country and Birmingham. It would support exactly what the Secretary of State has said about rebalancing the economy, because it has the largest concentration of manufacturers anywhere in western Europe. It would greatly help with the regeneration of the black country, and it would be easier, cheaper and quicker to build.

[Mr Speaker]

It sounds to me as though the hon. Gentleman wants an Adjournment debate on the subject.

[Mr McLoughlin]

If the hon. Gentleman has one, I will make sure that a Minister answers it properly. I would need to look a bit more closely at the maps, but I think that he is doing the opposite to what most other colleagues with city centre sites are doing. He is asking me to take it from a city centre, and he is thus demonstrating the problems that we have in trying to get a route established and accepted by everyone and that serves the best areas of the country.

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

The Secretary of State said that this proposal must benefit all our regions, and he will know that the best part of our region lies to the east, in the Humber. Can he confirm whether work will begin now on how we can improve our connectivity into Sheffield Meadowhall or say how we can benefit from the increased capacity on the east coast line?

[Mr McLoughlin]

The truth is that my hon. Friend is looking forward to the benefits that will come from this. Part of the reason for making the announcements now is that once we have the route signed off—it is out for consultation—we can look at getting the right connections into these stations in the longer term, for the benefit of all parts of the United Kingdom.

[Alison McGovern (Wirral South) (Lab)]

High Speed 2 is incredibly important for all of Merseyside and our city region’s development. Further to the answers that the Secretary of State has given already on connectivity, will he confirm that the northern hub should not be the end of better inter-city rail services in the north of England, but the start and that we need to start planning for better now?

[Mr McLoughlin]

Yes. I was in Liverpool and met the mayor a few weeks ago. It was substantially easier to get from London to Liverpool than it was to get from Liverpool back to Derby.

[Sir Bob Russell (Colchester) (LD)]

Taxpayers of Essex, Suffolk and Norfolk and users of the Greater Anglia line will contribute to the cost of HS2. We have had years of neglect by successive Governments of rail investment in East Anglia. The Secretary of State has said that he is determined to make sure that the benefits of HS2 run much wider than the places directly served by the new line. How will it benefit Colchester?

[Mr McLoughlin]

Huge investment—£2.2 billion, I think —is already going into the area that serves the hon. Gentleman’s constituency. I appreciate that he might like us to have a high-speed link to his area. We are being ambitious, but I am afraid that that ambition can only go so far.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

This morning I received an e-mail from a constituent who said he found it utterly incredible that the line should go from Birmingham to Manchester without stopping at the north Staffordshire conurbation. There is anger in Stoke-on-Trent that HS2 will just skim the west of the potteries and not stop there. What benefits can HS2 bring to my constituents? Will the Secretary of State explain the current thinking for a stop at Crewe, rather than one along the M6? What assurances can he give that the existing west coast main line will not be affected?

[Mr McLoughlin]

The hon. Gentleman needs to look at the two documents we have published, but I have made it very clear that today is the start of the process and I expect him to make representations, as he has just done. I know Stoke-on-Trent and the surrounding area incredibly well. We have made improvements to its road infrastructure, but they have been very controversial over many years.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I strongly welcome the Secretary of State’s statement, not least as a demonstration of our party’s commitment to the north of England. Although Blackpool will not be getting a high-speed station—I will not stand here today and demand one—will he none the less explain when Network Rail will be able to make an assessment of how much capacity the HS2 project will free up on the west coast main line?

[Mr McLoughlin]

My hon. Friend asks a reasonable question. I think I can best answer it by saying that we will have a better indication of exactly what capacity will be freed up once the line is confirmed and Network Rail is asked to start the work on the consequences of building the line.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Secretary of State made reference not only to passenger capacity on the west coast main line but freight. Given the importance to the Scottish economy of connectivity between Scotland and the rest of the UK, will he discuss with the Scottish Government how freeing up capacity will benefit freight services to and from Scotland?

[Mr McLoughlin]

Now that the hon. Lady has asked me to do so, I will.

[Mr Philip Hollobone (Kettering) (Con)]

Whenever and from wherever construction starts, and whatever configuration High Speed 2 takes, will the Secretary of State ensure that this is a British railway, with the trains built in Britain, the tracks built in Britain, all the equipment coming from British firms, and British workers and British firms building the railway?

[Mr McLoughlin]

I am determined, by the long-term nature of the notice we are giving, that British companies will be able to compete and win the business that will be available, and will go out to tender in the usual way. From what I have seen of British engineering, I believe it is well able to compete with anywhere else in the world.

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

The publication today states that the Government have been working productively with the Scottish Government on this issue for two years, yet after two years the only firm commitment we have is for a further study into high-speed rail to Scotland, followed by identification of a remit for further work. That does not sound like very high-speed decision making to me. Why will the Government not commit themselves now to extending high-speed rail to Scotland, and start preparing the route now to make sure it actually happens?

[Mr McLoughlin]

I gently say to the hon. Gentleman, because he is bringing a chord of disharmony into what so far has been a fairly harmonious occasion, that we have made more progress on high-speed rail in two years than the previous Government did in 13.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I warmly welcome the announcement today that my constituents’ journey time from London to Preston will be reduced by 30% from 2 hours 8 minutes to 1 hour 24 minutes—a great thing for Preston. However, there is still some confusion among the public, who believe that a stop is necessary to benefit from the speed of HS2. Will the Secretary of State make it absolutely clear to many of my constituents, who use Lancaster and Preston, that as soon as phase 1 is started they will benefit from the reduced journey times, whether or not they have a stop?

[Mr McLoughlin]

My hon. Friend is right to say that his constituents will benefit from the opening of the first part of the line, from London to Birmingham, because the trains will be able to travel at high speed between those two cities, saving about 40 minutes on overall journey times. And that is before we have extended the line further north.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Improvements to rail, road and air transport infrastructure are vital if regions such as the north-east are to continue as leading exporters, so will the Secretary of State outline what discussions he has had with regional airports, such as Newcastle International airport, about ensuring that the HS2 plans lead to a properly integrated transport system?

[Mr McLoughlin]

As I said earlier, some of my discussions with various bodies have been curtailed until the route is announced, but those conversations should start in earnest as a result of today’s announcement.

[Henry Smith (Crawley) (Con)]

I commend my right hon. Friend for his statement. He is right about how important connectivity with the London hub airport will be when the issue of the hub is determined. Will cognisance also be taken, however, of the importance of linkage with major international gateways to the south of London, such as Gatwick airport and the Gatwick Express?

[Mr McLoughlin]

My hon. Friend is right. We cannot look at these things singly, but must consider how they impact not only on Heathrow airport but on other airports and availability to constituents who wish to use those services.

[Mr Frank Field (Birkenhead) (Lab)]

I direct the Secretary of State back to the question about construction beginning in the north. Given that London is all-powerful and will see this project completed, if it is in London’s interest, will he take a new stance on the hybrid Bill? If the leaders in Liverpool, Manchester and Leeds could fit in with his timetable, might we have a hybrid Bill please?

[Mr McLoughlin]

Of course I will consider the representations, but it is not so much a question of those leaders of cities in the north fitting in with the timetable, but of the other areas we have to address in the proposals. We are out to consultation, and the right hon. Gentleman will have heard that some people are not too happy with the route proposed and would like changes and adjustments to be made. That takes time, and once we have settled on the route—as I said, we are out to consultation, which means I have not settled on one—we will have to carry out environmental assessments and the like, which I am afraid take considerable time. I am keen to get on with this as quickly as possible, but I am constrained by what we need to do.

[Michael Ellis (Northampton North) (Con)]

I commend my right hon. Friend for what was, in many respects, a courageous statement and one that has support from all corners of the House. Will he confirm, however, that rail fares, which are already high in many areas, will, in respect of HS2, not be too high and will make HS2 accessible to all?

[Mr McLoughlin]

The Department is currently conducting a fares review. Like everybody else, I am keen to see passengers benefit from cheaper fares, but the truth is that those able to book trains in advance and outside rush hour can already get some very cheap fares—cheaper, in fact, than they have been for many years. However, we do not mean to build a railway only to see people unable to take advantage of it. I will want to ensure that people can take advantage of those services.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I welcome the Secretary of State’s commitment to a south Yorkshire-based approach to the placement of the HS2 station in the Sheffield city region. Indeed, the choice of Meadowhall suggested today seems to offer a reasonable way forward. Will he consider ensuring, however, that the enabling aspects of the hybrid Bill contain at least a commitment to phase 2? Let us separate the enabling from the quasi-judicial aspects of the Bill.

[Mr McLoughlin]

I am grateful to the hon. Lady for that suggestion and will think on it a little more.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

When it comes to the impact of High Speed 2 on Lancaster and the rest of the north-west beyond—dare I say—Manchester and Merseyside, if I understood it correctly the Secretary of State was saying that high-speed trains from London to Manchester would enter the west coast main line just above Wigan, stopping at Preston, Lancaster, Carlisle and Glasgow, so that we in Lancaster will therefore also get shorter journey times.

[Mr McLoughlin]

The answer—[Interruption]—I am sorry, I was trying to follow exactly what my hon. Friend was saying and checking the points he was making—is that shorter journey times to Lancaster will certainly be a result and a benefit for his constituents.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

On the very point that the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) has just made, what will be important for those travelling beyond the Wigan area is quality connectivity, so that people can continue and eventually complete their journeys. The Secretary of State has also mentioned that the Minister of State has been in contact with the Scottish Government. Is it best that I meet his right hon. Friend to discuss how those discussions have gone?

[Mr McLoughlin]

I am more than happy for the hon. Gentleman to meet the Minister of State, and I will do all I can to facilitate such a meeting.

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

The Secretary of State will be pleased that I am not asking for a re-routing via Bridgend or Aberystwyth—yet!—but what I would ask, echoing the sentiments of my hon. Friend the Member for Hayes and Harlington (John McDonnell), is whether he will consider bringing forward the Heathrow spur, which would bring a direct, long-term economic advantage to south Wales, Bristol and Avon.

[Mr McLoughlin]

I think the hon. Gentleman is referring to the great western spur, which is in the outline of the plans we have talked about for 2014 to 2019. As somebody who had a daughter who went to Aberystwyth university, I think that what he refers to would create some challenges for us.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Given the dire economic statistics that we saw on Friday, what will the Secretary of State be doing to ensure that those in the UK steel industry are given priority in procurement contracts for long steel products—I am thinking of sites such as Scunthorpe and Teesside beam mill—so that regions such as the north-east can benefit from this project?

[Mr McLoughlin]

The hon. Gentleman makes a perfectly reasonable point. I want to see British industry able to benefit from this. There will need to be competition, but I am pretty sure that British industry will be able to compete and provide the services we want and require. We will also be looking for engineers who can work on this scheme. Indeed, the construction phase will create many thousands of jobs, with, I think, the scheme creating many thousands of jobs for the longer-term future of the country.

[Jonathan Ashworth (Leicester South) (Lab)]

As an east midlands MP, the Secretary of State will know that his announcement today has not been universally welcomed across Leicestershire. It is certainly true that the city of Leicester will not see the same advantages that the wider Nottingham and Derby conurbations will see, with the proposal to put the station at Toton. One way he could win over his Leicestershire critics would be to bring forward—and start sooner—the electrification of the midland mainline.

[Mr McLoughlin]

The hon. Gentleman makes a tempting offer. We are committed to the electrification of the midland mainline, which will have substantial benefits for Leicestershire. I would add that East Midlands airport was built by the three counties—Leicestershire, Derbyshire and Nottinghamshire—and is situated at the north of Leicestershire, which the county at that time felt was beneficial to it. The Toton sidings are basically not far from the north end of the county, so I think they will have benefits for Leicestershire as well.

[Ian Mearns (Gateshead) (Lab)]

Twenty years ago, I could travel from Newcastle to London in 2 hours and 38 minutes. In his announcement today, the Secretary of State said that in 20 years’ time we will be able to do it in 2 hours and 18 minutes. Does he think that 40 years is enough for 20 minutes, given the importance of connectivity for the economic regeneration of a place such as the north-east of England?

[Mr McLoughlin]

I imagine that I would need to check out the timetable that the hon. Gentleman has just alluded to, because it is not unknown for Opposition Members to look on the past through rose-tinted glasses. Part of the problem might be that more people are now using the railways so there are more stops, which means that his journey is perhaps taking a little longer than it used to. However, I am very much minded to ensure that his region, like every other region in the north of the country, can benefit from the proposals I have brought forward today.

[Mr William Bain (Glasgow North East) (Lab)]

The Secretary of State will be aware of the strength of support in the Scottish Chambers of Commerce and in Glasgow and Edinburgh city councils for the extension of high-speed track right up into Scotland’s two major cities. Would it hasten the evaluation of the economic case for that if the Minister were to commit to legislating, in this Parliament, in a single Bill covering the entirety of the route between London, Manchester and Leeds?

--- Later in debate ---

[Mr McLoughlin]

I refer the hon. Gentleman to the reply that I gave some time ago.

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

I, too, welcome today’s announcement, and I particularly welcome the news that there will be two stations in Manchester. That makes a great deal of sense in relation to the connectivity that will already exist through the northern hub investment. May I reiterate to the few critics of high-speed rail that the case for this project is based on capacity, not on journey times? If we were to spend the same amount of money on the west coast main line, we would get nothing like the amount of capacity that will be freed up by High Speed 2. That is why this is the right choice for the northern economy.

[Mr McLoughlin]

The hon. Gentleman is absolutely right. This will give faster journey times, and I think that people will welcome that, but one of the overwhelming reasons for High Speed 2 is capacity. It is a fact that no new railway line has been built north of London for 120 years, and it is high time that that was put right. If we are to add to the capacity, it is right that we should take advantage of high-speed trains, which every other country in Europe and all our major competitors have already adopted.

[Andrew Gwynne (Denton and Reddish) (Lab)]

This will be good news for the Greater Manchester economy, albeit some time in the future. May I press the Secretary of State on the point made by my hon. Friend the Member for Ogmore (Huw Irranca-Davies) about connectivity? If the Greater Manchester economy is to get maximum benefit from High Speed 2, we will need proper connectivity with the continent, with London and with Heathrow airport. We can do better than the plans set out in these proposals. Will the Secretary of State commit to providing proper connectivity with Europe and with Heathrow airport?

[Mr McLoughlin]

What we have announced today is exciting for the north and for the future of the rail industry in this country. The hon. Gentleman talks about connectivity, but this is a matter of connectivity not only with the south but with the major cities of the north. As I said earlier, it can take longer to get from Manchester to Derby than from Manchester to London. This is about connectivity between the major city regions in our country, and we are determined to work towards that. I thank the hon. Gentleman for his comments, and I hope that we can satisfy his requests at least in part.

High Speed Rail

Lord McLoughlin Excerpts

Monday 28th January 2013 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

High Speed 2 is the engine for growth that Britain needs to compete and succeed in the global economy. It will generate jobs, rebalance the economy and secure the country’s future prosperity.

In January 2012, the Government announced the HS2 route that will link London and Birmingham, known as phase 1, following a thorough consultation. Today, I am publishing my initial preferred route, station and depot options for phase 2 linking Birmingham with Manchester, the East Midlands, Sheffield and Leeds.

There will be a comprehensive programme of engagement on all aspects of phase 2 and a public consultation, planned originally for 2014, has been brought forward to begin ahead of schedule this year.

A Command Paper published this morning. “High Speed Rail: investing in Britain’s future phase two—the route to Leeds, Manchester and beyond”, details the Government’s preferred route for 211 miles of new track and stations in the following locations:

Manchester (alongside the existing city centre terminal at Manchester Piccadilly).

Manchester Airport (linked directly to Manchester Airport’s three terminals).

Leeds (in the South Bank area of the city centre).

South Yorkshire (at Sheffield Meadowhall, alongside the M1).

East Midlands (between Nottingham and Derby at Toton, alongside the M1).

In addition, Crewe will be connected directly with the high speed line via a dedicated link. HS2 will be integrated with the existing national railway network allowing cities and towns in England and Scotland beyond the high speed tracks—including Liverpool, Glasgow, Edinburgh, Newcastle, York, Preston, Warrington, Lancaster, Carlisle, Durham and Darlington—to benefit also from new connections and dramatic time savings thanks to trains able to use both conventional and high speed railway lines.

HS2 means our railway network will have the capacity to cope with ever increasing numbers of passengers and free up space on existing rail lines for more commuter, rural and freight services, meaning fewer cars and lorries on our roads.

We will deliver a fair deal for people whose homes, land or businesses will be affected by construction by continuing to offer a generous compensation package and investing millions in tunnels and other mitigation measures. That is why we are also launching today a public consultation on an exceptional hardship scheme to assist property owners and compensate people fairly. This is an interim scheme; longer-term compensation proposals will be developed in the future as they have been for phase 1.

Construction on HS2 will begin in four years and phase 1 will open to passengers in 13 years. Phase 2 will open six years after that.

A series of supporting documents setting out in detail the Department for Transport’s phase 2 proposals are available on: https://www.gov.uk/government/policies/ developing-a-new-high-speed-rail-network.

New Stations Fund

Lord McLoughlin Excerpts

Thursday 24th January 2013 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I am pleased to inform the House that Network Rail is launching today the new stations fund, which will help towards the capital cost of opening brand new railway stations in England and Wales.

This fund will provide up to £20 million of additional funding to projects which are ready to be brought quickly into use for the benefit of passengers and the economy.

The Government are committed to improving the railways. Opening new stations can provide a boost to the economy and deliver longer-term benefits through improved access to the rail network and better connectivity for passengers.

Proposed new stations must already be at an advanced stage of development and be supported by the local authority, train operating companies and Network Rail. The £20 million fund will contribute towards the cost of scheme construction but bidders must also have available a portion of funding towards the project themselves.

Applications for funds will be assessed by a cross-industry panel. Because this fund is designed to support station proposals which are already well developed, we expect bids to be received by the end of February 2013 with a recommendation from the panel before the end of March 2013.

Oral Answers to Questions

Lord McLoughlin Excerpts

Thursday 17th January 2013 Commons Chamber

[Heidi Alexander (Lewisham East) (Lab)]

1. What the maximum regulated rail fare rise was in January 2013.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

The average increase in regulated fares was 4.2%. An extremely small number of fares will have risen by 9.2%, but those will have been offset by reductions elsewhere. The “5% flex” policy was introduced by the previous Government.

[Heidi Alexander]

Commuters using Hither Green station in my constituency have seen their annual season ticket rise in the past two years from £856 to £944, yet overcrowding on routes into London remains horrendous. What guarantee can the Secretary of State give my constituents that this time next year overcrowding will be less and that there will not be huge profits going to train operating companies?

[Mr McLoughlin]

One of the problems we face is that there is a huge demand and we have seen huge increases in the number of people using the railways. Matching that, the Government are pulling in huge investment. We have set out our plans for 2014 to 2019, as has Network Rail, which published its plans last week. I understand the concerns of the hon. Lady’s constituents, but I have to say that a lot of work needs to be done on investment.

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

If I am pressing my right hon. Friend, as indeed I am, to invest more in track capacity on the West Anglia line and to ensure that there is a purchase of new rolling stock soon, do I assist my constituents if at the same time on their behalf I ask him to peg fares, or even reduce them?

[Mr McLoughlin]

I am grateful to my right hon. Friend. I met him this week and he made the case very strongly for extra and faster capacity for his constituents in the feed-in to Liverpool Street. He highlights the exact dilemma: people want extra investment and it has to be paid for. The Government are prepared to subsidise the railways and are doing so, but the passenger also has to pay for extra capacity and new trains.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Many of my constituents, whether they are using local or cross-border services on the west coast main line, are frequently confused by the times at which they can use their tickets. Would it not be a sensible step to print on the tickets the precise time when they can be used, so that we end confusion and people do not end up paying fines?

[Mr McLoughlin]

In some cases, those times are printed on pre-booked tickets. We are conducting a fares review, and I would like to see a much simpler ticket operating system so that people understand the fares they are being charged. The review is due to report in May, and that is one of the points I am looking at.

[Sir Roger Gale (North Thanet) (Con)]

The franchise agreement imposed by the previous Labour Government has meant that my constituents travelling from North Thanet have faced year-on-year increases way and above the average level. It now costs a huge sum of money to travel to London from Kent. It is an appalling service. Will my right hon. Friend seek to ensure that Railtrack and Southeastern now deliver what my constituents are paying for?

[Mr McLoughlin]

I have met with my hon. Friend to discuss the service in his constituency and in the rest of Kent. He has made a number of points that I will be discussing with Network Rail in due course.

[Lilian Greenwood (Nottingham South) (Lab)]

Very straightforward: will the Secretary of State categorically rule out “super peak” fares? A simple answer will do: yes or no.

[Mr McLoughlin]

As I said, the Department is undertaking a review of fares. That is not to look at a way of making fares more expensive, but to ensure that people understand how fares are delivered.

[Mr Ben Bradshaw (Exeter) (Lab)]

2. What discussions he has had with Network Rail on improving the flood resilience of the south-west rail network.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I had a number of conversations with Network Rail throughout December about improving the flood resilience of the south-west rail network. I also visited works on the west coast main line on new year’s eve, where I was able to discuss the issue in person with David Higgins, Network Rail’s chief executive.

[Mr Bradshaw]

I thank the Secretary of State for that reply. Between the end of November and the end of December, Devon and Cornwall were effectively cut off from the rest of the country by rail for two periods lasting more than a week each. That is not acceptable for rail travellers or our economy. Will he impress on Network Rail the absolutely urgency of tackling the problem at Cowley bridge in Exeter, which is the cause of most of the problems?

[Mr McLoughlin]

The situation that people in the south-west faced over that period was unacceptable. It was the result of weather that we do not see often. I have talked to many Members who have made representations to me on that, and I have asked Network Rail to give a briefing to Members from those areas. That will take place in early February, and I hope that the right hon. Gentleman will attend.

[Neil Parish (Tiverton and Honiton) (Con)]

Further to the point by the right hon. Member for Exeter (Mr Bradshaw), the Tiverton to Exeter line is extremely low and will be affected by flooding not only this year, but in future years. A substantial job needs to be done on that particular track of rail, so I urge the Secretary of State to do as much as he can to get Network Rail to put a package in place.

[Mr McLoughlin]

I accept what my hon. Friend says and I hope that he will come to the meeting I am organising with Network Rail, which I will also attend. I am trying to break it into regions in the parts of the area served so that Members can discuss their concerns directly with Network Rail.

[Mr Adrian Sanders (Torbay) (LD)]

There are two other important areas within the south-west that raise potential problems for the resilience of rail services. One is the rail line between Exeter and Honiton, which also floods, but most crucially there is the coastal route between Exeter and Newton Abbot, which for decades has required a great deal of maintenance. We want certainty about the future of the resilience of our rail services in the south-west.

[Mr McLoughlin]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), and I are aware of the problems affecting the hon. Gentleman’s constituents and the area he represents. As I said, at the meeting with Network Rail, we will be able to discuss in detail all the problems that Members are facing and—I hope—come to some solutions.

[Mr David Crausby (Bolton North East) (Lab)]

3. What his latest estimate is of the cost to the public purse of cancelling the award of the west coast main line franchise; and if he will make a statement.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I have stated that bidders will be remunerated in full for the reasonable costs of putting together and submitting their bids. As I reported to the Transport Committee on 10 January, I expect that figure to be in the region of £45 million.

[Mr Crausby]

I come from the world of industrial manufacturing, where incompetent mistakes get someone the sack. It occurs to me that in this Government no one gets the blame, while hard-working, travelling members of the public pay the price for the mistake through higher rail fares. Will the Secretary of State tell me exactly which Minister, if any, will take responsibility for his Government’s humiliation in this affair?

[Mr McLoughlin]

I think I have been very open with the House. I have made two or three statements to it about the incident involving the west coast main line, and I have commissioned two reports that have broadly been welcomed, I think, by the House. Both those who wrote the reports have given evidence to the Transport Committee, during which, Sam Laidlaw, who wrote the report on what went wrong in the Department, said that Ministers were not made aware.

[Charlie Elphicke (Dover) (Con)]

I thank the Secretary of State for being so open with the House about this matter. It is an issue not just about the cost to the public purse, but about the potential for franchises to be delayed. In my constituency in Deal, we want a hard-won commuting high-speed service to be made an all-day high-speed service. Will he tell us what the impact of the delay might be?

[Mr McLoughlin]

As I said, two reports were conducted, one by Sam Laidlaw and the other by Richard Brown. I published the latter last week, and in the near future will make a statement to the House about how I intend to implement Mr Brown’s recommendations.

[Mr Speaker]

As the Clerk has very originally observed, the Secretary of State has brought the matter back on track. We are grateful to him.

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

The Laidlaw report is clear about where the blame lies for the west coast franchise fiasco—it was Ministers who decided to carry out a botched reorganisation of the Department that left no one in charge of rail, cut one third of the Department’s staff and axed external audits of procurement. Is it not a disgrace that with the well over £45 million of taxpayers’ money that the Secretary of State admits down the drain, every single one of those responsible Ministers is either still in the Cabinet or has been promoted to it?

[Mr McLoughlin]

There are many ways in which one can read the report. The hon. Lady means to put her interpretation on it, and whatever I say will not change that interpretation. It is quite clear in the report that Ministers were not made aware of some of the problems, and if they had been referred up, different actions could have been taken.

[Maria Eagle]

If the Secretary of State will not accept what Laidlaw says about ministerial responsibility, perhaps he will accept the verdict of the Brown review, which is also clear about where the blame lies. It was the mistaken decision by Ministers to move to longer franchises as the rule, not the exception, and experiment with this risky new policy on the most complex franchise route. Instead of repeatedly blaming civil servants, who cannot answer back, when will Ministers finally take responsibility for this staggering waste of taxpayers’ money?

[Mr McLoughlin]

I think I have been very open with the House, and I have also commissioned inquiries. Initially the hon. Lady questioned their independence. I am glad that she is now happy to abide by those reports, which were clear that, had Ministers been warned, different actions could have been taken, which is exactly what the permanent secretary said before the Select Committee on Transport.

[Chris Williamson (Derby North) (Lab)]

4. What recent progress he has made on the Thameslink and Crossrail rolling stock contracts; and if he will make a statement.

--- Later in debate ---

[Stephen Mosley (City of Chester) (Con)]

8. What recent progress his Department has made on securing an operator for the west coast main line franchise.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Since the cancellation of the west coast competition, the Department has negotiated an agreement for Virgin Trains to continue running the service for up to 23 months until November 2014. This will be followed by a long-term contract.

[Stephen Mosley]

My right hon. Friend will be pleased to hear from a regular west coast main line user that, so far, the interim service seems to be of high reliability and quality. During the original bidding process, both Virgin and First Group promised substantial longer-term improvements to the west coast main line service. Will the Secretary of State encourage future bidders to be similarly ambitious?

[Mr McLoughlin]

I assure my hon. Friend that I am grateful for his update on the service he is receiving and pleased to hear about the satisfaction he and his constituents are getting from it. We are always looking for improvements. I hope that when we come to negotiate the next longer-term contracts, a number of improvements will be included in them, but I also hope to see some improvement on this particular line before 2014.

[Bill Esterson (Sefton Central) (Lab)]

What lessons will the Secretary of State apply to the west coast franchise from the experience of the not-for-profit east coast main line, not least in respect of the return of a £190 million dividend to taxpayers?

[Mr McLoughlin]

I am always looking to learn lessons from everything that happens on the railways. I believe that the private sector has brought tremendous growth of passenger numbers and improvements in services on the railways. Like the last Government, I am committed to seeing the east coast main line offered to franchise as well.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

9. What steps he is taking to accelerate major road-building projects.

--- Later in debate ---

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

May I take this opportunity to thank the emergency services who responded so professionally to yesterday’s helicopter crash in London, in which, sadly, two people lost their lives? The Air Accidents Investigation Branch is continuing its investigation, and I will keep the House updated on its findings.

Since I last addressed the House at Transport questions, I have published the Richard Brown independent review into franchising, which concluded that it remains a fundamentally sound model. I will make further statements on rail franchising in due course. Over the Christmas period I also announced details of a new £170 million local authority pinch point fund, targeting the most congested points on local roads, as well as the allocation of an extra £215 million to councils to maintain roads.

[Mr Thomas]

The cost of travelling by train and tube from the suburbs of London into central London—for example, from West Harrow in my constituency to Westminster—has increased by 25% in the last two years alone. What discussions do Ministers plan to have with the Mayor of London about ameliorating the impact of high fare rises on those whose budgets are already squeezed?

[Mr McLoughlin]

The current fare regime and price increases are exactly the same as those under the last Government, and I do not remember him complaining about them then.

[David Mowat (Warrington South) (Con)]

T4. The new Mersey Gateway bridge will be tolled, with the risk of significant extra traffic through Warrington. The inspector at the planning inquiry stated the toll should be set no higher than that of the nearby Birkenhead tunnel. Will the Secretary of State confirm that in any evaluation of a change to the tunnel toll, he will also look at the situation of the bridge and of Warrington?

--- Later in debate ---

[Kelvin Hopkins (Luton North) (Lab)]

If Britain is to see a substantial modal shift of freight from road to rail, it is vital to construct dedicated rail freight capacity capable of carrying full-sized lorry trailers on trains. Will the Government give serious consideration to practical schemes to provide such capacity?

[Mr McLoughlin]

I will always look at practical schemes that come forward. I am pleased to say that the amount of freight being carried on the railways has dramatically increased, and I very much hope that our plans in the near future will show that we want it to increase even further.

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

The Minister is aware of my concern about the apparent reinterpretation by the Scottish Government and Transport Scotland of the very welcome £50 million that the UK Government announced in their 2011 autumn statement for sleeper refurbishment. Will the Minister comment on his understanding of the position, and could we perhaps discuss it later in a meeting, not least in the context of the new Caledonian sleeper franchise?

--- Later in debate ---

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

To what extent does the Secretary of State plan to rely on private sector money to fund HS2? Have the Government approached or received any expressions of interest from potential funders, including any foreign sovereign wealth funds?

[Mr McLoughlin]

First and foremost, I want to get the Bill for HS2 through the House. We will make further announcements on HS2 in the near future.

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

Will the Secretary of State outline when the Caldervale line that runs through my constituency will get new rolling stock to replace the current Pacer units, which are unpopular, uncomfortable and outdated?

[Mr McLoughlin]

I promise the hon. Lady that I will write to her, bearing in mind the concerns she has just expressed.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Electrification of the Lakes line from Oxenholme to Windermere would probably be the least expensive and most straightforward electrification project in the network. It would also provide a massive boost for the £3 billion tourism economy in Cumbria. Will the Minister meet me, rail operators and rail users to take forward this project?

Rail Franchising

Lord McLoughlin Excerpts

Thursday 10th January 2013 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

When I took the decision last October to cancel the competition for the inter-city west coast rail franchise and to put the wider franchising process on hold, I commissioned two independent reviews.

I am today laying before the House the second of these, by Richard Brown, the chairman of Eurostar and a highly respected industry figure. His report sets out his recommendations on how best to get the franchising programme back on course. I welcome this report, and am grateful to Mr Brown and his team for their swift and thorough consideration of the issues.

Mr Brown concludes that franchising is a fundamentally sound approach for securing the passenger railway services on which so many people rely. He has identified a number of detailed recommendations for improving the way that franchises are specified and franchise competitions are run. The issues he has identified deserve, and will get, very careful consideration. His recommendations include:

that the franchising programme should be restarted as soon as possible, but at a pace that both the Department and the industry can sustain;

that franchise term should be determined by the circumstances and size of each individual franchise;

proposals to strengthen and simplify the bidding and evaluation process for each franchise;

proposals for the financial and contractual structure of future franchises, including in relation to risk allocation and capital requirements; and

that the Government should plan to devolve responsibility for further English franchises to the relevant authorities.

Mr Brown also makes recommendations on how to strengthen my Department’s capability to manage the future franchising programme, echoing the findings of Sam Laidlaw’s independent inquiry into the lessons to be learnt from the inter-city west coast competition. My Department has already published a response to Mr Laidlaw’s report, setting out a series of actions that will allow it to resume the franchising programme, with the confidence of the rail industry, as soon as possible. The permanent secretary has now appointed a single director-general with responsibility for rail, including franchising.

The review recommends that the Government should determine, by February, our plans for the three franchise competitions which I put on hold last October. I accept that recommendation, and I will update the House when I have determined those plans.

Until then, however, I consider that it would be inappropriate to publish Mr Brown’s specific recommendations about these three franchise competitions because of their stock market sensitivity, and so I have redacted the relevant paragraphs from the version of the report I have published today. I will publish the redacted paragraphs once I have decided the way forward for those three competitions.

Mr Brown also recommends that we should set out a clear programme for future franchise competitions. I will do so in the spring, alongside a further statement of the Government’s rail franchising policy in the light of Mr Brown’s recommendations and the Transport Select Committee’s “Rail 2020” report.

Rising Cost of Transport

Lord McLoughlin Excerpts

Wednesday 9th January 2013 Commons Chamber

[Maria Eagle]

I want to make a little progress, but I might allow the hon. Gentleman to intervene a little later.

The pain is not over yet. This year is set to see even greater pressures from the rising cost of transport as the Government unveil their rail fares and ticketing review, with proposals for even higher fares at the times when most people need to travel. Ministers are to reform bus funding in a way that, deliberately it would seem, will penalise transport authorities that seek to regulate bus fares in the way they are regulated in London.

In contrast, as we set out in our motion, Labour would be taking steps now to ease the pressure on those who rely on our public transport system, standing up to the train and bus companies on behalf of commuters. We would be on the side of passengers, not vested interests.

Last September this House debated rail fares, and to the frustration of commuters—and many on the Government Benches, judging from what they told their local papers—the Prime Minister marched his MPs through the Lobby to oppose Labour’s motion to cap fare rises at 1% above inflation. Of course, Liberal Democrat MPs were marching alongside them. Yet within a month of Tory and Liberal Democrat MPs voting down Labour’s attempt to help commuters, we had a U-turn. On the eve of his party conference, the Prime Minister finally said that he agreed with Labour, and pledged to cap the annual fare rise at 1% above inflation. As commuters found when they returned to work this month, however, that was yet another broken promise from this Prime Minister and this Government, because fares were capped not at 1% above inflation, but at 9.2%. The reason the Prime Minister could not honour his pledge to commuters is clear: he was simply unable or unwilling to stand up to the vested interests in the private train companies. They had lobbied hard before the last election to get an agreement that the Conservative party would give back to them a power that had been taken away by the Labour Government when times got tough—the right to turn the annual cap on fare rises into an average, turning a cap of 1% above inflation into fare rises of as much as 9.2%.

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I am surprised by what the hon. Lady says. She said that the previous Labour Government took that power away from the train operators when times got tough. Will she confirm that times got tough in 2010, which coincided with a general election?

[Maria Eagle]

No. There was a rule change that would have applied each and every year after the decision was made. Lord Adonis, who was in post at the time as Transport Secretary, took that decision and had been absolutely clear about it. If anybody in the House doubts that, they can read the Select Committee on Transport report on rail fares and franchises, published in July 2009. Lord Adonis told the Committee:

“The Government's intention is, therefore, that in future the cap should apply to individual regulated fares, not just to the average of each fares basket.”

He did not say “for one year” but “in future.” As Lord Adonis reaffirmed last year, when the issue came up:

“It was my firm intention to continue the policy for subsequent years, and I was mystified when…my successor”—

that is, the right hon. Member for Runnymede and Weybridge (Mr Hammond)—

“reinstated the fares flexibility. The only people who supported this change were the train companies.”

I do not therefore accept that the cap was a one-off or that it would not have continued into the future under a Labour Government.

How have the Government reacted? The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), told passengers to stop complaining because fares are

“not nearly as expensive as is being presented”,

and then told peak-time commuters that they were paying for a premium service. I assure the Under-Secretary that many passengers do not feel that that describes their experience in getting to work in the morning on an overcrowded train. They do not agree with him that fares are not expensive.

Meanwhile, it was revealed that the hon. Gentleman’s colleague, the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns), was avoiding taking the train altogether, and had a chauffeur bill to and from his constituency—a commute that would take just half an hour by train on a season ticket that would cost taxpayers not £80,000 a year but £4,500 a year. Transport Ministers—

--- Later in debate ---

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I start on a bipartisan note by joining the hon. Member for Garston and Halewood (Maria Eagle) in wishing her colleague the hon. Member for Barrow and Furness (John Woodcock), whom I see in his place, a speedy recovery and return to the Front Bench. We all wish him well and understand why he has taken the decision that he has in the short term.

I could not help but think that the hon. Member for Garston and Halewood and myself must have lived in different countries. From listening to her speech, it was almost as if there had been utopia until the general election, with everything fine and wonderful and the train companies bowing to the wishes of the Government and always doing what was right by consumers and the Government. Then I read a few Select Committee reports from the last Parliament to put me on the right track. I could not help but be struck by a report of the Transport Committee from 2006, when it had a Labour majority and a Labour Chairman. It stated:

“Both the Department for Transport and the train operating companies quoted growth and the fact that ‘the UK has the fastest-growing rail patronage in Europe’ as reasons not to be overly concerned about price levels. Indeed, the Government demonstrated breathtaking complacency”

about fares and ticketing. The hon. Lady should not imagine that the problem of fare rises is new. She said that there was no recession then, but we were about to go into one of the biggest recessions that this country has ever suffered. I will come to that a little later, but I am conscious of time—although you did not tell me to be brief, Mr Deputy Speaker, I am aware of the fact that you said there will be a time limit on speeches. I will try to be a lot briefer than the shadow Secretary of State was in her 30-minute opening speech.

I am afraid that a lot of what the hon. Lady said was a mixture of the ill informed and the inaccurate. The motion does nothing to help passengers or investment, and it says all that we need to know about the Labour party. Let us be plain about some of the facts, which might help the Opposition. The motion calls on the Government to cap regulated fares at 1% above inflation. We have. It was the last Government who planned for 70% of costs to be met by fare payers in 2013 and 2014, which would mean fares rising this year not by 1% above inflation but by double that. The fare rises are lower than they would have been under Labour’s plans. That would have been an additional tax on hard-working commuters that we have not been prepared to impose.

I do agree with the shadow Secretary of State on some things. She has said that

“we should reduce the public subsidy to the rail industry”.—[Official Report, 19 May 2011; Vol. 528, c. 522.]

I agree. She has also said that if she were running the Department’s budget now,

“we would have to make difficult and painful decisions in respect of cutting the deficit”.

Indeed, and Labour did make some of those difficult decisions. She talked about ticket office opening hours, and it is a fact that in the last five years of the Labour Government, Ministers approved cuts in opening hours at approximately 300 stations. Now the Opposition seem to think that that is wholly wrong, but they were only too aware of the need for it when they were in government.

I agree with the hon. Lady, too, that it is right that we have a record level of investment in our railways at the moment, and that railway passengers have to contribute to that as well as the taxpayer. We have more trains and better services and we are delivering new lines. We are also delivering for passengers by capping the average increase in regulated fares at RPI plus 1% not just this year but last year and next.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I note that my right hon. Friend and his fellow Ministers have a long-term aim of reducing the cost of railways to both passengers and taxpayers, and therefore ending the era of the above-inflation rail fare increase. Will he therefore reassure me that he will not look to the taxpayer and the fare-paying passenger to bear the £33 billion cost of his plans for the High Speed 2 railway?

[Mr McLoughlin]

I am grateful to reaffirm to my right hon. Friend the Government’s commitment to adopt what was Lord Adonis’s plan for HS2, and I pay tribute to the former Secretary of State. My right hon. Friend and I disagree on HS2. I believe that it is vital for future investment and opportunities for the whole country. I will say more about that in the House in a few weeks’ time.

[David T. C. Davies (Monmouth) (Con)]

Will my right hon. Friend also mention the rise in transport costs for users of the Severn bridge and say whether there is any possibility of capping those increases when the bridge returns to public ownership in 2017-18?

[Mr McLoughlin]

If I am still Secretary of State in 2017, I will have been the longest serving Transport Secretary. If my hon. Friend will forgive me, I have enough problems on my plate without making commitments for 2017. I look forward, however, to a Conservative Government making that decision—that is as far as I will go towards meeting that commitment at the moment.

The fact that we have capped fares to RPI plus 1% will benefit more than a quarter of a million annual season ticket holders by around £45 a year, and some commuters will be more than £200 better off over the two years. The motion before the House is confused in another way. It attacks the flexibility that allows operators to increase some regulated fares by more than RPI plus 1% if they cut other fares by an equal amount—for example, on Virgin Trains the Rugby to Euston season ticket has increased by almost 1% less than inflation. Today, the hon. Member for Garston and Halewood tried to claim that it was not the last Government who introduced that flexibility, or that such flexibility existed for more than one year. The changes to the agreement, which I can read to her, make it clear. The deed of amendment states:

“With effect from 00.00 on 1 January 2010 Schedule 5.5 of the Franchise Agreement will be amended as set out in the Appendix to the Deed…From 00.00 on 1 January 2011”.

Therefore, the agreement was amended for just one year.

[Maria Eagle]

Is the Secretary of State saying that Lord Adonis, whom he just praised, misled the Transport Committee when he said that he intended the agreement to go into the future and that it was a permanent change? Does he realise—he will find it out in 2014—that the year before an election, the limits of how far into the future one can go in the time of one’s successors are set by Whitehall and are different from those for the beginning of a Parliament?

[Mr McLoughlin]

I am not accusing the noble Lord of misleading anybody; I am informing the House of what he did as Secretary of State. He may have wished his changes to last longer, but they did not and were solely for that one year. Indeed, when the 5% flexibility was introduced in 2004 it led to some increases of 11% under the previous Labour Government in 2009 alone. That flexibility was suspended for one year—an election year.

However, that is not Labour policy now. How do we know? Well, let us look at Wales where this year under the Labour devolved Administration fares went up by RPI plus 1%, with flexibility of 5%.

[Henry Smith]

My right hon. Friend is right. Labour says it has changed its policy on fare flexibility, but in Wales, where it is in charge of the devolved Administration, it has agreed flexibility of up to 5% on train fares.

[Mr McLoughlin]

Indeed; I am grateful to my hon. Friend. I hope no Welsh Labour MPs support the motion tabled by the shadow Secretary of State. If they do, not only will they back up my argument that we are having a synthetic debate introduced by an Opposition who have synthetic policies on transport costs, but they will not mean what they say. When Labour is in a position to change the rules, it does not do so. In Wales, it has accepted the flexibility it believes it needs to provide a proper service; the Labour Government in Wales have acted in exactly the same way as the UK Government.

[Richard Burden (Birmingham, Northfield) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I will, but unfortunately Birmingham is a few miles away from Wales.

[Richard Burden]

Indeed it is. The Secretary of State says that the debate is synthetic, but the anger of my constituents and many others at the performance of London Midland in the past year is not synthetic. He has recently dumped the deal with London Midland. The good news is that that provides some pre-concessions to passengers, but it is also said that he has not actioned a break clause in the contract. That could have happened at the end of this year, but it has been extended to 2015. It is also unclear what milestones and review mechanisms will be in place to hold London Midland to its word. Will he clarify whether his measures give London Midland more of a free rein or whether he will introduce a measure that forces it to do what it says it will do?

[Mr McLoughlin]

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), has made a statement on that, in which he also outlined some of the requirements we expect of London Midland. He and I will be watching the performance of that franchise very carefully. It is important that we give passengers the service they rightly expect and demand. We have put in place a number of measures that will cost London Midland considerable money to put into operation, and I expect it to do so.

I am conscious of the time—time moves on when I am continually trying to help colleagues to understand where their policies have gone wrong in the past. We are looking at ways to improve our railway services. As I have said, the Labour party, which is in control in Wales, has kept exactly the same flexibility on rail fares that the UK Government have retained.

In 10 years, the Labour Government electrified only 10 miles of railways; this Government will electrify 850 miles, including the midland main line, for which my hon. Friend the Member for Loughborough (Nicky Morgan), the Whip, who is sitting on the Front Bench, has campaigned so hard.

[Julie Hilling (Bolton West) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I will give way only briefly, because I am conscious of the time.

[Julie Hilling]

Does the right hon. Gentleman remember the amount of money the Labour Government had to put into the railway to rebuild it after 18 years of no investment under the previous Tory Administration?

[Mr McLoughlin]

The hon. Lady is a sadly missed member of the Transport Committee, and was there when I first appeared before it. She should be careful, however, because she was probably a member of the Committee during its inquiry on “Rail 2020”, which quite clearly shows that the worst year for subsidising the railways was 2000-01. I cannot remember what party was in government at that time, but it is true that investment went up afterwards—[Interruption.] She is looking for the page number. Page 9 simply and straightforwardly sets out the record.

[Julie Hilling]

Will the Secretary of State give way?

[Mr McLoughlin]

I must press on. I am sorry I cannot give way to the hon. Lady. The facts I have pointed out are in the report. I will try to make progress and give other hon. Members the chance to contribute to the debate.

We are putting record investment into the railways. In the 19th century, our railway was a symbol of Britain’s innovation—including London’s underground, the first anywhere and 150 years old today. Now, the railway is experiencing an extraordinary renaissance. Last year, the number of passenger miles travelled was almost 50% higher than it was in 2000. More people are travelling by rail today than at any time since the 1920s, and rail freight has grown by more than 60% since privatisation. We have soaring demand, but limited space. Regular passengers on busy lines know only too well what that can mean—overcrowded carriages and uncomfortable journeys. That is not good enough and we are going to sort it out.

In July, we announced £16 billion of funding for the network between 2014 and 2019. Inter-city travellers will benefit from the completion of the northern hub in Manchester, a £240 million investment on the east coast main line and a further £300 million for high-value, small-scale schemes in other parts of the country. We approved a £4.5 billion contract to build a new generation of inter-city trains in County Durham, creating some 900 jobs, and we are procuring thousands of new carriages for Crossrail and Thameslink. We are also getting cracking with HS2, the biggest new transport scheme since the building of the motorways. Meeting demand, however, is only part of the problem.

While the previous Government blew the budget, the railway was allowed to grow wasteful—up to 40% more expensive to run than those of our European competitors. We have therefore had to take a hard look at the industry and have a rail reform programme to tackle the £3.5 billion annual efficiency gap identified by the McNulty report in his rail value-for-money study. Already, major savings are being found. Ultimately, this focus on efficiency will help us to deliver our goal and put an end to above-inflation fare increases at the earliest opportunity. A railway that is efficient and modern is a railway that is affordable to use.

[Nia Griffith (Llanelli) (Lab)]

May I ask the Secretary of State whether, in his drive for efficiency and savings, he can give assurances to the steel industry that it will not be penalised by rail freight charges?

[Mr McLoughlin]

I will look at the hon. Lady’s point, but I hope she will make representations to the Welsh Assembly following the motion that the hon. Member for Garston and Halewood has tabled. Perhaps the hon. Member for Llanelli (Nia Griffith) will consider not voting for the motion in light of it being in direct competition to what the Welsh Assembly, which I understand is Labour controlled, is doing.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am conscious that the Secretary of State has not yet referred to bus services. My constituents rely entirely on bus services, as they do not have the luxury of a rail link. Does he agree that it is entirely wrong for operators such as Stagecoach to scaremonger about the introduction of quality contracts in Tyne and Wear and to threaten to sack staff and pull out of the region? Should the Government not back up integrated transport authorities, such as mine, which are making decisions that are in the best interests of local people?

[Mr McLoughlin]

I am coming on to say something about bus companies, but I will not comment on individual contracts that are being negotiated, as it would be wholly wrong of me to do so.

I want passengers to get the best deal from a ticket system that is easy to understand, and that is why we have set up the fare and ticketing review. This is not about higher fares; it is about simpler fares. It is not about catching out passengers who have to travel when trains are busiest, but getting good deals for people when there are seats to spare. Taxpayers, whether they use trains or not, all contribute to the cost of running the railway. I know that when people face big bills and tough times they really feel the pressure of higher fares. That is why we are looking at ideas such as smart ticketing and more flexible season tickets, so that they only have to pay when they actually need to travel. The way we work is changing and it is right that tickets change too.

This Government are on the side of passengers, whether they use trains or buses. That is why we have protected free bus travel for pensioners and are putting in place a level playing field so that operators can compete to bring fares down. The basic truth, however, is that the cost of bus travel has risen, including during the decade to 2010 under the Labour Government, and that is mainly due to higher operator costs, such as fuel.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Secretary of State give way?

[Mr McLoughlin]

I am sorry, but I must make some progress.

From the first day of the coalition Government, our priority has been to tackle the deficit that we inherited, to rebalance our economy, to get people back to work and to boost growth. Transport plays a key part in that process. This Government have capped fare rises. We are getting the investment in, tackling overcrowding, increasing seats and services, and delivering High Speed 2. It is the right deal for passengers and the right deal for Britain’s future.

[Mr Speaker]

There is a six-minute limit on Back-Bench speeches, and it applies with immediate effect.

--- Later in debate ---

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Happy new year, Madam Deputy Speaker. I am grateful to my hon. Friend the Member for Garston and Halewood (Maria Eagle) for inviting me to deliver the winding-up speech for the Opposition. That was especially generous given yesterday’s front page on the “ConservativeHome” website and a lead article written by someone appropriately called Harry Phibbs—it was not spelled Fibs, although I am not sure what kind of future he thinks he has in politics. Mr Phibbs writes about a dozen politicians who he says should defect to the Conservatives, and he names me along with some other distinguished colleagues, including the former Transport Secretary, Lord Adonis, and my hon. Friend the Member for Glasgow South (Mr Harris). I am grateful that the shadow Secretary of State trusts me with this winding-up speech in the face of such provocation.

I understand Mr Phibbs’s confusion, because in the 21st century, party lines can blur on some issues, of which equal marriage and Europe are good examples. On transport, however, and the motion before the House, nothing could be clearer: as my hon. Friend the Member for Garston and Halewood laid out when opening the debate, bus fares are up twice the rate of inflation, services are disappearing and a prime ministerial promise of capping rail fares at 1% above inflation has been broken. Fares are increasing not by 4.3%—1% above inflation—but by 9.2%, and even worse, Government documents propose super-peak tickets that will cost even more. There are no problems with party lines on this issue. People are either with the vested interests—the train operating companies and the Government—or with hard-pressed commuters, the Transport Committee and the Opposition motion on the Order Paper. I will return to those issues shortly.

The Secretary of State generously joined the shadow Secretary of State’s tribute to my hon. Friend the Member for Barrow and Furness (John Woodcock), and—quite correctly—that was well greeted across the House. The Secretary of State has had difficult times during his short tenure. He is regarded as a honourable man but he has been picking up the pieces of the west coast main line franchise fiasco and the Davies commission signalled a Government U-turn—well, certainly a Conservative U-turn—on aviation policy in 2015. My hon. Friend the Member for Garston and Halewood is not the only Member critical of the delay in the announcement by the Davies commission, and she is joined by Mayor Boris Johnson and Lord Heseltine. In my view, however, the biggest mistake—

[Mr McLoughlin]

rose—

[Jim Fitzpatrick]

I hope the right hon. Gentleman will forgive me; he knows that time is very limited but I do not wish to be discourteous. I was about to pay him a compliment in saying that in my view, one of the biggest mistakes made by one of his predecessors, the right hon. Member for Runnymede and Weybridge (Mr Hammond), was scrapping road safety targets that had bipartisan support across the House for 30 years and massively reduced deaths and serious injuries on our roads. Indeed, I commend the Secretary of State because at least he has had the decency to bring in forecasts that acknowledge we need to measure such things and set an ambition to reduce the numbers of people killed and seriously injured on the roads.

We have heard a number of thoughtful contributions. My hon. Friend the Member for Gateshead (Ian Mearns) made relevant points about the east coast main line and local connections, as well as sharing disturbing data on staffing conditions. The hon. Member for Harrogate and Knaresborough (Andrew Jones), a former Department for Transport Parliamentary Private Secretary, mounted a sterling defence of the coalition, which was a good way to sweeten his special local pleading, which I am sure went down well.

The distinguished Chair of the Transport Committee covered the recommendation from the new Committee report, to which I shall refer in a moment. The hon. Member for Argyll and Bute (Mr Reid) reminded us how the Lib Dems are the honest brokers in the coalition. He even got the Scottish National party on side, albeit briefly. The hon. Member for Milton Keynes South (Iain Stewart) used his characteristic gentle aggressiveness and Transport Committee experience to criticise Labour’s record, and sought to use European comparisons to justify UK prices. My hon. Friend the Member for Bolton West (Julie Hilling) raised the question of overcrowding on her local trains, as well as high ticketing costs and local buses, and the hon. Member for Nuneaton (Mr Jones) majored on the question of costs. My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) raised a number of local issues as well as discussing major infrastructure items.

To return to the substance of the motion, according to the Department for Transport’s figures—the annual bus usage statistics for England—there was an increase in bus fares of 6.5%, which means fares have gone up by, on average, twice the rate of inflation. They have gone up by 5.4% in London. As we have heard, research has shown that one in five council-supported bus routes were cut or reduced last year, and that 41% of local authorities have had to axe services. That is not a good record on buses.

As we have heard, on rail fares, the Prime Minister promised to peg increases at 1% above inflation. That is another broken promise to add to the 70 missed targets headlined in The Daily Telegraph today—although perhaps it is one of the 70. The target was not only just missed; fare increases of up to 9.2% have been registered. And it gets worse: the Transport Committee states in its “Rail 2020” report:

“We recommend that the Government rule out forms of demand management which would lead to even higher fares for commuters on peak times”.

Why does it make that recommendation? It does so because of a quote from the Government’s rail fares and ticketing review from last year. The scriptwriters from “Yes, Minister” could not have improved on this language, and hon. Members will need to concentrate on the words:

“To provide a stronger incentive for behavioural change and more even usage of peak capacity among existing passengers, a wider ‘menu’ of fares could…also include a ‘high peak’ fare priced higher than the current Anytime day fare, a season ticket priced higher than the current season ticket”,

which means higher prices on routes. Perhaps the Minister will comment on that, because the Secretary of State did not refer to it, even though my hon. Friend the Member for Garston and Halewood raised the super-peak ticket on a number of occasions.

Labour’s position is a total contrast. The noble Lord Adonis set out his view last year of the policy he followed as Secretary of State in 2010. He said:

“Prior to 2010, train companies had the right to increase individual fares by up to five per cent above the…RPI+1 per cent level. This was a legacy of the privatisation settlement. I scrapped this flexibility because I believed it was deeply unfair”.

Of his successor as Transport Secretary, the right hon. Member for Runnymede and Weybridge, Lord Adonis has said:

“It was my firm intention to continue the policy for subsequent years, and I was mystified when…my successor…reinstated the fares flexibility. The only people who supported this change were the train companies. It is the job of government to be on the side of the travelling public. Labour took this seriously, which is why we scrapped the fares flexibility. By contrast, the present government appears just to be on the side of the train companies.”

Government Members asked why the policy was introduced only in 2010. That is a legitimate question, but a better one would be: why has it not been repeated since 2010? We have had three years of coalition fares increases, but the policy has not been back.

The Prime Minister promised capped fares, but it has not happened, and the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), held out the prospect of the end of the era of above-inflation fare increases, but when asked by the BBC when that would happen, he could not answer. The Government are out of touch on rail. My hon. Friend the Member for Garston and Halewood quoted the right hon. Member for Runnymede and Weybridge, who said that rail is a “rich man’s toy”. The Under-Secretary of State—long-serving in the Government; long-suffering on the Opposition Benches—tried to claim over the new year that rail fares were

“not nearly as expensive as”

they were “being presented”, and that passengers were paying for a “premium service”. If by “premium service” he means paying more, getting less and standing for longer, I agree. Just this week, the rail Minister, the Minister of State, was bullied into using rail by the media, which was a sad passage.

Labour would put passengers first by banning train companies from increasing fares above a cap set by Ministers. Government Members have the opportunity to stand up for their rail and bus commuters by supporting our motion tonight in the Lobby. I strongly urge them to do so and I commend the motion to the House.

Rail Franchising

Lord McLoughlin Excerpts

Thursday 20th December 2012 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

I would today like to give an update on the situation in relation to franchised train operator London Midland (LM).

Passengers who use LM trains may be aware that the operator has been experiencing difficulties recently, with a number of services being cancelled due to a shortage of driving staff

This situation has caused inconvenience and disruption, particularly to passengers in the west midlands, many of whom have expressed their dissatisfaction to me. I very much share their disappointment that they have not had the reliable service that they rightly expect.

However, although the recent levels of performance have been extremely disappointing, I am pleased to say that the measures that LM have put in place are beginning to work.

LM has implemented increases to driver efficiency to enable drivers to operate an increased number of routes during existing shifts, improved driver training processes, provided additional incentives for drivers to work overtime and put in place new measures that allow for drivers to cover shifts on other parts of the network where there are shortages.

This is in addition to the ongoing training programme that LM is undertaking to ensure that new drivers enter productive service as quickly as possible.

However, LM’s performance has been of such a level that they are now in breach of their contractual obligations. We have made London Midland aware that they must now take action to compensate passengers for the disruption caused. We have, therefore, agreed with LM that they will provide a substantial package of passenger benefits by way of compensation for the inconvenience that has been caused.

LM has agreed to spend an additional £4 million over the remainder of the franchise to put in place measures to ensure that these problems do not happen again. In addition, the package of passenger benefits includes the issue of five free rail day passes to London Midland season ticket holders, with an expected value of up to £3.5 million. We have also agreed that London Midland will invest a further £2.25 million in infrastructure improvement projects. We have required London Midland to discuss with Centro, the west midlands passenger transport executive, how the majority of this money will be invested for the benefit of those passengers who have experienced the worst disruption.

As a result of this consultation, LM has agreed that most of this money should be directed towards measures such as improvements to safety and security at stations and improving the reliability and efficiency of LM trains.

Lastly, we have also agreed with LM that they must make available an additional 500,000 advance tickets on key routes on the LM network, giving a net benefit of around £1.9 million to passengers who will be able to take advantage of these cheaper fares over the next two years of the franchise.

I hope that LM will be able to remain the operator of this franchise for the remainder of its contract—to September 2015. But London Midland will continue to work to challenging performance benchmarks for the remainder of the franchise, and we will take further action (including ending the franchise early and re-tendering it, if appropriate) in the event of any recurrence of performance problems.

In addition to the package of passenger benefits, we have agreed to revise the profile of performance benchmarks for the next year, to include additional measures that can penalise LM financially in the event of further poor performance. We have also agreed financial measures to ensure that the reduction in revenue as a result of the free and discounted tickets is borne by LM, and not by the taxpayer.

I am confident that this package, on balance, represents a good deal for passengers and taxpayers, and sends a message to the industry that this level of cancellations is unsatisfactory. I hope that LM can now put this period behind it, and continue to operate a good service for its passengers for the remainder of its franchise.

Roads Maintenance

Lord McLoughlin Excerpts

Tuesday 18th December 2012 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

In the autumn statement earlier this month the Chancellor announced an additional £333 million for a dedicated fund to provide for essential maintenance to renew, repair and extend life of the highway network in England.

I am today publishing further details about how this fund will operate. Of the £333 million, I have allocated £215 million of this fund to local highway authorities in England, with £140 million to be allocated in 2013-14 and £75 million in 2014-15. The remainder will be allocated to the Highways Agency for work on the strategic road network.

It will be for individual local highway authorities to target the extra funds where it is most needed, for example on priorities such as road resurfacing, maintenance to bridges or repairing damage to the highway infrastructure caused by severe weather events, such as the recent flooding which had affected many colleagues’ constituencies.

To promote greater transparency I am also writing to local authorities explaining that each one will need to commit to publishing a short statement on its website at the end of each financial year setting out on what and where (in terms of location) this additional funding has been spent, and how it has complemented (rather than displaced) planned highway maintenance expenditure. I am also encouraging local authorities to consider how to minimise the disruption to business and other road users while the works are ongoing.

West Coast Rail Franchise

Lord McLoughlin Excerpts

Thursday 6th December 2012 Commons Chamber

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

With permission, Mr. Speaker, I shall make a statement on what went wrong with the west coast franchise agreement and what we are doing to put things right.

I shall begin by updating the House on the Laidlaw inquiry, and on the decisive action that we are taking in response. I shall then inform the House of the new deal with Virgin Trains—including an enhanced service—that will begin this weekend. My approach to all this, from the start, has been to come to the House to explain the situation openly, quickly and clearly, and it is in that spirit that I make my third statement on the subject today.

Let me deal first with the Laidlaw inquiry. On 3 October, I announced the cancellation of the competition to run the inter-city west coast franchise because of the discovery of unacceptable flaws in the process run by the Department for Transport. As I explained to the House on 15 October, I launched two independent inquiries. I asked the first inquiry body, led by Sam Laidlaw, to look into what happened and why, and I am publishing Mr Laidlaw’s final report today. I asked the second body, led by the Eurostar chairman, Richard Brown, to focus on any lessons to be learnt for the purpose of future rail franchising. That inquiry is well advanced, and I expect to receive Mr Brown’s report by the end of the year. I shall publish it after that. I have placed a copy of Mr Laidlaw’s final report in the Vote Office, and I am placing a copy of my Department’s response to it in the Library. I do not hide from the seriousness of his findings. They make extremely uncomfortable reading for the Department. What happened caused serious problems for bidding firms, including FirstGroup, which was in no way at fault. Action must, and will, be taken.

Let me turn to the detail. Mr Laidlaw confirms much of what he first touched on in his interim report. He finds that the Department wrongly calculated the amount of risk capital bidders would have to offer to guarantee their franchise proposals against default, and he says that these incorrect figures were varied in ways that were wrong. Significantly, he also states for the first time that Ministers made the original 14 August provisional award without being told about the flaws and after being given “inaccurate reports”.

Mr Laidlaw also confirms that if his recommendations on strengthening the organisation are acted upon quickly, the Department will be able to do its job correctly in the future. There is nothing in the report to suggest that the flaws discovered in this franchise competition existed in other procurements in the Department.

Finally, Mr Laidlaw confirms that he has seen no evidence of bias against Virgin. He also offers a clear prescription, which we are already acting on. The Department will ensure that all future franchise competitions are delivered with a clear timeline, rigorous management and the right quality assurance. We will also create a simpler and clearer structure and governance process for rail franchise competitions. That will include the appointment of a single director general with responsibility for all rail policy and franchising, and we will ensure that we have the right mix of professional skills inside the Department and, where necessary, from professional external advisers.

I thank Mr Laidlaw for carrying out such a comprehensive review to such a tight timetable. Any specific personnel issues resulting from what has gone on are—and must, of course, remain—for the permanent secretary.

Secondly, let me turn to the future of the west coast main line. In all my actions, I have put the service to passengers first. That is why I am pleased to tell the House that my Department has negotiated terms with Virgin Rail Group to allow Virgin Trains to continue running the west coast service for up to 23 months. Our intention is to run a full competition for the longer term franchise to follow on from that.

The terms we have negotiated with Virgin secure a continued service for passengers at the same levels they enjoy today, and in some cases better. The timetable that was already agreed for December 2012 will operate, and today the last of the 106 Government-funded Pendolino carriages comes into service. That will allow more trains and longer trains on this vital route. That timetable includes a new hourly service between London and Glasgow.

I also want to see more improvements, including the introduction of new services from London to Blackpool and Shrewsbury. Subject to Virgin securing the track access rights to provide them and to our completing a value-for-money assessment, I hope that both of these new services will be introduced from December 2013.

The Laidlaw inquiry has told us that changes to the Department’s governance and structure are needed. We are carrying them out, and we have a new deal for the west coast main line. This has been an extremely serious issue for my Department and for the civil service, but I am determined that we learn the lessons and get on with the job we are here to do. With our commitment to High Speed 2 and the increase in capital spending on roads announced by my right hon. Friend the Chancellor of the Exchequer this week, the Government are committed to improving our transport network and backing our railways. I commend this statement to the House.

--- Later in debate ---

[Mr McLoughlin]

I had hoped that I had given the hon. Lady adequate time to read the report, but it seems that I did not. First, I will deal with her points about Ministers. I refer her to page 44, where paragraph 4.118.2 says that

“inaccurate statements were made to the then Minister of State in writing as to the manner in which the CAC”—

the contract award committee—

“had approached the SLF sizing process in respect of First’s bid at its meeting on 27 June”.

If inaccurate information was given to Ministers, a fact stated in the report, Ministers would have acted in good faith on the information they were given.

May I also make the point that is made on page 63 of the report? It states that

“in implementing substantial cost savings required by the Government’s spending review in 2010, the DfT significantly reduced its headcount, the number of contractors used and its use of external consultants.”

Mr Laidlaw goes on to say:

“That is not to say however that, with appropriate escalation…of the issues, sufficient resources could not or would not have been found.”

There was no significant escalation of the issue, so I think there is truth in that.

A number of parts of the report refer to the Minister of State, the Secretary of State, the Prime Minister and the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), asking questions and I am afraid that there was a damning failure by the Department that must be put right. The hon. Lady says that I seek somehow to blame three civil servants. I have never, in any of the statements I have made in the House or privately, mentioned the names of any civil servants. That is a matter for the permanent secretary. We now have the HR report and the permanent secretary is considering that and what will happen in the future. I would have hoped that the hon. Lady would welcome that.

The hon. Lady talks about the position with First Great Western and its contract to run its railway line. May I remind her who negotiated that contract? It was inherited by the Government and was not our contract at all. If she feels that there are any problems with it, then excuse me but it is not the responsibility of the Government. She asked a specific question about the second year of the contract with Virgin Trains and I will write to her with the answer.

[David Mowat (Warrington South) (Con)]

The Secretary of State read two quotations from the report, which both implied to me a severe organisational failure. Did Laidlaw have anything to say about the position of the permanent secretary in all this?

[Mr McLoughlin]

As I think I said to my hon. Friend when I made my first statement on this matter, there are obviously serious questions to answer. The present permanent secretary took his post in April, when many of the incidents to which we are referring had already taken place.

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

The Secretary of State acted decisively when he became aware of these issues, but the standing of the Department has been severely damaged by this episode. Three franchises were postponed and the £40 million is simply the first stage of the cost to the public purse. What lessons does the Secretary of State take from this incident for future ministerial responsibility?

[Mr McLoughlin]

I am grateful to the hon. Lady and I know her Committee will see Mr Laidlaw and no doubt others during their deliberations on this subject. There are a number of lessons not just for Ministers but for the civil service as a whole and on closer reading of the report they become apparent. I hope that this sort of episode will not happen again to any Government.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

The Secretary of State will be unsurprised to hear me welcome the news about direct services to Blackpool. Does he agree that any infrastructure investment is only as good as the economic planning by local stakeholders? Will he encourage local councils and the local enterprise partnership to meet local MPs urgently to discuss how to take advantage of that announcement and not wait until December 2013 to decide what to do about it?

[Mr McLoughlin]

I am grateful to my hon. Friend, particularly for the way in which he has campaigned for this service. I know that he will be pleased by the intention I have announced today. As I have said, it is an intention and is not absolutely tied down as there are a few processes to go through. Given the way in which he has shown leadership, I very much hope that he gets that message across to the stakeholders involved so that we can make progress.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Is it not clear that the right hon. Gentleman is doing his very best to clear up an appalling mess that he inherited from his predecessor? Although of course matters of personnel in his Department are, as he says, the responsibility of the permanent secretary, the overall administration was the responsibility of his predecessor and it is unacceptable that she complacently remains a member of the Government having left this expensive mess. I am travelling up to my home in Manchester this afternoon. What am I to say to the excellent train crew who will be looking after me and all the other passengers about the security of their jobs, in which they have the right to be confident and which has been left in total dubiety by what happened before the Secretary of State took over?

[Mr McLoughlin]

I think I am grateful for the conservative way in which the right hon. Gentleman made his point. What he can say to the crew on the west coast main line is that both this Government and, in fairness, the previous Government have invested huge amounts of public money in that line—some £9 billion. I am glad to be able to say today that we have completed the delivery of the 106 new Pendolino carriages to show our support for that line. I hope that my announcement today and the fact that I have not done what I initially said I would do, which was a short-term contract, then a medium-term contract, gives train crew security and that they can work with their company for the future franchise.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I was disappointed with the shadow Secretary of State for Transport. When we called Sir Richard Branson into the House of Commons, he and his officials specifically stated that they had first raised concerns about the bidding process with the Labour Government and Lord Adonis. I welcome the announcement of a direct service for Shrewsbury. My hon. Friend the Member for The Wrekin (Mark Pritchard) and I have long campaigned, along with other Shropshire MPs, for this vital service for Shropshire, which will be a great boost for tourism and business for Shrewsbury, the county town. When we finally have that service I will invite the Secretary of State to join me on the train from Shrewsbury to London and I will buy him a drink on that journey.

[Mr McLoughlin]

My hon. Friend is getting into the Christmas cheer a little early. He, along with my hon. Friend the Member for The Wrekin (Mark Pritchard), have been vociferous in making the case for a service to Shrewsbury and other stops on the way. There is still work to be done, but I very much hope we can get that service by December next year.

[Derek Twigg (Halton) (Lab)]

I have not seen the report so perhaps the Secretary of State can answer this question. He refers to the risk capital that bidders had to put forward as a guarantee and says that Laidlaw said that Ministers were not told about the flaws after being given inaccurate reports. What questions did Ministers ask about the capital that bidders would have to offer to guarantee the bid?

[Mr McLoughlin]

I was not in those meetings, for obvious reasons, but I know that Ministers were constantly probing. Mr Laidlaw saw the former permanent secretaries at the Department—not just the present one, but the former ones—and spoke to former Ministers there too.

[Graham Evans (Weaver Vale) (Con)]

I welcome the Secretary of State’s decision to award an interim franchise to Virgin Trains, as this provides a great deal of stability for passengers up and down the country. Will he join me in paying tribute to the Virgin staff on that line, who throughout this very difficult time have always acted with great professionalism?

[Mr McLoughlin]

I had a meeting just the other day with some disabled people. They sang the praises of Virgin Trains as providing some of the best services to disabled people. I was pleased to be able to pass that message on to Sir Richard Branson when I met him yesterday.

[Mr Mike Weir (Angus) (SNP)]

The Secretary of State said that the Brown report would look at the lessons learned for future rail franchises. Perhaps the biggest lesson is that the whole system is a shambles, but given that the report is due shortly, what process does he have in place for taking account of its lessons in the negotiations with Virgin for the franchise in the immediate future?

[Mr McLoughlin]

The truth is that what both Governments have recognised about franchising is that it has brought massive passenger growth on the railways and the railways have flourished since franchising has taken place. The hon. Gentleman asks me to say what implications the Brown report will have for franchising. I think I had better wait till I receive it before I answer.

[Simon Wright (Norwich South) (LD)]

I welcome the degree of transparency that Ministers have brought to these matters. What plans is the Secretary of State making to foster a culture in which admissions of fault are freely made in the Department and processes paused and rectified where necessary? Is it not right that if mistakes are found, hands must be held up?

[Mr McLoughlin]

I am pleased that my hon. Friend welcomes the transparency that I have demonstrated today. I hope I do not have to do it too often.

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

Edinburgh is served by both the west coast main line and the east coast main line services, and between the two there have been three occasions in recent years when the franchise process has gone wrong. Given that the Government will have to sort out the franchise system, not just for the west coast main line, would it not make sense now to decide to keep services on the east coast main line operated by the current operator and allow it to get the benefits of closer co-operation with Network Rail, rather than force it to go through a franchise process again?

[Mr McLoughlin]

The hon. Gentleman is jumping to too many conclusions at the start. When the previous Government brought in Directly Operated Railways to run the east coast main line, they made it very clear that they would want to move to a franchise process and re-let the franchise, and that is certainly the position that this Government take.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

The welcome announcement of extra capacity and services on the west coast main line drives a coach and horses through one of the prime reasons for High Speed 2, which is to reduce overcrowding on the WCML. Given the stark warnings of the Laidlaw report, particularly chapter 7, which identifies failings in the capability and capacity of the Department for Transport, how can anyone trust the Department with what will be the largest peacetime spend on a project? Is it not time the Secretary of State took another brave decision and consigned this poorly managed, ill-conceived and increasingly thinly justified project to the waste paper basket?

[Mr McLoughlin]

My right hon. Friend is vociferous on this issue on behalf of her constituents. She is asking me to prejudge announcements that I will make next year. The Chancellor of the Exchequer made it clear yesterday that we will be moving forward with HS2. I look forward to welcoming her to the Department next week.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Further to the previous question, will the Secretary of State clarify whether there are any implications for the value-for-money exercise that was carried out on High Speed 2 and, if there are, whether he will be asking the civil service to go back over them again?

[Mr McLoughlin]

That is a valid question, but of course, as I have said, this is a franchise exercise that went wrong. High Speed 2 is a capital project that I think will benefit the United Kingdom and our long-term capacity. No railway line has been built north of London for over 100 years, so it is about time we increased capacity.

[Nigel Mills (Amber Valley) (Con)]

The Secretary of State said that there were no implications from the Laidlaw report for any other procurement in his Department, but the interim findings clearly set out that there were concerns about the Department’s management structure and the quality assurance process. Is he still confident that there is no need to review the Thameslink rolling stock contract to ensure that no mistake was made in it as well?

[Mr McLoughlin]

I can assure my hon. Friend that I have of course looked at that situation. I believe that the contract that was announced some time ago will be coming to a conclusion in the near future.

[Bill Esterson (Sefton Central) (Lab)]

The failure of the franchising system, at a cost of £40 million, compares with how the east coast franchise has been taken in-house, saving nearly £200 million. Is it not time that consideration was given to bringing the west coast franchise, and every other franchise, back in-house in line with the successful model used for the east coast franchise?

[Mr McLoughlin]

I think the hon. Gentleman, in a rather convoluted way, has called for the renationalisation of the railways. That is certainly not something this Government will do. If he can convince his Front Benchers that that might be the right way forward, we will be interested to see that development.

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

I very much welcome the additional services and carriages that the Secretary of State has announced. In addition, both Virgin and FirstGroup pledged in their bids significant long-term enhancements to services on the west coast main line. Whatever conclusions are reached following the Brown report, will he ensure that these additional benefits are still secured for passengers?

[Mr McLoughlin]

I am sorry, but I missed the last part of my hon. Friend’s question. I know that he, as a member of the Transport Committee, will continue to press for a very good service through his constituency.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The Secretary of State will be aware that the three civil servants suspended over this fiasco have this morning been reinstated. What does that say about the judgment of leading officials and Ministers in the Department for Transport, and can he elaborate on the reinstatement?

[Mr McLoughlin]

Staffing is a matter for the permanent secretary, who received the Stow report, which dealt with human resources. The suspensions took place as a precautionary measure while the report was being produced. Obviously, consequences will flow from the permanent secretary receiving that report, and those will become public in due course.

[James Duddridge (Rochford and Southend East) (Con)]

I congratulate the Secretary of State on the decision on the west coast main line, but has he considered the Essex Thameside franchise and whether C2C should be given a similar concession?

--- Later in debate ---

[Mr McLoughlin]

I am waiting to receive the Brown report, which will, I hope, take us further on lessons to be learned for future franchising. I will be most insistent on passengers receiving the services that they are currently getting, and, where possible, an enhanced service.

[Ian Lavery (Wansbeck) (Lab)]

Has the Transport Secretary assessed the potential for running the west coast main line under public ownership and what the benefits might be?

[Mr McLoughlin]

I believe that the way in which the west coast main line is run by Virgin has been very popular with Members, not on the Government Benches but on the Opposition Benches, who have announced their intention to support that franchise.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I thank the Secretary of State for the speed with which he has dealt with this and the integrity that he has shown throughout in dealing with this difficult problem. My constituents are still seeing much needed improvements, with extra carriages and the line to Blackpool, but I hope he will forgive me if I remind him that Fleetwood remains a town with a railway line but without a railway service.

[Mr McLoughlin]

I do not mind my hon. Friend reminding me of that, and I know that he will do so on many occasions when he gets the opportunity. I look forward to having discussions and conversations with him about how we can possibly improve the situation in which his constituents find themselves, but I hope that he welcomes the fact that the line has come part of the way to his constituency, if not yet all the way.

[Mr William Bain (Glasgow North East) (Lab)]

The west coast main line is of huge importance to the Scottish economy, as it carries half a million passengers a year along its whole length for business and tourism purposes. What assurances has the Secretary of State received this morning from Virgin trains about whether the 248 workers who are employed by the company in Scotland will have security in their jobs for the future?

[Mr McLoughlin]

I am not responsible for the personnel decisions of Virgin trains, but I am sure that the hon. Gentleman will make representations to the company. I hope he welcomes the fact that I have announced today the completion of 106 new Pendolinos and the hourly service to Glasgow, which are substantial improvements in this service for people in Scotland.

[Mr Philip Hollobone (Kettering) (Con)]

May I praise my right hon. Friend for launching these inquiries so soon after he took office? However, while Parliament holds Ministers to account, who holds the Sir Humphreys to account? There is a stink about this process among the permanent secretariat in our civil service. What has happened to the previous permanent secretary in the Department—is he or she still in the civil service? Is the current permanent secretary going to take any responsibility?

[Mr McLoughlin]

My hon. Friend says that Parliament holds Ministers to account. In fact, it is not only Parliament that holds Ministers to account, because that also happens through the Select Committee procedures, on which I will certainly not lecture my hon. Friend, and that applies to permanent secretaries and officials as well. There will undoubtedly be other reports not only by the Transport Committee but by other Select Committees and by the National Audit Office. Various reports will come out on this subject.

[Chris Williamson (Derby North) (Lab)]

Will the Secretary of State agree to meet staff representatives through their trade union to discuss and consider the ongoing uncertainties and concerns about this contract?

[Mr McLoughlin]

I am always happy to meet various bodies, and if the hon. Gentleman puts a proposal to me I will certainly consider it.

[Mr Marcus Jones (Nuneaton) (Con)]

I congratulate my right hon. Friend on using the interim finance to bring forward further service improvements on the west coast main line. He will know that we are meeting next week to discuss some of these issues, but will he take my comments as a bid for the return of some of the Virgin off-peak services that the previous Government took away from Nuneaton in 2008?

[Mr McLoughlin]

My hon. Friend has just given me a taster of what our meeting next week will be about. I will no doubt have a better explanation for him then. He has been a very strong voice for Nuneaton in trying to get extra facilities for his constituents.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is now clear what a complete shambles this whole affair has been and how much time and money has been lost. Fast, frequent and reliable trains are critical to the Greater Manchester economy, but with nearly three years’ delay until the new franchise comes on track, vital investment decisions will put the reliability and speed of this service at risk, which our economy can ill afford. How will that be addressed and where will the money come from for this much needed investment?

[Mr McLoughlin]

I welcome the hon. Lady to this place. I am sure she will be a prominent speaker on transport issues over the years to come. I would point out to her that the levels of investment that we are putting into the railways are as impressive—if not more so, given the financial situation the country finds itself in—as what the previous Government put in. I met council leaders in Manchester a few weeks ago and talked about a huge amount of investment that is going into the Manchester area. I have already mentioned the completion of the Pendolino trains, and the purchase of new carriages will enhance the service for her constituents and the people of Manchester.

[Mark Pritchard (The Wrekin) (Con)]

I welcome the Secretary of State’s statement, particularly the announcement that a new direct rail link from Shropshire to London will start from next December. I pay tribute to him and the Minister of State for all their work. I also pay tribute, in a cross-party spirit, to the hon. Member for Telford (David Wright) and to my right hon. Friend the Member for North Shropshire (Mr Paterson), my hon. Friend the Member for Ludlow (Mr Dunne) and my hon. and dear Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) for all their work. In the ongoing discussions with Virgin, could the important Shropshire market town of Wellington and the important town of Telford also be considered for the timetable?

[Mr McLoughlin]

I did not actually announce the confirmation of that service, but I very much hope that it will be confirmed. I accept my hon. Friend’s bid for it to stop at other stations on the way, but we will just have to see what progress we make.

[Glyn Davies (Montgomeryshire) (Con)]

When the direct line from Euston to Shrewsbury was withdrawn, it was a huge blow to the whole of central Wales—to the tourism industry, the economy and the travelling public. Will the Secretary of State accept my constituents’ appreciation of the fact that that direct link has been restored by today’s announcement, a full two years before it would have been if the FirstGroup bid had gone ahead? Will he also join me and my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on the first trip, on which I will buy coffee for both of them?

[Mr McLoughlin]

By the sounds of it, we will have a full train on that particular trip. I had better talk to my right hon. Friend the Chief Whip to make sure that the timetable is conducive to the House’s sitting times.

[Jason McCartney (Colne Valley) (Con)]

I remind my right hon. Friend of the chaos, cost and uncertainty that resulted from the east coast main line collapsing not just once, but twice under the previous Government. With that in mind, will he update the House on the progress of that franchise?

[Mr McLoughlin]

I am grateful to my hon. Friend for rightly pointing out that mistakes and things that go wrong in franchising are not new and that they have happened in the past. As I said, I am awaiting the Brown report, which will tell us about future franchising and will be an important part of our debate on it.

[Mark Pawsey (Rugby) (Con)]

The Secretary of State’s decision today will provide welcome stability to the many users of the west coast main line in my constituency. I know that they will be pleased to be able to continue to travel on Virgin trains. I welcome the fact that, under the interim contract, he is not just maintaining the status quo, but providing improvements, such as a new direct service to Rugby from Scotland for the first time since 2008.

[Mr McLoughlin]

I am grateful to my hon. Friend for welcoming the new services. The simple fact is that the train operators are very much aware of the demand for new and regular services. As anyone who has witnessed today’s statement will know, we are coming under increasing pressure to expand them and certainly not to decrease them.

[Mr Peter Bone (Wellingborough) (Con)]

On behalf of the House, may I thank the Secretary of State for coming here for the third time to make a statement on this matter? In all my time in the House, this has been a unique experience. For the first time, something has gone wrong in a Department and a Minister has had the courage to come here to admit it and to do something about it. I have never seen that before. With regard to his former role, will the Secretary of State encourage other Ministers to do the same thing?

[Mr McLoughlin]

I think Ministers are always ready to hold up their hands when something goes wrong. We need to be straight with the British people. I would not have expected such applause from my hon. Friend, bearing in mind the occasional crossed words that we may have had when I was in my previous role.