Transport and the Economy

Lord Wilson of Sedgefield Excerpts

Tuesday 28th February 2012 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to take this opportunity to raise the issue of declining rural bus services, especially in County Durham and in Sedgefield.

County Durham is a rural area and home to many villages, most of which had a colliery at one time. When the collieries were open, people did not have very far to travel, but now that the collieries have closed many people find that they have to travel a long way, and many miles, to get to work, so a reliable public bus service is a necessity.

The bus service is required not only for work, but by young people who want to go to college; by the elderly, who might want to go to hospital or to a medical appointment; by the same groups of people to see friends and family; especially by young people just starting out on their career, who may not have the money to buy a car and need the bus to get to work; and by people on low incomes. We need to think also of the unemployed, who might see a job in the newspaper or in the jobcentre that they would love to do, but who know that they cannot apply for it because there is no bus service to take them to the factory or the office.

Concerns about local bus services have risen up the political agenda not only in areas such as Sedgefield over the past couple of years, but in the rest of County Durham. I have a steady flow of complaints from constituents who are incensed at the cuts to services, especially by Arriva, which pulls services at the last moment, without any notification or consultation. Any cancellation of a route is not well advertised. On more than one occasion, whole villages have been left without any services whatsoever. When I compare the services that Arriva has in County Durham with those that it has in London, I think, yes, we should have an excellent public transport service in the capital city, but we need something equivalent in our rural areas as well, with regulation to ensure that there is a social obligation on privatised bus companies to ensure that people can get to work.

Bus services are being cut in our rural areas as part of the expenditure cuts to address the deficit. There has been a 28% fall in funding for councils, combined with the ending of ring-fencing of grants for bus services, a 20% cut in the bus service operators grant paid to bus companies, and a shake-up of the free travel scheme for pensioners. Pensioners now often say, “What is the point of a bus pass if there are no buses to catch because they have been cancelled?” As a consequence of all these cuts, Durham county council has withdrawn £322,000 in funding from subsidised public transport routes, leaving many villages with few or no services in the evening or at the weekend. My postbag has been full of letters and petitions about the repercussions of the changes brought about by spending cuts originating in Whitehall.

Let me explain what this has meant in practice for people needing these services in the rural communities of Sedgefield—villages such Bishop Middleham and Fishburn, as well as Middleton St George, which is in the south of the constituency. One local constituent can no longer get to work without the help of friends, and others can no longer catch a bus and so have to use a taxi, which obviously inflates the cost of getting to work.

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

I sympathise with the hon. Gentleman’s constituents who face a problem with bus services, but does he accept that this is not a new phenomenon? Rural bus services have been poor in many areas for a long time, and the previous Labour Government did nothing about reintroducing any sort of regulation in areas such as County Durham.

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[Phil Wilson]

There may have been a lack of regulation, but we had a level of subsidy that had not been cut to the extent that it has been since, and some subsidies that were made available have been paid back to the Treasury.

[Angela Smith]

Does my hon. Friend recognise that the Local Transport Act 2008 brought back a level of regulation, but it was opposed by the Conservative party with which the hon. Member for Manchester, Withington (Mr Leech) is in coalition?

[Phil Wilson]

We can see from the lack of people on the Liberal Democrat Benches that this issue is not of particular importance to them. Whatever they said before the election, they are saying exactly the opposite today.

I have a constituent called Mrs Hardy who lives in Bishop Middleham. She has asthma and a heart complaint and has worked at the same place for 34 years. Now she cannot get a direct route to work and arrives an hour late, and the return journey that she has to make does not take her back to her own home. She is quoted in The Northern Echo as saying:

“I am now in the stressful situation of having to beg lifts from friends, colleagues and family and don’t know how I am going to get to work from one day to the next.”

Her story is not unique. However, with the help of Durham county council, I have been able to get Arriva to put on a couple of buses on workday mornings so that people like Mrs Hardy can get to work. That new regime starts on 19 March. Likewise, by applying pressure on Arriva, we have been able to redirect buses around Fishburn. However, that only partly solves the problem and is not the whole answer. There must be many more employees in my constituency who find themselves in such a position.

I have raised this issue with the Department for Work and Pensions. If somebody resigns from their job voluntarily because they can no longer get to work, they can no longer claim benefit because they are deemed to have resigned. The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) responded:

“The Jobseekers Act (1995) provides that JSA will not be paid for a period between 1 week and 26 weeks to anyone who has lost their employment as an employed earner by leaving voluntarily without just cause.

The law does not provide guidance on how just cause should be interpreted because the circumstances in which employees leave employment are so varied.”

The Government need to do a bit of joined-up thinking on this issue because it affects many people in rural areas around the country, who we are perhaps not finding out about. This situation needs urgent attention. The Department for Transport needs to liaise with the DWP to find out the extent of the problem in rural areas. The problems with the buses in my constituency came to a head in the new year.

Last week, we found out from the Transport Committee report on the expenditure of the Department for Transport that the money was there to maintain the subsidy, but it was handed back to the Treasury. To use the Select Committee’s word, how “slack” is that? The Select Committee was surely correct to state in paragraph 11:

“Money voted by Parliament for expenditure on transport should be spent on transport, not handed back to the Treasury.”

My question to the Minister is whether, because the money has been there in the past, it will be there in the future. Will his Department push for extra funding for subsidies so that additional bus services can be provided in areas such as County Durham? There is a lot of talk about the need for growth in the economy. I respectfully suggest to the Government that it is a fundamental prerequisite of any economic growth strategy that employees are able to get to work.

The lack of understanding in this area does not promise much for the future. There seems to have been a fundamental failure in basic arithmetic. The Department has imposed deep cuts to bus grants, leading to the axing of dozens, if not hundreds, of bus routes and to steep fare hikes, only to end up with £543 million to spare. As a consequence, Durham county council and other local authorities are getting the flak for the cut in bus subsidy and the resulting cuts in bus services. My constituents have great difficulties in getting to work, to the hospital, to college or to see friends. The Department for Transport lost £543 million down the back of the sofa, just to find it and hand it back to the Treasury. Will the Minister therefore apologise to Mrs Hardy and the many others who are having difficulty catching a bus today because of his Department’s carelessness?

The letter from the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell also states:

“The matter of poor public transport in Sedgefield and County Durham”—

at least the DWP acknowledges that transport in Sedgefield and County Durham is poor—

“is a matter for the Department for Transport. I have forwarded a copy of your letter to that Department so that Ministerial colleagues are aware of your constituents’ concerns.”

Will the Minister tell me what his Department and the DWP are doing to alleviate the situation of poor public transport in places such as Sedgefield and County Durham? Is there any joined-up thinking in Government to alleviate this problem? Finally, what plans does the Department have to re-regulate or regulate more thoroughly bus services in rural areas around the UK so that people who have jobs can get to them?

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[Angela Smith]

I wholly concur. In fact, if we are to maximise the agglomeration benefits of HS2, I would argue that the economies—from the far north to London and the south—that are linked by the HS2 line must have clear strategies in place for economic development in order that the transport investment represented by high-speed rail can perform to its full potential.

[Phil Wilson]

It is obviously vital that the HS2 route eventually reaches the north-east of England. I do not know whether my hon. Friend is aware of it, but Hitachi is building a train-building facility in Newton Aycliffe in my constituency. It has already said that if this project goes ahead, it will be bidding for the rolling stock.

[Angela Smith]

That illustrates my point about the need to have clear plans for economic development in place alongside plans for transport investment.

The report is also important because it points out very clearly that there is a lack of transparency and consistency in the decision-making process at the Department for Transport. Finally, it is important because it points out that the removal of regional structures created by the last Government risks creating a vacuum in effective planning for transport infrastructure.

I want to focus particularly on the report’s recognition that the Government should produce a White Paper explaining explicitly how their plans for transport investment will be linked to their plans for the economy more generally, and in particular explaining their plans for rebalancing the UK economy. Rebalancing is important not just to the economic development of areas such as the north-west and Yorkshire but to the whole country, including London and the greater south-east.

We need transport investment to maximise the potential for a more dynamic set of relationships between economies across the country. HS2 is a case in point. According to The Northern Way, its potential impact of £13 billion would deliver at least £3 billion of economic impact to the north. The point is, however, that its economic impact will affect the whole country, and therefore potentially benefits everyone.

What do we need if we are to rebalance the economy in transport terms? I believe that we need three things. First, we need more transparency and greater consistency in decision making, so that we can hold the Government to account in relation to their stated aim of rebalancing the economy. Secondly, we need political bravery: we need to use investment to maximise economic development in areas such as the north of England, and to remove barriers to growth in those areas. Thirdly, we urgently need to know more about how the Government will develop sub-regional, regional and even cross-regional structures enabling them to produce sound, well-thought-out strategies for the delivery of transport infrastructure.

The removal of the regional development agencies and, by definition, The Northern Way group of RDAs, has left a vacuum in regional planning, especially—as the report points out—in the context of their role in supporting regional economies. Moreover, the local enterprise partnerships have not been thought through. How will these new structures working at sub-regional and city-regional level work structurally across LEP boundaries to deliver what our regions need?

The north of England is a perfect example. As a result of The Northern Way and its superb work in developing arguments and strategies relating to transport, the case for the northern hub has been clearly made and accepted even by the coalition Government. The northern hub is needed, of course, to tackle congestion on the northern rail network, thereby helping to remove barriers to economic growth; but it is also needed in the context of the decision to go ahead with HS2. It is important that we deliver both projects in order not just to reduce congestion on the network but, as I mentioned earlier, to maximise the potential benefit of HS2.

If we are to maximise the potential of HS2 to make the relationship between the economies of the north and London more dynamic, we must also ensure that those agglomeration benefits are spread across the north. If that is to happen, the Government must recognise the importance of transport infrastructure in supporting economic development plans. In particular, they must recognise our great northern cities as hubs for economic development. They must recognise the importance of greater connectivity—not only with London, on a north-south axis, but on an east-west axis, between the northern urban centres, and with international gateways not just at Heathrow and Gatwick but at the mouth of the Humber and Mersey rivers.

We need regional planning. As the report says, without it there will be a risk that choices will be made on a basis that discriminates against weaker economies. There is already an example of that in the form of the Government’s decision to electrify the Leeds-to-Manchester cross-Pennine route, which discriminates against what I call the third point of the golden triangle of the north: the city of Sheffield.

We need the Govt to recognise the broader context of an economic policy that involves stimulation of the economy and the role that transport could play in it. Long-term infrastructure projects should be brought forward, as outlined in Labour's alternative plan for jobs and growth, but instead we are seeing significant cuts in investment, such as the £759 million cut on top of the £528 million efficiency savings supported by Labour.

We also need the Government to recognise the spending disparity between the north and the south. The Passenger Transport Executive Group has produced some interesting figures. In 2010-11, transport spending per head was £774 in London and £276 in Yorkshire and the Humber. The source of those figures is the most recent version of a public expenditure spending analysis from Her Majesty’s Treasury. I ask the Minister to respond to them, and to demonstrate by way of a full written explanation—

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[Lilian Greenwood]

I will not go through all the cuts right at this moment, but I have already said that we would not have cut £759 million from the rail budget—[Interruption.] Well, the Minister has put forward £528 million-worth of savings from the rail industry in his departmental plans, and we would not have opposed that. We would happily find the same efficiencies that he says he would find, such as the £245 million from Crossrail. We certainly agree that where there are efficiencies to be found, they should be found. I could go through his entire departmental budget, but that would detract somewhat from the debate. I am happy to do that another time.

Under Labour, there would not have been a £680 million cut in local transport funding, which is leading to a Beeching-style cull of our bus network. The Campaign for Better Transport estimates that one in five supported bus services have been scrapped. Whole communities have been left isolated, without access to public transport, and fares are rising on those services that remain. Under Labour, three quarters of local authorities would not be reviewing school transport provision, with many families being asked to pay more just to get their children to school. That increasing problem was rightly highlighted by the hon. Member for Staffordshire Moorlands (Karen Bradley) in her wide-ranging speech about the challenges facing her rural constituency. As my knowledge of Staffordshire Moorlands was previously limited to Alton Towers, I now know a lot more about it.

Time and again the Government have chosen policies that have a disproportionate impact on the very people who need their help, particularly in these austere times. My hon. Friend the Member for Sedgefield (Phil Wilson) made that point clearly and passionately. He focused in particular on the impact of bus cuts on villages in his constituency and the real problem that that is creating not only for people seeking work, but for those trying to stay in their jobs. The unemployed, 64% of whom do not have access to a car, need buses to get to interviews and jobs. How can they get back into work if there is no bus or the fare is unaffordable? What about young people, 72% of whom rely on buses to get to college? How can they stay in education or training to get the qualifications they need for the future if there is no bus or the fare is unaffordable?

Labour would be prepared to maintain investment in our much-needed bus services, but it would not be a blank cheque; we want something for something. We would reverse the cut to the bus service operators grant, but in return we would expect the bus companies to work with us to deliver a concessionary fares scheme for 16 to 18-year-olds in education or training. Many people would like to get on their bicycles because it is not only a good way to protect the environment, but a cheap way to get about. We would not only protect the road safety budget, but reallocate funding to improve cycling infrastructure and give people the confidence they need to use their bicycle.

Even for those people who do have access to a car, the situation is little better under this Government. The Chancellor’s decision to increase VAT to 20%, just when global oil prices had taken the cost of filling the tank to record levels, is a real drain on household budgets, especially in rural areas. That is why a temporary cut in VAT back down to 17.5% is a vital part of Labour’s plan for jobs and growth. It would cut the price of a tank of petrol by around £1.35 and put money into people’s pockets.

The Government claim that one of their primary objectives is to rebalance the economy, including by reducing the north-south divide. I am not sure whether Derby considers itself to be in the north—Derbyshire always feels reassuringly like the north to me—but I do not think that the Government’s claims to be rebalancing the economy away from reliance on financial services and towards manufacturing ring true with voters in Derby. The decision to award the Thameslink contract to Siemens, which will build the trains in Germany, is a real kick in the teeth for Bombardier, the only company that designs, manufactures and assembles trains in the UK. That decision put the whole future of UK train manufacturing at risk, along with thousands of highly skilled engineering jobs not only in Derby but across the midlands.

I welcome the Government’s admission that they got that wrong and their decision to amend the tendering process for Crossrail, but why, instead of spending months saying that they could do nothing about the process for Thameslink, did they not act to protect 1,400 jobs at Bombardier? Having delayed the project by a year, Ministers had the time and opportunity to restart the procurement process and ensure that wider socio-economic factors could be taken into consideration. They have proved that today.

In response to the Transport Committee’s call on the Government to explain how their policies will achieve economic growth and tackle regional disparities, the Department cites the example of HS2. There is cross-party consensus that high-speed rail is the right way to deliver greater capacity and reduce journey times between our major cities. By linking to the existing east and west coast main lines, high-speed services will serve cities including not only Manchester, Sheffield and Leeds, but Glasgow, Edinburgh, Newcastle, Liverpool, York and Durham. Once again, however, the Government have missed a trick: why are they legislating only for the first phase of the new high-speed line, from London to Birmingham, when they could have given a real boost to cities in the north by taking the whole Y route forward as one project, opening up the possibility of beginning construction in the north and the south and accelerating the benefits north of Birmingham? I hope that the Minister will respond to the pleas from his hon. Friend the Member for Manchester, Withington (Mr Leech), who asked for faster progress on HS2 to help Manchester and other northern cities.

Labour has offered to work on the same cross-party basis to tackle the urgent need for extra capacity at Britain’s airports. The Government’s failure to set out any strategy for aviation, or even a plan to do so by the end of this Parliament, is putting jobs and growth at risk across the country. Regional airports have an important role to play. The hon. Member for Stockton South (James Wharton) mentioned Durham Tees Valley airport, and I know that my hon. Friend the Member for Sedgefield has led a local campaign on behalf of the airport, so Members on both sides of the House will look forward to the Minister’s response to that call for Government support.

[Phil Wilson]

The campaign in the area is a cross-party campaign. We have already arranged a meeting with the Minister of State on 24 April to discuss the public service obligation and the way forward. One of the reasons why One North East did not apply for a PSO was the cost that involved, and I am concerned about asking the LEP to do that. If One North East did not have the money, I am sure that the LEP will not. I think that we need to be a little more sophisticated in how we raise money to go ahead with this.

[Lilian Greenwood]

I thank my hon. Friend for that clarification. He is quite right that one of the effects of scrapping our regional development agencies has been to make co-ordination more difficult.

The Government’s call for airports to be “better not bigger” is not a policy but a slogan, and the blanket ban on expansion in the south-east makes no sense, but that does not mean any backing down from our commitment to tackle climate change. Any new capacity must go hand in hand with tougher targets to reduce carbon emissions from aviation. I hope that the Minister will take forward that work on a cross-party basis.

Tackling climate change is not just a challenge, but a huge opportunity for British business, so it is deeply disappointing that Ministers have reversed their commitment to support the development of a national public recharging network for lower-emission vehicles, instead leaving the roll-out of recharging infrastructure entirely to the private sector. That is a real missed opportunity when such cars could and should be a growing industry.

Families throughout the country are paying the price for the global financial crisis of four years ago, and whoever was in power would have had to make tough decisions on spending, but that is why it is so important that every penny the Government spend delivers on their overall objectives, and that in turn is why Transport Ministers are failing: they simply do not have a strategy to address needs of the country. Not only are they cutting too far, too fast, but they are making the wrong decisions—the wrong decisions to create the jobs that the economy so desperately needs, the wrong decisions to get people back into work and to support young people in education and training, the wrong decisions to support British businesses, and the wrong decisions to ease the cost of living for hard-working families.

It does not have to be that way. Labour would make tough decisions—we accept that there have to be significant cuts in spending—but we would ensure that all our efforts were focused on getting the economy moving again and on getting people into work. That is the only way to cut the deficit and we would ensure that every penny spent on transport served that purpose.

Civil Aviation Bill

Lord Wilson of Sedgefield Excerpts

Monday 30th January 2012 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

Aviation makes a major contribution to the UK economy: the industry makes up £19 billion to £20 billion a year of our gross domestic product and employs 600,000 to 700,000 people. My concern tonight, in the context of this Bill, is the future of regional airports and the connectivity they offer between the regions they serve and the rest of the world.

In 1995, Heathrow served 21 domestic destinations and today it serves only six, only two of which are in England. Durham Tees Valley airport in County Durham, which is in my constituency and has part of its runway in the Stockton North and Stockton South constituencies, was once connected to Heathrow, but in February 2009 British Midland International—bmi—withdrew its service. Durham Tees Valley still has a twice daily flight to Schiphol airport in Amsterdam, and Schiphol and Charles de Gaulle airport in Paris now serve more regional airports in the UK than does Heathrow. I understand that bmi withdrew its slots from Durham Tees Valley to Heathrow as it wanted to use them for more lucrative long-haul flights into the capital, but those slots have yet to be filled. Although it might make sense to have the long-haul flights, there is a problem for connectivity between the regions, economic development and the global economy.

BAA bills Heathrow as our global gateway, but that cannot be true if only two regional airports in England have access to the international links through that airport to the rest of the world. The route to Schiphol from Durham Tees Valley is excellent and serves the Tees valley well.

Let me tell hon. Members something about the Tees valley and why it is so important that we maintain the connectivity between the airport and the rest of the world. It has to do with the size of the industry in the area. The economy of the Tees valley is based on the largest integrated process industrial complex in the UK. It contains industries specialising in petrochemicals, energy, renewable energy, biofuel and steel making. It has the third largest port in the UK and there is also a world-class advanced engineering industry based on the design, construction and maintenance of petrochemical plants, power stations and major infrastructure such as bridges. In addition, the region has the Wilton centre, which is Europe’s largest non-military private sector research centre. The petrochemical industry alone contributes £3.5 billion to the UK economy and 70,000 UK jobs depend on it. On top of that, Hitachi Rail Europe is coming to Newton Aycliffe, which is in my constituency and about 12 miles to the west of the airport. Again, a worldwide industry has been attracted to the region.

Although we have the link to Schiphol, I understand that it does not provide a connection with Australia and that the number of flights that connect to the middle east and north America have reduced in recent years. That is why the routes into Heathrow are so important. As the bmi slots into Heathrow have yet to be filled, I want the Government to consider some kind of public service obligation so that the slots remain reserved for flights from Durham Tees Valley into Heathrow. I have been pressing for that for several years, even before 2010, when Labour was in power. I would like to have the opportunity to discuss the matter with the Minister, in a meeting if possible, to see whether we can make progress. At the moment, there are about three PSOs in the UK: two in Scotland and one in Wales. In Europe, however, there are about 250, and they keep regional airports connected to international hubs.

That proposal is important for Durham Tees Valley airport, especially today. As we know in the north-east, the airport is being put up for sale by Vancouver Airport Services and Peel Airports Ltd.

[Alex Cunningham (Stockton North) (Lab)]

My hon. Friend and neighbour has proved to be a great champion for our local airport, which, as he said, is up for sale. Does he agree that when considering the future of Durham Tees Valley airport, as well as taking into account all the points he has made, the directors must seriously consider all offers to secure an expert company that is interested in providing the widest range of services at the airport rather than potential owners who are simply interested in serving the interests of shareholders and are not committed to a long-term viable future for the airport?

[Phil Wilson]

My hon. Friend makes a very important point. Transparency is very important when it comes to the sale and I know that the board is meeting every week at the moment to ensure that everything is out in the open. It is vital that whoever takes over the airport ensures it is there for the benefit of all the region, not just the shareholders.

Five or six years ago, approximately 900,000 passengers a year used the airport, but that figure is now down to 180,000 or 190,000. The largest part of those passenger numbers comes from the KLM flights between Durham Tees Valley and Schiphol. It is important that in the sale of the airport we ensure we get someone who will invest in the facility.

The airport has a proud history. It was originally known as Goosepool airport and then as RAF Middleton St George, and it was an RAF Bomber Command station during world war two. The airfield began its life as Royal Air Force Station Goosepool and in 1941 became RAF Middleton St George. The aerodrome opened as a Bomber Command station in that same year and, after the war, it served various squadrons. In 1964 it was sold and became Teesside International airport and, in 2004, it became Durham Tees Valley airport.

I understand that there are several prospective buyers for the facility at Durham Tees Valley, and I want to make sure that, whatever happens, it remains a commercial airport. If that is not to be the case, I want to make sure that it still has an aviation purpose for the north-east, whether as a general aviation facility, a cargo facility or a commercial operation. It is vital that there is a future for some kind of aviation in the Tees valley in whatever guise, because the business is needed—as I have said, it is a massive industrial complex—the tourism is needed, and investment in the facility by whoever buys it is needed.

I want to see an aviation future for Durham Tees Valley because connectivity is very important to an area with such a huge and internationally important industrial base. It is important to keep a commercial airport, but there is also a great need for the wider aviation facility. There has been criticism of the airport in the local press, but now is not the time for criticising Durham Tees Valley—we should be supporting its sale. I want the airport to have a viable aviation future that will benefit the whole region, as it is an important economic asset. The time for criticism, celebration or both is after the sale period, which I understand will be in the next week or so. In the spirit of the cross-party consensus this Bill has secured, I hope that the cross-party consensus among Tees valley MPs will also continue.

Finally, I should like to ask a question about the Bill. I understand that some of the inspections that the CAA currently undertakes will continue but that their cost will be transferred to regional airports and ultimately, I should think, to the customer. To avoid placing unnecessary burdens on regional airports and customers, will the Minister look at this issue again and let us know in today’s debate whether that is case? In an age in which greater connectivity and globalisation are bringing the world closer together, regional airports and the regions they serve deserve to be part of that economic growth, connectivity and globalisation and the economic wealth they can bring.

High-speed Rail

Lord Wilson of Sedgefield Excerpts

Tuesday 10th January 2012 Commons Chamber

[Justine Greening]

I hope that I can provide reassurance. We have certainly developed the calculations on costs in line with Treasury guidance, which is very conservative. Of course I will be aiming, if at all possible, to have the project come in under budget, although I suspect that there will also be others who will have to manage the costs over the coming years.

[Phil Wilson (Sedgefield) (Lab)]

I commend the Secretary of State’s statement this afternoon. Is she aware that the High Speed 2 announcement could bring benefits to the north-east of England almost straight away? Hitachi Rail Europe, which wants to build its train factory in Newton Aycliffe in my constituency, has announced that it will bid for the rolling stock to be made there when the time comes, which could bring jobs to Durham, the Tees valley and the north-east of England.

[Justine Greening]

The hon. Gentleman points out the very welcome investment from Hitachi in his area. Combined with the unprecedented investment that the Government are making in our railways today and in future, which I have announced today, that bodes well for creating more jobs building rolling stock in the UK.

High Speed 2

Lord Wilson of Sedgefield Excerpts

Thursday 13th October 2011 Commons Chamber

[Dr Huppert]

As ever, I am delighted to agree with everything my hon. Friend says. Her constituents will benefit and the scheme will eventually need to continue, and I hope that it will be sooner rather than later.

There have been debates about the economics of High Speed 2, and I think we all agree that it is absolutely right that we scrutinise them. The solution to our chronic capacity problem must deliver value for money. We have heard debate about the exact facts and figures. The ones I have seen place some reliance on or about the generation of 40,000 jobs and £44 billion for the economy, but the real economic impact of high-speed rail lies in changes that are harder to quantify. For far too long we have focused on London and the south-east, and it is key that high-speed rail helps to address that problem. High-speed rail will enable businesses in our major cities to compete with those in the capital and south-east. It will provide larger talent pools and more potential clients, improve domestic tourism and help us to rebalance our economy away from the City.

We also need to look at the issue raised by the hon. Member for Wirral West (Esther McVey)—rail freight.

[Phil Wilson (Sedgefield) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

I am afraid not; I do not have enough time.

The number of container freights on a north-south axis has grown by 56% in the past eight years, leaving freight services, particularly around Liverpool, in a complete bottleneck. There are companies that would like to use rail freight much more, but simply cannot find the space to put the containers on the railway. We constantly have this tricky balance between keeping commuter services for those travelling to London and ensuring that businesses in the north have access to the freight services they need. We need both. In an advanced country that cares about sustainable growth in every region, this is not the trade-off we need.

I wish I had more time to talk about the environmental consequences, but I would hope that all hon. Members agree that decarbonising domestic transport is a crucial measure that needs to be taken and that modal shift is important in achieving that. A shift of 6 million air trips and 9 million road trips on to rail is definitely a significant step forwards.

High-speed rail is not some idealistic dream based on shaky, long-term assumptions; it is a logistical imperative. High-speed rail is vital for the long-term sustainability of our country’s infrastructure. The arguments for it heavily outweigh those against it, and I am delighted that the Government are taking it forward. I look forward to working closely with the Department for Transport, the Minister and other stakeholders to ensure that this project goes ahead and provides value for money for taxpayers and passengers alike, as well as providing the sustainable and efficient transport infrastructure that Britain is desperately lacking.

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

It is a pleasure to be able to contribute briefly to this debate. A number of points have been made by other hon. Members, including my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz), and I will not repeat those. However, I wanted to have the opportunity to make a couple of other points, particularly about Scotland.

First, I want to make the point clearly that better transport links have many and varied benefits for business and the wider economy, and that is as true in Scotland as it is in other parts of the United Kingdom. Sectors of the economy that are particularly important in Scotland—finance, tourism and the food and drink industries—respond positively to improvements in transport links. That is part of the case being made by business organisations, trade unions, Glasgow city council and Edinburgh city council, and a range of bodies in Scotland that very much support HS2. The hon. Member for Wirral West (Esther McVey) is no longer in her place, but I accept her point that a high-speed network alone does not draw business to the UK, and is not the complete answer. However, it is an important part of the answer, for Scotland as well as for the rest of the UK.

I wish to discuss the points made by the hon. Members for South Northamptonshire (Andrea Leadsom) and for Banbury (Tony Baldry) about the 40,000 jobs that would be created across the UK during the construction phase. I think I am right in saying that they both intimated that those jobs would be in the south-east of England. I say to both of them that that is not my experience of the jobs associated with other projects. For example, London 2012 work has gone to construction firms based in Glasgow, Edinburgh, Aberdeen, Carlisle, Manchester, Newcastle—and, no doubt, many other places.

[Phil Wilson]

It is not just the route and its construction that are important; the rolling stock is important too. Hitachi, which is going to build a rolling stock factory in Newton Aycliffe, in my patch, has already said that it will bid to make the rolling stock for this route. That means that the north-east would benefit even before the route actually got to the north-east of England and created thousands of jobs.

[Tom Greatrex]

My hon. Friend makes an important point, and I thank him for his intervention. What he says is also true of other firms—for example, those in my constituency that make the toughened glass for the windows of the rolling stock. A range of other supply chain benefits will accrue to a number of industries and companies, and will help to increase employability and skills in the economy.

Secondly, I wish to discuss the environmental impact. I do not want to talk about the number of trees that will be planted along the line, but there is an environmental impact and benefit through getting people to shift from air to rail. From my constituency it is about a 90-minute flight between Glasgow and London, and I have to admit that I fly more often than I probably should. Even when we take into account the time taken getting to and from airports, flying is still quicker than using the fastest of the trains on the west coast.

Intercity Express and Rail Electrification

Lord Wilson of Sedgefield Excerpts

Tuesday 1st March 2011 Commons Chamber

[Mr Hammond]

As I have said, my right hon. Friend the Secretary of State for Wales and I will continue actively to look at the case for electrification to Swansea. I said that we would do so in the light of developing service patterns. The important point is that once the valleys lines are electrified, it is quite possible that new electric services could be provided that head through Cardiff and to the west, which might change the economics, and thus the business case, for the Cardiff to Swansea section.

[Phil Wilson (Sedgefield) (Lab)]

I congratulate the Secretary of State on his announcement on the intercity express programme. As he knows, the investment and jobs involved are very important for my constituents in north-east England. Will he join me in congratulating the Back on Track campaign, which was led by The Northern Echo, Durham county council, the chamber of commerce and the northern TUC? Will he also congratulate my constituents on the way in which they brought this matter to the attention of the Department for Transport, and helped it to make the right decision?

[Mr Hammond]

I am happy to acknowledge the hon. Gentleman’s tireless battle for the IEP. He has arranged for various worthies from his constituency to visit me and the Department to make the case. This has been a complex process with legal, technical, financial and commercial issues to resolve. We have worked closely with Hitachi to get to this point. I understand that he wanted us to get here more quickly, but I assure him that we have progressed as fast as possible.

Rail Investment

Lord Wilson of Sedgefield Excerpts

Thursday 25th November 2010 Commons Chamber

[Mr Hammond]

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

[Phil Wilson (Sedgefield) (Lab)]

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

[Mr Hammond]

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

Transport (Investment)

Lord Wilson of Sedgefield Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hammond]

I commend my hon. Friend for his tenacity. I know that he campaigned on this issue for many years before he arrived in this place, and he will no doubt continue to campaign on it for many years to come. The scheme is not currently on the list that I have published today and, as I have said to other hon. Members, it will be some time before we open the list to additional bids for future spending review periods. I do not want to encourage local authorities to spend significant sums of taxpayers’ money on schemes that I know we will not be able to fund in the foreseeable future.

[Phil Wilson (Sedgefield) (Lab)]

On “Question Time” last week, the Secretary of State raised expectations in the north-east on the Intercity Express programme and the potential for the building of a factory by Hitachi in Newton Aycliffe in my constituency. How long will we have to wait for a decision on that? It has raised expectations in the area, but will we get a response before Christmas?

[Mr Hammond]

I hope so. I said at the beginning of my statement, but perhaps I was being obtuse, that other major rail projects are under consideration, and I hope to be able to make an announcement to the House in the next few weeks. The Intercity Express programme is one of those under consideration. As the hon. Gentleman will know, it is an extremely complex package of projects, and the new bid that we have received from Agility Trains requires careful analysis at a technical, financial and legal level. That work is ongoing, and once we have completed it, I will be in a position to make an announcement.

Inter-city Express Programme

Lord Wilson of Sedgefield Excerpts

Wednesday 15th September 2010 Westminster Hall

[Phil Wilson (Sedgefield) (Lab)]

I asked for the debate today to give voice to the north-east’s campaign to ensure that the inter-city express programme is allowed to go ahead, due to the economic impact it would have on the region. It would have profound implications for the north-east because the investment would be the biggest in the north-east since Nissan in the 1980s. That is how important it is, not only for the north-east, but for the rail infrastructure and the UK economy at large. Hitachi has already said to me in writing that the preferred site for the factory to manufacture the trains would be in Newton Aycliffe in my constituency.

My area’s involvement in the railways goes back to their beginning. Locomotion No. 1 travelled along the railway line a few hundred yards from the potential factory site on its way to Darlington in September 1825 to start the Stockton and Darlington Railway. That is how long my area has had its historic relationship with the railway. For something like 160 years, train building was a massive industry in south Durham, just a few miles away from Newton Aycliffe at Shildon wagon works, which closed in 1984 with the loss of more than 2,000 jobs. The inter-city express programme provides us with the opportunity to bring train building home.

In 2007, the Department for Transport issued an invitation to tender to transform the UK’s inter-city train services and replace the outdated diesel high-speed trains that have provided the service since the 1970s. Agility Trains, a joint venture between Hitachi and John Laing, won that contract. Agility Trains will deliver state-of-the-art super-express trains based on the highly successful 395 Javelin trains in Kent, which have recently won a Passenger Focus independent survey for being the best trains. Hitachi also manufactures the bullet train in Japan.

If the programme goes ahead, Hitachi will build a purpose-built factory in my constituency alongside the second largest industrial estate in the north-east. The best way of describing the inter-city express programme is as a service and supply contract to provide new trains and a dramatic improvement to the inter-city services on the east coast main line between London, south Wales and the south-west. The contract was privately financed and managed on a pay-as-you-go basis, which means that payments are not due until the trains are delivered in 2015, after the next election. The cost of the service is spread over 27 years of operation, with payments made on a per train, per day basis. Payments depend upon delivery of a clean, reliable and fully serviceable train, thereby ensuring that the interests of the supplier—Hitachi—and the passengers are aligned.

The programme will deliver a significant increase in seating capacity, a reduction in journey times and a huge increase in reliability and comfort without need for hugely expensive track upgrades. It will also mean that passengers will be able to travel on trains that do not dump toilet waste on the track. We need to move on from the Austin Allegro era of technology.

On 26 February 2010, a written ministerial statement said that Sir Andrew Foster would subject the inter-city express scheme to a value-for-money assessment. On 6 July, the Secretary of State for Transport published the results of that assessment:

“Sir Andrew suggests that the inter-city express proposition is ‘positive and attractive’ in a number of ways. He suggests that the PFI-style funding arrangement is novel and well aligned in terms of financial incentives. The faster acceleration and longer carriages would have a positive impact on network and passenger capacity, and the specification has also taken network sustainability and environmental imperatives seriously.”

Sir Andrew raised some technical questions about the trains, but the Secretary of State said:

“I see this as a lesser issue”.—[Official Report, 6 July 2010; Vol. 513, c. 10WS.]

Hitachi has been working closely with the Department since July regarding the issues raised by Sir Andrew, and I am sure that they can be resolved. It wants to simplify the bi-modal technology for example, to bring down costs. Bearing that in mind, the economic case for the inter-city express programme to go ahead is significant.

Not only will the programme bring improved rolling stock to the railway infrastructure, which is required in the 21st century if the economy is to grow, it will also mean so much to the economic growth of the north-east. The programme helps fulfil the Government’s stated aim of rebalancing the north-east economy in favour of private sector growth. Public financial input will not be needed until after the next election, and will be recouped through the innovative financial formula Hitachi has drawn up.

Some argue that it should be left to the train operators to acquire the trains they need, but, surely, economy of scale means that this proposal is the cheaper option, and it offers sufficient volume to attract a major manufacturer to the UK. Therefore, it goes some way towards meeting the Government’s stated aim of growing the private sector—something we all want to see—and Hitachi will put in the investment up front. If the inter-city express programme goes ahead, and I know that the Minister cannot give an answer today, Hitachi has said that its preferred site is Newton Aycliffe. In a letter to me, it stated that, on a range of criteria, including required land size, test track availability, road access, proximity to deep sea ports, local labour availability and flexibility, and ease of business with local and regional agencies and authorities, County Durham and Newton Aycliffe scored highly. That is a tribute to the people of Newton Aycliffe, to local decision makers, and to the north-east’s ability to attract foreign investors, of which there are 500, about 100 of which are in County Durham.

However, what benefits will Hitachi bring to the region? Some 800 direct jobs; up to 9,000 jobs in the supply chain, seven out of 10 of which will be in manufacturing, mainly in the region but also nationally; and for every £1 of investment there will be £48 return over 20 years. Hitachi will start building a £90 million purpose-built factory next year. Some 200 construction jobs will be generated, and private sector investment precedes any public sector investment, which will be over a 20-year-plus period. Over two decades, the region will benefit in net gross value added terms by £660 million, and Teesport will also benefit because some components will be imported from Japan.

The inter-city express programme will replace the rolling stock on the east coast main line. As someone who uses the east coast main line weekly, I know that the rolling stock needs replacing. At present, demand outstrips supply on the line. With rail travel from the north-east to London costing three times as much as flying, and as there are no longer flights from Durham Tees Valley airport to Heathrow, but only from Newcastle, there is an acute problem that needs to be remedied. The new carriages with extra passenger capacity will help to resolve the problem.

The 800 jobs will help to pump much needed expenditure into the local economy through wages. Newton Aycliffe town centre is going through a period of regeneration, and the boost to the local economy that Hitachi offers will help see the local shops boom and breathe new life into the town. Newton Aycliffe has the skills that Hitachi requires. The recent global economic downturn has seen many people with those skills put out of work. The initiative will help to put those idle hands back to work.

I have said that the initiative will match some of the Government’s stated objectives—rebalancing the north-east economy in favour of the private sector and providing work to those who have skills, as well as offering apprenticeships to our young people who do not have those skills. The Government want to create 2 million private sector jobs in the next five years, and this initiative will help to do that. The programme is private-sector led. Hitachi has also committed to using local suppliers first and foremost. If it goes ahead, the investment and the presence of Hitachi will provide the north-east with the largest private sector investment since Nissan 25 years ago.

The issue has united the north-east in a campaign to ensure that the inter-city express, and Hitachi’s presence in Newton Aycliffe, goes ahead, and to put the case for the region. The groups that have got together to do that include: North East chamber of commerce; Durham county council, with the support of the leaders of the Conservative and Liberal groups, as well as the controlling Labour group; the Federation of Small Businesses; the northern TUC and Unite. They have come together to promote the importance of this project to the north-east. The Northern Echo is running a “back on track” campaign because this is so important to local people. A petition launched by the partners is attracting thousands of signatures.

The Secretary of State for Transport has kindly agreed to meet a delegation of business people from the north-east next Tuesday so that we can again make the case for the opportunities that the proposal will provide for the north-east. The partnership has produced a report stating the north-east’s case for the inter-city programme to go ahead, and I sent a copy to the Minister earlier today. I hope that she found it useful. The north-east has learned over the years to stand up for itself, and is saying “We’re here and we can do the job.” Hitachi, one of the biggest companies in the world, has faith in the region, and I hope that the Government also have faith in it.

The right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said:

“I welcome Hitachi’s interest in building rolling stock in the North-East, and I very much hope the project will go ahead—it would bring enormous benefit to our region.”

In a letter to me, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) said:

“I am pleased that Hitachi has announced publicly that it intends to establish a new train assembly plant in the UK, should the Intercity Express Programme go ahead. We recognise that this would represent a significant boost to the economy in your constituency. This is to be welcome.”

The Foreign Secretary said in a speech in Tokyo on 12 August:

“I am…here to announce the significant new emphasis that the British Foreign Office will give to providing direct support to the UK economy, helping British business secure new opportunities in the emerging economies and putting our diplomatic weight behind British enterprise as well as helping to bring Japanese and other investors to Britain.”

He went on to say:

“We will work alongside British businesses and the rest of Government and other Governments around the world to use our political influence to help to unblock obstacles to commercial success”.

The Secretary of State for Transport met the president of Hitachi, and the Japanese ambassador, and talks have taken place between our Prime Minister and the Prime Minister of Japan because the issue is so important for bilateral relations.

I understand that a decision on the programme will be made as part of the comprehensive spending review. Will the Minister tell me whether the announcement will be part of the statement, or ancillary to it? How are the talks with Hitachi going since the Secretary of State made his written statement in July? How does the Department’s position marry up with the Foreign Secretary’s position that everything must be done to attract Japanese companies to Britain, and to remove any obstacles to that? What prospect does the Minister see for the north-east’s economy if the proposal does not go ahead?

I am not a deficit denier, but one way of solving the problems of the deficit is to increase the economy by increasing the private sector. The inter-city express programme and the Hitachi plan for locating in the north-east would do just that. When the decision on the inter-city express programme is eventually made, I hope that those who make it know the difference between slimming and starving, because starving the north-east’s economy is not the answer.

I am here today to promote the interests of my constituents and those of the north-east. There is great support in the region throughout businesses and parties. I hope that the Minister will consider these representations when her colleagues make the final decision on the inter-city express programme, and that they make the right decision. I believe she knows that that is to let the project go ahead.

--- Later in debate ---

[Phil Wilson]

Does the right hon. Lady agree with me that the answer is not to give the existing rolling stock a lick of paint, but to invest in the infrastructure? The rolling stock has been around since the 1970s, and the technology that we have brought on board through Hitachi is cutting-edge. The trains that it uses are comparable with the Javelin ones used in Kent, which are some of the best in the country. The kind of technology that Hitachi wants to bring on board is suitable for people in the north-east of England and elsewhere who would benefit from it.

[Mrs Villiers]

I can assure the hon. Gentleman that the respective merits of the different options will be carefully and rigorously considered before a decision is made. This entire debate will be a helpful contribution to the decision-making process.

The hon. Gentleman mentioned that the Secretary of State for Transport has met the president of Hitachi, as has the Secretary of State for Business, Innovation and Skills. I have discussed the project with the former Japanese Minister for Transport, and the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), discussed the matter on a visit to Japan. We are taking the concerns of the Japanese Government on board in discussions on the process. Agility’s proposals are due shortly, and they are likely to include plans to standardise the design of the new trains, as was recently reported in the railway press. I am also advised that Agility expects to offer a significant cost-saving, while still meeting the specification that it was originally asked to meet. We will then be able to complete our assessment of both the IEP and the credible alternatives on an equal footing.

In conclusion, I would like to assure the hon. Gentleman that the Government will take into account the representations that we have received from him today, and the representations in the report that he has submitted to us, along with those that he and colleagues have made in the past. The decision on the future of the IEP will be made on the basis of the fullest possible evaluation of all the relevant matters. I am, of course, well aware that the recent period of uncertainty has been a cause for concern to those with an interest in the project, such as the hon. Gentleman and his constituents, and the Government really appreciate the patience shown by all concerned, not least Agility Trains. However, there is a complex interaction between the IEP and other key programmes under review as part of the comprehensive spending review. In light of that inescapable fact, it seemed impossible to make a sensible and objective decision on the IEP in isolation from the conclusions that we have to reach on those other interdependent projects, and from the overall decisions on the resources available for transport infrastructure.

Although the stage that we have reached means that I cannot give the hon. Gentleman all the answers on the programme, as he has kindly acknowledged, the Government are anxious to resolve the matter, and we will convey the decision to the House as soon as we can, as part of the spending review process in October. I thank the hon. Gentleman again for his contribution, and I look forward to continuing discussions with him on the subject. As I say, we will report to the House as soon as is practical regarding this decision, which is crucial not just for the north-east but for the future of the railway network in this country.

Oral Answers to Questions

Lord Wilson of Sedgefield Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Hammond]

The previous Government commissioned a report from Sir Andrew Foster, which has now been delivered. It was a detailed piece of work containing a lot of recommendations, and one of Sir Andrew’s suggestions was that we should review the possibility of an upgrade and life extension of the existing 125 fleet. That is one option that we will consider during the pause that I mentioned.

[Phil Wilson (Sedgefield) (Lab)]

If the intercity express programme survives the comprehensive spending review, Hitachi intends to build the trains in Newton Aycliffe in my constituency, creating hundreds of jobs there and thousands in the manufacturing supply chain. It would be one of the biggest investments in the north-east since Nissan. Would the Minister be prepared to meet me and a delegation of north-east businessmen and trade unionists so that we can get the point across about how important the scheme is to the north-east of England?

[Mr Hammond]

I am always happy to meet Members, and I would be very happy to meet the hon. Gentleman, but I can tell him that I met the president of Hitachi recently on his visit from Tokyo, and that I have met the Japanese ambassador, and they forcefully made the same points as him. We will of course take them into account.

I should perhaps say that Hitachi is also interested in other rail projects in the UK, and we have heard very encouraging signs that the company intends to establish a serious presence in the UK as part of our future rail infrastructure development.