High Speed 2

Theresa Villiers Excerpts

Tuesday 23rd November 2010 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In the brief time that I have available, I will try to run through the points made by right hon. and hon. Members, and I will write to them about any points that time prevents me from covering now.

I am very grateful to have support for high-speed rail from across the House, across parties and across the country. That support is very welcome. There was a particularly vocal presence in the debate today from Yorkshire, which was particularly welcome.

However, we recognise that it is vitally important to think with great care about the local environmental impact of the project. Of course, we had some very comprehensive accounts of the potential impact, first from my hon. Friend the Member for Wycombe (Steve Baker) and then from my hon. Friend the Member for North Warwickshire (Dan Byles). It is important that they are here in Westminster Hall and able to put their constituents’ point of view.

I strongly believe that careful mitigation measures can eliminate the most intrusive local impacts of high-speed rail. Modern engineering techniques give us an expanding range of ways to use sensitive design to make transport infrastructure easier to live with and less intrusive; a number of Members have referred to the example of High Speed 1, where that mitigation work has been done with some success in many areas.

I believe that it is possible to find a solution that is balanced and fair; that generates the significant economic benefits of high-speed rail for the country as a whole, and that is fair to the local communities that are directly affected by whatever line of route is ultimately chosen. Hopefully, this debate will take us closer to finding a solution and choosing that route.

We intend the consultation to be inclusive, wide-ranging and comprehensive, providing a range of opportunities for Members and their constituents to go through these kinds of concerns about the impact on landscapes and communities. Our consultation is designed to run for about five months, which is longer than the statutory minimum. We take this process very seriously, because we know the gravity of the concern that is felt in some communities.

The business case for high-speed rail was discussed by a number of Members. We are absolutely confident about the very significant benefits that a line from London to Birmingham would generate and we believe that those economic benefits are even more significant when they are linked to a “Y”-shaped high-speed rail network that connects the capital with Birmingham, Manchester and Leeds.

I welcome the comments of my hon. Friends the Members for Warrington South (David Mowat) and for Calder Valley (Craig Whittaker) about the importance of using transport infrastructure to try to remedy imbalances between economic prosperity in different parts of the country. There is strong local support in much of the country for high-speed rail.

In answer to the questions from a number of Members about Scotland, as the hon. Member for Denton and Reddish (Andrew Gwynne)—the shadow Rail Minister—has already pointed out, the “Y”-shaped network to deliver high-speed rail to Manchester and Leeds could enable us to deliver journey times to London from Edinburgh and Glasgow of about three and a half hours. There is also the issue of promoting the air-to-rail switch, which is so important to the hon. Member for Cheltenham (Martin Horwood). In due course, we certainly want to see a genuinely national network built, and that is why we are in regular dialogue with the Scottish Government. We are happy to work with them on establishing how we bring that network about in the future.

A number of Members have talked about the carbon impact of high-speed rail. I believe that high-speed rail can play an important role in our plans to develop a low-carbon economy, particularly by promoting the air-to-rail switch that a number of Members referred to. Even with our current energy generation mix, high-speed rail is a much lower-carbon option than flying.

My hon. Friend the Member for Wycombe argued that the Government had overstated the expected increase in demand. He and a number of other Members sought to challenge the business case. However, there is no doubt that the benefits generated by the extension of high-speed rail to Birmingham will exceed the cost of building the line.

Furthermore, it is clear that there is already a significant crowding problem on our railways. The simple fact is that we need this new railway. Important parts of our rail network are already suffering from serious overcrowding problems. As my hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned, one only needs to go to Euston on a Friday night to see how popular the railways have become. There is simply no realistic alternative that would give us the level of benefit that high-speed rail will generate.

[Andrea Leadsom]

Does my right hon. Friend the Minister accept, however, that greater consideration should be given to using an existing transport corridor rather than tearing through great swathes of English countryside?

[Mrs Villiers]

It is always the case that, when efforts are made to construct these major transport projects, there are advantages to using existing transport corridors. However, sometimes using those existing corridors is simply not possible. Nevertheless, the Secretary of State for Transport asked High Speed 2 to look again at the route that it had proposed and at the environmental impact of that route. In a very short time, we will publish a package for consultation that will take on board a number of the concerns that have already been raised with the Government and with HS 2, to mitigate the environmental impact of the project.

I want to go back to the points that were made about using upgrades to the conventional rail network to relieve the capacity problem. It is simply not possible to relieve the capacity problem without a new line. Without delivering a further significant uplift in rail capacity, some of our key transport corridors will become even more overcrowded in the years to come. I strongly believe that high-speed rail is the best way to deliver that new capacity, not least because it would free up space on existing networks for more commuter, regional and freight services. My hon. Friend the Member for Rugby (Mark Pawsey) mentioned that issue and I think that there is potential for his constituents to benefit from the extra space on the west coast main line that will be released by high-speed rail. Dramatically improving connectivity between a number of our most important cities has the potential to change the economic geography of the country.

As for the environmental impact, I recognise that our plans for high-speed rail are already having an impact on some communities, even in advance of the final decisions on the project. That is why we have launched an exceptional hardship scheme, to assist those with an urgent need to sell their properties and move home.

The Secretary of State has made it clear that, as and when any final route is chosen, we will put measures in place to address blight, and those measures will go well beyond the requirements of statute. I say that in response to a number of points that were made about the exceptional hardship scheme. My hon. Friend the Member for North Warwickshire had some concerns about how the scheme was working. I was not aware of those difficulties, so if he wants to write to me about the specific issues I will be happy to look into them.

Earlier this year, the Secretary of State visited the line of route that has been recommended by HS 2 Ltd. He acknowledges the vital importance of designing a new high-speed rail line in a way that will reduce local impact where possible and that will take on board the types of points that we have heard this morning.

We fully recognise the need to balance the benefits of the high-speed rail project with the local impact on landscape and communities. In the summer, the Secretary of State instructed HS 2 to consider how best to improve its recommended route 3 to reduce any negative social and environmental impacts. An initial report has already been published that identifies a number of ways to reduce problems on the northern part of HS 2’s preferred route. That work is continuing in relation to a number of other areas of sensitivity—

[Mr Mike Weir (in the Chair)]

Order. I am afraid that we have run out of time for this debate. We now move on to the next debate.

National Express East Anglia

Theresa Villiers Excerpts

Tuesday 2nd November 2010 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I join my hon. Friend the Member for Witham (Priti Patel) in saying that it is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate her on securing the debate and on presenting her case with such energy and tenacity. It gives us a useful opportunity to consider the performance of rail services on the East Anglia franchise. I pay tribute to the energetic campaign she has run to champion the interests of her commuting constituents.

I want first to outline some of the Government’s broader plans for reform of the railways, because they may help to address a number of the issues that have been raised today. Secondly, I will focus on my hon. Friend’s concerns about the works under way at Marks Tey station, and Mr Clark’s retailing stand. Thirdly, I will consider the general performance of National Express East Anglia, and fourthly, I will attend to my hon. Friend’s points about the new timetable

Just a few months ago I announced that the NXEA franchise would be extended by a little over six months. I chose to exercise the Government’s contractual right to do that to allow the outcome of our consultation on rail franchising to be taken on board in the letting of the new franchise. That extension will also enable the interim conclusions of the McNulty study on rail value for money to inform our decisions on the future of rail services in East Anglia. Of course, I urge my hon. Friend to make her views about current services known when the re-let takes place. The record of all the bidders for the potential new franchise will be taken into account in assessing their suitability to take it on.

The Government believe that we need to reform the railways to ensure they deliver better value for money. My hon. Friend emphasised that concern. Unless we get costs down, we will not be able to bring about the improvements to services and capacity that passengers want, so we are committed to reforming Network Rail. When Labour established the company, it failed to put in place sufficiently robust accountability mechanisms to ensure that Network Rail would deliver value for money and high-quality performance at the level needed for a modern and successful railway. We need to tackle that accountability gap, and to get the people running our tracks and trains working more efficiently and cohesively together. We also need to modernise the franchising system. We propose to move to longer franchises to give the private sector the certainty it needs to help us deliver vital improvements, such as better services and stations. They should also help us in providing better rolling stock, which I know is a serious concern for my hon. Friend and many of her constituents.

The reforms are aimed at moving away from a system in which Whitehall specifies detailed and prescriptive inputs into franchises. Instead, we want a stronger focus on the quality of outcomes for passengers, giving more flexibility to the professionals who run our railways to apply innovation and enterprise in working out the best way to deliver those outcomes. Let me assure the House that the outcomes we set will be demanding for the franchise my hon. Friend is concerned about and for all the rest for which we have responsibility. Operators who do not comply with franchise requirements will face sanctions, including termination of the franchise in the most serious cases. I expect our reform plans for Network Rail and franchising to get the two sides of the rail industry working more cohesively together, and to ensure that they are more responsive to passenger needs. I therefore believe they will help to address a range of the issues raised by my hon. Friend this afternoon.

As to the national station improvement programme and the works that are under way at Marks Tey, a budget of £150 million has been allocated to the programme to improve the passenger environment at about 150 medium-sized stations in the current railway control period. The improvement scheme at Marks Tey station includes the provision of a modern ticket office building and booking hall area, and a small retailing opportunity. We hope that the project will give passengers protection from the weather, which they currently lack. It will also improve staff accommodation, which is apparently in such disrepair that the station office suffers from repeated flooding. The London-bound platform will be widened to improve circulation for passengers. New waiting shelters will also be installed on that platform. The station forecourt will be redesigned to provide a passenger pick-up and drop-off area and improvements to cycle and motorbike parking.

My hon. Friend is concerned that the work under way is not the best way to deploy taxpayers’ money. Decisions on how to deploy the budget were devolved to the rail industry, but they are overseen by an NSIP project delivery board and ultimately by the rail regulator, to ensure that proper checks are kept on the way in which the rail industry spends taxpayers’ money. I am informed that national passenger survey scores were taken into account in deciding which stations were most in need of improvement, but in addition—I know my hon. Friend is a little sceptical about their value—comments from local stakeholders were taken on board. I understand that with respect to Marks Tey, a value-for-money assessment was carried out by Network Rail and NXEA. NXEA consulted a range of stakeholders, including some local rail user groups and station tenants, local authorities, rail staff and Passenger Focus. It is unfortunate that the train operator’s customer surgeries at Marks Tey took place only fairly late in the day, after most of the key decisions had been made about the shape of the upgrade programme. I understand my hon. Friend’s concerns about that, but I have received some assurance that customer feedback from an earlier point was taken on board in putting together the improvement proposals. Clearly it would have been preferable if NXEA had carried out those customer surgeries earlier.

[Priti Patel]

I would welcome an assurance that for future developments of this nature, there will be greater transparency in the consultation and dialogue with communities. It is all well and good receiving a survey and ticking a box, but there is the question of understanding the intricacies of planning and the impact on the community and businesses. That should be taken into consideration.

[Mrs Villiers]

I do not think it would appropriate for us to mandate a model for consultation, but across the board we encourage train operators to engage extensively with passengers and local stakeholders on decisions of this kind, and a range of other issues that are important for commuters.

National Express has advised my officials that passengers have commented on the queues and congestion caused by there being only one poorly positioned ticket window at Marks Tey. Passengers interchanging between the main line and Sudbury have also complained about the state of the toilets and the waiting shelters on platforms 3 and 4. However, it seems that improvement works at Marks Tey are designed to relieve those conditions.

The key issue for my hon. Friend today is the future of Nigel Clark’s newspaper and coffee retailing business. My hon. Friend has fought a robust campaign to secure the future of Mr Clark’s news stand and the service it provides to her commuting constituents. If I remember correctly, I prepared a briefing for the Prime Minister on the subject, so I know that my hon. Friend has taken the matter to the top; I am impressed by her determination. However, my answer must be the same as that which I gave in correspondence.

It is not for me, the Minister responsible for rail, or for the Department for Transport to dictate how train operators should structure retail opportunities at their stations. However, my hon. Friend knows that I have passed her concerns to NXEA, along with the petition that she delivered to me on the subject. She has put her concerns on the record, and fought a good campaign. It is for National Express and Mr Clark to resolve matters, no doubt assisted by my hon. Friend’s robust intervention. I understand that a six-month lease for a temporary unit has been agreed, although my hon. Friend has expressed some concern about its location. I hope that a longer term solution will be found in due course. I know that Mr Clark and others will have the chance to submit proposals for use of a new and permanent retail unit should they wish to do so. I hope that the matter will be resolved, and I urge both sides to find a satisfactory outcome.

I turn to the overall performance of NXEA. The latest period for which complete performance data are available shows that 90.9% of NXEA trains arrived on time. That is according to the moving annual average. However, those figures are aggregated across a diverse franchise that covers long-distance, rural and commuter services, so they do not necessarily reflect the experience of commuters using the services in my hon. Friend’s constituency. Nevertheless, as she pointed out, satisfaction with NXEA is lower than for train operators in other places, so there is clearly room for improvement, particularly in light of what she said today.

A key task for the Government and the Department for Transport is to protect the passenger and hold train operators to account for their performance, particularly in relation to some recent reliability problems. For example, in early summer NXEA suffered some significant problems with its fleet, which caused a large number of delays and cancellations. The Department took up the problem with NXEA. As a result, an emergency action plan has been adopted. Part of that plan involved hiring additional engineering staff, who were placed at Liverpool Street station to try to deal with technical faults on the spot, in order to keep the trains in service. I gather that that has had a positive impact and that fleet performance has improved considerably.

I emphasise that reliability issues on the rail network in my hon. Friend’s constituency are not solely down to National Express East Anglia. Another significant factor is the performance of Network Rail. According to the latest industry figures, approximately 70% of passenger delays on the line are caused by Network Rail or other train operators. A significant amount of work is under way to improve reliability on the great eastern main line route. Most of the overhead electrical equipment between Liverpool Street and Colchester stations dates from the late 1950s, and extensive renewal work is being undertaken by Network Rail on the Liverpool Street to Chelmsford section. That work is due to be completed by 2012, and it will provide real improvements in reliability. Problems with the ageing infrastructure are one reason for the concerns expressed by my hon. Friend’s constituents.

Every passenger dreads hearing the terrible words “planned engineering work”. However, when scheduling maintenance and renewals work, the rail industry always faces a difficult balancing act. On the one hand it needs to deliver the relevant work in an efficient and cost-effective manner; on the other it is essential to minimise disruption for passengers whenever possible. Because of the scale of work needed on the East Anglia routes, there has been a long series of weekend track possessions. No matter how much care is taken, is inevitable that possessions will cause some disruption, but on the routes in question it sometimes results from delays in Network Rail handing back possession to National Express East Anglia. If the possession overruns, the train operator does not gain access to the tracks at the scheduled time.

Such disruption can be considerable, especially for passengers facing the dreary Monday morning commute. It is such problems that we need to address in our rail reform programme; we must ensure that Network Rail becomes more responsive to customer concerns about issues such as track possessions and overruns, and that it improves its performance overall in providing an infrastructure that keeps services running. We are very focused on those reforms as well as on reforming the franchise system. The twin tracks of reform are designed to deliver the enhanced levels of improvement necessary to address the problems my hon. Friend has highlighted.

The Office of Rail Regulation is responsible for regulating Network Rail’s performance and its stewardship of the national network. In addition, I regularly meet senior representatives of the ORR and rail industry to discuss operational performance and the measures being taken to address problems. I have raised the issue of the performance of the East Anglia routes at this regular forum. In addition, officials at the Department for Transport are in regular contact with train operators to discuss service reliability; and targets for each operator are closely monitored.

The third concern raised by my hon. Friend relates to the timetable to be introduced in December. The Government are funding increased capacity for the NXEA franchise, but that has meant a significant recasting of the timetable. In order to get a timetable that maximises the efficient use of the network and ensures overall passenger benefits, a small number of stations are left with longer gaps between trains. My hon. Friend referred to two of them. Unfortunately, there is no getting away from the fact that difficult trade-offs have to be made and conflicts resolved between the various passenger groups. Efforts to get the maximum efficient use out of the network will sometimes mean that such conflicts are resolved in favour of the busier journeys.

I have listened carefully to my hon. Friend, and I emphasise that it is important that the operator endeavour to keep instances of extended gaps between services to a minimum. The new timetable was developed following extensive consultation during the summer of 2009. I have seen no evidence that the train operators acted unreasonably in making their decisions; but when the new franchise is re-let, timetabling with be considered afresh. That will give my hon. Friend an important opportunity to make further representation.

Our rail reforms are designed to make the rail industry perform more efficiently and respond more effectively to the sort of problems highlighted by my hon. Friend. Programmes to expand capacity on the East Anglia franchise and to renew and improve the infrastructure in order to ensure more reliable services are already under way. Although we had to take tough decisions on rail fares, we have made it clear that the three-year rail fare increase will enable us to deliver the upgrades that are vital to improving life for passengers and to securing our long-term economic competitiveness.

Oral Answers to Questions

Theresa Villiers Excerpts

Thursday 28th October 2010 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

1. What recent representations he has received on the method of payment of tolls on the Severn bridges; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Department for Transport has recently received representations from the Wales Office about the method of payment on the Severn bridges. The Secretary of State has met the Deputy First Minister, and payment methods at the Severn crossings were discussed.

[Jessica Morden]

The facility enabling people to pay with credit and debit cards—for which I was grateful—was introduced in time for the Ryder cup, only to be whisked away again the minute the event was over. That has caused confusion. My constituents would like to pay by modern methods, which is fair enough. Can the Minister assure me that an end to the situation is in sight?

[Mrs Villiers]

I can. I know that a long-running campaign has been conducted by a number of Members.

As the hon. Lady says, the system was introduced for the Ryder cup. We considered it important to meet the deadline, given the significance of the event. The temporary scheme has been withdrawn for the moment, but is due to be back in operation on Friday next week. That gives us a chance to do some more work in order to make it more efficient, but there will be further work to make it more efficient still. We hope to introduce a system in the new year that will not require PINs. The temporary system does require them, and that causes delays and adds to congestion.

[Peter Aldous (Waveney) (Con)]

2. What steps he is taking to ensure the economic sustainability of the rail network.

--- Later in debate ---

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Government recognise that redoubling the railway between Swindon and Kemble could generate important passenger benefits and improve resilience by providing a diversionary route for the Great Western main line to Wales. Unfortunately, the need to address the deficit means that we are not able to commit Government funding to this project at present, but it remains our aspiration to take it forward in the future.

[Mr Robertson]

I thank the Minister for that response, but my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) and I have been campaigning on this issue and on the issue of improving the A417/419 road. The absence of either of those schemes impedes travel between Gloucestershire and London, and that is detrimental to Gloucestershire’s economy. Will she revisit both those schemes as soon as possible?

[Mrs Villiers]

I am very much aware of the campaign that my hon. Friend has run, alongside my hon. Friend the Member for The Cotswolds and other local MPs, such as the hon. Member for Cheltenham (Martin Horwood). I have met a number of MPs to discuss this project and we recognise that it is a good scheme. Important work is being done through the Grip 4 study, which is due to conclude shortly. We hope that we will be able to fund this scheme, but at the moment the deficit—the significant crisis in the public finances—that we have inherited means that we cannot take forward all the good schemes that are on the table. There is no doubt, however, that this scheme will be a serious contender when we assess these schemes again in relation to the next railway control period.

[Tony Baldry (Banbury) (Con)]

7. If his Department will fund (a) tunnelling and culverting work and (b) other mitigation work arising from the construction of any future rail line as part of the High Speed 2 project.

--- Later in debate ---

[David Tredinnick (Bosworth) (Con)]

11. What proposals for improvements to the M1-M6 junction he is considering; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I refer my hon. Friend to the oral statement made by the Secretary of State for Transport to the House on 26 October, and the supporting documentation. The preferred option for improving the junction is the proposal announced in February 2009 to provide free-flowing traffic links between the A14, the M1 and the M6.

[David Tredinnick]

Does my hon. Friend agree that that is one of the most dangerous junctions and one of the most important junctions on the motorway network? When does she expect the works there to be completed, and what other projects do the Government have to improve the M1 and M6 motorways?

[Mrs Villiers]

I agree that that is a very important junction on our strategic road network. That is one of the reasons why we have prioritised funding for the project at a time of intense pressure on the public finances because of the deficit that we inherited. I also agree that road safety is an important issue in this case. The Highways Agency is working hard to manage and mitigate the road safety impact of the current junction, but we believe that the scheme will provide additional long-term road safety benefits. The scheme is not likely to be able to be progressed before 2015, but we are working on a revised timetable, with a view to construction beginning some time after that period.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Another important junction that has congestion problems and very poor design is junction 13 on the M60 at my Worsley constituency, but instead of doing something about junction design and improving the safety and other aspects there, Ministers have pushed forward with a white elephant of a scheme to add another lane to the motorway at that point. I and my constituents have objected to that from the start. The additional lane will blight the lives of people who live near the motorway. Given that they cannot push ahead with the good schemes that Members have put forward this morning, I urge Ministers to cancel that stupid white elephant of a scheme, think again and use the scarce public resources where they are better utilised.

[Mrs Villiers]

I refer the hon. Lady to the statement that the Secretary of State made earlier this week on the difficult decisions that we have made to prioritise investment in the most significant traffic bottlenecks on our road network. However, she will be well aware that before all those projects proceed to completion, they must pass through the appropriate planning appraisal programme, and full consideration will be given to the local community’s views as part of that important process.

[Mr Speaker]

I call Matthew Offord.

--- Later in debate ---

[Martin Horwood (Cheltenham) (LD)]

Although we are expecting rail fares to rise only by 10% over four years in real terms, will Ministers look into changing the basis for the cap calculation from the retail prices index to the consumer prices index—because, after all, what is fair for pensioners ought to be fair enough for profit-making rail companies?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The decision on rail fares has been difficult, but we have had to make it as part of the tough decisions needed to tackle the deficit. Of course we will keep under review the way that the system works, and I am happy to meet the hon. Gentleman to discuss the issue.

[Chris Evans (Islwyn) (Lab/Co-op)]

T3. Constituents of mine travel on the Ebbw Valley rail line from Cardiff to Islwyn, but they cannot travel to Newport because there are major engineering works at the Gaer junction. Has the Minister had any discussions with the First Minister about providing money for those engineering works so that my constituents can travel to work from Islwyn to Newport?

[Mrs Villiers]

I have not discussed that specific issue with the Welsh Assembly Government, but I am happy to do so.

[Jo Swinson (East Dunbartonshire) (LD)]

East Dunbartonshire cycle co-operative does excellent work and has enthused hundreds of people into taking up cycling through a local cycle festival, maps, cycle clubs and even a Guinness world record attempt at the number of cycle bells that can be rung simultaneously. This shows what can be done with a group of committed volunteers and a bit of grant funding, but how can we ensure that cycling promotion is not just left to volunteer champions but is done more systematically wherever people live in the country?

--- Later in debate ---

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

May I ask the Minister for special consideration for communities in the south-east that had RPI plus three imposed on them by the previous Labour Government in 2006?

[Mrs Villiers]

I am well aware of the concerns of users of the Southeastern franchise who have been asked to pay RPI plus three over the past few years. That was linked to investment in rolling stock, and the rest of the country will move on to RPI plus three to even out the perceived inequality from the year after next.

[Lilian Greenwood (Nottingham South) (Lab)]

On Tuesday, the Secretary of State seemed to think me most ungrateful because I did not thank him for the tram extensions. I am sorry to disappoint him, but the people of Nottingham South sent me here to do things, not just to say thanks. Does he accept that the tram on its own will not solve the problems, particularly for freight traffic, caused by congestion on the A453? It really is vital that the widening scheme goes ahead.

Mutual and Co-operative Rail Franchise Bids

Theresa Villiers Excerpts

Wednesday 20th October 2010 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship today, Mrs Brooke.

I congratulate the hon. Member for Luton South (Gavin Shuker) on securing the debate and providing us with the opportunity to discuss an important issue, namely the potential involvement of mutuals and co-operatives in the rail franchising process. The issue is of concern to a number of hon. Members and has been the subject of a range of parliamentary questions.

I would like to make it clear that the coalition Government support the creation and expansion of mutuals, co-operatives, charities and social enterprise. We fully appreciate and recognise the brilliant work done by the co-operative, mutual and not-for-profit sector in many areas of policy and public life. In fact, we want to see such groups playing a bigger role in delivering public services and in helping us to tackle the key social problems that we face in modern Britain.

I want to be clear: the Government would treat a rail franchise bid from a mutual or a co-operative in exactly the same way as they would treat a bid from a competitor in the commercial sector. If a mutual, co-op or any other not-for-profit organisation can meet the accreditation criteria, it may bid for a franchise. If it offers the best deal for the passenger and the taxpayer, it can win the franchise. I cannot promise to bend the rules for mutuals and co-operatives, but I can promise to treat them fairly and objectively, judging their proposals on the same basis as those of their commercial competitors.

Before I deal with how the accreditation and procurement process works, I will respond briefly to the points made by the hon. Member for Luton South on Network Rail—not obviously the subject of today’s debate, but important none the less. I hope, Mrs Brooke, that you will allow me the latitude to respond.

The hon. Gentleman is right that we need to reform Network Rail. I am glad that there is growing consensus around that—before the previous general election, the Government seemed to think that there was no justification for reform, so I welcome his voice joining those of us who think that we need mechanisms to make Network Rail more accountable. He is right that we need to take care to get any reform right—we want not to rush into it, but to think carefully about the best way to deliver results for passengers and taxpayers.

I recognise and, to an extent, share the hon. Gentleman’s concerns about the Network Rail decisions on bonuses in recent months. I am pleased that the company has suspended its management incentive plan, which I hope we see reformed in the future. We are determined to make Network Rail more accountable and more efficient. Our work is informed by that of Sir Roy McNulty, and I have no doubt that our discussion today and the speech by the hon. Member for Luton South will also form an interesting part of the McNulty review.

In order to address the issues raised by the hon. Gentleman about mutuals, one first needs to consider the general rules on rail franchising. As the hon. Gentleman acknowledged, rail franchises deliver an essential service. There are 1.2 billion passenger journeys made every year. The train operating companies are, at the moment, substantial businesses—they each have a turnover in excess of £100 million per annum and they provide employment to hundreds and, in some cases, thousands of people.

The Government have a twofold interest in rail franchises. First, we need to protect the passengers’ interests and to hold train operators to the demanding obligations of service delivery placed on them by their franchise contracts. Secondly, we need to protect taxpayers’ interests, by obtaining value for money from the franchise contracts and for the considerable sums spent on the railways.

The hon. Gentleman will appreciate that, while some franchises pay a premium and others receive a direct subsidy, all operators benefit from the Government grant made to Network Rail to maintain and renew the infrastructure. He will appreciate that considerable sums are at stake when a franchise is let and that, in letting a franchise, we trust the operator with serious and important responsibilities in relation to our economy and transport system. Therefore, the greatest care is needed to ensure that we do the best that we can to make the right decisions on whom we award a franchise to.

A key issue for the hon. Gentleman was clearly the accreditation process used to assess whether a bidder can qualify to take part in a franchise competition. The Department for Transport has recently completed a consultation on rail franchising—it closed on Monday—and I take the opportunity to thank all those who took part. Until the consultation responses have been properly considered, I cannot say with certainty whether the reforms that we will undertake will involve changes to the accreditation process. Although this is not the primary focus of the consultation, we are happy to consider whether ways can be found to make the process of letting franchises less complex and expensive to carry out. Whatever reform we adopt, however, it must still ensure that the process is fully compatible with objective public procurement principles and regulations. I am sure that the debate will provide useful input for the decisions on whether reform to the accreditation process is needed, to be considered alongside the consultation responses.

The procurement process has two main elements: first, accreditation; and, secondly, the formal bid stage. The appropriateness of potential bidders is considered at the first stage. The accreditation process is designed to achieve a manageable field of bidders, which can be expected to submit attractive, competitive and realistic proposals. Keeping the number of operators that can proceed to the formal bid stage to a manageable number reduces cost for Government and industry. The winning bidder must be capable of delivering a high-quality service at the price it has undertaken to pay. The procurement methodology needs to comply with European Union procurement law and treaty principles, including equal treatment, proportionality and transparency.

The legal entity signing the franchise agreement is required to be a limited company formed for that purpose, but the accreditation process assesses the financial standing and technical capability of the parent organisation, so it would be open to a mutual or co-operative to establish a special purpose vehicle in order to run a franchise in the same way as commercial parent groups do now. Bidders are assessed to ensure that they have a level of financial standing proportionate to the size of the franchise concerned, in order to provide assurance as to the stability of the potential operator. The Government need to be confident that each bidder will have sufficient financial capacity to meet the working capital needs of the franchise business. We need to assess with great care whether the bidder will be able to absorb the risks that we seek to transfer to it, which at the moment means obtaining the performance bonds that the Department needs as security in the event of a franchise default.

The hon. Gentleman has made a passionate plea on behalf of co-operatives and mutuals. I value their work, but I would be very reluctant to compromise on rules that require us to make a careful assessment of the financial capacity of those that bid for rail franchises, because of the accompanying potential risks. Having said that, we are looking at the whole process of the franchising system as part of our response to the consultation. A key aim of the franchising process must be to protect the interests of passengers and taxpayers, so it is essential that we have safeguards in place to avoid letting the contract to an organisation that, ultimately, finds that it cannot cope. The most recent example of franchise collapse, that of National Express East Coast, shows that it is possible to deal with that situation without disruption to services. However, such collapses are clearly unsettling for passengers and the work force, and leave the taxpayer with the considerable cost of stepping in to run the railways as the operator of last resort.

I hear what the hon. Gentleman says, but financial credibility checks and standards are important, and likely to become even more so in the future as we move to longer franchises, as proposed in our consultation. We will need to make longer-term judgments on the credibility of bids and on the capacity of the potential franchisee to deliver major investment, which we hope will make a considerable difference to the quality of experience for passengers under the proposed new franchise model.

I turn now to the hon. Gentleman’s questions about the experience assessed when looking at franchise bids. The current rules require bidders to demonstrate a track record of operating transport systems, not necessarily in rail. Recent competitions have said that it should cover a period of at least two years. However, a completely new organisation might be able to meet that requirement by showing that its management team and work force have such a record. The issues discussed by the hon. Gentleman could be taken on board in the assessment of whether the potential bidder had the right track record to give us confidence to take their bid seriously.

A new and small organisation may have less experience than other bidders and will, therefore, find it harder to get through this stage, especially if it is interested in one of the larger, more complex franchise opportunities. My officials have an open door policy for people who want to get into the rail franchise market. I am happy to meet the delegation from ASLEF that the hon. Gentleman mentioned. It is useful to put it on the record here that if there are others—whether they are commercial operators, mutuals or not-for-profit organisations—that are interested in bidding for a rail franchise, we are willing to talk to them, and my officials are happy to advise them on how to grapple with what everyone accepts is not an easy process.

The hon. Gentleman advocated waiving or reforming some of the requirements in the case of a bid by a mutual. Removing the financial standing and technical capability factors or compromising them would import some real risk to franchisee financial resilience. That is my anxiety about what he advocates. If we were to waive the experience requirements in relation to a mutual, we would have to make the change for all potential bidders. That would reduce our ability to consider the track record of the major franchise operators that are currently in the market. The EU rules on equal treatment and non-discrimination mean that we have to treat all bidders the same and assess them against the same criteria. Therefore, anything that we do to help a mutual or co-op would also have to be offered to a commercial operator. If we were to relax the requirement on a track record, we would not be able to assess the previous experience and performance of the only groups that currently hold franchises. There would be public anxiety if the track record of train operators could not be considered in the award of new franchises. Moreover, the existing process is a further incentive and addition to the other regulatory mechanisms. We must keep performance levels high. To get through this difficult process, I encourage any mutual or co-operative that is considering bidding to approach my officials to get further advice.

The hon. Gentleman referred to the Go! Co-operative. I am delighted that we have that as an example of a co-operative that has expressed interest in running open access services. I gather that it would like to operate services linking main lines to some smaller market towns. I am told that it has identified a route from Yeovil Junction to Oxford for its first proposed services and that it hopes to commence operation during 2011. That is a welcome initiative. It is not for me to say whether it will get its paths or even get the operation off the ground. None the less, I very much welcome its involvement in the rail industry. There are also examples of small community-based companies running services, such as the Wensleydale railway in North Yorkshire, which has taken on a branch line from Northallerton to Redmire and is running passenger services.

I want to touch briefly on one last area. The voluntary and not-for-profit groups are already successfully engaged with the UK’s railways: I refer to community rail partnerships. The Government are very supportive of such partnerships and the work that they do. They have successfully brought additional passengers to many lines and helped to build up services and make better use of redundant property. For example, the Devon and Cornwall rail partnership works with the train operator in selling tickets at a number of locations. It encourages rail use by making it easier for the public to buy tickets. Partnerships such as South Fylde, Leeds to Morecambe and the Clitheroe line have produced impressive promotional material. Others such as the Bittern line in Norfolk have run successful promotional events. Almost all partnerships see the voluntary sector involved in improving and maintaining station facilities. There are numerous examples of local enthusiasts devoting huge care and attention to station gardens and floral displays. Right across the country, from Penmere in Cornwall to West Runton in Norfolk and Green Road in Cumbria, we see the visual evidence of the value of the work done by the voluntary and not-for-profit sector on our railways.

To conclude, the Government fully recognise and value the contribution made to the rail industry by the community-based and not-for-profit sector. I was interested to hear the hon. Gentleman’s example of co-operative cleaning services. I have no doubt that there are other areas in which mutuals and co-operatives will get involved in rail supply services. Rail franchise procurement processes can present a daunting challenge to any organisation, particularly those that have not operated a similar contract before. That is why my officials offer an open door policy for potential bidders. If a mutual or co-op expresses an interest in running a rail franchise, we will not place extra barriers in their path. They will be subject to the same rules and requirements as commercial operators. If they can meet the accreditation criteria, they can bid for a franchise. If they offer the best deal, they can win a franchise. It is as simple as that.

Railway Industry

Theresa Villiers Excerpts

Tuesday 19th October 2010 Westminster Hall

[Katy Clark]

My hon. Friend makes some powerful points, to which I will return later in my contribution. The privatised rail companies propose to threaten the progress that has been made in the railways in recent years. They want their companies to take over the infrastructure, perhaps on leases that would coincide with the length of the franchises. There is talk of trialling such arrangements in Merseyside or Scotland. The train operating companies have promised that that will incentivise them to invest in the railways, but they have provided absolutely no evidence to support that submission. Indeed, the evidence of the past and of their tenure with the railway passenger services shows that they simply seek to maximise profit and boardroom pay, as I have already mentioned. In fact, the Government’s own consultation document, “Reforming Rail Franchising,” states:

“European procurement law makes clear that contracts over 15 years require significant investment to be provided by the franchisee. Therefore, our starting proposition is that 12 - 15 years should be the standard length of franchises”.

That seems to say that we should extend franchises to the maximum length at which franchise holders have no legal obligation to invest significantly and leave investment completely at the discretion of the franchise holder.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I assure the hon. Lady that, whatever the length of the franchise, we will be pressing for the best deal for the taxpayer, including investment with longer franchises—whether they are for 10, 15 or 22.5 years.

[Katy Clark]

I am very pleased to hear the Minister say that. However, if we are going for franchises of approximately 12 to 15 years, there will not be that legal obligation, which must have a consequence for the decision that companies make.

[Mrs Villiers]

I am sure that the hon. Lady will appreciate that franchise documents impose significant legal obligations, and we expect those to include investment in the railways, particularly where a longer franchise is granted.

[Katy Clark]

I am pleased to hear the Minister say that. If the Government decide to go down the path of franchises of such a length, we will be actively scrutinising the situation to ensure that the contracts in place not only are legally binding but are enforced and deliver for the taxpayer and those who use the railways.

We know that the train operating companies are demanding further fragmentation and privatisation of our national railway structure. The former Network Rail chief executive talked about simply sweating the assets of the railway infrastructure. If franchises were coming to an end and existing operators were either not going to bid again or were not shortlisted for replacement, there is a great deal of concern that there would be little pressure on them to invest.

I also ask the Minister to consider carefully concerns that breaking up Network Rail would have a negative impact on rail freight. There is a real fear that passenger operators will be tempted to fill any spaces in the timetable with their own revenue-raising services, which would push freight to one side. Freight trains are often heavier than their transport equivalents and can do much damage to the track, which raises the possibility that the private operator could limit free access or leverage high track access charges on the movement of freight. That would force freight from the railway to the road, which would have a series of unhelpful environmental consequences.

Many people in the industry and in the rail trade unions are also concerned about the arguments of those who are making the case for breaking up Network Rail. In particular, they are concerned about the report of the Office of Rail Regulation, which is quoted again and again as stating that, compared with other European railways, Network Rail is up to 40% less efficient. I say to the Minister that hon. Members may make such points today because they have read articles in the press, but many in the industry, the RMT and the other railway unions have a great deal of concern about that report’s methodology. They believe it is flawed and that it has cherry-picked different aspects of rail infrastructure efficiency from abroad to paint our railways in a more unfavourable light. The report does not seem to take into account factors that determine efficiency, such as adequate investment over long periods, the need for a unified command structure and, most importantly, the continued fragmentation of our infrastructure compared with European railways.

We need to consider the benefits of having an integrated, publicly owned railway. I therefore hope that the Minister will ensure that those conducting the rail review—and the Government themselves—do not just look at the issue on an ideological basis, but consider the comparisons with other European railways. There has been some concern about the ORR’s report and I suggest to the Minister that she should be willing to receive more detailed representation from those who are concerned about that issue. It is obviously vital that we make the right choices for our railways.

In June, the Secretary of State said:

“Passengers and taxpayers will rightly ask why it is that our railways in the UK are so much more expensive than those in the rest of Europe.”

I believe that the answer is already there for him to see. For example, the 2009 European Commission report into the rail market made it clear that the structure of UK railways is radically different from that of railways in the rest of Europe. In terms of passenger operation and infrastructure, most of the railways in Europe are publicly owned and accountable, whereas in the UK they are not.

Compared with other railways in Europe, the organisation and structure of our railways is horrifically complex—they are fragmented and have numerous interfaces. We have 24 operating companies, three freight operators, three rolling stock leasing companies, two infrastructure controllers—Network Rail and Eurotunnel —and seven major infrastructure renewal companies. That must lead to huge inefficiencies. There is a duplication of function and a loss of economy of scale. In addition, the fact that there are so many individual companies means that there are increased profit margins and transaction costs—even the legal and consultancy fees are duplicated again and again. Skilled personnel validate and monitor contracts instead of getting on with the job and, perhaps most damaging, there has been a loss of a rail culture that focused on getting the job done, with one company and one stakeholder blaming the other when things go wrong. I understand that the rail review has already indicated that the railways could save hundreds of millions of pounds a year by reducing that fragmentation and the number of different organisations involved with them.

I hope that the Minister will look at what is happening to railways across Europe, which are overwhelmingly publicly owned and far more integrated than those in the UK. I believe that that would provide a better service and cheaper fares for the public, that it would be better for the environment and that it would lead to more high-speed rail and more electrification. Will she give an undertaking that there will be a transparent consideration of an integrated and publicly owned railway and that the methodology used to consider those matters will be made public?

I pay tribute to those who work on the railways. My hon. Friend the Member for York Central (Hugh Bayley) mentioned the Jarvis workers who have already lost their jobs. Thousands of Network Rail workers have been asked to make efficiency savings and many have already lost their jobs. I hope that we are now moving towards a period of stability and consolidation. We know, as he indicated, that many of the Jarvis workers are still without work and have lost their pensions. Given his comments, I suggest that it would be helpful if the Minister met me, him and other interested colleagues to discuss the plight of those workers and whether the Government can do more to ensure that alternative employment is available for them in these difficult economic times. Thousands of jobs have already been lost on our railways, on both the passenger and freight sides, and we are also seeing a gradual attack on train guards as companies try to introduce driver-only operations, which will reduce staffing levels even further and, I believe, raise significant safety concerns.

In Scotland, the Scottish National party Administration have taken advantage of the clause included in all railway franchises that allows railway companies to ask the Government to make good the loss of revenue caused by strike action. The Labour party in Scotland says that it will remove that clause from ScotRail franchises if it is successful in next year’s elections. Does the Minister agree that the current review of railway franchises should look at that matter and remove that provision from all franchises?

Many people who work in ticket offices are losing their jobs, with implications not only for them but for safety. We know that there is some protection for ticket offices, as train operators are required to consult passengers and Passenger Focus if they wish to shut offices or change their opening hours. Does the Minister agree that those protections must remain in place and should not be removed as a result of the review? Thousands of jobs are under threat in London Underground, many in ticket offices, as a result of the Mayor’s decision to renege on his election promise on staffing levels. Cuts will also fall elsewhere, including safety-critical railway maintenance jobs. As a result, there has been strike action on the Underground, as the Minister is aware. Indeed, the workers who were hailed as heroes after the London bombings in 2005 are now often vilified in the press as enemies of the state. I hope that there is a negotiated settlement to the dispute, and I pay tribute to those members of the RMT and the Transport Salaried Staffs Association who are taking a stand on behalf of passengers and rail safety.

I have put several questions to the Minister and am most anxious that she respond to them either today or, if she is unable to do so, in writing at a later date. I will mention those questions again, because they can often be lost in Adjournment debates. Will she clarify whether the McNulty review will inform the transport decisions in the comprehensive spending review set out tomorrow? Will she write to the executives of the big transport companies and ask that they practise pay restraint in the boardroom? Will she agree to a levy on the profits of the privatised rail industry or, at the very least, tell the companies to freeze their profits and invest them back into the railways? Will she meet me and other interested parties to discuss the continuing plight of the former Jarvis workers? Will she ensure that the franchising review results in the removal of clauses that allow taxpayers’ money to be used to indemnify train operating companies against losses incurred during industrial action? Will she ensure that the Government transparently consider the benefits of an integrated and publicly owned railway network and publish the methodology that they will use to consider the matter?

--- Later in debate ---

[Mr Weir]

The hon. Lady makes a good point. Whether electrification is greener than its alternative depends on how the electricity is generated, but that is an associated issue. However, she is right that the faster train journeys can be made, the more likely it is that people will use the train rather than travel by air. That is my point. Flying to London from Manchester or Birmingham no longer makes sense, but it does make sense to travel from Aberdeen by air unless something is done to speed up the train line. I appreciate that that is not easy to do, but the Government must look at the issue seriously.

My other point is about the high-speed rail network. The Government have announced their proposal to go with the Y route, which would run up the centre of England to the north-east and the west coast. It will speed up journey times and, if I understand it correctly, link up with the east coast line and provide a slightly faster journey time at least as far as Edinburgh. As it stands, however, although the proposal will considerably speed up rail travel to the north of England, it does not address the central problem of taking the line further north into Scotland. If the Government are serious about the issue, we must look at an extension of the line to ensure faster travel times from Scotland and encourage people away from the longer domestic flight routes. Unless we do that—and the same argument goes for the east coast—we will not get the green benefits that we hope for. As it stands, if I were to use the high-speed line to get home, I would probably have to change train twice to get to Montrose, and that will not significantly reduce the journey time.

[Mrs Villiers]

The hon. Gentleman may recall from the coalition’s programme for government that we want a genuinely national network. Experience tells us that that must be delivered in phases as it takes some time. The ultimate goal, of course, is to take high-speed rail to Scotland. It would be interesting to hear whether the Scottish Government are willing to devote resources to that programme in the future. I have discussed the issue with them, and I hope that in the future they will consider whether they can devote some of their resources to aiding such a project.

[Mr Weir]

I am sure that the Scottish Government will do that. However, there is not much point in building a high-speed line if it does not link up with the rest of the network. At the moment, the high-speed line will run nowhere near Scotland. I understand that Network Rail had a proposal that would have taken the line into central Scotland. That would have made more sense, it would have linked central Scotland with the main high-speed network running south, and it would have provided the basis for an extension of the network further north. At the moment, as the Minister knows, the high-speed network comes nowhere near Scotland, and it will be many years before it gets as far as Edinburgh. The Government seem to take a London-centric view of the matter. If we were to tip things the other way so that the line ran south, the speed of journeys would increase faster and the green objectives of the Government and the Scottish Government would be met.

The Scottish Government have invested a lot in the railway in Scotland. I accept that that is their responsibility and that some of the work must be done in Scotland—there is no argument about that. For example, the Scottish Government opened a new station at Laurencekirk on the east coast line, although strangely enough the direct mainline services will not stop there, so people still have to get a train to another station to get on those direct services. ScotRail runs a good service to Edinburgh and Glasgow, but again, people have to change trains to get on to the direct line to travel further south. People going on business trips look for a direct service. New lines have been opened from Stirling and Alloa; there is a new line from the border and considerable improvements along the Paisley corridor. All those things have improved rail travel in Scotland, but we still need links to the lines that will take us to continental Europe through the Eurostar network. To do that, unfortunately we need to rely on the Government in this place taking action on the east coast line and the high-speed line.

My main point is to ask the Minister about the rolling stock for the east coast line, which is the responsibility of her Department. As the hon. Members for Newton Abbot (Anne Marie Morris) and for Hayes and Harlington (John McDonnell) pointed out, the new trains are vital to show that the Government are serious about investment in our railways and in the important economic asset of the east coast line. I appreciate that the comprehensive spending review is tomorrow, but I urge the Minister to ensure that the rolling stock is purchased and that a clear signal is given about the future of the line.

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

I am pleased to contribute to this important debate about the future of the rail industry, particularly as this is my first official outing as a member of the Opposition Front-Bench transport team. I also congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) on securing the debate today.

In recent years, a welcome consensus has developed around the importance of support for the railways, both the conventional and high-speed varieties. All parties recognise the important role that the rail industry must play in reducing the environmental impact of travel, and welcome the growth in passenger numbers that we have seen in recent years, to the point where more people travel by train today than at any point since the 1940s.

We need a system that works effectively and puts the needs of passengers, and indeed freight, at its core. We all want a clean, safe and efficient train network in the future, and one that is fit for purpose. The previous Labour Government were committed to providing that and, as my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, we hope that the current Government recognise the need to continue the investment in the railways that our country so desperately needs. Given the comprehensive spending review tomorrow, we may well soon see how committed the Government are to the future of the railway industry. Like my hon. Friend the Member for North Ayrshire and Arran, I also welcome the lobby today by trade unionists and the TUC. We should remember that everyone is rightly concerned about the cuts that might be announced in the near future.

I would like to look at fares. The coalition’s programme for government stated that they were

“committed to fair pricing for rail travel.”

Will the Minister comment on reports from Channel 4 News over the weekend which speculated that we could face double-digit rises in train fares over each year of the spending review? It was reported that train fares are expected to be more than 30% higher by 2015, and industry sources pointed to a possible 40% hike in prices by 2015.

Media reports also suggested that the cost of a typical commuter season ticket between Brighton and London could increase from £3,104 a year to £4,260 by 2015, and between Swindon and London from £6,640 to £9,130. Does the Minister think that long-suffering train users will be willing to accept that?

[Mrs Villiers]

I would be grateful if the shadow Minister answered a question. Is he saying that if Labour had been re-elected, it would have cut rail fares?

[Andrew Gwynne]

I am very grateful to the Transport Minister for that, but of course it is my job to ask her questions. Labour is in opposition and I am asking whether she thinks that those kinds of speculative rail increases are fair on passengers.

[Mrs Villiers]

The hon. Gentleman should not believe all he reads in the papers. The coalition is committed to fairness on rail fares. The announcement on the fares formula for the next few years will be made on Wednesday in the comprehensive spending review.

[Andrew Gwynne]

I appreciate that, but it could well mean that some lines end up with a pricing of RPI—the retail prices index—plus 5%. That is particularly ironic, as the hon. Member for Lewes (Norman Baker), who is now a Transport Minister, was elected on a pledge in the Liberal Democrat manifesto on train fares for RPI minus 1%; and the Secretary of State, as the Minister has reiterated today, has previously said that he has made a commitment to fair fares.

Passengers will not pay more for less. If they see increasing fares alongside cuts to plans for new capacity and infrastructure, that could mean fewer people travelling by rail. What guarantees do we have that fare rises will be matched by infrastructure and capacity improvements? I appreciate that the Minister will be reluctant—perhaps unable—to add much today and we shall have to wait to see what the Chancellor of the Exchequer says in tomorrow’s comprehensive spending review.

Franchising was mentioned. The Government’s consultation includes an intention to impose a far more relaxed and flexible specification. Flexibility can be a good thing, but there is a worry that a hands-off approach could allow train companies to become too focused on short-term profit and cost cutting, rather than delivering the best service for passengers and encouraging greater use of the railway. Will the Minister give me assurances that that will not be the case and that sufficient specification to guarantee socially important services will remain?

It is encouraging that there is interest in rail franchise bids from not-for-profit, mutual or co-operative franchise enterprises. Indeed, I note that my hon. Friend the Member for Luton South (Gavin Shuker) has secured a debate on that topic in Westminster Hall tomorrow. However, there are still unfair barriers that prevent such bids from benefiting passengers and taxpayers, as we saw recently with the attempt by the Co-op through its Go! Co-operative initiative, which would have been the UK’s first co-operative train operating company.

I shall refer briefly to some recent investments in rail. It is important to acknowledge, as my hon. Friend the Member for Hayes and Harlington and others did, the significant progress that the previous Labour Government made in the past decade in rebuilding the country’s transport infrastructure after many decades of under-investment, which happened, to be fair, under Governments of all political persuasions.

We have completed the £9 billion programme to modernise the west coast main line, resulting in massive reductions in journey times, as I thankfully know from experience. It is now less than two hours from Stockport to London and, more importantly for me on a Thursday, from London back to Stockport.

Performance, capacity, reliability and safety levels throughout the rail network have improved significantly. High Speed 1 was up and running ahead of schedule, and the stunning redevelopment of St Pancras station proved to be a fitting terminal for high-speed trains to and from the continent. We delivered Britain’s first high-speed rail line and set out plans for a new north-south high-speed rail network—points made by my hon. Friend the Member for Hayes and Harlington and by the hon. Member for Angus (Mr Weir).

We more than doubled investment in local transport from 1997, improving accessibility and helping to tackle social exclusion in local communities. By May 2010, investment in transport had reached its highest level as a proportion of national income for 30 years. In addition, Labour finally achieved what previous Governments had tried but failed to do, in securing a funding deal for Crossrail. That is one of the most ambitious transport projects of recent years and will add 30,000 high-value jobs to London in the first 10 years and add an estimated £20 billion to the UK’s gross domestic product. We also set in place the £5.5 billion upgrading of Thameslink, which will introduce new cross-London routes and, with longer, more frequent trains, will allow for much-needed capacity, more seats and less crowding on key routes in the capital.

The northern hub made it an ambition over the next 20 years to increase the number of train services in the north, including cities such as Newcastle, Liverpool, Manchester, Leeds and Sheffield, by 40%—700 more trains a day—making it possible for 3.5 million more passengers to travel by train every year. Those innovative and challenging projects were either delivered or planned. We need to continue that long-term focus on infrastructure and service if we are to provide Britain with the transport system that it needs to compete in the new global economy.

I wish to raise some specific issues with the Government. Transport cuts so far have totalled £683 million. That includes £108 million coming from Transport for London and £50 million from the better stations programme. I declare an interest, as that had a particular effect on Stockport station, which affects some of my constituents. The plans for hundreds of extra carriages to ease overcrowding have been put on hold.

In opposition, the Conservatives criticised the Labour Government in their 2009 rail review document, which recognised the need for extra capacity but accused us of not taking the problem seriously. There is a need for more trains, and I ask the Minister to tell us what the Government will do to alleviate that problem.

Can the Minister give me an assurance on electrification—an issue mentioned by my hon. Friend the Member for Bolton West (Julie Hilling)—both of the north-west routes and the great western main line, which are important projects to both regions? Likewise, can the Minister confirm that the Thameslink replacement of rolling stock will go ahead, which would in turn lead to the cascading of trains to the great western main line and the north-west routes?

The Government owe it to London’s business community and the travelling public to be open about their plans for Crossrail. Will the Crossrail project be delivered in full, as proposed by the previous Labour Government? Will there be any cost cutting in areas such as engineering, which could lead to shorter platforms and less capacity? Will the number of stations on Crossrail remain unchanged?

May I ask also about the bonfire of the quangos that we saw last week? What plans does the Minister have for Passenger Focus and what will its functions be now? How will disabled passengers be heard effectively now that the present Government have abolished the Disabled Persons Transport Advisory Committee? The input of disabled passengers should be important, and that body provided a unique opportunity for both disabled people and industry to represent their case to Government.

The Government need to look beyond the period of the comprehensive spending review. We need a long-term vision for rail and we need to deliver these projects to build on our ambition for a world-class rail service in this country. The previous Labour Government left the rail network in a far better condition than we found it in. Rail passenger numbers increased by 40% in the past 10 years, and punctuality and quality of service improved steadily over that time, too. That is not an inheritance that the current Government should squander.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing the debate, and congratulate the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), on his recent appointment and his first address from the Front Bench.

I thought that it would be useful to consider the questions that the hon. Lady helpfully repeated at the end of her speech. First, she asked whether Sir Roy McNulty’s work is informing the comprehensive spending review. Neither his interim report nor his final report have yet been published or finalised, but I can assure the hon. Lady that Sir Roy has kept my right hon. Friend the Secretary of State and officials at the Department for Transport informed of his work, so that is feeding into the decisions being made on the comprehensive spending review. The early draft work, as it has been going ahead, has helped us to feed into the Treasury process and the CSR.

The hon. Lady also asked whether I would write to the executives of the rail operating companies about remuneration.

[John McDonnell]

Before the Minister moves on from the McNulty report, I point out that I asked whether she would meet the rail unions to discuss the McNulty report when the interim report is published in November.

[Mrs Villiers]

I was going to come on to that, but I am happy to answer it now. I have slight qualms about this while the industrial action is continuing on the London underground, because I am concerned about the huge inconvenience that that is causing passengers. As the hon. Gentleman is keen for me to meet the unions, I am happy to do that, but I would still urge them to find an alternative way to resolve their dispute on the London underground.

[John McDonnell]

The two issues are unconnected. We will make sure that the right hon. Lady can travel on a non-strike day.

[Mrs Villiers]

I suppose that I am particularly sensitive about the issue because the day on which I was due to meet the Transport Salaried Staffs Association coincided with a strike day so, for all sorts of reasons, it seemed inappropriate to go ahead with the meeting.

Turning to remuneration in the rail industry, the level of pay across the industry clearly needs looking at in the context of the McNulty review. I have discussed remuneration levels with the train operators, and I expect that dialogue to continue.

The hon. Lady’s third question was about introducing a windfall levy for the train operators. The Government have no plans to do that. Her fourth question was whether I would meet her and colleagues to discuss those who—tragically for them—were made redundant by Jarvis. Yes, I would be happy to do that.

On the franchising review, the hon. Lady asked specifically about a clause on ScotRail and she will appreciate that that is a matter for the Scottish Government, but she also asked a wider question about the approach that the UK Government will take in relation to the franchises for which we are responsible. I am not convinced that we should have a blanket withdrawal of that type of indemnity clause; there is a place for such clauses in appropriate circumstances. She then asked whether the McNulty review, and the Government considerations flowing from it, would look at an expanded role for the public sector and additional nationalisation. That is certainly one of the options that Sir Roy will consider.

The hon. Lady also asked about ticket offices and the loss of guards. In many cases those are matters for those operating services, but the overall approach in relation to the franchises is governed by the ticketing settlement agreement. We need to look at reforming that, to ensure that we get it right, but it is obviously important to consult properly with the communities affected by the decisions.

The hon. Lady also talked about the strike action on the London underground and the loss of guards. I am convinced that we need to modernise working practices in the rail industry. I am concerned, as I already said to the hon. Member for Hayes and Harlington (John McDonnell), about the damage to the London economy caused by the strike action that is taking place. We have to recognise that the way in which people buy tickets has changed, and that rightly will impact on London Underground’s decisions about the deployment of its staff.

[Julie Hilling]

Does the Minister consider important the feeling of safety of passengers travelling on the underground, and on the rail network generally? Stations can often be very lonely, scary places for all rail users but particularly for women travelling alone. The fact that we have staff in ticket offices and on platforms increases both the feeling of safety and the actual safety.

[Mrs Villiers]

Forgive me; I am probably trespassing on devolved matters because the relationship between London Underground and its employees is of course a matter for which the Mayor is politically accountable. I have to say, however, that of course I am concerned about security for women using public transport—I am a woman myself—but there is a real argument for saying that staff deployed on platforms are more valuable to passenger security than those stuck behind ticket office windows. I am not sure, therefore, that the security issue can justify the retention of ticket offices. Security focuses on whether people have access to staff in stations, which is not the same as whether a ticket office is open.

I shall go on to some of the wider issues addressed by the hon. Member for North Ayrshire and Arran. I would like to assure the House that the coalition has put rail at the heart of its strategy for transport, in terms of re-energising our economy, reducing carbon emissions and addressing congestion on our roads. I welcome the support shown today for taking into account the concerns of both passengers and rail freight—a point rightly made by the shadow Minister. Much will depend on the announcements made tomorrow in the spending review. It is clear that transport will not escape the pain that is the unfortunate consequence of the deficit that we have inherited from the previous Government, but I emphasise that the Chancellor has made it clear that he recognises the economic benefits of investment in infrastructure to support economic growth, and that he recognises in particular the importance of investment in transport infrastructure.

The shadow Minister asked me about Crossrail. I am sure that he welcomed, as I did, the support expressed by the Chancellor at the weekend for the Crossrail project. We have also expressed clear support for Birmingham New Street, we are taking forward plans on high-speed rail and we are working very hard on Thameslink. Our focus in all those projects is to ensure that we value-engineer costs down to keep the projects affordable and deliverable within the spending envelope that is now available.

[John McDonnell]

I emphasise that, although there is a commitment to the Crossrail project overall, people are concerned about the paring down of the project and the missed opportunities that might result from that. For example, in my own constituency, Hayes and Harlington station is to be redeveloped. If there is any paring down in the investment of such station projects, we will miss the chance to include modal transfer opportunities and to ensure the integration of our local transport network.

[Mrs Villiers]

Both the Secretary of State and I have repeatedly talked about our support for delivering the whole project, and it is worth bearing in mind the excellent work done by the team behind Crossrail to find lower-cost ways to deliver the same transport benefits, and to deliver the whole project.

It is true that there has been significant good news on the railways in recent years. Since privatisation there have been some striking successes, with train punctuality now at record levels and a significant increase in the number of passenger journeys. Also, the number of miles travelled on the railways has gone up by 75%. Since privatisation, therefore, a story of managed decline has been transformed into one of significant growth. Although the recession has subdued that trend to a degree, we expect it to resume once the economy recovers.

So, that is some of the good news about the UK’s railways. But the downside is that the cost of running the railways did rise dramatically under our Labour predecessors. If we are to deliver the improvements to services and capacity that hon. Members have called for today, and that passengers want, we have to find a way to get costs down. The disastrous deficit left for us by our predecessors makes it essential that we drive out cost inefficiencies on the railways, and we owe it to passengers to do our very best to get costs down.

[Andrew Gwynne]

Does the Minister not also recognise that it was the investment by the previous Labour Government that led to the very improvements that she has just championed as a cause of privatisation?

[Mrs Villiers]

I certainly recognise that the previous Government invested in the railways, and we would expect investment to continue under the current Government, given the huge importance of the railways to our economy and to our climate change ambitions. I covered the fares issue briefly in response to the shadow Minister, but I shall repeat my comments on it. The coalition is committed to fairness in rail fares, but the reality is that the crisis in the public finances means that we might have to take some difficult decisions on fares, as in other areas. As I have said, I am unable to give further details on the fares formula until it is announced for the coming years in the CSR on Wednesday.

There has been much discussion about the McNulty process, which is focused on trying to understand why the cost of the railways is higher in this country than in other parts of Europe, and I am sure that today’s discussion will contribute to and inform that process. It is important that a range of options be considered, and as part of our drive to deliver high-quality rail services at an affordable cost we need to consider how we reform Network Rail. Not even the levels of taxpayer support over recent years have succeeded in turning the company into the customer-oriented organisation that train and freight operators want. That fact was driven home when the rail regulator published the figures, to which the hon. Member for North Ayrshire and Arran referred: the potential 40% efficiency gap between Network Rail and European comparators. I acknowledge that there are always problems comparing Network Rail precisely with different railways in the rest of Europe, but these things should sound a warning bell that there is an issue to be addressed. If we are to be fair to passengers and the taxpayer, we need to find a way to make Network Rail more efficient.

[Katy Clark]

I think that it is accepted on all sides that there are issues to be addressed; indeed, that was why the previous Government set up the review in the first place. However, the Minister will have listened to what I said about the concern about the methodology used in the ORR report. Is she willing to hear further representations about that from those in the industry who have concerns? Given the publicity that the issue has had in the press, there is clearly a view that the Government will listen to the ORR report rather than taking a more forensic look at how other European railways operate.

[Mrs Villiers]

Of course I would be happy to accept further representations. One reason why we have continued with the McNulty study, which was set up by our predecessors, is precisely to find the true picture of the cost of Network Rail. The work done by the ORR is valuable, but it is just one point of view. Sir Roy is drawing on views and research from across the rail industry, including internationally, to find out what the facts really are.

Whatever reform we ultimately select, we will need to stress-test it in relation to the interests of freight operators. It is vital that we get the right balance between the interests of the railways’ passengers and freight customers.

In looking at the options for reforming Network Rail, it is interesting to look at what has been done north of the border. Network Rail has decentralised its Scottish operations, and accounting separation has been introduced. We need to look carefully at whether such decentralisation might improve Network Rail efficiency in other parts of the UK.

My officials are working with Merseytravel, the passenger transport executive for Merseyside, to explore whether to devolve the running of the track used by the Merseyrail franchise so that it is wholly governed by local decision making. That project could help to provide an important benchmark against which to measure Network Rail’s performance.

Another key issue is whether further contestability could be introduced for some of the work now carried out exclusively by Network Rail. Again, there is a Scottish example that is worth considering. In 2006, for example, Transport Scotland opened up about £20 million of rail funding for smaller-scale enhancements at stations and asked for offers from Network Rail and the train operators. By the end of the bidding process—if I recall correctly, this was under the Labour Administration— £19 million of the £20 million available was allocated directly to the passenger operators because their bids were judged to be better than Network Rail’s. A similar approach has been used for the national stations improvement plan in England.

The hon. Member for North Ayrshire and Arran talked at length about franchise reform, which is the second limb of our work to improve the railways’ performance for passengers and to get better value for money. The Department for Transport has recently concluded a consultation, and we are considering the responses. As I assured the hon. Lady during her speech, we want to encourage greater private sector investment in return for potentially longer franchises. We would continue to impose legally binding contractual obligations in franchises, including on the scale of the investment promised. We hope and believe that longer franchises will help us to deliver the investment and improvements that passengers want, including better stations. Longer franchises should also make it easier for train operators to invest in long-term relationships with Network Rail and their work force, which are crucial to running the railways efficiently.

We want to move to a system in which franchises are less heavily specified. In response to the shadow Minister’s questions, however, I can assure him that we will continue to set demanding outcomes for train operators to achieve in terms of the quality of service that they deliver. We will have demanding and legally binding requirements to protect the interests of the passenger and the taxpayer. The difference is that in setting those outcomes, we propose to give the people running the railway more flexibility over how they deliver them.

[Katy Clark]

The Minister will recall that, in my initial contribution, I quoted the Government’s consultation document, which said that European procurement law referred to 15 years and that that was why a starting point of 12 to 15 years should be the standard length of franchises. Does she not accept that that rings alarm bells? Will she explain why there is a link between European procurement law and her starting point?

[Mrs Villiers]

Obviously, the UK Government are bound by European procurement law to procure public contracts in a fair and objective way. In the context of rail franchises, it sets a top limit of 22 and a half years for contracts that involve investment. The reference to European procurement law was included in the consultation document because it governs the maximum that we can deliver in terms of rail franchises. Throughout the process of negotiating franchises, however, we will look to secure the best deal possible for the taxpayer, and we will ensure that we continue to protect the passenger interest. Train operators that do not comply with the obligations we impose on them will face sanctions, which, in extreme cases, could include removing the franchise.

In the few minutes that I have available, I want to talk a little about the inter-city express programme in response to the hon. Member for Angus (Mr Weir). I can assure him that we have no plans to scrap through services to destinations such as Aberdeen and Inverness, which he mentioned. As he said, the report produced by Sir Andrew Foster referred to one of the alternative strategies for the IEP, which involved ending those through services. As I said, however, we have no plans to do that. We recognise the economic value of such services, and we have certainly received strong representations from the Scottish Government and Scottish colleagues about the importance of retaining them.

[Mr Weir]

Will the Minister give way?

[Mrs Villiers]

I am sorry, but I have only two or three minutes, and I want to respond to an awful lot of points.

The hon. Gentleman and others talked about the electrification of the railways. We included our support for electrification in our programme for government and we recognise its benefits. It will support our sustainability objectives and improve services for passengers. It will become more and more of a greener option as we decarbonise the electricity-generating network. The pace at which we can deliver electrification will obviously depend on affordability and the priority of tackling the deficit. Much will depend on the comprehensive spending review announcement tomorrow. Of course, these decisions are also linked with the work on the high-level output specification rolling stock programme, Thameslink and the future of the IEP. An announcement will be made on those in due course.

Lastly, in the brief time that I have, I want to reiterate the Government’s support for high-speed rail, which is a vital upgrade for our transport network. We recently announced our support for a Y-shaped network, with a line to Manchester and trains running on from there to the west coast main line and Scotland, and another line splitting off at Birmingham and going through the east midlands and South Yorkshire to Leeds, with trains, again, running on to the existing network and destinations further north. We will consult on that shortly. We will also have regard to the communities affected by the line’s local impact before taking final decisions on whether to go ahead and what route to take. We appreciate that realistically these lines can be delivered only in phases, but our ultimate goal is to deliver the national network, for which I am sure there will be cross-party support.

Much has been achieved since privatisation, but we need a fresh focus on reducing costs in the railways that we already have. We need a drive to deliver high-speed rail because of the huge benefits that it can provide. The coalition is determined to meet both those challenges, and I welcome the representations that I have received on them today.

Rail Services (Enfield)

Theresa Villiers Excerpts

Wednesday 15th September 2010 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing the debate and presenting an impassioned case for improvement to rail services in the borough of Enfield. I recall him raising the issue in Transport Question Time shortly before the summer recess. I know that he is a staunch campaigner on these matters in his constituency, standing up for the interests of local commuters in a highly effective way, alongside my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), whom it is great to see in the Chamber today. As the near neighbour of both my hon. Friends—I represent Chipping Barnet—I well understand the importance of transport links in the London suburbs.

My hon. Friend the Member for Enfield North set out his concerns about reliability and performance. As we have heard this morning, train services to Enfield are operated by both National Express East Anglia and First Capital Connect. In my ministerial capacity, I take a close interest in the performance of all train operators, but my role as MP for Chipping Barnet means that I have an additional reason to scrutinise the performance of FCC on the Great Northern line, as it serves my constituency as well as Enfield.

That franchise experienced significant disruption between October 2009 and January of this year. That was largely caused by industrial action, and Thameslink services were the worst affected. However, there were also problems on the Great Northern line, which serves Enfield. It was particularly regrettable that action by drivers meant that no trains ran on Remembrance Sunday last year on the suburban Great Northern line services. I am relieved that the problems that led to that disruption have gone away for the moment, and that First Capital Connect’s overall public performance measure has recovered to reach the levels prevailing prior to that episode. However, the underlying issue for the railway—namely that on a number of routes drivers are not under a contractual obligation to work on Sunday—obviously has yet to be resolved.

As far as National Express East Anglia—the main focus of my hon. Friend’s remarks this morning—is concerned, in the latest period for which complete performance data are available, 90.8% of NXEA’s trains arrived on time, according to the PPM moving annual average figure. That is an improvement, albeit a modest one, on the 88.6% reliability levels that it inherited from the previous franchise in 2005. It is also worth noting that PPM figures are aggregated across a diverse franchise, covering long-distance, rural and commuter services. That means that they do not necessarily give us all the answers, when it comes to the specific performance of Enfield services. As my hon. Friend pointed out, NXEA’s most recent national passenger survey results indicate that it is below the average for London and the south-east. I agree with my hon. Friend that there is room for improvement.

My hon. Friend referred in some detail to capacity and his constituents’ concerns about crowding. The latest passenger loading data confirm that overcrowding is indeed an important issue on some Enfield services. Anxiety about overcrowding in a number of parts of the UK’s rail network increased during the previous Government’s term in office. In my view, one of Labour’s most serious mistakes was that it took far too long to wake up to the seriousness of this problem. It took, for example, over a decade to get moving on projects such as Crossrail and Thameslink. Four successive Labour Secretaries of State for Transport promised extra carriages under the HLOS—high-level output specification— programme, but that political decision came late in the day and less than a quarter of what they promised had arrived by the time that Labour left office. That leaves the current Government to deal with the problem during very lean times, when the pressing need to deal with the deficit that we inherited from our predecessors places intense pressure on the public finances.

The issue for consideration today is how we address the problems experienced by commuters—problems of the kind outlined by my hon. Friend—in an affordable way, consistent with our pledge to address the deficit that we inherited from the previous Government.

First, I should mention that I meet senior representatives of the rail industry and the Office of Rail Regulation every month to assess performance levels on all lines, and to scrutinise carefully the record of Network Rail and the train operators. Of course, the ORR takes the lead on these matters, but I am grateful to those who participate in what is a very useful process for me. Following on from my hon. Friend’s intervention at Transport questions, I raised the issue of NXEA services in Enfield with the group.

As my hon. Friend was kind enough to acknowledge, the Government’s wider reform agenda has the potential to drive forward progress in addressing a number of the issues that he raised. Our approach has three parts: first, reform of Network Rail; secondly, reform of rail franchising; and thirdly, taking forward capacity enhancement programmes where they can be reconciled with our commitment to address the deficit.

As hon. Members will be aware, making progress on reliability and delivering extra capacity depends in no small part on ensuring that Network Rail, as the infrastructure provider, delivers high-quality services to its customers in an efficient and cost-effective way. In the case of the NXEA services that we are considering, the most recent industry figures indicate that Network Rail was responsible for just over 60% of delays on the franchise. In particular, I am advised that Network Rail infrastructure has suffered a number of overhead line problems.

I very much welcome the fact that the franchise operator and Network Rail are working together to try to address the problem. However, if we are to improve Network Rail’s performance and reduce its costs, the company needs to be made more accountable for its actions, and that includes demonstrating greater accountability for its decisions on executive bonuses. We are considering a number of options, and we are working with the ORR and other stakeholders to take that work forward. I should make it plain, however, that the status quo is not acceptable, and we will be making changes in due course.

As we heard this morning, the Government are consulting on reforms to the rail franchising system, and those are the second element of our strategy for addressing the problems outlined by my hon. Friend. The reforms are aimed at moving away from a system in which Whitehall specifies highly detailed and prescriptive inputs for franchises—what my hon. Friend referred to as the command-and-control approach to the railways. Instead, we want a stronger focus on the quality of outcomes for passengers, while giving the professionals who run our railways more flexibility to apply innovation, enterprise and specialist expertise in working out the best way to deliver outcomes.

We need a more qualitative approach to the assessment of franchise bids—an approach that judges the quality of a bid’s overall package of proposals to invest in the railways, improve services and grow passenger numbers—rather than focusing solely and exclusively on the binary question of the level of subsidy or the premiums to be paid. Again, I hope that that will address some of the problems involved in what my hon. Friend referred to as the money-go-round.

Franchises should also be longer. We expect 10 to 15 years to become the normal, expected length, with the possibility of franchises running for up to 22 and a half years, where significant investment is promised. The increased certainty that longer franchises will give train operators will encourage private sector investment in the railways and help to deliver the improvements that passengers want. My hon. Friend called for us to include better services, better stations, longer trains and better rolling stock. On the specific improvements that he asked for, I hope that he will understand that I cannot prejudge the process that will commence once the franchise re-let is under discussion, but I encourage him to take part in the consultation on the re-let as and when it starts.

Our reformed franchises will set demanding passenger satisfaction outcomes for train operators to achieve. Train operators that do not comply with franchise requirements will face sanctions. Ultimately, in the case of very serious failure, sanctions will include termination of the franchise. The approach that we have set out in our consultation document will enable and incentivise train operators to respond more effectively and efficiently to commuters’ concerns. I expect our proposed measures to help address a range of the customer service and capacity issues that my hon. Friend outlined.

At this point, I should respond to my hon. Friend’s questions about the timetable for re-letting the East Anglia franchise. I reiterate that I decided to cancel the franchise competition initiated by the previous Government to ensure that the new franchise was issued under the reformed system, and to ensure that passengers using NXEA services could have the benefits of the changes that the coalition has promised to deliver. The franchise was due to be re-let and to commence on 1 April 2011, but a contractual extension has been agreed until October 2011.

I turn now to the third element of Government policy that is relevant to the matters under consideration: delivering additional capacity, where that can be reconciled with our commitment to address the crisis in the public finances that we inherited from the previous Government. The Department for Transport is funding 120 new carriages for the East Anglia franchise. Most will be used on the Stansted Express route, with some deployed on Cambridge commuter services. The carriages are expected to enter service from March 2011, and that will free up carriages that will be used to strengthen services on other parts of the NXEA network. The decisions on exactly where those carriages will go have yet to be made, but I am advised that stations in Enfield will be among those that benefit from the extra capacity.

Additional capacity will be introduced on First Capital Connect lines to Enfield in December 2010. In the morning peak, five of the six stations in the borough—Gordon Hill, Enfield Chase, Grange Park, Winchmore Hill and Palmers Green—will have three additional six-car train services to Moorgate, and one of the existing services will be doubled in size from a three-car to a six-car train. The five stations will also be served by additional services to Hertford North and Gordon Hill from Moorgate. The remaining station, Crews Hill, will be served by two additional six-car train services.

In the evening peak, the same five stations will have an additional three services, two of which will go to Gordon Hill, with the third going to Hertford North. That is except for Grange Park, which will have two additional services running to Gordon Hill. All those additional services will be six-car trains. Additional services will also run from Gordon Hill to Moorgate. Crews Hill will benefit from an additional six-car train running to Hertford North. There will be three more services during the morning peak, and extra carriages will be added to one of the existing services. Evening peak service capacity will see similar improvements and increases in capacity. Those morning and evening peak improvements are part of the additional 3,800 peak-time seats being added to Moorgate services from December.

In conclusion, I understand my hon. Friend’s concerns. The Government are working to ensure that we have a reliable railway and that crowding problems are addressed. We face the difficult task of achieving that at the same time as tackling the state of the public finances that we inherited from the Labour Government. I have summarised some of the most important initiatives that we are taking to seek to achieve those important goals. When the consultation process begins for the re-let of the franchises serving my hon. Friend’s constituency, I very much hope that he will make his views known. I am sure that they will be a valuable and welcome contribution to that important process, just as his remarks this morning have been a valuable and welcome contribution to the debate.

Inter-city Express Programme

Theresa Villiers Excerpts

Wednesday 15th September 2010 Westminster Hall

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing this debate on this important issue.

--- Later in debate ---

[Mrs Villiers]

Before the interval for voting, I was congratulating the hon. Member for Sedgefield on his passionate support for the IEP. I thank him for the correspondence that he has sent to the Department, setting out a number of the points that he has raised, and for the report that I received today on the case that he has prepared for the IEP project. I am grateful for all of those. My colleagues at the Department and I will be giving serious consideration to all the points raised in the report and in today’s debate.

I welcome the fact that the hon. Gentleman, alongside a delegation from his constituency and around the north-east, is due to meet my right hon. Friend the Secretary of State for Transport to put these points to him directly. The coalition Government have made it clear that rail has a key part to play in our transport strategy. Although our priority has to be tackling the deficit that we inherited, the Government fully recognise the significant economic benefits generated by investment in transport infrastructure—a point that has been explicitly acknowledged by the Chancellor of the Exchequer. Nevertheless, we must apply a rigorous cost-benefit analysis to all our planned infrastructure projects, targeting investment where it makes the most difference and where it will generate the greatest economic benefit.

That is the background against which we need to assess the future of the IEP. There can be no doubt that the project has encountered a degree of controversy since the previous Government embarked on it over half a decade ago. The objective was, as we have heard, to replace Britain’s fleet of InterCity 125 trains, and to invest in capacity and passenger journey improvements on the east coast and Great Western lines. The procurement process began early in 2007, and two years later, Agility Trains was announced as the preferred bidder. An important component of Agility is Hitachi, the manufacturers of the Japanese bullet train.

As we heard from the hon. Member for Sedgefield, Hitachi simultaneously announced its plans to build the new train order in the UK. This summer, the company announced that its preferred site for a new manufacturing facility is Newton Aycliffe in the hon. Gentleman’s constituency. As he has explained, that town has historic ties with the railways. As we heard today, Hitachi has said that it proposes to use the site in County Durham to bid for orders abroad, and has aspirations to export British-built trains to Europe. The parallel with the successful model used by many Japanese car manufacturers is obvious; it is a very positive example of what can be achieved. As the hon. Gentleman explained, the facility has the potential to create hundreds of new jobs, and potentially many more in supplier industries. He has put the case articulately and strongly for the economic benefit that will accrue to his constituents and the wider north-east.

Of course, such inward investment would be very welcome and entirely consistent with the Government’s stated goal of rebalancing the economy and promoting manufacturing industry. I take on board the strong points that the hon. Gentleman made about the skills base in the north-east, and how appropriate it would be to support a facility of the kind that Hitachi has announced the intention to build.

However, the hon. Gentleman will, I am sure, appreciate that the decision on the IEP needs to focus on objective and established procurement principles—namely, on whether the project provides the right solution for passengers and the railways; whether it delivers value for money, compared to the alternatives; and whether it is affordable for the taxpayer.

In its original form, the order would have been the single largest procurement of rolling stock ever, and one of the biggest private finance initiative transactions in British history. During the later part of 2008 and 2009, the capacity of the debt market contracted and the previous Government decided that it would be better to split the transaction into smaller parts.

The deteriorating state of the debt market was just one of the challenges that faced the project. A further issue arose when the previous Administration changed their mind on electrification. Having published in 2007 a long-term plan for the railways that had a limited role for electrification, the Government put out the tender for a fleet, with a significant proportion of diesel trains as part of the IEP proposal. Two years later, at the height of the contractual negotiations, the Government announced they had changed their views and proposed to electrify. That meant that the order had to be changed to an electric and bi-mode mix, which led to an increase in costs. By the time Labour left office in May, £26 million had been spent on consultancy and preparation costs, without the contractual close stage even having been reached. That has caused a degree of concern.

The project was in some difficulty when the previous Secretary of State, the noble Lord Adonis, decided to commission an independent review by Sir Andrew Foster. When it was published in July, the Foster report presented a measured and thoughtful analysis of the relevant issues. As the hon. Gentleman has correctly pointed out, Sir Andrew had some very positive things to say about the IEP. He described the proposition as “positive and attractive” in a number of ways. He described the PFI-style funding arrangements as

“novel and well-aligned in terms of financial incentives”.

He concluded that faster acceleration and longer carriages would have a positive impact on network and passenger capacity. He acknowledged that the specification had also taken network sustainability and environmental imperatives seriously. Unfortunately, he also had some concerns about the project. He concluded that the previous Administration had made a number of mistakes on the programme. In particular, they did not engage the railway industry well enough and had sought to micro-manage the process. Importantly, the Foster report also highlighted that although the project has always exceeded the Department for Transport’s economic thresholds, its value for money has seen a decline over time, while its costs have increased.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

Although I acknowledge and am extremely sympathetic to the case made by the hon. Member for Sedgefield (Phil Wilson) on behalf of his constituents and the north-east, is the Minister considering carefully Sir Andrew Foster’s conclusion that he is not convinced that all credible alternatives to IEP have been identified? He sets out the case in his report for a short-term IC125 refurbishment, which would be both cost-effective and technically feasible. The skills, buildings and infrastructure enabling that work to be done already exist in places such as my constituency of Crewe, where Bombardier can already carry out that work.

--- Later in debate ---

[Mrs Villiers]

My hon. Friend’s intervention is timely, as I am just about to come to that point. As he rightly says, Sir Andrew did make some points about the possible alternatives to the current IEP proposition.

In response to Sir Andrew Foster’s report, my right hon. Friend the Secretary of State for Transport announced that the Government would use the period up to the spending review to give further consideration to the future of the IEP. In accordance with Sir Andrew’s recommendations, the Government are reviewing all the credible options in light of value for money, affordability and their compatibility with the plans for further rail electrification. That means careful consideration of how the IEP proposal could be reduced in cost, and evaluating alternative ways of addressing the problem that the IEP was designed initially to solve—that is, how to address the problems surrounding the ageing high-speed train fleet. As my hon. Friend points out, the alternatives include the possibility of refurbishing and extending the life of the existing InterCity 125 rolling stock. In that regard, compliance with disability deadlines will be an important factor to bear in mind in the assessment.

[Mr Kevan Jones (North Durham) (Lab)]

Is the right hon. Lady suggesting that the north-east should once again get second best, while the constituency of the hon. Member for Crewe and Nantwich (Mr Timpson) is, I think, served by a line with brand new trains?

[Mrs Villiers]

I am saying that we have to carry out a very careful assessment of what the right outcome is for this programme, and what the right way is to address the problem of the ageing InterCity 125 fleet. That is what the Government are doing at the moment.

[Ben Gummer (Ipswich) (Con)]

One thing was omitted from the original planned routes for the implementation of IEP, and that is the inclusion of the London-Norwich line, to the great disappointment of the people who live along it. The problem is that the rolling stock is not only ageing, as is that of the high-speed train fleet, but actually the cast-offs from the main lines to the north-east and north-west. If the routes are to be renegotiated, I hope that the line will be included, but I have to say that this is a lunatic way to procure trains. We heard about the Austin Allegro, famously specified by civil servants. I would not like this to be a similar instance of specification by civil servants that is not suitable for industry.

[Mrs Villiers]

Many parts of the network would like to have extra capacity, and I shall take my hon. Friend’s concerns on board as a representation. Regarding additional projects of that sort, it clearly all depends on what proves to be affordable, but we intend to learn lessons for the procurement process from the experience of the IEP.

As regards reappraisal of the original IEP concept, the Department has listened with great care to the ideas put forward by Agility on how to improve the value for money of its proposition, and I would like to put on record our sincere thanks to Agility for the diligent and constructive work that it has done, in contributing to both the Foster review and the re-evaluation process that followed. I am very aware that the issue is taken seriously in Japan.

[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.

Heathrow Operations

Theresa Villiers Excerpts

Tuesday 7th September 2010 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In January 2009, the previous Government announced their decisions relating to the future of Heathrow Airport. In addition to supporting the construction of a third runway, a number of additional decisions were taken relating to operations at the airport.

This Government have already made their position clear in rejecting the case for a third runway, and opposing new runways at London’s other main airports—Gatwick and Stansted. I now wish to outline the Government’s position in relation to those additional operational decisions.

I can confirm that we remain firmly committed to retaining runway alternation and will not approve the introduction of mixed mode operations at Heathrow. This Government believe that any potential benefits mixed mode might bring to the airport are outweighed by the negative impact such operations would have on local communities.

Operating procedures known as westerly preference, early morning runway alternation and night-time rotation of easterly/westerly preference have also all brought noise mitigation benefits to local communities. This Government do not intend to revisit previous decisions taken in relation to these procedures and they will continue to operate as they do now.

The previous Government’s decisions in 2009 also included a commitment to end the Cranford agreement. This decision was based on the desire to distribute noise more fairly around the airport and extend the benefits of runway alternation to communities under the flight paths during periods of easterly winds. We support that objective and do not intend to re-open the decision. A number of infrastructure and operational changes by BAA and NATS are needed to implement this decision. The airport operator, BAA, is currently developing proposals for ending the Cranford agreement with a view to confirming the necessary works by the end of this year. I will look to BAA to ensure that proper consideration is given to appropriate mitigation and compensation measures for those likely to be affected by the proposals.

Oral Answers to Questions

Theresa Villiers Excerpts

Thursday 22nd July 2010 Commons Chamber

[Brandon Lewis (Great Yarmouth) (Con)]

10. What progress has been made on the Government’s review of rail franchising; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Government today launched their consultation on the future of rail franchising policy. Our proposed reforms will lead to longer, more flexible franchises to incentivise private sector investment in the railways, which will benefit passengers and improve value for money.

[Nick de Bois]

Given the current poor standard of commuter service that my constituents in Enfield North receive from National Express, as evidenced by the lowest average customer satisfaction rates across the south-east, how will our franchising proposals improve the experience for passengers in my constituency and elsewhere?

[Mrs Villiers]

We will ensure that the new rail franchising system imposes on train operators demanding performance requirements, based on passenger outcomes and passenger satisfaction. Operators that do not meet those demanding requirements will face serious sanctions that will include, in the most serious cases, termination of the franchise. We believe that longer franchises will lead to more private sector investment and the improvements to stations and railways that passengers want, to improve their journeys. Longer franchises will also enable train operators to build longer-term working relationships with Network Rail, which are so vital to ensure that our railways are run efficiently and deliver value for money.

[Iain Stewart]

Many of my constituents in Milton Keynes are angry that despite paying about £5,000 for annual season tickets and having undergone years of misery as the west coast main line was upgraded, they are still denied access to Virgin trains at peak hours; the trains either do not stop at all or—perversely—they do stop, but only to let people off, not on. The long-term solution is the extra capacity that High Speed 2 will deliver, but will my right hon. Friend give an undertaking that when the west coast main line franchise comes up for renewal in 2012, she will ensure that my constituents have fair access to high-speed services?

[Mrs Villiers]

All representations from the affected communities will be taken on board as the decisions are made. We hope that what will result from the rail franchising reforms on which we are consulting at the moment is a better and more intelligent and flexible approach to timetabling. That will enable the demands of passengers to be more readily met than they are by the current inflexible system. My hon. Friend is right that the long-term solution has to be a new high-speed rail line. There will come a time in the not-too-distant future when the west coast main line will be simply full to bursting and we will need to provide extra capacity. That will release more space for commuting and stopping services on the west coast main line.

[Brandon Lewis]

The tourist industry in Great Yarmouth is worth almost £500 million, yet the train station is not exactly a welcoming gateway to our town. Residents would like a better station. Will the Minister give some assurance to the residents of Great Yarmouth that under the new franchise agreement we will be able to put some onus on the franchisee and Network Rail, to make sure that they can invest in things such as the stations themselves, so that we can get a better train station for Great Yarmouth?

[Mrs Villiers]

I recall the discussions that we had on this issue when I visited my hon. Friend’s constituency. I believe that the issue is a prime example of how the reforms that we are proposing could yield significant benefits for passengers. They will give the opportunity for private sector investment in stations such as Great Yarmouth’s. At the moment the franchise is of about seven years, and that simply does not give the certainty needed for private sector investment to pay for itself during the franchise. With longer franchises, we can expect more station improvements of the sort that my hon. Friend wants.

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

Will the Minister agree to meet a small delegation led by me and my hon. Friend the Member for Coventry North West (Mr Robinson) to discuss the Nuckle project in Coventry? The situation has been going on for a number of years and it needs resolving one way or another.

[Mrs Villiers]

Yes, I shall be happy to meet that delegation.

[Kelvin Hopkins (Luton North) (Lab)]

Given that franchises have failed already, many more franchises are going to fail under what is likely to be a much harsher financial regime. Is it not time to bring things in-house and begin to recreate the state railway systems that operate so well and so much more cheaply on the continent of Europe?

[Mrs Villiers]

The hon. Gentleman’s views on the railways are well known, although I am afraid that I do not share them. It would have been impossible for there to have been the significant growth in passenger numbers that we have seen since privatisation without the benefits that private sector innovation and enterprise have brought. Reversing things and renationalising the railways would be a retrograde step.

[Sadiq Khan (Tooting) (Lab)]

I note from the Order Paper that there are five identical questions on rail franchises from new MPs no doubt keen to impress their Whips. Half an hour before oral questions we had a press release from the Department for Transport announcing a consultation on the new rail franchises. Will the Minister confirm that in the new consultation that she has announced this morning, there will not be any barriers to stop new models, such as mutuals and co-operatives, from taking over franchises?

[Mrs Villiers]

There would be no barriers to mutuals and co-operatives bidding for franchises if they fulfilled the criteria. All franchise bids will be judged objectively on the quality of the services they will provide for passengers and value for the taxpayer.

[Charlie Elphicke (Dover) (Con)]

4. What plans he has for the future of the port of Dover; and if he will make a statement.

--- Later in debate ---

[John Robertson (Glasgow North West) (Lab)]

8. What estimate he has made of the number of passenger flights cancelled as a result of travel agents going into administration in the latest period for which figures are available.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In the year to 31 March 2010, 29 companies licensed by the air travel organiser’s licence scheme failed. Under the ATOL scheme, managed by the Civil Aviation Authority, 2,445 passengers were able to complete their holiday and return home without charge. A further 45,114 were entitled to full refunds.

[John Robertson]

The Minister will know that 180 passengers were stranded at Glasgow airport on Friday, thanks to the collapse of Goldtrail. There were also 16,000 people stranded abroad. How does she propose to try to help those people get compensation? In some cases, they have been told that they will have to wait for at least two years before they get their money back. How can she stop those companies causing such disruption and ensure that people get home as quickly as possible?

[Mrs Villiers]

The CAA is working hard to repatriate the people affected by the Goldtrail failure, which has caused significant anxiety and disruption to people’s holiday plans. Our officials are working hard with the CAA to ensure that that repatriation effort goes well. We are also urging the CAA to ensure that lessons are learned from XL and the long time it took to process claims. The CAA urges all those who are ATOL protected to submit the relevant documentation so that refunds can be processed as quickly as possible. In the longer term, we need a bigger reform of the way in which the system works.

[Jane Ellison (Battersea) (Con)]

To refer my right hon. Friend to earlier answers on rail franchising—

--- Later in debate ---

[Peter Aldous (Waveney) (Con)]

13. What progress has been made on the Government’s review of rail franchising; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I refer my hon. Friend to the answer that I gave earlier.

[Peter Aldous]

Will the Minister confirm that the review of the Greater Anglia franchise will recognise the vital importance of the east Suffolk line from Ipswich to Lowestoft, and the need for both an hourly service along the whole line and the reintroduction of through trains to London, which are being withdrawn in December?

[Mrs Villiers]

My hon. Friend will appreciate that it would not be wise for me to start making timetabling decisions at the Dispatch Box. However, we are determined that the franchising reform, on which we will consult in the next few weeks, will deliver improvements for passengers, improve train operators’ ability to respond flexibly to increases in passenger demand on particular routes and help deliver the private sector investment to provide vital enhancements to our railways.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Given that current legislation prevents organisations and companies that do not yet run rail franchises from bidding for them, will the Government consider changing it in their review to allow mutuals and co-operatives to bid for future franchises?

[Mrs Villiers]

I think that that question has been dealt with already. If mutuals and co-operatives can satisfy the requirements of the franchising process, they will be permitted to bid.

[Jane Ellison (Battersea) (Con)]

I think this is the appropriate moment to ask my question, Mr Speaker. In her discussions with rail franchises and franchisees, will my right hon. Friend ask them whether they will consider bringing longer trains through stations whose platforms have not been lengthened when they have available rolling stock? That is common on the continent, but we do not do it here, and it would greatly help at overcrowded stations such as Wandsworth Town station in my constituency.

[Mrs Villiers]

I am well aware of my hon. Friend’s strong campaigns for rail services in her constituency, and our visit to Clapham Junction railway station was particularly informative. She makes a good point about the more flexible use of capacity, and the train operators and Network Rail would certainly do well to take it on board. I suggest she raises it further with them.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

14. What recent representations he has received on a compulsory requirement on cyclists under 16 years old to wear cycle helmets.

--- Later in debate ---

[Graham Jones (Hyndburn) (Lab)]

Will the Minister let my constituents, and those of the hon. Member for Burnley (Gordon Birtwistle), know what progress he has made on the Todmorden Curve rail project?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I know that the local authorities are working hard on this project and have engaged Network Rail to do some important work on it. I very much appreciate the benefits that it could deliver, particularly when tied in with development proposals, if they go ahead. I am keeping a close eye on that. The hon. Gentleman will not be surprised to hear that I cannot give him guarantees on funding at the moment because of the state of the public finances. However, I know that the local authorities are taking this very seriously.

[Christopher Pincher (Tamworth) (Con)]

T4. Does my right hon. Friend agree that although high- speed rail services are important to our economy, many communities along the route, whichever may be chosen, will be adversely affected, including some communities in my own constituency? Will he therefore agree to mitigate, as far as he can, the impact on those communities, and will he also agree to—

--- Later in debate ---

[Alison McGovern (Wirral South) (Lab)]

Last week, I spoke to residents in Heswall in my constituency who are most concerned to get the train to Liverpool rather than their cars. The Wrexham to Bidston electrification project is vital for that. Will the Minister explain briefly what work her officials in the Department are doing to work with Network Rail, Merseytravel and others to take this vital project forward?

[Mrs Villiers]

We are in touch with Network Rail and Merseytravel on this issue. Indeed, I discussed it with the director general of Merseytravel only recently. The hon. Lady will appreciate that this has been worked on by the Welsh Assembly Government, and I very much hope that progress can be made on it. However, she will appreciate that, as I said previously, the crisis in the public finances that we have inherited means that I cannot give guarantees on additional funding from central Government at the moment.

[Charlie Elphicke (Dover) (Con)]

T5. I see that the shipping Minister has been to Harwich and Felixstowe in the past week. I invite him to come and see the port of Dover, so that he can see at first hand how our plans can be the jewel in the crown of the big society and make Dover the jewel in the crown of the nation once again.

--- Later in debate ---

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Minister rule out reclassifying Network Rail as a public company, which would be a Railtrack mark 2, and commit to a not-for-dividend organisation?

[Mrs Villiers]

We are looking at the options for reform of Network Rail. We believe that the status quo is not acceptable, because Network Rail is not accountable enough to its customers or the passengers whom they serve. As for its balance sheet status, we believe that this is a matter for national statisticians. We will make decisions on the future of Network Rail based on what is best for passengers and the taxpayer, and not—as the previous Government did—on the basis of tortuous calculations about whether things are on or off the balance sheet.

[George Eustice (Camborne and Redruth) (Con)]

T8. One of the projects currently under review in my area is the east-west link road in Camborne and Redruth, which is a crucial element of a broader regeneration project, led by the private sector, that would create 6,000 new jobs. Does the Secretary of State agree that when it comes to prioritising transport projects after the comprehensive spending review, one of the key criteria to apply will be the impact on enterprise and jobs?

Rail Franchising

Theresa Villiers Excerpts

Thursday 22nd July 2010 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In a written statement of 17 June, I informed the House that the Department for Transport would shortly begin a consultation exercise on the future of rail franchising policy. That consultation has been published today.

The reforms presented for consultation include longer more flexible franchises aimed at incentivising private sector investment in the railways to benefit passengers. The consultation will provide industry partners, local authorities, passengers and other groups with the opportunity to comment on the Government’s approach to rail franchising. In particular, we would welcome responses on the best way to ensure that the proposed reforms improve the efficiency and value for money of rail franchises, for both taxpayers and fare payers.

The consultation will remain open until Monday 18 October 2010. Copies have been placed in the Libraries of both Houses.