Midland Main Line

Theresa Villiers Excerpts

Monday 16th April 2012 Commons Chamber

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

Like others, I congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing the debate and on an excellent speech. I welcome the strong interest shown in the debate by the presence of so many hon. Members from up and down the length of the route.

My hon. Friend put the case for electrification of the midland main line with cogency and clarity and I pay tribute to the campaign that she, so many of the groups she mentioned and so many of the Members in the Chamber have been leading on that important issue. I welcome the interest of the Derby Telegraph, a paper with which I am very familiar—for all sorts of reasons. I have received many representations from Members who are attending the debate and from other groups and colleagues. I particularly mention the representations received by the Parliamentary Secretary to the Treasury, my right hon. Friend the Member for Derbyshire Dales (Mr McLoughlin).

[Anna Soubry (Broxtowe) (Con)]

Does my right hon. Friend agree that we are seeing a complete outbreak of cross-party support for the project? She identifies Members representing cities and towns—for example, Beeston and Attenborough in my constituency—all of which will benefit if the scheme goes ahead. I do not know whether she has seen a paper written by Jim Bamford from Nottinghamshire county council—my hon. Friend the Member for Loughborough (Nicky Morgan) referred to him. He sets out the excellent economic case for electrification and the improvement of the line not just for the good people of greater Nottingham but for those throughout the whole of the east midlands right up to south Yorkshire.

[Mrs Villiers]

My hon. Friend is entirely correct. There is significant cross-party support, and there is a range of interesting research and evidence on the potential benefits of electrification of the midland main line, much of which I have seen directly. As I think the hon. Member for Leicester South (Jonathan Ashworth) mentioned, in February, I met MPs to discuss the proposals, along with the deputy mayor of Leicester. This debate provides a welcome opportunity for the House to reflect on an important subject for the regions concerned.

[Chris Williamson (Derby North) (Lab)]

I, too, congratulate the hon. Member for Loughborough (Nicky Morgan) on securing the debate. I think that the case for the electrification and upgrade of the midland main line is unanswerable, and I hope that we will hear some reassuring words from the Minister this evening. Does she agree that it is absolutely essential that the Government do everything in their power to ensure that the trains that run on the midland main line—and indeed on every railway line in the country—are, wherever possible, built in British factories, and preferably in the Derby factory of Bombardier?

[Mrs Villiers]

The hon. Gentleman knows that I have a very high regard for the Bombardier operation in Derby, and he will appreciate that we are bound by European rules on the procurement of rolling stock.

The Government appreciate the economic benefits that investment in transport can bring in general. That is why we have given priority to investment in our rail network, even when budgets are limited by the pressing need to deal with the deficit. As well as going ahead with high-speed rail, we have embarked on a major programme of rail improvements on a scale larger than anything attempted since the Victorian era. That programme plays a significant role in two of our important priorities: promoting economic growth and cutting carbon. It is also vital that we get the cost of running the railways down, so that we can respond to concerns about fares.

Where there is a strong business case, and subject to affordability, the Government support the progressive electrification of the rail network as a way to reduce the cost of running the railways, boost the economy, increase passenger comfort, and reduce carbon. As we have heard from my hon. Friend the Member for Loughborough, electric trains cost less in fuel and maintenance than their diesel equivalents; they are quieter; they are lighter, which saves on wear and tear to the track; and they emit less carbon dioxide. That is why the Government have already committed to an extensive programme of rail electrification, which includes the Great Western main line from London to Oxford, Newbury, Bristol and Cardiff, and lines in the north-west, including from Liverpool to Manchester and from Blackpool to Manchester. Indeed, Mr Deputy Speaker, your constituency is set to benefit from the changes. Subject to confirmation of the business case, the line from Manchester across the Pennines to Leeds and York is also due to be electrified.

As my hon. Friend the Member for Loughborough and others have rightly emphasised, the midland main line plays a major role in supporting the economies of the east midlands and south Yorkshire. Most inter-city services on the line are provided by modern, high-performance, diesel Meridian trains. The line also benefits from the recent investment in new stations at Corby and East Midlands Parkway, and from the £800 million transformation of St Pancras. The Government have committed to further improvements by 2014. Network Rail is due to complete a £69 million investment to deliver an eight-minute improvement in journey times for passengers between London and Sheffield. In the longer term, the economies of the east midlands and south Yorkshire will benefit from the second phase of High Speed 2, with journey times slashed and rail capacity dramatically increased.

We recognise that there is a good case, on economic and financial grounds, for further investment in the midland main line over and above what we are already committed to. The scale of what can be delivered depends on what is affordable, and on a careful and fair assessment of competing priorities elsewhere on the rail network. The report commissioned by East Midlands Councils and South Yorkshire passenger transport executive entitled “The Case for Upgrading and Electrifying the Midland Main Line” is very impressive. It highlights significant potential economic, environmental and financial benefits from electrification and the other upgrades to which my hon. Friend the Member for Loughborough referred.

The Government recognise that the electrification of the midland main line could help spread the benefits of HS2, because it would enable through-running of services between the new high-speed network and the midland main line. This is something that we will consider as we prepare our response to the advice of HS2 Ltd on phase 2 of the project to complete the Y network to Manchester and Leeds. This potential benefit and the others mentioned today, including the important points made by my hon. Friend about freight and the potential benefits to freight from an electrified midland main line, will all be taken into account in our decisions on the forthcoming HLOS statement.

As my hon. Friend the Member for Loughborough set out, electrification of the midland main line and various other upgrades to the line are included in Network Rail’s initial industry plan for possible delivery in the period between 2014 and 2019. This document and the priorities that it sets out will play an important role in forthcoming decisions on which projects can be funded in the CP5 rail period to 2019. I welcome the decision by the rail industry to prioritise electrification of the midland main line in the IIP. The Government are currently considering how much funding will be available in total for rail investment in the five-year period up to 2019 and how it should be allocated. We will announce our decisions by July.

Although the business case for midland main line electrification does indeed look impressive, as I have acknowledged at the Dispatch Box before now, there can be no doubt that the project would be complex and challenging, and it would be expensive to deliver. Network Rail has estimated the capital cost of electrification alone to be just over £530 million, not including the other improvements mentioned in the debate. Major engineering work would be required. Just to make room for the overhead wires, more than 50 bridges would have to be rebuilt.

So, alongside midland main line electrification and upgrades, we will need to assess the case for improvements on other routes to determine which projects are given priority. The initial industry plan contains proposals for rail improvements likely to cost about £4.5 billion in total during the CP5 control period. This is on top of £5 billion for projects already committed for the period, so we will need to strike a balance and make choices. Of course we want to fund projects which promote economic growth and improve efficiency, as we believe electrification of the midland main line would do. We also need to ensure that the Government’s finances are not overstretched during difficult times.

[Sir Alan Meale]

I refer again to the point that I raised earlier—£12.2 billion was spent on the networks, but only £200 million of it went in the east midlands. That is not fair. We demand and we need the extra investment.

[Mrs Villiers]

I can reassure the hon. Gentleman that we are committed to continuing investment in our rail network. We are committed to a major programme of electrification. The previous Government managed only about 15 or 20 miles of electrification in 20 years, so we are making progress on that. Although I cannot prejudge the outcome of the deliberations, I can assure my hon. Friend, the hon. Member for Mansfield (Sir Alan Meale) and everyone else attending the debate this evening that we recognise the benefits that electrifying and upgrading the midland main line would bring. We are aware of the strength of the business case. We are very much aware of the strength of the support for this important upgrade to the rail network. That is why we are working closely with Network Rail to ensure that we have the most up-to-date information to inform our decisions on the midland main line project and whether we can include it in the HLOS programme for CP5.

[Meg Munn]

Can the Minister tell us what role the reduction in emissions will play in the decision?

[Mrs Villiers]

It is important to take into account the potential environmental benefits of any project in all areas of government, and I acknowledge that electrification of the midland main line would have a positive impact in reducing carbon emissions. We will take that into account.

The hard work of my hon. Friend the Member for Loughborough, many of the other MPs who are here, the local authorities, the stakeholders and the local newspapers on this issue has given momentum to the campaign to electrify and upgrade the midland main line. I congratulate them all on that. We will continue to listen with care to the views of all who promote this project when we make decisions on which rail projects can be prioritised and afforded in the next railway control period. This debate has provided more useful and valuable input into that decision-making process. I am grateful to all Members who have contributed. I will take very seriously the representations made in this debate and the numerous representations that I and the Department have received on the benefits to be gained environmentally and economically from electrifying and upgrading the midland main line.

Question put and agreed to.

EU Transport Council

Theresa Villiers Excerpts

Tuesday 27th March 2012 Written Statements

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

I attended the first Transport Council under the Danish presidency (the presidency) in Brussels on Thursday 22 March.

The presidency sought agreement to a general approach on a proposal for a regulation which defines the trans-European transport network (TEN-T). This sets out the actions to be undertaken at EU and member state level to develop the network. I was able to support the general approach after securing a UK amendment that will ensure that progress on the projects required by the regulation would be subject to the availability of financial resources. This amendment received support from Germany, Latvia, Finland, Romania, Ireland, Bulgaria, Slovenia and France. In my contribution to the debate, I also argued that governance structures on corridors should be less burdensome, more flexible and focus on contentious cross-border projects. Most member states supported the compromise text which was viewed as a balance between the Commission’s initial proposals and what they could accept.

The Council also agreed a general approach on a proposal for a regulation of the European Parliament and of the Council on ground-handling services at EU airports and repealing Council directive 96/67/EC. This proposal is part of the airports package. My intervention emphasised the UK’s reservations about the cost impact and administrative burdens of the original proposal, but I acknowledged that these had been largely addressed in the presidency’s revised text. In particular, I welcomed the removal of compulsory licensing and of the Commission’s proposed powers to tell a member state to close its markets to third country operators that refused to open theirs. Another important point secured in the negotiations in the run up to the meeting was the assurance that service quality would be set locally, with enforcement centred on the contractual relationships between airports, airlines and ground-handlers, with efforts to set homogenised Europe-wide standards removed from the proposal.

In the light of these changes and the fact that the regulation is expected to deliver more competition in ground-handling at airports in other European countries and hence reduce costs for airlines (and indirectly for passengers), I felt able to support the presidency’s compromise text.

Under any other business, the Commission set out their future intentions on the follow up to the Costa Concordia accident in Italy in January. They intend to carry out a review of legislative proposals on domestic passenger ships, to be submitted for consideration at the IMO (International Maritime Organisation). The Commissioner also indicated there may be a revision to the ship stability directive, and work on watertight doors, with a second wave of regulatory activity later in the year. The Commissioner was supportive of renewed discussion both with the EU and the IMO on passenger ship safety. Italy gave an account of the emergency response to the accident and noted there would be an administrative enquiry.

I intervened to stress the need for a considered response that takes on board the outcome of the investigation currently underway before any decisions are taken as to whether regulatory changes are needed.

Also under any other business, the Commission provided an update on the international reaction to the inclusion of aviation in the emissions trading system (ETS). The Commission reported that the International Civil Aviation Organisation (ICAO) had initiated new work to identify a global market-based measure for the aviation sector. If this work leads to an international agreement on tackling climate change emissions from aviation, the EU could, as set out in the ETS directive, review its legislation. I stressed the importance of maintaining a unified and robust European position and there was clear support from other member states for the aviation ETS.

The proposal for a regulation of the European Parliament and of the Council amending Council regulation (EEC) No 3821/85 on recording equipment in road transport on which the presidency was hoping for a general approach and the any other business item Galileo and EGNOS programmes on which the Commission was providing information, were not discussed at the Council.

During my visit, I was also able to hold a bilateral discussion with the vice-president of the Commission, Siim Kallas on the main items for Transport Council discussion. A constructive exchange took place on upcoming Commission proposals for airport slots and rail policy. I used the opportunity to highlight the UK’s work with the Commission on the better regulation agenda.

I also met my counterparts from Cyprus and Ireland to discuss plans for their forthcoming presidencies of the EU, in July-December 2012 and in January-June 2013, respectively. The Cypriots’ main priorities focus on re-energising the integrated maritime policy, and promoting ‘Blue Growth’. The Irish are at an early stage in their preparations and sought UK’s views ahead of their presidency. My discussion with the Cypriots and Irish Ministers also included an overview of the important work that the UK is taking forward with the European Commission on the better regulation agenda.

Night Flying Restrictions (Heathrow, Gatwick and Stansted)

Theresa Villiers Excerpts

Monday 26th March 2012 Written Statements

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

The current restrictions on night flying at Heathrow, Gatwick and Stansted airports were set in 2006 and are due to expire in October 2012.

The Government’s forthcoming aviation policy framework will set out key parameters for aviation, including on noise annoyance to local communities. To ensure our proposals to replace the current night flying regime can take account of the aviation policy framework which the Government have committed to have in place by next spring, and will include the framework for managing noise, we will extend the existing night flying regime at these airports for a period of two years until October 2014. As a first step to replace the current regime in 2014, we will launch a first stage consultation later this year which will seek detailed evidence of the effectiveness of the current regime including costs and benefits and airlines’ fleet replacement plans. This will be followed by a second consultation next year which will enable us to take account of adopted policy when developing our specific proposals.

The Government will take into account the freeze in quota limits during this extension period when setting the next regime and expects airlines to continue to improve their environmental performance in the interim.

Further details of the extension and the timetable for setting a new regime have been published on the Department’s website.

EU Transport Council

Theresa Villiers Excerpts

Thursday 15th March 2012 Written Statements

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

I will attend the first Transport Council of the Danish presidency (the presidency) which will take place in Brussels on Thursday 22 March.

The presidency hopes to achieve general approach on the following:

A proposal for a regulation of the European Parliament and of the Council on Union guidelines for the development of the Trans-European Transport Network (TEN-T). Progress to date has been encouraging. The revised text issued by the presidency has gone some way to addressing our concerns, particularly in relation to binding standards and deadlines. And also by recognising the need to take account of member states’ finances and to consider the economic viability of projects. Additionally, I will continue to push for changes on the core network and TEN-T corridors to minimise risks to the UK. I will consider whether the improvements achieved are satisfactory to justify UK support for a general approach.

A proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EEC) No. 3821/85 on recording equipment in road transport and amending Regulation (EC) No. 561/2006 of the European Parliament and the Council. This proposal would amend the specification for tachographs, which measure hours spent at the wheel by commercial lorry and bus drivers. The proposed general approach addresses many of the concerns raised through negotiations, including:

Removing the proposed ban of operators with tachograph workshops from installing or calibrating tachographs in their own vehicles. Member states are left to take appropriate measures to prevent conflicts of interests between workshops and operators.

Removing the proposal to merge the driving licence with the tachograph card.

These represent significant gains for the UK with regard to minimising costs and burdens on industry and the Government.

A proposal for a regulation of the European Parliament and of the Council on ground-handling services at EU airports and repealing Council Directive 96/67/EC (part of the airport package). The proposed regulation has been subject to intense official-level scrutiny by Council working groups and these discussions are ongoing. Progress to date has been encouraging from a UK perspective, and we believe that the resulting regulation could potentially help further open up market access while minimising administrative and financial burdens for industry. However, at this stage, it remains unclear whether or not it will be possible to seek a general approach at the March Council. If it is not possible, there will be an orientation debate instead.

Under any other business, the Commission will provide information on the Costa Concordia accident, the aviation emissions trading system and the Galileo and EGNOS programmes.

Rail Ticketing and Overcrowding

Theresa Villiers Excerpts

Tuesday 6th March 2012 Commons Chamber

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

I congratulate my hon. Friend the Member for Reading West (Alok Sharma) on securing the debate, and on his interesting and well-thought-through contribution on the issues that face not only his constituents who commute but rail passengers across the country. There is no doubt that there are significant concerns about overcrowding on a number of routes at particular times of the day, including those used by his constituents. The Government take those concerns very seriously. We also take seriously the problems on routes into a number of cities around the country. That is one of the reasons why, even in these difficult times for the public finances, the Government have prioritised investment in our rail network.

As my hon. Friend has generously highlighted, the programme of capacity expansion to which we are committed is bigger than anything seen since the Victorian era, and a number of the most ambitious and important changes will be taking place in the Great Western franchise area, which serves my hon. Friend’s constituents in Reading.

Our programme includes a new fleet of IEP—intercity express programme— electric and bi-mode trains built in Newton Aycliffe in County Durham; electrification of the lines linking Paddington and Bristol, Cardiff, Oxford and Newbury; upgrades to signalling and train operating systems; provision of an electric suburban fleet; a massive redevelopment of Reading station; Crossrail infrastructure works and rolling stock introduction, including improvements to Paddington; and, last but not least, redoubling the Swindon to Kemble line. All that is on top of the current programme that is delivering the 48 carriages that will benefit the Great Western franchise. I am pleased to say that, as part of that roll-out, two additional three-car trains—class 150s—started in full service on the Reading to Basingstoke line just last week. This releases turbo trains from that route to strengthen the Paddington services and provides a capacity uplift in its own right on the Basingstoke line.

My hon. Friend focused his remarks, among other things, on the reporting system and its relation to crowding levels. We are in the process of re-letting the west coast franchise—and that new franchise will require the franchisee to use automatic passenger count equipment. We will, of course, consider similar provisions for future franchises. I note my hon. Friend’s particular concerns about the regularity of reporting. Franchisees have generally been asked to supply data for at least each quarter, but I acknowledge that modern technology means that more frequent reporting is becoming a more viable option, to which we will give careful consideration. By collecting better data about demand and usage than is available now, we have an opportunity to transform and improve planning in the rail industry.

We are at the start of an intense retendering programme for rail franchising. Through this, we plan to deliver the longer franchises, for which my hon. Friend rightly called, including on the Great Western network. We also propose to deliver greater flexibility to respond to customer demand in a commercial way, within a framework set by the franchise that protects key outcomes for passengers, taxpayers and the economy. That means giving operators more freedom to design service patterns and stepping back from the system that arose under the previous Government whereby timetables were effectively set in Whitehall. We want to see more decision-making power transferred to people who are closer to the front line. I believe that this is in tune with some of my hon. Friend’s remarks, and that these changes will lead to a better match of capacity and demand and better outcomes for passengers.

On 22 December 2011, the Department for Transport launched a consultation on the new Great Western franchise. We will ask bidders to consider how they would strengthen the reliability of services and improve stations and trains. Current franchises already include train planning requirements. For example, we have issued the invitation to tender for the west coast franchise, including obligations on planning timetables and stock in order to minimise crowding on short commuter flows —generally under 20 minutes—and to give passengers a seat on longer journeys. In cases where crowding cannot be eliminated, the new west coast franchise would require the operator to ensure the impact is not unduly concentrated on a single route or service. Every franchise has its own set of circumstances, and the consultation on Great Western explicitly asks for views on how we can best address overcrowding issues on its routes.

Of course, we have to acknowledge that there are many places on the UK network where using existing resources more effectively and efficiently will not be enough to meet the demand for rail. In some cases, crowding problems can be realistically addressed only with infrastructure improvements. It is not impossible for these to be delivered as part of a franchise agreement, particularly smaller-scale projects, and we have included provisions in the west coast ITT to make it easier and to encourage it. Medium and large upgrades will generally require Network Rail or Government funding, which brings me back to the major programme of investment to which I have already referred. Responding to concerns about crowding effectively requires both Government and train operators to play their part.

My hon. Friend made some good points about ticketing. As the number of passengers using our railways each year continues to grow, it is more important than ever for us to get fares and ticketing right. As my hon. Friend said, that was considered in the McNulty review. Our vision of a modern customer-focused railway includes smarter and more transparent fares and ticketing. We want buying a ticket to be a straightforward transaction, not an obstacle course, and we want passengers to be able to choose from a range of fares that are designed to meet their needs without having to understand every nuance of the underlying fares structure.

Like my hon. Friend, I recognise the benefits of smart ticketing. I acknowledge that the technology presents the possibility of more flexible season tickets, and we intend to explore it as part of our forthcoming fares review. The season ticket model has remained largely unchanged for many years, and I agree that we need to update it to reflect modern patterns of work and travel and the fact that increasing numbers of people no longer work the traditional nine-to-five, Monday-to-Friday week.

Rail ticketing can contribute to our efforts to support a more flexible working culture, as well as removing barriers to entry to the workplace by, for example, women who are weighing up the costs and benefits of returning to work after having children and are considering part-time work. The smart ticketing technology that is now becoming available could deliver a range of new types of ticket, with the potential to transform the way in which we think about and pay for rail travel. I assure my hon. Friend that the Government take the wider roll-out of smart ticketing very seriously. Indeed, that is partly why £45 million was recently committed to the development of flexible smarter ticketing on routes in the south-east.

My hon. Friend mentioned the Chiltern business zone product that runs on some services between London and Birmingham. That is the sort of passenger-focused innovation that we want train operators to consider when operating within the framework of the longer, more flexible franchise agreements that we will be rolling out as part of our reform of the franchising programme, because we want them to encourage more passengers on to trains when they have the capacity to get the best use out of rolling stock.

As I have said countless times at this Dispatch Box, I consider it vital for the cost of running the railways to come down. I agree with my hon. Friend that that is essential if we are to respond effectively to the concern expressed by passengers about the level of fares, in his constituency and in many other parts of the country. It is also the only viable means of delivering an end to above-inflation fare rises. It is fair for passengers to contribute to the cost of running the railways and to the coalition’s massive rail improvement programme, and the fares that they pay are making an important contribution to that; but neither fare payers nor taxpayers should have to pay for industry inefficiency.

In line with the recommendations in the McNulty report, we believe it is crucial for those responsible for track and for trains to work more closely together. A crucial part of delivering cost reductions is ensuring that both sides of the rail industry are subjected to strong shared incentives to reduce costs and improve services, and we will therefore expect train operators to deliver closer working relationships and alliances with Network Rail as part of wider efforts to deliver the savings that the McNulty study concluded were possible.

As my hon. Friend anticipated, we will shortly publish a policy statement—in the form of a Command Paper—on rail reform, reducing the cost of the railways, and improving services for passengers. It will set out a strategy for an affordable. sustainable, safe and high-quality railway that will deliver a better deal for both taxpayers and fare payers. I encourage Members to read the Command Paper when it is published, and to respond to the fares and ticketing consultation that we will be launching shortly. It is important that the concerns of their constituents are heard loud and clear as we take forward the crucial process of not only improving and expanding capacity on our railways, but reforming them in order to deliver lower running costs and better services for passengers.

Question put and agreed to.

Oral Answers to Questions

Theresa Villiers Excerpts

Thursday 23rd February 2012 Commons Chamber

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

2. How her Department will calculate the level of rail fares for services between Scotland and England in January (a) 2013 and (b) 2014.

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

The cap on regulated fares is calculated according to the formulae in franchise agreements. The current planning assumption, as set out in the 2010 spending review, is that the cap will increase by RPI plus 3% in January 2013 and in January 2014 for operators franchised by the Department for Transport. However, no final decision has been made.

[Mark Lazarowicz]

It is good to see the Minister in her place today, and I am sure that the whole House wishes her a speedy and full recovery from her accident.

As well as the RPI plus 3% increase proposed by the Government here, the Scottish Government are proposing RPI plus 3% increases in rail fares in Scotland and the potential removal of sleeper services and of cross-border services north of Edinburgh, so my constituents and many people in Scotland face a double whammy. How can we expect people to continue to move on to the railways when we are putting such obstacles in their way?

[Mrs Villiers]

The hon. Gentleman raises very important issues, and the concerns that he expresses are one reason the Chancellor secured the funding to ensure that the 2012 increase would be just RPI plus 1%. We recognise, however, that it is vital that we get the cost of running the railways down, because that is the long-term, sustainable way to respond to passengers’ concerns about the level of fares.

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

I, too, welcome the right hon. Lady back to her place.

Last month The Daily Telegraph was briefed that future fare rises are “not set in stone” and are “under constant review.” Will the Minister of State therefore tell the House whether she still intends to allow train companies to hike fares by as much as 8% above inflation in 2013 and in 2014, and has she taken any decisions about fare rises in the years after that?

[Mrs Villiers]

As I said in my opening answer on this question, the current assumption is based on RPI plus 3%, but we will keep those matters under review, as we did in relation to 2012, to see whether further funding can be secured to opt for a different approach. In reality, however, it is crucial that we get the costs of running the railways down—costs that spiralled during the Labour Government. They failed to respond to the problem and were severely criticised by their own Labour-dominated Select Committee at the time for not doing anything serious about rail fares. We are going to get the cost of the railways down so that we get better value for money for passengers.

[Maria Eagle]

The Minister seems to be saying one thing to the train companies and another to passengers. I have with me the invitation to tender for the west coast main line, which promises bidders that they can increase fares by up to 8% above inflation next year, by up to 8% above inflation the year after that and, then, by up to 6% above inflation every year for the rest of the entire 15-year franchise. So it seems that the decision has been taken. When is the Minister of State going to stand up to those vested interests and stand up for passengers?

[Mrs Villiers]

The shadow Secretary of State has resorted to the same old stuff about the fares basket flexibility that the leader of her party got completely wrong at Prime Minister’s questions. It was a fares basket flexibility that Labour suspended for one year and we introduced, and the Labour Administration in Cardiff are still using that flexibility. It is entirely disingenuous for the shadow Secretary of State to get up and talk about—

[Mr Speaker]

Order. We do not use the word “disingenuous” in the Chamber, and I am sure that the Minister of State is happy to withdraw it. We are extremely grateful for her answer.

--- Later in debate ---

[Anas Sarwar (Glasgow Central) (Lab)]

6. What assessment she has made of the effect on services to Scotland of the bid by International Airlines Group to acquire BMI.

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

The Department has made no such assessment. The proposed sale is a commercial matter between BMI’s owner and the prospective purchaser. Any competition issues arising from the proposed sale will be subject to the appropriate EU and UK competition authorities.

[Anas Sarwar]

BMI’s withdrawal of its flights from Heathrow to Glasgow last year left British Airways as the sole operator. Since then, average fares have increased by 34% and the number of flights on the route has decreased by 50%, affecting 1.8 million passengers and more than 300,000 small and medium-sized enterprises. What steps will the Minister take to ensure that Scottish businesses and the wider public are given access to a much more open, fair and competitive market?

[Mrs Villiers]

It is difficult for me, as a Minister, to comment on the specific deal, as that is a matter for the competition authorities. It is worth bearing in mind that Aberdeen, Edinburgh and Glasgow have 60,000 such flights a year, so there is excellent connectivity as things stand. It is important that in our discussions with the European Commission on its airports package we ensure that it is aware of the importance of regional connectivity. We will look into that in our aviation framework document. Our plans for High Speed 2 will deliver a three and a half hour journey time between Scottish destinations and London, which will provide an attractive alternative to aviation.

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

BMI’s headquarters is at Castle Donington in my constituency. Many of my constituents are very concerned about their employment prospects at the company. Will my right hon. Friend update the House on the progress of the proposed takeover by International Airlines Group?

[Mrs Villiers]

My understanding is that the directorate-general for competition at the European Commission has been informed, and that the Office of Fair Trading is in contact with the parties and the Commission on the proposed sale.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

That was a very feeble answer from the Minister of State. Does she realise what British Airways is doing at the moment? To give an example, a 9.15 pm flight that I was supposed to take left at 10.36, after two other flights to City airport had been cancelled. It arrived after the Heathrow Express had left and I got home at 1.15 in the morning. That is what BA is doing now. This is not a question of competition. I want the Minister to tell the EU that it is not acceptable to the people of Scotland for BA to take over the BMI franchise. It will do what it is doing now and destroy the service from Edinburgh to this city.

[Mrs Villiers]

It is not the role of Ministers to make decisions on these deals. There are legal rules that put in place the role of independent competition authorities in deciding these questions. Of course the Government take seriously the importance of regional connectivity. That is one reason for our pressing ahead with HS2 and our Y-shaped network to Leeds and Manchester, which will deliver a three and a half hour journey time to Scotland, providing an excellent addition to current connectivity.

[Ian Swales (Redcar) (LD)]

7. What plans she has to ensure the rail network serving ports can carry modern freight containers.

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

Our policy is to continue to develop the strategic freight network to drive UK economic growth and support the expansion of our maritime trade.

[Ian Swales]

I welcome the public investment to upgrade the rail connection from Teesport to the east coast main line by the end of this year. However, there is still no suitable east-west rail crossing for modern containers anywhere between the midlands and Scotland. Will the Minister also address that problem?

[Mrs Villiers]

The Government have a major programme of improving the capacity of our rail network to take freight, particularly the 9 feet 6 inches high cube containers that are such an important a part of international trade. That is why the railway control period up to 2014 will see about £350 million spent on upgrading the network. A crucial part of that is improving links to ports, for example between Southampton and the west coast line and on the Felixstowe-Nuneaton line. That will provide major benefits on carbon emissions, road safety and relieving congestion on our roads.

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

What actions is the Minister taking to improve access to ports outside the south-east?

[Mrs Villiers]

The hon. Lady will have heard of the proposals being taken forward to improve gauge clearance to Teesport, and we are working on a number of other schemes and projects to improve rail freight connectivity with our major ports. Despite the deficit and the pressing need to reduce spending, our work on the strategic freight network has continued, and we propose to continue it in future.

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

Has my right hon. Friend had an opportunity to quantify what extra capacity there will be for freight transport on the classic rail network following High Speed 2?

[Mrs Villiers]

HS2 has done some major studies on that. I do not have the numbers in front of me, but it is clear that one of the major benefits of HS2 will be to free up paths on the existing north-south network for freight, and indeed for other passenger services, relieving the current congestion problems.

--- Later in debate ---

[Elizabeth Truss (South West Norfolk) (Con)]

In order to upgrade the service to half-hourly on the Fen line and the Norwich-Cambridge line, there needs to be an upgrade at the Ely North junction. Network Rail has conducted an economic study that suggests that this will have a positive benefit, and the Department for Transport wants to specify it in the next franchise. May I ask what progress has been made to move forward on this investment?

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

I know that my hon. Friend is a strong campaigner for improvements to the rail lines that serve her constituency. This is something that we are looking at carefully. We have asked Network Rail to do important work on deciding how we might improve the frequency of the services in the way that she wishes to see, and whether the infrastructure needed to deliver that is within the budgets that have already been allocated to Network Rail. We will also look at what we might be able to do in the next control period, as part of our high-level output specification—HLOS—statement, which we will publish in the summer.

[Jonathan Ashworth (Leicester South) (Lab)]

Will the Minister update the House on the Department’s attitude the electrification of the midland main line? There is widespread concern that, because of HS2 and other pressures, the electrification will not go ahead for quite some time. It would, however, provide a huge boost to the east midlands economy and to cities such as Leicester.

[Mrs Villiers]

Leicester and the communities around it have been running a very good campaign on this issue. The Government have made it clear that we see the progressive electrification of the rail network as an important part of our transport and environmental policy. The electrification of the midland main line has been prioritised by the industry in its initial industry plan, which will form an important part of the decisions that we have to make on what will be funded in the next railway control period. We will give further details in our HLOS statement in July.

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

Given the recent disappointing Christmas drink-drive statistics, is it now time to revisit the decision not to accept the North review’s recommendation to reduce the drink-drive limit?

ATOL Reform Regulations

Theresa Villiers Excerpts

Thursday 9th February 2012 Written Statements

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

Today I am pleased to announce the Government’s decisions on the proposals set out in last summer’s consultation on the reform of the Air Travel Organiser’s Licensing (ATOL) scheme which can be introduced through new regulations under existing powers.

ATOL is a longstanding and important scheme, which last year protected 18 million holidaymakers from travel company failure. ATOL is particularly relevant in today’s uncertain times, allowing consumers to book with the confidence that if their holiday company fails, their money will be protected or they will be able to return home as planned if they are already away, without any extra cost.

It is essential that the scheme should apply in an effective way in the modern holiday market; so that consumers are clear about their rights and how to use them, and holiday companies know which of their products must be protected.

In addition the Air Travel Trust Fund, which provides for refunds and repatriations under the scheme, is operating at a deficit and is supported by a Government guarantee. The fund needs to return to a financially self-sustaining basis as soon as possible so that taxpayers’ money is no longer exposed to risk.

Between 23 June and 15 September 2011 the Government consulted on a set of initial reforms to the ATOL scheme with the following objectives:

Improving clarity for consumers about what holidays are protected.

Returning Air Travel Trust Fund finances to a self-sustaining basis, with the deficit repaid and Government guarantee phased out.

The longer to medium-term objectives are to:

Further improve the clarity of the scheme and develop a more consistent and coherent

regulatory framework for businesses.

Look at options for how the ATOL scheme is managed and- financed once it is financially self-sustaining, with a view to reducing its cost to the travel trade and consumers.

The ATOL reform consultation received 82 responses. I am grateful to stakeholders for taking the time to reply. In the light of the responses and further analysis, I am confirming today that new ATOL regulations will be made that will:

Bring into the ATOL scheme flight-plus holidays sold by tour operators and travel agents. These are holidays that look like packages but do not meet the legal definition, and so do not currently require protection under the scheme. Including these holidays will end a significant source of confusion for consumers, and we expect up to an additional 6 million holidays a year will be fully ATOL protected as a result.

Ensure that on paying for an ATOL protected flight-only, package holiday or flight-plus, consumers receive a certificate confirming that their trip is covered by the scheme. To give the travel trade sufficient time to prepare, this requirement will come fully into effect on 1 October 2012. Until then, consumers will receive clear confirmation that their holiday or flight is ATOL protected.

Taking account of consultation responses and further discussion with stakeholders, the new ATOL regulations will include a number of changes to the draft regulations consulted on. These include changes to the definition of a flight-plus holiday and a revised approach to the exemption for flight-only sales where tickets are provided immediately on payment. Further details on these changes are included in the summary of responses and the Government’s decisions published today on the Department’s website.

It is intended that the new regulations will be laid in Parliament in March, before coming into effect on 30 April 2012.

In addition to bringing greater clarity to consumers about ATOL protection for holidays and flights, we expect that these reforms should allow the ATOL scheme’s financial deficit to be repaid within three years. This will pave the way for possible future changes to improve how the ATOL scheme is funded and managed. The Civil Aviation Authority plans initial discussions with stakeholders on options for this later in the year, building on responses to the question posed in the consultation on this subject.

These regulations complement the clause in the Civil Aviation Bill introduced on 19 January 2012 that would allow the ATOL scheme to cover holidays sold by airlines and those organised on an agent for the consumer basis. Subject to parliamentary process, the Government’s intention is that such a step would only be taken following full consultation with stakeholders including an impact assessment.

Transport

Theresa Villiers Excerpts

Monday 23rd January 2012 Ministerial Corrections

[Jonathan Ashworth]

To ask the Secretary of State for Transport which consultants and advisers her Department has employed in respect of the (a) Thameslink programme, (b) Thameslink rolling stock procurement and (c) Intercity Express programme; how much she has budgeted in respect of each such contractor; and how much each contractor has invoiced to date.

[Official Report, 23 November 2011, Vol. 536, c. 411-12W.]

Letter of correction from Mrs Theresa Villiers:

An error has been identified in the written answer given to the hon. Member for Leicester South (Jonathan Ashworth) on 23 November 2011. The full answer given was as follows:

[Mrs Villiers]

[holding answer 21 October 2011]: The information requested can be found as follows.

[Mrs Villiers]

[holding answer 21 October 2011]: The information requested can be found as follows.

Intercity West Coast Rail Franchise

Theresa Villiers Excerpts

Friday 20th January 2012 Written Statements

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

In May last year, the then Secretary of State announced that the next intercity west coast franchise would start on 9 December 2012.

The Department for Transport has today published an invitation to tender to mark the commencement of the formal bidding stage of the competition to replace the current operator on the west coast main line. The new franchise will continue through to March 2026, this date being aligned to the introduction of high-speed services along the proposed HS2 route.

Increasing capacity and tackling overcrowding is our priority. Some 106 extra “Pendolino” carriages are being provided for the west coast. In addition to the 45% increase in capacity delivered in December 2008, 31 existing Pendolinos are being lengthened from 9 to 11 carriages and four new trains are being introduced, increasing the number of standard class seats on each train by almost 50%, from 320 to 470.

In all, the 106 new carriages will make 28,000 extra seats available each day, an increase of 25%. We expect that the additional and lengthened trains will be targeted on those routes and times of day with the highest demand.

It was further announced in May that a consultation would take place on a revised train service requirement (TSR). A summary of and response to this consultation has also been published today on the Department for Transport website.

The TSR has been designed to give bidders greater flexibility to respond to passenger demand and run their businesses in a more commercial way within a framework set by the franchise that protects key outcomes for passengers, taxpayers and the economy. The TSR requires the provision of the same number of weekly stops at each station as set out in the current franchise; but will allow the franchisee to vary the capacity provided on individual days of the week in order to cater for the variations in daily demand.

The ITT contains less specification than in previous competitions, with a stronger focus on outcomes, for example on passenger satisfaction, rather than detailed prescriptive inputs. We expect the additional flexibility set out in the ITT to enable bidders to provide both a better service for passengers and an improved financial return for taxpayers.

However, we will continue to specify core requirements and to manage overall compliance of key deliverables, such as performance and service quality. The franchise will contain new obligations based around passenger satisfaction with stations, trains and customer services.

The franchise length of up to 15 years including an option to extend by 20 months is intended to encourage the development of long-term relationships between the operator and stakeholders, giving greater scope to challenge and reduce excessive industry costs. We also expect the certainty provided by a long franchise to encourage investment in assets such as stations, by extending the period over which commercially attractive schemes can pay back. The new franchisee will take over full repairing responsibilities for the 17 stations they manage. We believe that cost savings can be achieved through combining roles currently split between the operator and Network Rail in relation to stations.

A new risk-sharing mechanism based on macro-economic variables has been introduced to remove some of the perverse operator behaviour experienced under the cap and collar system, while still providing an appropriate allocation of risk between the taxpayer and the operator.

Cap and collar led to stronger concentration on revenue generation schemes rather than on cost reduction because support was available in the event of underperformance on revenue. Our new risk-sharing mechanism helps create a more balanced approach to revenue and costs when bidders are considering how to develop their business.

A profit-share mechanism has been introduced to enable the taxpayer to benefit from a share in profits above an agreed threshold which the franchise has generated, while continuing to provide sufficient incentive for the franchisee to outperform.

The franchise will specify the introduction of ITSO-based smart ticketing. The introduction of smart ticketing will provide significant benefits for passengers and the use of the ITSO standard will enable the same card to be used on a range of different public transport services.

The intercity west coast ITT takes forward the franchising reforms set out in January 2011. Given the diversity of the rail network, our approach will be adapted to meet the individual requirements of different franchises. Future franchise contracts will not be identical but common themes will underlie all of them, including an emphasis on innovation, passenger satisfaction and greater commercial freedom to respond to the needs of passengers.

ATOL Reform and the Civil Aviation Bill

Theresa Villiers Excerpts

Thursday 19th January 2012 Written Statements

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

The Government consulted on proposals to reform the Air Travel Organisers’ Licensing (ATOL) scheme between 23 June and 15 September 2011. The consultation included proposals that would require new primary legislation to help bring greater clarity and coherence to holiday protection.

Following the consultation and after careful consideration of the responses, I am pleased to announce that the Civil Aviation Bill introduced today includes a clause that would widen the Secretary of State’s powers so that holidays sold by airlines or arranged on an “agent for the consumer” basis could be included in the ATOL scheme in the future. The Government’s intention is that such a step would only be taken following full consultation with stakeholders including an impact assessment.

The Government intend to make a further statement on the full range of proposals for ATOL reform, shortly.