Department for Transport

Alan Brown Excerpts

1st reading: House of Commons
Tuesday 27th February 2018 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to speak in this new world of estimates debates, which means that instead of debating obscure reports we can talk about numbers and principles. The reality is, though, that many estimates are still going to be rolled up and voted on without debate. We are a long way from full transparency.

There are some increases in the supplementary estimates, and they are all reactive increases. There is £265 million to cover the HS2 VAT risk—just like that—yet the £35 million to scrap VAT for Scottish police and fire services was supposedly a Budget set-piece announcement for Scotland. Only last week, the UK Government voted down a review of the £140 million of backdated VAT that we want to be refunded to emergency services in Scotland. Will the Minister explain how that £265 million of VAT can be found so easily for HS2?

Some £5.6 million is allocated in the supplementary estimates for Brexit costs. That is going to a be a drop in the ocean of what will be required. There need to be clear funding allocations as part of the Brexit preparations and there should be transparency about what that funding is for, especially if it is used in preparation for a no deal.

In my time in this House, the focus of much of the general transport debates has been on the whole north-south divide and whether London has much greater access to funding than other regions and nations in the UK. The bare figures back up the latter assertion: London and the south-east have between them shared more than 38% of the total spend over a five-year period. Such continual disproportionate spending creates either a vicious circle or a circle of prosperity, depending on how it is considered. Many of London’s transport projects have been used to drive the regeneration of areas, which brings further investment and jobs and thereby effectively sucks in more investment that could have been targeted elsewhere.

Even HS2 confirms the London-centric approach of successive Governments. There was no way that the UK Government was going to countenance starting in the north first or even, at the very least, undertaking north and south linkages at the same time. I certainly sympathise in particular with the north-east of England, which seems to suffer disproportionately. It also means that there will be some form of detriment to cross-border journeys.

Let us consider the Scottish total spend on transport over the past five years. At 13% of total UK spend, we are spending a higher amount per capita than the rest of the UK. On national road spending, Scotland is punching well above its weight. However, that is not because of the benevolence of the UK Government; it is despite the UK Government and thanks to the will of the Scottish Government.

Devolution has made a huge difference to the amount that can be spent on trying to alleviate the north-south divide. We need only consider the work that has happened since the Scottish Parliament came into being. Before that, we were completely at the mercy of the UK Government and suffered as a consequence. That alone is confirmation that power needs to be moved further from London.

In 2009, the Scottish Government completed the upgrade of what was the last remaining single-track trunk road in the UK: the road to the isles from Fort William to Mallaig. It is truly astonishing that that was overlooked for so long. Things are the same on many of the Scottish islands, where there are single-track roads with passing places, interspersed with upgraded stretches that have been partly funded by the EU. That brings us back to the question of what the UK Government are going to do to plug the EU funding stream. What are they going to do when access to European Investment Bank loans dries up?

It took until 2017 for there to be a continuous motorway between Glasgow and Edinburgh. The Scottish National party Government have funded and completed the M74 and M80 upgrades, and we are progressing with the A9 and A96 dualling programmes. The fact that so much work has been done illustrates the historical shortfall. Some Opposition parties in the Scottish Parliament are crying out for more work to be done, but it is really difficult, especially as the estimates process is year on year. Barnett consequentials might or might not arise out of a given Budget—conversely, a cut could be imposed on the Scottish budget—so it is clear that the estimates process is still not fit for purpose. It is certainly not conducive to long-term strategic planning.

At no point in the budgetary process are the Scottish Government asked what their needs are so that decisions can be made on that basis. Yet we all know that the extra money secured by the Democratic Unionist party was apparently not a sop to the DUP; it was just that the UK Government were doing a needs-based analysis for Northern Ireland and suddenly discovered that it needed another £1 billion. Hopefully the other nations and regions of the UK will now be given the same forethought in the estimates process.

When it comes to rail funding, there is a process that should allow longer term planning and investment: the control period cycles. Previously, Scotland was allowed to access up to 11.2% of Network Rail’s borrowing capacity, based on the relative size of Scotland’s network within the UK network. Since then Scotland has actually built more railway lines, thanks to the SNP Government, but our allocation of funding has been proportionately cut. That does not make sense. Even worse, the UK regulator, the Office of Rail Regulation, has stated that Scotland needs £4.2 billion for essential repairs in order to meet future demand. However, without any warning the UK Government have allocated only £3.6 billion, leaving a £600 million shortfall. What is the point of involving the ORR in a proper, scientific estimates process if it is just ignored by the UK Treasury? I am yet to hear any Transport Minister stand up to defend the ORR and demand that extra money for Scotland.

It is impossible not to mention the rail franchising debacle. I have stated that the estimates process is not fit for purpose, and the same certainly goes for rail franchising. We had the west coast main line tender debacle, which led to the direct award to Virgin. We had the Southern rail shambles and too many direct awards in general. The Transport Secretary’s failure to get a grip of the Southern rail situation has cost the taxpayer £240 million in lost revenue, and that is a small drop in the ocean compared with the situation with Virgin Trains East Coast. The Secretary of State needs to get a grip of the east coast main line and return it to public ownership.

In conclusion, this is supposed to be a more transparent system that allows greater debate, but it seems to me that there is a long way to go. There is a long way to go before we have proper long-term planning; a long way to go before there is equitable spending, and not a bias in favour of London and the south-east; a long way to go before we have a Secretary of State who understands that private franchises do not generate magic money that the Government could not otherwise access; and a long way to go before we know the implications of Brexit. With the UK Government determined to hide the Brexit sectoral impact analyses, I am also concerned that the estimates process will continue to be a guesstimates process and that there will be a complete lack of transparency.