Rail Investment

Andrea Leadsom Excerpts

Thursday 17th February 2011 Westminster Hall

[Mrs Ellman]

Indeed. The hon. Gentleman may recall that previous reports of the Transport Committee during the time of the previous Government were not slow to criticise the inadequacies of the Government where we felt it was appropriate to do so, and rolling stock was one of those areas. We also have the ongoing saga of the new generation of InterCity trains. In November, the Government announced that they had narrowed their options for the replacement of the old InterCity 125s down to two: a bid from Agility Trains for a mixture of electric and hybrid trains; and a proposal for a fleet of all-new electric trains that could be coupled to new diesel locomotives where the overhead electric power lines end. I know that many of my colleagues in Wales are anxious for that decision to be made because of the impact that it will have on the Great Western main line to Swansea. Again, the Government have not been very clear about what is happening regarding that line and I would be grateful for any clarification.

During the next control period, which is between 2014 and 2019, and beyond, it is extremely important that we have continuing and substantial investment in the rail network, improving it to accommodate passenger growth and to alleviate unacceptable overcrowding. One of the priorities for the next control period must be investment in the rail infrastructure in the north of England. Our Committee’s report shows very clearly how the south, particularly London, has benefited from rail investment. We support that investment, but we noted in the report that when we examined the amount of transport investment per head we found that there was three times as much in London and the south-east as in other regions of the country. We support investment in London and the south-east, but similar interest should be shown in the needs of the north.

The particular project that we recommended in our report was the northern hub. That bottleneck in the Manchester area critically affects the operation of both passenger and freight services right across the north of England, including in Leeds, Liverpool and Newcastle. The Northern Way study concluded that addressing the northern hub could provide economic benefits worth up to £16 billion for the economy of the north.

Investing in the northern hub remains as important as ever. However, there is particular concern about that issue, because of what has happened to the organisations that brought the project together. The combined work of the three northern regional development agencies was very significant in developing the project, costing it and working out its implications and benefits. Sadly, the project for the northern hub—the Northern Way project—may no longer be supported because the RDAs are being disbanded. Indeed, it is very unclear what will happen to the organisation that has developed and costed that project in such great detail. I would be very pleased if the Minister could confirm that she will support that project as a top-priority project for the north in the period ahead.

The longer-term investment priority is the development of a high-speed network. Our Committee welcomed the previous Government’s change of policy when they decided to support high-speed rail. However, we emphasised that investment in high-speed rail should not detract from investment in the existing classic network. Moreover, if high-speed rail is important for the route from London to Birmingham—as the current Government have stated, and I agree with them—it is equally important that it extends to the north.

The case for high-speed rail has been put forward, based largely on the need for additional capacity for both passengers and freight. That argument is very important, but it is also very important that the economic impact of high-speed rail is recognised. Indeed, the Government have said as much many times. They have said that their support for high-speed rail is based on the need to reduce the disparities between north and south. That means that if high-speed rail goes ahead, as I hope it will, it must go beyond Birmingham to the north.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the hon. Lady accept that there are concerns about whether High Speed 2 is necessary to achieve the capacity increases that are so badly needed between London and Birmingham?

[Mrs Ellman]

I thank the hon. Lady for her comments. That is an important issue and indeed it is extremely important that the Government spell out their case very clearly on the need for HS2, particularly given the considerable opposition to HS2 from a number of quarters. The Government must do that.

Finally, my Committee has recently returned from a visit to Brussels where we met the Transport Commissioner, European Commission officials and Members of the European Parliament, including members of the Transport and Tourism Committee. One of the subjects that we discussed was the UK’s failure to apply for funding from the European Union. We received information that suggested that the EU might be willing to part-fund the cost of feasibility studies into HS2, paying 50% of those costs. However, it appears that no application has been made for Trans-European Transport Networks, or TEN-T, funding, which could part-fund the costs of looking into HS2. Indeed, when members of my Committee questioned the Minister recently in our inquiry into European issues, it appeared that the UK was rather slow, or perhaps loth, to apply for European funding. I wonder if we could receive some assurance from the Minister today that the Government will look at that issue again, particularly the possibility of securing European funding for studies into the viability of HS2.

Deciding the priorities for rail is a very important task. Our Committee’s report was produced a year ago, but it is clear that the priorities and concerns that we highlighted are equally relevant today. I hope that this debate today will help to take the debate on rail priorities forward and help to secure increasing investment for the extremely important service that is our rail network.

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[Andrea Leadsom (South Northamptonshire) (Con)]

I join other hon. Members in congratulating the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), on securing this debate about the priorities for rail investment. That is an important topic, as it involves the relative merits of what our money is spent on. Value for taxpayers’ money is a subject dear to my heart.

Almost a year ago, I was the unsuspecting candidate for South Northamptonshire. Suddenly, I heard Lord Adonis’s announcement about high-speed rail that was, quite literally, to change my life, and it hit me out of the blue that the line would go through the middle of South Northamptonshire. Within days, I held a public meeting that was attended by about 550 people. Of those, 400 were on two floors of a town hall in Brackley, and 150 were outside on the pavement trying to get in.

I do not want to focus on that today. Hon. Members from across the House have made accusations of nimbyism, noted that if we want to make an omelette a few eggs have to be cracked and made other helpful remarks. Therefore, I will not talk about the fact that I have had nigh on 1,000 pieces of correspondence. My right hon. Friend the Minister knows that only too well, as I am in regular correspondence with her and the Department for Transport.

There are real concerns. Some schools in my constituency may be unviable from now on because of the risk that high-speed rail will run so close to the school that in a few years’ time—within the time frame for parents to decide where to send their children to school—that school will be forced to close. If that threat exists, why would any sensible parent send their child to such a school? There are families who need to move but do not quite meet the criteria for the exceptional hardship scheme. They do not know when they will be able to move, if ever. There is a risk that the famous English battle site at Edgcote will be severely damaged by the proposed route. There are many small battles to fight in South Northamptonshire to protect ourselves in terms of mitigation. Again, I will not talk about that now, because I have been accused of nimbyism too many times. Instead, I will focus on my 23 years in banking and finance, and hope that that will give me the credibility to point out the issues about value for money and the choices that we need to make about our priorities for rail infrastructure.

We expect the High Speed 2 line from London to Birmingham to cost around £17 billion. That is largely a guess, as such major infrastructure projects often have big overruns. I know the Department for Transport is concerned about the fact that civil engineering in this country costs such a great deal. As a frequent user of the line from Euston to Milton Keynes, I accept that the west coast main line is at capacity. I have taken trains home at 8 pm, and still found myself standing shoulder to shoulder. It is a matter not of having a seat, but of having anywhere to stand. However, is that need for capacity best met through a brand new, 250 mph train line, or can we achieve something similar by providing additional capacity on existing railway lines, and using the change—a significant amount of money—to fulfil some of the other interesting and compelling projects that hon. Members have mentioned today?

As I have heard many times, because of the capacity issue there has to be a new train line, and if we are to have a new train line, it may as well be high speed. That is my first challenge. High-speed rail has massive implications in terms of engineering costs and the impact on the environment and the communities through which it passes. Does the line have to be high speed? Will it even reach 250 mph? Certain international rail consultants have challenged whether such a line in Britain—a small country with complications caused by the lie of the land, the wrong sort of leaves, the wrong sort of snow and probably the wrong sort of trespassers on the line—will actually ever reach 250 mph on a regular basis. If it does not, what on earth is the point of spending the money to go in a straight line? That is my first major question.

Secondly, I have seen evidence that suggests that a similar amount of capacity could be freed-up on the west coast main line by providing 12-coach trains, making adjustments to certain stations and carrying out other alterations that would not incur the type of disruption that we saw in previous upgrades to that line. Is this an issue of capacity, or is it a case of, “HS2 is the answer, what is the question?”? I am unconvinced that we have said, “There is £17 billion to be spent, how best can we spend it?” I did not give the Minister prior notice of that question, but I would appreciate it if she would indicate whether she will be willing to talk to me separately about it.

I am not a transport expert by any means. My favourite film as a child was “The Railway Children”, and my 15-year-old has told me excitedly about Maglev. That is the future, although not in our lifetime I have been told. Meanwhile, we are stuck with ancient 21st-century technology, and we have to look at what we can do now.

Hon. Members have spoken about the importance of the electrification of other lines. They have mentioned the northern hub and the east-west line. A number of colleagues who will not be affected at all by HS2 have said, “What about my line? My constituents want to get from the east coast to the west coast. What are we doing for them?”

[Mrs Villiers]

I hope that my hon. Friend appreciates that over the next five years, the coalition Government will be embarking on one of the most extensive upgrades of our existing network in modern history. There is no evidence to suggest that high-speed rail is going to squeeze out other important rail upgrades. Both are important, and both will be delivered on.

[Andrea Leadsom]

I am pleased and reassured to hear that; nevertheless, in this time of great financial constraint, there is no doubt that a £17 billion project will lead to other choices not being taken.

The hon. Member for Luton North (Kelvin Hopkins) made an excellent contribution—he is clearly an expert on this matter. He spoke about a dedicated freight line. I do not wish to be a nimby, but if such a line went through my constituency, I can see the obvious merits of a dedicated freight line that I cannot see having looking carefully at HS2.

[Kelvin Hopkins]

The hon. Lady made a good point about high-speed trains having to go in a straight line. That gives them certain rigidities that do not apply to normal passenger routes up to 130 mph, or to freight trains that can manoeuvre and take tighter curves. That cannot be the case with high-speed trains. They have to go in straight lines because of the speeds involved.

[Andrea Leadsom]

I am grateful to the hon. Gentleman for that point. He is right—high-speed rail has to go in a straight line and it is much more expensive to create that, which greatly limits the number of stops. I have heard it said that the line needs to go from London to Birmingham for the purpose of speed and to solve the north-south divide. I agree with those hon. Members who have said that that alone will not solve the north-south divide and that other decisions will need to be taken. We need to consider the whole of Britain. From the point of view of many constituencies along the way between London and Birmingham, if the line were to be made viable with interim stops, so that there were some sharing of the benefit, it would be more attractive.

[David Mowat (Warrington South) (Con)]

No one would claim that high-speed rail on its own could solve the north-south divide. I do not think that anyone in the Chamber, including my right hon. Friend the Minister, would attempt to do that. However, will my hon. Friend admit that the creation of 40,000 jobs—that is KPMG’s estimate—in the north-west, north-east and Yorkshire as a result of high-speed rail would contribute to it? She said that other projects could be equally effective in helping to solve the north-south divide. Perhaps she will say which of those she would put her money on. Finally, three or four hon. Members have made the point that incremental improvements in rail are very effective in the short term. That is correct, but we cannot just make incremental improvements for ever—at some point, the Government have to call it.

[Andrea Leadsom]

I thank my hon. Friend for his intervention. However, I am not of the old USSR view that we should just do public project after public project for the sake of creating jobs. There needs to be a clear rationale for having the high-speed line in the first place. Any project needs to stand on its own merits and not be done just because it creates jobs, so I do not agree with my hon. Friend in that respect.

I have seen evidence—I hope that the Minister will comment on it—that the west coast main line, through incremental improvements that would not cause disruption, could come very close to providing the same increase in capacity as HS2. My central point is that that would be a much cheaper and less disruptive alternative means of achieving the same improvements in our rail infrastructure.

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[Martin Horwood]

Supply and demand on the railways clearly do not work in favour of the customer. If the Government had not taken a realistic approach to fares, as well as to public support for the railways, some of that critical investment in the railway’s future would have been lost. That, too, would in the end have damaged the interests of customers.

It is obviously regrettable that any fares have to rise at all. We all want to see them fall. Indeed, that Liberal Democrat aspiration was included in our manifesto. However, we must recognise that the Labour party has left us with an annual overspend that would have swallowed the Department for Transport’s budget many times over. We have to be realistic about the need to invest in that kind of environment.

The Select Committee made some important points about the security of that investment programme. Some of those programmes have been maintained. The Minister will know that I am going to mention one project that I think she maintains was not agreed but which I consistently maintain had been agreed, which is the redoubling of the Swindon to Kemble line. It was given enormous support by the Welsh Assembly, local councils, Labour MPs from south Wales and Swindon, Tory MPs from the counties between, and Liberal Democrats from Cheltenham, Bristol and Cardiff—and probably Chippenham.

The redoubling of that short stretch of line would have an enormous impact on the reliability of all the routes that serve those areas and constituencies. It would also be important to the resilience of the network in the west of England, particularly in the event of interruptions to cross-Severn services. Once again, I urge the Minister to look down the departmental sofa to see if any pennies can be found to secure that one project. It is a shame, but it is virtually the only railway project that was agreed under the previous Government that is not going forward.

The Select Committee report rightly talked about the value of rail enhancements, including many local projects, and stressed that they were as important as many of the larger projects. The importance of the right decision-making methodology was also mentioned. My hon. Friend the Member for Chippenham (Duncan Hames) made some excellent points about the need for a long-term strategic view and for joined-up planning in that respect. However, environmental concerns now take an even greater part in that methodology.

Passenger experience, too, is important. When it comes to franchise reform, it is important that we do not use only the basic metrics, such as punctuality; we should also consider the quality of passenger experience on some of our railway services. I would nominate leg room as being one of the most important. Passenger experience should play a much greater part not only in the awarding of franchises but in their maintenance and, if necessary, their recall when services and standards fall. It is also important that regional balance is considered. Many Members have made similar points. Some of the specific medium to long-term priorities identified in the report were equally important, and the points were all well made. I am an unashamed supporter of high-speed rail as is the Liberal Democrat party. The time scales involved are quite mind boggling. We can reassure some hon. Members about the investment involved, because it is spread over a long period of time.

[Andrea Leadsom]

Is the hon. Gentleman an unashamed supporter of HS2, or is he an unashamed supporter of dramatically increasing the amount of capacity on the west coast main line?

[Martin Horwood]

Both actually. The importance of High Speed 2 is not simply related to the stretch to Birmingham. If we consider the ultimate plan, which is to link London and Scotland, and then Scotland and Europe, by high speed rail, with another link to Wales and the west, we can see that it will compete holistically with aviation—I have already mentioned that aviation traffic tends to drop by 80% on routes covered by high speed rail—and cars. As people shift from conventional rail to high-speed rail, which happens and is an environmental issue because high-speed rail is more energy intensive, the likelihood is that their places will be taken by people abandoning car journeys as traffic becomes more competitive.

[Andrea Leadsom]

rose—

[Martin Horwood]

I am a little wary of the time, so I will plough on. I endorse the view that we need a balance in railway investment between not only Manchester but the whole of the north of England and London and the south-east. I echo the comments of my hon. Friend the Member for Chippenham about the need for a rebalancing in favour of the west and Wales. When we enter the next control period, it is important that we bear in mind such balances.

Electrification, which was raised by the Select Committee, is an important issue, especially in the context of the Great Western main line. We need to be wary about presenting the commitment to electrify as far as Newbury and Oxford as any kind of cut. That project will continue until 2018, so to look beyond that is already well into the next Parliament. The Labour party committed itself to 20% cuts in its submissions to the comprehensive spending review across unprotected Departments, so if extra and faster investment in electrification were to happen, it would be interesting to see what cuts would be made to pay for it.

We must be wary of the perception that all the investment is working its way out from London. If I were to suggest that we face a rise in rail fares across the entire network, constituents living in Wales or Bristol would not see a great return on that rise. However, someone who is living in, say, Witney, would be closer to one of the stations that would be electrified—Didcot parkway or Oxford—and they might get a very real and rapid return on their increased rail fares. We have to be wary about the perception that all the benefits are being delivered first to London and the south-east.

The hon. Member for Luton North (Kelvin Hopkins) made some important points about signalling technology. My hon. Friend the Member for Chippenham mentioned the European rail and traffic management system, and I raise an alarm about that. I urge the Minister to examine the experience of Londoners when the ERTMS was introduced on the tube system. She should perhaps take some advice on how well the system works.

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[Mrs Villiers]

It is open to the train operators to lease additional capacity if they so wish, and they may well be interested in exploring the option that the hon. Gentleman outlines.

Substantial work is under way on the strategic freight network, and I have repeatedly paid tribute to the work done on that by the previous Administration. I emphasise that rail freight plays a really significant part in our strategy for reducing carbon emissions and relieving congestion, and that is why the coalition has prioritised investment in projects such as the Felixstowe-Nuneaton gauge clearance.

The hon. Gentleman would like to see a dedicated freight line. I know his enthusiasm for that project and am always happy to engage with him on it, but the freight industry as a whole prioritises the projects in the strategic freight network, rather than a dedicated line. If the hon. Gentleman can make the case for going ahead with something like that in the future, I and my colleagues will of course be prepared to listen.

On the regional balance, in making project funding decisions it is important to take account of the needs of different areas. Although the business case for rail investment in the south-east can often be stronger because of the sheer volumes of passengers, assessment of the business case is just one element in the decision-making process and we can, and do, have regard to other factors, including the appropriate balance of funding between different parts of the country. It is worth recognising that improvements in London and the south-east can yield benefits for the economy as a whole, but the north of England will benefit directly from a whole range of programmes that are under way, including faster journey times between Liverpool, Manchester and Leeds, additional carriages, electrification, station improvements and important upgrades on the east coast main line, as well as the extension of light rail in Manchester and Newcastle, and in the longer term the north will benefit massively from our high-speed rail plans. The tough decisions made in the spending review mean that we are able to provide more than £1.5 billion for local authority major schemes in the period up to 2014-15, and that is a larger amount than the average annual Department for Transport spend on such schemes over the past 10 years.

High-speed rail has been a big issue in the debate this afternoon, as ever. My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) spoke with her usual passion and articulacy on her concerns about high-speed rail, and I welcome the input of all colleagues on this issue as it is one of the most important parts of the coalition’s programme to improve our railways. Very soon we will start a major consultation on our strategy for a Y-shaped High Speed 2 network, and I can assure the shadow rail Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), that we are committed to taking this railway to the north of England, in two delivery phases. Opponents of HS2 say that it will not have a big impact on the north-south divide, the important response to which is that they should look at the extensive support for the project in the north of England, and also at the rest of Europe, where cities such as Lille have been transformed as a result of the connectivity that can come with a high-speed link to a capital city.

Demand for travel between our cities is expected to increase significantly, and there is an industry consensus that the west coast route will be full to capacity within little more than a decade. My hon. Friend the Member for Blackpool North and Cleveleys indicated that there was some contention about passenger growth figures, but everyone accepts that there will be significant growth on the west coast main line.

[Andrea Leadsom]

Will my right hon. Friend give way?

[Mrs Villiers]

I am afraid that I really cannot. I do apologise.

We will face severe congestion and overcrowding on those routes in years to come, unless we act now to begin the process of delivering that capacity.

On the alternatives, upgrades of an existing line, even extensive ones, could deliver only half a new line’s capacity benefit and would be more expensive. My hon. Friend the Member for South Northamptonshire asked whether 12-car trains would deliver the equivalent capacity: no, they absolutely would not. The hon. Member for Luton North asked whether new signalling would deliver it, and the answer is the same. We are already introducing new capacity on existing lines, and there comes a point at which incremental changes do not deliver the upgrade needed. Moreover, High Speed 2 will deliver the benefits of capacity released on the existing network, with major benefits for places such as Milton Keynes, Luton, Northampton and Peterborough, and also for freight operators.

I sincerely believe that careful mitigation can address many of the most serious local impacts, and I know that my hon. Friend will continue to fight hard for her constituents, who might be affected by the line. We welcome their involvement in the consultation process on which we are about to embark, to ensure that we get the right answers on high-speed rail and that we listen to the views of people affected by it.

After 20 years of discussion, Crossrail is finally going ahead. I hope that that answers those concerned that High Speed 2 will swallow up all the funding available for rail. The hon. Gentleman complained that the Hitchin flyover might not go ahead as a result of the funding pressure on high-speed rail. It is under way, or will be shortly, as it is in an investment programme to which the Government have committed. We have confirmed that the Thameslink programme will proceed in full, despite anxiety that it might not. Some 1,200 new carriages will be delivered, almost doubling the number of north-south trains through the capital at peak times.

On the Derby factory and the procurement of the Thameslink trains, the hon. Member for Glasgow South tempted me to depart from the EU’s procurement rules. I fear that I would find myself falling foul of the European Communities Act 1972 if I did, so I will not advocate failing to abide by our treaty obligations, but I can assure the House that bids from UK-based operators will be considered carefully and assessed fairly, objectively and equally.

The Government expect an additional 650 carriages in several of our major cities by 2014. We expect services to be strengthened into Leeds, Manchester, Sheffield, Liverpool, Newcastle, Birmingham, Bristol—to answer the concerns of the hon. Member for Chippenham (Duncan Hames)—London Paddington and London Waterloo. In addition, new Thameslink and Crossrail rolling stock will enable the redeployment of hundreds more existing electric carriages, strengthening the case for further electrification of our network. I hope that that responds to the concerns expressed about the quality of rolling stock in the north. The hon. Member for Bolton West (Julie Hilling) rightly raised concerns about the quality of that rolling stock and the notorious Pacer trains. We believe that our programme of new rolling stock will help address those concerns.

As the Chancellor confirmed in his Budget speech, lines between Liverpool, Manchester, Preston and Blackpool will be electrified. The redeployment of electric rolling stock to those routes will in turn free up hundreds of diesel units, which will be available for train operators to lease after 2015. In November, the Secretary of State announced that Network Rail will electrify routes on the Great Western main line from London to Didcot, Oxford and Newbury. We expect to make an announcement shortly on the further electrification of that line. We have decided to press ahead with plans to buy a new fleet of trains to replace most of the high-speed trains operating on the Great Western and east coast lines. We have narrowed down the options to two, and we hope to give the House more information in the near future.

The hon. Member for Luton South and others were concerned about stations. We are continuing with the £150 million national stations improvement programme and the £370 million access for all programme, including £2.3 million to be spent on a scheme at Luton.