Railway Industry

Andrew Gwynne Excerpts

Tuesday 19th October 2010 Westminster Hall

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

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

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

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

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

“committed to fair pricing for rail travel.”

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

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

[Mrs Villiers]

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

[Andrew Gwynne]

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

[Mrs Villiers]

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

[Andrew Gwynne]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

--- Later in debate ---

[Mrs Villiers]

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

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

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

[Andrew Gwynne]

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

[Mrs Villiers]

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

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