Rail Infrastructure Investment Debate
Full Debate: Read Full DebateAndrew Jones
Main Page: Andrew Jones (Conservative - Harrogate and Knaresborough)Department Debates - View all Andrew Jones's debates with the Department for Transport
(5 years, 10 months ago)
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It is a pleasure to serve under your chairmanship, Mr Rosindell. I pay tribute to the hon. Member for Nottingham South (Lilian Greenwood) for her work as Chair of the Transport Committee and for her work in producing this report. I also thank her and other members of the Committee for the broader work that they do. I look forward to working with all of them over the months ahead.
I echo the words the hon. Lady started with on the importance of the rail industry to the UK economy. The Government fully recognise the importance of our nation’s infrastructure, and at its heart is our rail network. That is why we are investing record levels of rail funding—around £48 billion in the next control period between 2019 and 2024—in modernising our railway and giving passengers the reliable and punctual services they deserve. Our investment in vital railway works is aimed at what will improve performance for passengers and ensure safety and reliability. The operation, maintenance and renewal of the railway will help ensure smooth operation of the network. Our investment across the country, such as the £2.9 billion transpennine route upgrade, which I will talk about later; the ambitious works at Derby to modernise and improve the points and track there, completed on schedule in October; and the wider commitments, including dedicated funding for further improvements for freight and accessibility in the next investment period—all demonstrate how we are meeting the needs of passengers and freight users on our network.
The hon. Member for Brentford and Isleworth (Ruth Cadbury) mentioned fares. I am happy to point out that we are in the sixth year of capping regulated fare rises in line with inflation, and we are introducing new railcards so that anyone up to the age of 30 will have access to discounted rail fares. Our franchises support the introduction of record levels of private investment in the railway, including brand-new trains across the network.
The Labour party talks regularly about how the benefits of nationalisation will be cost-free, but the benefits of privatisation have brought investment, and nothing is more obvious than the arrival of the new rolling stock. We will see 7,000 new carriages enter service on our network over the next couple of years. The hon. Member for Oldham West and Royton (Jim McMahon) mentioned Pacer trains, and they will go this year as part of the renewal of rolling stock. It is worth pointing out that the rail franchise that dominated the north, including his and my area, was let in 2004 and expired only in 2016, and it was a no-growth franchise.
Yes, I will grant the Minister that. Does he not recognise that the private sector is not investing in rolling stock? It leases the rolling stock off companies and so the amount paid has a massive premium—about a third more, as found out by Merseyrail, which has now purchased its own rolling stock.
How individual operating companies wish to own and run their rolling stock is up to them, but the point is that private investment and the private sector, whether it pays for a lease or for ownership, is delivering, and the public sector did not, which is why we have the long-standing Pacer trains on our network. The no-growth franchise was a significant feature. I am sure that those who let that now think that that was a mistake, because of course we have had significant growth in the north and we are playing catch-up.
It is fair to say that we had a difficult year on our rail network in 2018, as many colleagues here have said. We all know that performance declined, never more so than around the introduction of the timetable in May. But it is also fair to say that we have seen a doubling of passengers across our rail network over the past 20 or so years, which shows it is a ringing success, demonstrating the success of the public and private sectors working together to deliver significant and sustained improvement.
I accept that passenger numbers have increased, but the truth is that the summer delays and the autumn cancellations were not a surprise. The timetabling was agreed by Northern. It designed it, crafted it and failed to implement it properly. The delays in the autumn were down to autumnal weather, which obviously takes everybody by surprise. It is not as though it happens every year when leaves come off the trees and fall on tracks. The basic management is poor, and surely not fit for purpose.
We have had autumn leaves falling since time began, and whichever rail company has been operating—including nationalised ones—they have found them quite difficult to manage. To suggest that it is suddenly a bigger problem is a mistake.
The Minister is incredibly generous in giving way, and I thank him. Delays are the scourge of commuters on the country’s train network, and of course they all get upset when trains are cancelled or delayed. Is there more the Minister can do to hold franchisee companies to account, with respect to how they communicate with customers and give compensation to rail users?
My right hon. Friend makes a powerful point. She gave a powerful speech, which recognised how transport investment, alongside other investments, can drive an economy. The work that she and colleagues have done on producing a business case has been highly effective. She asked whether I would work with her and of course I will, as I will work with all colleagues, to maximise the benefits of the rail investment we are putting in. As to communication, rail companies can do more. We should be looking at all digital and other means of communicating with customers to keep them informed. There are mechanisms through the franchise agreement for keeping the companies accountable. However, I also regularly meet the Rail Delivery Group, and through those and other regular meetings, with individual operating companies, I have already highlighted the issue of communication with their customers. I will continue to do so, but my right hon. Friend is right that there must be improvement on that.
I was saying a few things about how our network has played a role in the increasing economic growth of the past few years, and how that combination of the public and private sectors, working together, has delivered improvement. That includes private sector skills driving investment for passengers and rail freight. However, that success has also resulted in challenges. We have been open about facing such challenges, including in our programme of infrastructure works in the current investment period, and in the rail structures we inherited. That was very clear and it is why we have taken action and changed our approach. The work of the Select Committee has been very helpful in that respect.
In March 2018 we published our new approach to rail enhancements, called the “Rail Network Enhancements Pipeline: A New Approach for Rail Enhancements”. We have a knack of creating very difficult-to-say acronyms. In September the Secretary of State announced that he had appointed Keith Williams, a respected industry figure. He has expertise in driving customer service excellence, and therefore he is incredibly valuable as we seek to reform the rail industry to become more passenger-focused, and to lead a root and branch review of the railway. The Government’s new approach to enhancements has, as Members will be aware, been a key focus for the Transport Committee. The Williams review is a really exciting moment for our industry. The structures that we have had have helped to turn around decades of decline. We have gone from many years of decline to rapid growth. As many people now use the rail network as did in the 1920s—with all the challenges that come with that, which I shall come on to. The structure has helped to achieve the growth, but it is not clear to me that it will help us take things forward for the next stage. That is what Mr Williams has been asked to consider, and it is an interesting prospect.
The approach being taken learns lessons from CP5, responding to the recommendations of the Bowe review. It is quite profound. We are replacing a once-in-five-years plan with a rolling pipeline of investment, which was a key recommendation of the Committee. I can entirely see why both the review and the Committee made that recommendation. We will be able to respond flexibly to changes in circumstances, and emerging priorities. Unlike in CP5 where certainty—I know we have talked about it—often turned out to be frankly illusory, the supply chain can be confident that once we have made a decision we will stick to it. Those concerned will know exactly how far the commitment extends, for funding and delivery. I completely agree with the principle of transparency to help people plan accordingly. We shall be transparent about the progress of individual schemes as they move through the pipeline, and throughout the control period, but the point is that we are not simply making one announcement at the start of a cycle.
The RNEP has five stages, through which enhancement schemes move from concept to delivery, with increasing levels of detail and development required at each stage. We call them “determine”, “develop”, “design”, “deliver” and “deploy”. A theme runs through them, from “determine”, where the opportunity is identified, to “deliver”, where the solution is provided. Not all projects will progress through all the stages. Each stage is preceded by a decision point, where we will decide whether the scheme is ready to advance to the next stage, whether more work is needed, or whether there is a better way of achieving things. We commit to progress only to the next stage—not all the way to completion.
I completely understand the point that just because something enters the enhancements pipeline that does not mean it will reach the end. That depends on its progressing through the gateways. However, I should be grateful if the Minister set out clearly which parts of the enhancements pipeline will be transparent to the House and the wider industry. Will we know what things are in all the stages, or will we know only about the latter stages, once something has been committed to delivery? It would help us if we could be clear on that point.
My intention is that we should be as transparent as we can without giving a running commentary on schemes that also present challenges in the managing of expectation. I intend to be transparent about progress as they move through the pipeline—in the phrase I just used—and that suggests each stage of the process.
So is the Minister saying that when something moves from one stage of the pipeline to another, there will be an announcement to let us know?
Yes, exactly. What form it will take I do not know, but as schemes progress through, from “determine” to “develop” and so on, we will be transparent about it.
The objective is to secure value for the taxpayer by progressing schemes only when we have an appropriate understanding of how much they will cost, how long they will take, and the benefits that will be delivered. That is in great contrast to CP5, where that did not happen.
As the Minister will know, the Great Eastern main line taskforce is currently working to that very pipeline, for the next business case. Funding will be incredibly important for any project that enters the pipeline. I want to ask the Minister something on which I have previously pressed the Secretary of State. Will there be an opportunity to look at cross-Government funding that covers, for example, money from other budgets, such as local government and the Department for Business, Energy and Industrial Strategy? As the Minister knows, the GEML case made in 2014, which will be made again, looked across at the economic benefits of rail investment, and considered economic growth, too. That effectively means that we must look at new funding mechanisms that go across the Treasury, the Ministry of Housing, Communities and Local Government, the Department for Transport and the Department for Business, Energy and Industrial Strategy, so that we bring the economic benefits that many colleagues have spoken about in the debate.
My right hon. Friend is as wise as ever. Once a Treasury Minister, always a Treasury Minister, I suspect. The point about bringing things together was, I think, at the heart of such things as the national productivity investment fund, which is about making sure we have, and control, the levers to drive economic productivity—productivity being at the heart of the UK’s future economic success. I see rail working alongside Departments to open up opportunity—commercial, residential, trade and so on. I see that future of collaboration as the way we will take forward some of our projects across the network.
In the interests of transparency, I am trying to understand the pipeline process. The Minister knows of the huge frustration in my region about the delays with the Ely junction. How do we find out where in the pipeline such a project stands now?
One simple way, of course, is to ask the Minister concerned. I will find out exactly where we are with the Ely junction and respond to the hon. Gentleman. Significant works are planned around Ely, but there are a number of junctions around Ely—I have reviewed a map of them in the past few weeks—and I will need to remind myself specifically which one that might be.
Let me go back to the changes to CP6 from CP5, which create a direct contrast. I think it is fair to say that in CP5 we overcommitted to projects at too early a stage, meaning that later we had to change the scope or cancel altogether, increasing the uncertainty and the impact on the industry’s ability to plan for investment and delivery. The RNEP sets out the Secretary of State’s four priorities for rail enhancements across the country, and we will not progress any enhancement that cannot clearly demonstrate how it meets at least one of them. It is important that those priorities remain applicable to the whole country so that the network can be improved fairly and as a whole.
I welcome the fact that the Transport Committee’s report shared a similar approach to our own in promoting engagement with third-party proposals for rail schemes. On 20 March last year the Department published its guidance for market-led proposals and launched a call for ideas for the same. That call for ideas ran between 31 May and 31 July last year. We received 30 responses. DFT officials have assessed all of them and will now work with promoters to move their schemes forward, although I stress that they will still be market-led. We will be transparent about schemes as and when they progress into the pipeline.
The question was whether this has stalled. No, it has not. We certainly want to see new entrants into the market and ideas being brought forward. I am absolutely clear that not all ideas to drive forward our network will come from SW1—that would be silly.
I thank the Minister for confirming that 30 proposals were received by the Department. I know that he does not want to raise expectations or to give us too much information, but will he at least confirm how many of the proposals are being progressed? Of those 30, how many are the Department taking forward? When might we expect to hear more about which those are, and where in the country they might relate to?
I cannot remember off the top of my head. I looked at the schemes but cannot remember the answer. I will have to write to the hon. Lady with the details.
We spent a bit of time discussing electrification. The hon. Lady expressed some concern and asked whether we had ruled out electrification. Clearly the answer is no. Our railway infrastructure investment in CP6, however, is about securing positive outcomes, not necessarily specific outputs or inputs. We want to secure benefits for rail users and to do so in the best way possible, rather than simply building more railway for its own sake. Passengers expect high-quality rail services, and we are committed to electrification where it will deliver passenger benefits and value for money.
We will also take advantage of state-of-the-art new technology to improve journeys. The hon. Member for Cambridge (Daniel Zeichner) talked about digital rail. Certainly, technology has a role to play. It is one of the exciting opportunities in the sector. We are already progressing a number of digital rail schemes, using the £450 million secured under the autumn statement 2016 to begin the roll-out of that vital technology. I agree with his points.
Our new approach is designed to provide the maximum possible certainty of investment and a sustainable pipeline for the supply chain. That will provide benefits balanced for the whole country. I met the Railway Industry Association and understand entirely its point about how unwelcome “boom and bust” is. One former Chancellor and Prime Minister talked about putting an end to boom and bust—I am not sure that he would use that phrase again—so I will be cautious in my language and instead say that we will smooth the pipeline of work so that the industry can plan appropriately—skill up and scale up.
However, I suggest that the industry should look at a £48 billion budget pipeline over the next five years and think, “Fantastic!” This Government are buying rail like no other Government in British history. We live in a bumper time for our railways, in terms of rolling stock investment, enhancements, new lines and maintenance. I would imagine—this is what we see—that a lot of people look at this and think, “I want to get some of the great work being done by the UK Government.”
Another aspect of technology to promote is how it can deliver outcomes. That includes the introduction of new bi-modal trains, which reduce disruption to passengers resulting from heavy infrastructure works. The new bi-modal trains are being delivered into service with Great Western, LNER and TransPennine, bringing modern traction technologies on to Britain’s railways.
We continue to promote the use of new technology across rail. Recent franchise competitions have included requirements for bidders to develop innovative solutions around rolling stock technology that will, among other things, reduce emissions on the network. I am keen to take forward the decarbonisation agenda, which the hon. Member for Nottingham South mentioned, and it remains an absolute priority. I will work with the industry and will publish that report—it cannot happen soon enough. I am talking about publication of the decarbon- isation report and about working with different types of traction, such as hydrogen-powered trains, which I have read about. I look at the opportunities that they present to improve air quality radically, and I think, “We want some of that in the UK.” It will certainly be a priority.
The Minister is being characteristically generous in taking interventions. I welcome the news that the decarbonisation report will be published. Will he clarify whether he has received that report from Malcolm Brown, the former CEO of Angel Trains? Will the Minister tell us a little about what is in it, or when he will share that information with us?
We have received a further draft within the past few days. It is not the absolutely final version of the report, but I understand that we are very near it. I hope to read it, but I think that I should read it when it is finished, rather than in draft form—to be fair to Mr Brown. As soon as we have more information, I will keep the hon. Lady posted.
Regional spend has been a concern in this debate and more broadly. The hon. Member for Kingston upon Hull North (Diana Johnson) kindly said that I was definitely listening—to confirm, I am definitely listening, and definitely Yorkshire. The Government are clear that there should be a balance of rail investment across the whole network, to the benefit of the whole country. The Government and the Select Committee alike agree that capital spending in one part of the network can deliver benefits further afield.
I must stress, however, that the Department for Transport does not allocate funding on the basis of per head of population. Our railway is a network, with spending in a particular area benefiting users up and down the country.
Does the Minister agree that part of the problem with how schemes are assessed is that heavy consideration is given to economic return or gross value added? A mile of track in London will therefore always deliver more economic return than a mile of track in Manchester, Wales, Scotland or anywhere else, simply because of that economic assessment. Surely, to rebalance the UK, there has to be a levelling up in addition to that economic criterion.
I understand the hon. Gentleman’s point, and if that were the only consideration I can see how it could lead to inappropriate decisions, but that is not entirely the case. For example, the transpennine rail upgrade, which will be the biggest enhancement on our network over the next five years, would simply not be happening if we accepted his point. But I understand where he is coming from: we have to balance not only economic return and national efficiency, but the possible role in rebalancing our national geography. The lack of investment in some parts could easily be seen as a factor in economic performance.
Our decisions follow a rigorous and fair appraisal process that ensures spending goes to the projects and programmes where it is needed, delivering value for money for taxpayers and passengers. Sometimes that means that spending appears higher in some areas than in others. We cited various figures, but the numbers quoted are frequently from the IPPR. I have some reservations about the IPPR reporting, because it simply adds up future spending regardless of how far it extends. For example, its analysis includes 16 years of planned expenditure on HS2, where the most costly sections—because of land prices—are in London, but only five years of planned spending on maintenance for the other parts of our network. It includes locally funded spending by TfL, but not local, equivalently funded spending in other cities, which will result in a poor sample.
We look at data in a number of different ways. Investment in Birmingham, for example, could benefit users in Penzance, Edinburgh—anywhere across our network—and, of course, the west midlands. We look at two measures: where the investment is made and where the benefits will be felt. The numbers quoted so far on where spending is taking place largely have not taken into account where benefits are felt. However, spending figures going forward, as shown by the national infrastructure and construction pipeline, show that the Government expect to spend £248 per person in the north, compared with £236 in the south. There is an element of the phasing of schemes driving the individual spend in an area.
The rebalancing toolkit has been considered, which we have developed to support authors of strategic cases to assess how a programme or project fits with the objective of spreading growth around the country. I was asked whether it is being used. It is being used in the development of the transpennine rail upgrades and the Northern Powerhouse Rail business cases. The rebalancing toolkit is designed to help with the basic planning. It includes a checklist of questions to consider and potential evidence that can be used to help describe the rebalancing case for a project or programme in its strategic case. It is an ingredient. Does it need to be used in every single case? Given the amount of money we spend and the amount of time it takes us to plan our projects, I do not think it should be mandatory everywhere, but certainly it is an ingredient in making the right decisions. The toolkit’s objective is to make decision making more consistent by improving the focus, quality and transparency of the rebalancing evidence in the business case.
Let me answer some questions asked by colleagues. The transpennine rail upgrade offers the fantastic prospect of the north being the centrepiece of the next spending period. It is a £2.9 billion first phase of a scheme. Electrification will be a part of the proposals. It is phased to deliver the best benefits to passengers over the period. Freight will most certainly be considered; that is why we are also taking forward options for the development of the Skipton to Colne reconnection. It should be viewed as a phased activity.
The advice we have received from Network Rail is that if we spend any more money on that network during this period, with the amount of interventions required to deliver the schemes we will bring the northern rail network to a halt for just about every weekend over the next five years. We have taken the view that it would be an unacceptable price to pay, which would have a huge detrimental economic impact. We have listened to the industry experts and that is the advice they are giving us, so we are delivering this major project in phases. The criteria are about delivering the best benefits to passengers early, but our ambitions are not reduced at all.
Is it about merely measuring the benefit for the passengers? Are any other wider impacts assessed and measured, such as the impact on the environment and local areas, particularly where there are regeneration and economic development aspirations?
The wider considerations are taken into account. This is part of a broader plan. As the business case is created, it looks at economic benefits and environmental benefits. It is a wider case.
The hon. Member for Brentford and Isleworth asked about devolution. It is being considered as part of the Williams review, but the principle of devolution is a sound one. The suggestion that the Secretary of State is not supportive of Crossrail and the London Mayor is not correct. For example, TfL has run into some financial difficulties over the Crossrail cost overruns. We are helping it with a £2.1 billion credit facility, which it will pay back—it is a loan, not a grant. That is an important indication of how we are supportive of Crossrail and the London Mayor.
I would like to return to the transpennine route. From meetings with officials, my understanding is that the challenge is not in the tunnel but across three bridges. For that reason, the electrification programme has not been advanced between Huddersfield and Stalybridge, which is the real game-changer. The challenge is also to make the necessary upgrades to accommodate future freight. Will the Minister assess the advice from Transport for the North to ensure that the proper full upgrade is brought to the line? It would have a significant impact on reliability and will drive efficiencies in the system.
I am very keen for that line to be upgraded and will ensure that all the opportunities to progress it are considered. I want to make it absolutely clear that there is no loss of ambition, but at the same time we must be very careful when industry experts tell us that if we do any more we will bring the network to a halt for just about every weekend in five years. That is the advice from senior levels in Network Rail. On getting on with it, that cannot happen soon enough as far as I am concerned.
We still have 42 minutes left, but I do not anticipate that we will take that long. On the transpennine electrification, I accept the Minister’s point that we do not want excessive disruption, but will he accept that it is better to do the right thing, which will lead to cost-effective operations, environmental benefits and reliability benefits in the longer term, even if that sometimes means that delivery of the scheme will take longer? Will he commit to talk to Rail North about how the maximum benefits can be achieved in the long term, rather than a short-term approach that could bake in disbenefits over a very long period?
I will continue to talk with all the different bodies across the north to maximise the benefits. We are not taking a short-term approach; a short-term approach would be to get on and do it right away. We are taking the approach to deliver it in phases to maximise the benefits. At each stage we are also future-proofing it. That principle is already being implemented.
The hon. Member for Bradford South (Judith Cummins) talked about Northern Powerhouse Rail. I am also very keen for Bradford to be well served by that. Indeed, Transport for the North is developing the proposals for Northern Powerhouse Rail. That is great—it will be from the north, for the north. I went to Transport for the North’s last board meeting, at which I was going to receive the strategic outline business case. Transport for the North had to pull that business case at the last moment, but I will go up to its next board meeting; I do not criticise it in the slightest for that. The hon. Member for Nottingham South just mentioned the principle of getting things right for the longer term, and in pulling the business case, Transport for the North was making sure that it does that.
Northern Powerhouse Rail is a very exciting project. The only point I made when I said I would come back for the next board meeting was that I wanted Transport for the North to get on with the project promptly. Northern Powerhouse Rail and HS2 are linked in lots of ways, and any delays to Northern Powerhouse Rail could compromise other projects, so I urged speedy progress.
Colleagues mentioned HS2. I take the opportunity to confirm that HS2 remains a critical project for the Government.
In the light of the comments by the Chief Secretary to the Treasury, what representations has the Department for Transport made to reassert the case for HS2? Is the Minister confident that if there were a value-for-money review, the project would make it through?
I could answer that in a few ways. First, it is clearly right that the Treasury takes a view on managing the efficiency and delivery of public projects, because so much money is involved. We are spending half a billion pounds a week more on capital projects than the last Labour Government. We are catching up on investment.
What representations do we make? Of course there is regular dialogue between Ministers from all Departments, and certainly between the Department for Transport and the Treasury at both official and ministerial level. The Government remain entirely committed to HS2, which is part of the rebalancing of our national network. We need capacity on the network, and HS2 will deliver it.
The Minister has given way extremely generously, and I am grateful for that. Has the Treasury initiated a review of HS2, or did the Chief Secretary’s comment just reflect her personal view?
I am not the Minister with responsibility for HS2, so the day-to-day correspondence does not come across my desk, but the Government are entirely committed to HS2. The Treasury is right to say that we will look at projects to ensure that they come in on budget and on time, and that we do not see project-creep in terms of cost. The Treasury has been sighted, for example, on the way we are re-planning our investment process to ensure that decisions are made in as informed a way as possible so that there are as few surprises as possible.
Let me be absolutely clear to everybody that HS2 is a critically important project. Work is already under way to deliver it. The hon. Gentleman made the point that the appetite for it grows the further north one goes, and I am happy to echo that entirely. HS2 presents fantastic regeneration opportunities, about which I have had conversations with Judith Blake in Leeds, Andy Burnham in Manchester and Andy Street in the West Midlands.
The hon. Gentleman also highlighted the industrial relations issues that blight some parts of our rail network. The Government are keen to see a second person on trains. Indeed, we have said that there will be no blockage from the Government if that is what everybody wants. We can make changes to any agreements. Indeed, we have gone further than that and said that we will provide financial support. I have made those comments to the unions and the company. The dispute is between those two parties, but the Government can play a role in creating an environment to help them get around the table and talk, and I think I have done that. I want to see them get around the table and talk and, as they do so, stop the strikes, which have had a detrimental impact on the economy of the north.
I have not yet addressed the comments by the hon. Member for Inverclyde (Ronnie Cowan) about devolution to Scotland. Rail is devolved to Scotland. The Scottish Government set their own high-level output specification. The statement of funds available is above the Barnett formula for CP6. Off the top of my head, having discussed Scottish rail issues with colleagues in the Adjournment debate on Monday night—that was very late, so I understand that not everyone will have been present—I think it is £4.85 billion. There is significant funding available for the Scottish rail network, and the Scottish Government have control over rail.
This is not just about funding; it is also about control and management. When ScotRail is run by the Scottish Government and Network Rail is run by the UK Government, that can obviously fall between two stools. That is what we seek to address. We want the responsibility to go with the railway.
I just point out that decisions about what happens are taken north of the border. We have a national rail network, which cuts across all the nations of the United Kingdom, but decisions are made north of the border. I have had conversations with the Scottish Transport Minister, and I fully understand where his responsibilities start and mine finish.
We have accepted many of the Transport Committee’s recommendations, and I hope I have made it clear that our new approach through the RNEP is clear, logical and fair, and makes sense. We want that approach to lead to better outcomes for passengers, certainty for the supply chain and the industry, and a much more balanced portfolio of investment. I know that colleagues are hungry for investment. We are catching up on decades of under-investment in our rail network and other modes of transport by Governments of all colours. It is clear that we all agree that rail plays a huge role in our national economy, and that is why we are investing in it at record levels. I look forward to keeping the House and the Committee updated on our progress.