Taxis and Private Hire Vehicles

Andy McDonald Excerpts

Tuesday 29th April 2014 Westminster Hall

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Thank you, Mr Chope, for the opportunity to speak in the debate. I congratulate my hon. Friend the Member for Easington (Grahame M. Morris) on securing it and on expounding a well worked-out argument, with which I am certain that most hon. Members in the Chamber agree. The Law Commission consultation is extensive, asking many questions and offering several sensible proposals. I will focus on my concerns about the accessibility of taxis and private hire vehicles for disabled people.

At the beginning of this year, Boro Taxis, which operates in the south Middlesbrough part of my constituency, hit the headlines in national and local media outlets following what many might see as exploitation of and disregard for disabled passengers. On 31 December 2013, Middlesbrough council’s licensing department was reported to have found that a number of private hire operators were charging disabled passengers—wheelchair users, in particular—up to twice the standard fare, with licensing officer Tim Hodgkinson arguing that this was a “widespread” practice and a “direct consequence” of passengers’ disability.

The council sent notices to the relevant operators advising them that it considered the practice to be in breach of their regulatory and statutory obligations. I am sure that most hon. Members find such flagrantly discriminatory practices repugnant. Disabled people throughout the country struggle to access transport as is, and to charge them extra because of their disability strikes me as totally wrong.

[Andy McDonald (Middlesbrough) (Lab)]

Does my hon. Friend agree that one of the fundamental principles underpinning the Equality Act 2010 is that disabled customers should not be treated on less favourable terms than able-bodied customers, and that surely extends to the price that fare-paying taxi customers are charged for the same journey? If that happens under the existing regulatory framework, what on earth will things look like if the deregulation programme goes ahead?

[Tom Blenkinsop]

I agree with my hon. Friend. Such circumstances are occurring now, while the trade is regulated, but my fear is that with further deregulation, instances such as the one I described will become increasingly common and harder for local authorities to monitor and to manage.

On 11 January 2014, somewhat astonishingly, the owner of Boro Taxis, Mr Bashir, admitted that his own company policy at the time was “morally totally wrong”. The firm, however, subsequently started to refuse to carry any wheelchair users, arguing that it would be “uneconomic” to do so. News of the Boro Taxis decision resulted in a ferocious backlash, and thousands of social media users, many of whom were likely customers, called for and pledged to a boycott of the firm.

The company quickly performed a welcome U-turn on the decision, given the ensuing negative publicity, but the issue continues to be one that users of the taxi service talk about and it is often referred to when the firm is discussed. That there was even such a proposal in the first place, however, I fear shows an unwelcome eagerness to discriminate and to treat disabled passengers as liabilities, rather than as valued customers. My main fear about the proposed deregulation of the trade is that such practices will become more common.

That is only one case, but it demonstrates a problem that I suspect, from communications from disabled people throughout the region, to be systemic. The Law Commission is therefore correct to identify equality and the needs of disabled passengers as an area in desperate need of legislative reform. In the consultation, disability groups highlighted the lack of training and disability awareness among taxi and private hire drivers, with issues such as an increased risk of injury due to wheelchairs not being properly secured, or a deaf passenger being unable able to communicate effectively with the driver. That is of course a two-way street: drivers may also injure themselves while helping disabled passengers in an inexpert fashion. Employers have to ensure that their drivers are trained and compensated properly for such training.

Some excellent training schemes are available to drivers on all aspects of dealing with people with a disability, such as loading and unloading wheelchair users, securing the wheelchair, or how to operate the swivel seat, the hearing loop and so on. More importantly, however, training will ensure that drivers and indeed taxi firm owners are aware that it is imperative to treat all people of differing abilities with dignity.

Various training schemes have been adopted by local authorities, but I firmly believe that national safety standards should be applied as a minimum and that this should include disability awareness training. On a business level, there should therefore be a fair playing field and a good standard of customer services maintained for all, especially disabled people, nationally. Furthermore, a statutory requirement should be placed upon licensing authorities to take steps to ensure taxi and private hire drivers’ compliance with their equalities obligations.

Middlesbrough council’s report into accessibility, which highlighted the issue of charging disabled passengers extra, was a welcome step. It will have made a real difference for disabled people in the town. That should be the practice nationwide, and it should be done on a regular and standardised basis. I am aware that some councils are hesitant to undertake monitoring and testing due to concerns about the safety and welfare of their employees, but a statutory requirement of that kind could be met through regular consultation with disabled passengers by licensing authorities, and through improved and easier reporting structures for recording incidents.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 20th March 2014 Commons Chamber

[Mr Goodwill]

I know that this is what is known as a parliamentary service, which does save the cost of closure, but given that the passenger numbers were 900,000 in 2006 and 161,092 in 2013, action on more than just public transport links will be required to ensure the airport’s future.

[Andy McDonald (Middlesbrough) (Lab)]

The Minister will know that the Tees Valley metro was seen as a key component in establishing better links to the airport. That concept appears to have slipped somewhat. Will he meet me to discuss the viability of the Tees Valley metro so that we can pursue our economic ambitions right across the Tees valley?

[Mr Goodwill]

I will be more than happy to do so, and ensure that Teesside has the same good transport links from which many other parts of the country benefit.

Rolling Stock (North of England)

Andy McDonald Excerpts

Wednesday 12th March 2014 Westminster Hall

[Angela Smith]

The hon. Gentleman has encapsulated perfectly the lack of strategic grip that seems to be present in the DFT. Building a curve and new link but not being able to use them illustrates perfectly the stupidity of the position that we are in.

It appears that Northern Rail will receive fewer additional units from the south than it was promised in 2009, when Lord Adonis, the then Secretary of State for Transport, announced a major programme of electrification in the north. Back then, it was proposed that six Class 319 electric trains would be refurbished and transferred from First Capital Connect to Northern Rail in 2013—last year—and that they would operate between Manchester and Liverpool. However, it was recently reported that only three units would now be delivered, behind schedule and un-refurbished. A senior Northern source has been quoted as saying:

“We’ve told DFT we’re less than 10 months away from the proposed start of the electric service, we’re beyond the critical path, they’re not going to get refurbished and we’re not going to be able to operate the full service in the time we’ve got available.”

On top of these important issues there is another important perspective to this debate: just how serious are the Government about devolving power to the regions? The Minister knows well, following encouragement from the Department for Transport, that northern transport authorities have formed the Rail North group, with a view to taking responsibility for Northern and TransPennine services from 2016, and that date cannot come quickly enough for me. The proposed core of this network would cover around 21% of all UK stations. However, Ministers now appear to be rowing back on these proposals.

In November, it was reported that the Government were reconsidering their position, and in January a poorly defined partnership agreement between the DFT and the Rail North group was announced, without much of the devolution that was first promised. It subsequently emerged that the Department may force the Northern Rail operator to raise car parking fees. That move is opposed by the West Yorkshire passenger transport executive and flies in the face of true devolution. Given that the Department decided to move trains from the north to the south and is retreating on its promise to devolve rail network responsibilities, is localism now a phrase without meaning as far as the Government are concerned?

We in the north believe that we need efficient, well-run railways with modern trains providing the capacity that a growing network needs. We need those trains so that our economy can compete with the south—we all know how big that challenge is—if we are to close the north-south gap. On the Northern franchise, however, the average age of the fleet is 23 years, which compares with a national average of 18 years. Many routes are still served by the Pacer railbuses, which make up about a quarter of the fleet. I will not name my source, but I was approached several years ago by someone who asked whether the Pacer trains might have a future in the new country of Kosovo, but the trains may still be required on those Northern Rail services if the Government do not get their finger out.

The Pacer trains cannot be made compliant with disability access regulations without extensive refurbishment, and the oldest units are 30 years old. Under the Disability Discrimination Act 2005 the trains will either have to be made compliant or be withdrawn before 1 January 2020. Ministers have already said that that is

“generally a matter for train operators.”

The train operators are having their arms tied behind their back by decisions made in DFT that do not give franchisees the security they need to secure deals with the rolling stock companies. Because of the shortage of diesel trains in the UK—this is the other big issue—Pacer trains, which are unsuitable, may have to remain in service for longer than they should.

[Andy McDonald (Middlesbrough) (Lab)]

Will my hon. Friend give way?

[Angela Smith]

No, I really must move on.

What assessment has the Minister made of the ongoing viability of the Pacer trains, which are heavily used on the Northern franchise? Passengers in south Yorkshire, on the Doncaster to Rotherham and Rotherham to Sheffield routes, hate those trains, which provide a terrible service and are like sitting on a trolley bus—they are awful. The trains give an awful ride, and they give passengers the impression that they are using a second-class, substandard service.

Has the Department considered applying for an exemption to disability access regulations for the Pacer trains that could see non-compliant vehicles in use beyond 2020? That is an important point. Northern Rail passengers need to know whether Ministers will allow those trains to be used beyond 2020. We need an answer.

I will now bring my comments to a close. It is becoming obvious where the Government’s priority lies when it comes to rail lines, and the priority is not with passengers in the north of England. As their ill-fated, illogical and shambolic franchising policy goes off the rails, it is the north of England that suffers. We are witnessing a situation in which the huge blunder that was west coast franchising has led to a comedy of errors, with the consequences landing squarely in the lap of the north of England and its railway services. The real issue, of course, is that the Government are just not getting to grips with the heart of the problem mentioned by my hon. Friend the Member for Blackley and Broughton, which is that there are not enough trains in the system to provide the expansion capacity that the UK so badly needs.

At least the Prime Minister will be happy, now that he knows that there will be additional, modern 170 trains running into his constituency, making it easier for him to cope with the arduous journey to London. Hopefully he remembers that that comes at a cost to rail users in the north and beyond, as they will be left with less capacity, more crowded trains and, undoubtedly, frustrating delays as a result, unless we hear confirmation from the Minister today that the Government will ensure that that terrible decision does not go ahead. I look forward to hearing the Minister’s response and his answers to my questions.

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[John Pugh (Southport) (LD)]

It struck me, Mr Turner, that you represent probably the most southerly constituency in the House. It is just as well that you are not able to contribute.

I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing this opportune debate and putting her points in a feisty way, although I think she could have been a little more consensual. It was not this Government, after all, who decided that the best way to spend £6 billion was on Crossrail, rather than on improving rolling stock in the north. I speak as a jaundiced member of the Crossrail Bill Committee, to which I was sentenced for two years.

Rolling stock is not just a trans-Pennine issue; it is a quality issue in many areas, because, frankly, the quality is dire. I have had a long-standing campaign against the Class 142s, which are essentially Leyland buses on wheels. They were originally produced by Mrs Thatcher, almost as an emergency motion to keep Leyland Motors going. Most of them still running are on the Northern Rail franchise, although not all—some are on Arriva in the Welsh valleys. Those trains are not the oldest stock in the northern area—the oldest are the refurbished Merseyrail trains—but they are certainly the most uncomfortable and the most outmoded and they are not disability-compliant. They are probably not safe in either a collision or a derailment, and they certainly deter business passengers.

Any sane franchise arrangement would seek to get rid of the Class 142s, and I have tried to help with that. I have investigated the safety issues and I have contacted fellow northern MPs, some of whom are present for this debate. I have surveyed passengers, and I have spoken to franchise holders, the Department for Transport— particularly on the safety issues—and the media. The BBC did a good exposé of how bad conditions are on the trains, which are virtually cattle trucks. The responses I get are various: I am told that the trains are cheap to run and that, although they are rickety, one man with a decent set of spanners can usually repair them, saving an expensive trip to the repair shop; I am told they have utility, because they can be coupled and decoupled on the smaller lines; and I am also told that someone has to have them and, more horrifyingly, that they might be refurbished at some point. That sends a chill of fear down the spine of anyone travelling in the north.

[Andy McDonald]

Does the hon. Gentleman share my concern? The last time I was on a Pacer 142, I was horrified to see that where a seat had become detached from its iron frame, it had been bolted back and new cloth had been put on, with the likelihood that it would last a lot longer.

[John Pugh]

With that example, one surely has to think about what would happen in an accident where a passenger was thrown around the carriage.

Despite the appalling treatment of the northern franchises, patronage, profitability and demand are up. To be fair, the Government have started to realise the potential. They have started to put capital into the north, and we should all praise them for the northern hub go-ahead and the electrification. They have also, I hope, started to realise that we get a raw deal in the north. Recently, my colleagues and I submitted a document called “Grim up North?” to the Chancellor, which, among other things, analyses transport expenditure.

We are not fighting a particular Government but a Whitehall mindset. Frankly, Sir Humphrey knows all about Chiltern Railways. His friends travel on those lines and he has used them. Time and again in the Department for Transport, we come up against obstacles, whoever happens to be the Minister. We come up against what is called the business case argument, which basically says that transport investment should follow demand and profit, and the Department will point out that those are greatest in the south. That is not a false view, but it has to be set against the other principle that transport strategy and investment can drive demand, profit and economic growth. Unless we do something to arrest the downward spiral, we will continue to have a good case made within the Department for investment in the south and a rather mealy-mouthed case made for investment in the north.

It is rather like being in a strange family, where there is a large, obese child—a sort of cuckoo in the nest, rather like London—and when the food is doled out or, in this case, when franchises and coaches are doled out, we look at our meagre portions and we complain. We are told and will be told by the Department that the demand and the profits are greatest in the south, and that is where the franchises want to go, but we simply cannot go on like that. We have to contest the Whitehall mindset. We are already seeing signs of that mindset clawing its way back. Although we have the northern hub and electrification, there is anxiety about franchise devolution, as the hon. Member for Penistone and Stocksbridge pointed out; there is a lack of thought about the consequences of electrification for those areas that are not electrified, as the hon. Member for Kingston upon Hull North (Diana Johnson) pointed out; there is confusion about the franchises; and we have rolling stock issues in abundance. Generally speaking, we have to recognise that, while we can carry on moaning and appearing like whingeing northerners, there comes a point when we collectively need to move from being whingeing northerners to becoming rebellious northerners.

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

I would like to mention a couple of quick points. My hon. Friend the Member for Glasgow South (Mr Harris) referred to nationalisation. It has been pointed out that we have a nationalised system, with Nederlandse Spoorwegen and Deutsche Bahn operating franchises. The purpose of a railway system is not to provide people with an opportunity to extract value for their own benefit.

We, too, are plagued with the Pacer 142 trains, the performance of which is shocking. The travel time from Saltburn to Darlington is 53 minutes—Usain Bolt or a domestic cat could give those trains a run for their money. In fact, my wife’s grandma raced the trains years ago, and I think she could still do that now. The height of our ambition—

[Mr Andrew Turner (in the Chair)]

Order. I call Jonathan Reynolds.

Disabled People (Access to Transport)

Andy McDonald Excerpts

Thursday 9th January 2014 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I am pleased to have the opportunity to speak in this important debate. I am very grateful that my hon. Friends have given so much attention to the issue of wheelchair accessibility, but there is one specific issue—the need for audiovisual announcements on public transport—that I wish to address.

Before the Christmas break, I marked the international day of persons with disability by navigating Middlesbrough town centre blindfolded, with the help of the Guide Dogs association. I was joined by representatives and service users from Middlesbrough Shopmobility, as well as Linda Oliver and her guide dog Zoë. Wearing a blindfold and experiencing the world without sight was extremely unsettling and it gave me a greater understanding of what it is like for a blind or partially sighted person to do what we, the fully sighted majority, take for granted. With many blind or partially sighted people reliant on buses for mobility and freedom of movement, it is concerning and disappointing that they are often prohibited from accessing such a lifeline.

I welcome the progress that has been made to make public transport more accessible for those with disabilities, but I urge the Minister to go further. Blind or partially sighted people whom I met told me that accessing public transport can be a very difficult and disorientating experience. I know that to be true, as I was given the experience of being blindfolded and taken on a short journey on a bus around a town that I am so familiar with. I soon lost my bearings and all sense of my surroundings and became completely reliant on assistance from those around me to get on the bus, find my seat and get off at the correct stop. I agree entirely with the hon. Member for Eastleigh (Mike Thornton) and with the Guide Dogs association, which has pointed out that when we get off at the wrong stop, it is an annoyance, but for a blind person it can be very dangerous.

The changes to the Public Service Vehicles Accessibility Regulations 2000 to make buses more accessible for disabled people are welcome, but sadly fall short of including audiovisual announcements. The Transport Committee rightly highlights the fact that the lack of onboard AV information reduces the willingness of the visually impaired, as well as the wider public, to use buses. AV announcements would help the elderly, who may not be as confident as they once were, or those with special needs, who could strike out more independently if they had the reassurance that AV announcements would bring. Indeed, AV announcements would also help the fully able first-time visitor to a town or city to navigate around.

It is not always possible for a blind or partially sighted person to rely on a bus driver or fellow passenger to tell them when to get off. Bus drivers have a great deal to do these days: they are not only drivers but conductors. It is simply unrealistic to expect them to be able consistently to offer extra assistance to the visually impaired. That is backed up by the figures from the Guide Dogs for the Blind Association report, “Road to Nowhere”, which states that around half of travellers surveyed are not told when to get off at the correct stop.

[Sir Robert Smith]

A constituent contacted me who had taken a bus from Aberdeen to Westhill, and had told the driver that they needed to know when they got to the Tesco store. The driver forgot, which meant that my constituent had to stay on the bus until it returned to the depot and then have another go with another bus driver. There was no way that they could have found their way if they had got off at the wrong stop.

[Andy McDonald]

That is a stark illustration of the point I am making. The problem will not cost a lot to put right. Research by the TAS Partnership found that it would cost only £2,100 to install a system to make AV announcements on a single-decker bus and £2,500 on a double-decker bus. The systems could be introduced over a number of years, as new buses are brought into the fleet, to mitigate the burden on bus companies. Is it not ridiculous that we are talking about such sums of money, when AV devices should be an integral part of the plant and machinery of any bus operation? Windscreen wipers were not compulsory years ago. Such devices should be part and parcel of the ordinary running of a bus company. When it comes to the business case, I have not run a bus company, but it would not surprise me if making buses more attractive for people attracted more passengers and encouraged a greater flow of income. It is not rocket science.

The introduction of AV announcements will give greater independence to passengers. I urge the Government to take account of the Transport Committee’s recommendations and ensure that such announcements are phased in over the next 10 years and on all new buses. I applaud the determination of the Guide Dogs for the Blind Association, which is campaigning for the creation of a fund to encourage local authorities and bus companies to install AV announcements. Ultimately, the issue is one of equality, and indeed of disability discrimination. I urge the Minister to consider closely the suggestions made in this debate. They will give our fellow citizens the dignified assistance they request to overcome the hurdles and difficulties they face as they endeavour to play their full and rightful role in our society—difficulties that the majority of us simply never encounter.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 12th September 2013 Commons Chamber

[Mr Burns]

Because, as I would hope the hon. Gentleman appreciates, the purpose of Directly Operated Railways is not to run a railway ad infinitum; it is a short-term measure when a problem arises with a franchise. He is absolutely right that as part of the record-breaking investment in our rail infrastructure we are investing in the east coast main line—as we are doing in the west coast main line and other lines— because that is the way forward. With the innovation and impetus of the private sector and a private sector franchisee, the maximum benefits can be ensured from state and Government investment.

[Andy McDonald (Middlesbrough) (Lab)]

Why have the Government reordered the franchising timetable, and what is the justification? The east coast main line timetable has been accelerated way out of order. What is the cost to the taxpayer?

[Mr Burns]

The reason for the change in the timetable is the unfortunate episode with the west coast main line—[Interruption.] I said “unfortunate”. Following the Brown inquiry, we redrew the franchising programmes and took his advice that the west coast main line and east coast main line franchises should not be done at the same time. That is why we are pressing ahead with putting the east coast main line franchise back into the private sector in February 2015.

Disabled Access (Train Stations)

Andy McDonald Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Norman Baker]

On Chippenham station, I am advised that Network Rail had to go through the lengthy planning process to which my hon. Friend correctly referred, which of course also involves building consent. In addition, it has to co-ordinate its plans with other projects in and around the station. However, I am told that that has now happened and that a detailed design for the project is complete. Work is due to start in November this year and to be completed by July 2014. However, I have asked Network Rail to review its time lines to determine whether it can accelerate construction, given the delay that has already occurred.

[Andy McDonald (Middlesbrough) (Lab)]

Given the comments that have been made in the debate and the expectations on train operating companies to build in such facilities described by the hon. Member for Penrith and The Border (Rory Stewart), will the Minister consider giving some guidance on, or commenting about, the extent to which we could build these requirements into the franchising contract documentation and place obligations on the train operating companies to deliver those very facilities?

[Norman Baker]

I want to come on to the various mechanisms through which improvements can be made, but the hon. Gentleman is right to say that, in theory, franchise requirements can be designed to achieve them. However, other methods are perhaps more effective. If I may make some progress, I hope that I will be able to give him some comfort.

Some 104 of the projects under the Access for All programme have already been completed, which is good news, and we expect the majority of the rest of the projects to be completed by March next year, which will be a full year ahead of schedule. The work has included significant engineering work at stations such as Clapham Junction, which is the station with the most daily train services in Europe and is now fully accessible for the first time in its 150-year history.

East Coast Main Line Franchise

Andy McDonald Excerpts

Thursday 20th June 2013 Commons Chamber

[Mr Jackson]

I think that is semantics. I made it clear that I was talking about the 12 months to 31 March 2013. If the hon. Gentleman wants to write to me to take issue with me, that is fine.

[Andy McDonald (Middlesbrough) (Lab)]

Will the hon. Gentleman give way?

[Mr Jackson]

No, I want to make some progress, but I will give way later to the hon. Gentleman, whom I know has a special interest in the subject.

The Labour Government accepted that public service provision by this train operating company was always going to be a short-term expedient because of a special set of circumstances on the east coast main line. As the Minister has said, in order to leverage key, private sector capital, it is important that we have a new, long-term private partner to innovate and drive up standards on the east coast main line.

It is all very well for Lord Adonis to have a road-to-Damascus conversion. Obviously, being in opposition concentrates one’s mind, but when he was a Minister he spoke out strongly for private sector provision on this particular line. I challenge the Labour party: is its policy now wholesale renationalisation of the railways, or is that just for the east coast main line? I know that the hon. Member for Blyth Valley (Mr Campbell) would definitely give me a clear answer, but I am not sure that he and the hon. Member for Nottingham South (Lilian Greenwood) would have a meeting of minds on the issue.

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

I will be brief, Madam Deputy Speaker. I congratulate the hon. Members who secured this important debate.

The passions that questions of democratic control arouse in all parts of the House are understandable, and falling into dogmatic defence of the present or romanticised views of the past is a constant danger, but the main problem of franchising is not the money skimmed off the top by the train operating companies—the money paid out in dividends was 2% of sales in 2012—or even the massive fiscal drag caused by fragmentation, payments to rolling stock leasing companies and the excess interest on Network Rail debt, paid for no other reason than to keep it off the public balance sheet. The biggest problem of franchising, which echoes through the McNulty report, the Brown report and every major policy discussion of the past 20 years, is that the debate about the future of rail in this country has become a debate about what colour the trains are. The real debate must be about whether rail is a private enterprise or a public service.

The Minister himself has been caught in such narrow thinking, insisting time and again in Westminster Hall that Directly Operated Railways could not run a railway indefinitely, because it was not intended to do so when it was set up in the dim and distant days of 2009. With respect, though, what previous Transport Ministers imagined DOR’s role to be is of no consequence. The question surely must be not whether it was intended to run indefinitely, but whether it is capable of doing so. The tremendous success of East Coast demonstrates that it is. Total premium plus operating profit amounted to £647.6 million in the four years to 31 March 2013, and as hon. Friends have pointed out, the total by the end of the term will be £800 million. That is more in both cash and real terms than any previous franchisee on the line has achieved. All that money is available for reinvestment in our railway network.

[Roberta Blackman-Woods]

My hon. Friend is making a powerful speech. Could not the Government, if they wanted to, amend the Railways Act 1993 to enable East Coast to bid for the franchise as a public company? That might not be exactly what we want, but it would at least help.

[Andy McDonald]

My hon. Friend makes a good point. Such a leap of imagination—if people opened their mind to other possibilities that are available—would be welcome.

East Coast has achieved revenue growth of 9% over three full years, with 4.3% growth in 2012-13. Journey numbers have increased from 18.1 million in 2009-10 to 19.1 million in 2012-13. All that has resulted in a £40 million surplus. I was disappointed to hear Government Members criticising the service East Coast provides, when the record shows the contrary is true. Nine out of 10 trains are on time, according to the latest public performance measure, and the national rail passenger survey gives the service a 92% overall customer satisfaction rating—the highest score of any franchise on the line since records began in autumn 1999. Government Members’ critical comments are therefore highly regrettable.

If East Coast remains in public hands indefinitely, it will be to the benefit of passengers, communities and taxpayers. Several times in the course of this debate, the idea has been floated that such an arrangement would be more attractive than Ministers realise and that the public would find it engaging. More than that, it would mark a fundamental change in the thinking of the past 30 years—the economic voodoo that says that involving the private sector always, magically, creates benefits.

The truth is that railways cannot be run for profit. British Rail was subsidised. Network Rail is subsidised. No railway in the world is not subsidised in some shape or form. In that environment, train operating companies are simply one more player lobbying for a share of taxpayers’ money. They are required to return a profit for their shareholders, but their profits are not won in the marketplace; they are created by legislation.

The efforts of train operating companies are not turned outward, focused on striving towards greater efficiency or customer satisfaction; they are turned inward, focused on ringing out as much subsidy as possible from the taxpayer. Fares cover, on average, only 65% of the cost of the network, so all dividends are the result of Government largesse—and Governments have been more than generous. In the two years from September 2010 to September 2012, Network Rail’s debt, for which the taxpayer is ultimately responsible, has increased by £4.1 billion.

I would like to take this opportunity to praise the Department for Transport for resisting the self-defeating austerity advocated by the rest of the coalition Government and borrowing at very low interest rates to invest in upgrading our national infrastructure. I also offer my consolation for the fact that, in order to keep that off the Chancellor’s radar, the Department has had to pretend that it is not Government debt and pay an additional £150 million a year in interest as a result.

Surely now is the time for honesty. Private companies in the rail sector do not spur innovation. They extract value and are unnecessary, as East Coast shows. The investment in the railways is all Government money, underwritten with Government debt. The current system is unsustainable, because Network Rail now spends more on servicing its debt than on maintaining and upgrading the network, and that debt is increasing. The taxpayer paid for the service, pays for the service and will always pay for the service. It is only fair that they get what they pay for.

[Several hon. Members]

rose—

East Coast Main Line

Andy McDonald Excerpts

Wednesday 5th June 2013 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

It is a great privilege to serve under your chairmanship, Dr McCrea, in this vital debate on the future of the east coast main line. I am sure you will keep us on track and on time. Debates between hon. Members on nationalisation and democratic control of industry often stall due to an obstinate adherence to our political prejudices. All of us, on both sides of the House, have political prejudices about the relative merits of private and national ownership of basic industries. At the outset, I invite Members to disregard all preconceived theories and consider the future of the east coast main line objectively, as a technical problem with hard facts.

According to a written answer from the then Minister of State for Transport in 1996, the total gross proceeds to the taxpayer from selling off our rail infrastructure were £5.28 billion. Adjusted for inflation, that would be slightly more than £8 billion today—equivalent to only the past two years of taxpayer subsidy. According to the Office of Rail Regulation, the east coast main line is the only line in the country that comes close to paying for itself. Government subsidy makes up only 1% of East Coast’s income, against an industry average of 32%. The total cost to the Exchequer of the east coast main line was only £9 million in 2011-12; by comparison, Northern Rail, jointly owned by Serco and the Dutch Government, cost the taxpayer £685 million. Since the UK Government put the franchise under the publicly owned Directly Operated Railways, financial stability has been restored. The total premium, plus operating profit, amounted to £647.6 million in the four years to 31 March 2013; that is more in both cash and real terms than any previous franchise on the line, and all that money is available for reinvestment in our railway network.

East Coast has seen revenue growth of 9% over three full years, with 4.3% growth in 2012-13. The Minister of State described that growth to the Select Committee on Transport as a “plateau”. One wonders what word he would use to describe the Chancellor’s performance over the same period.

[The Minister of State, Department for Transport (Mr Simon Burns)]

Very good.

[Andy McDonald]

Thank you very much.

Journey numbers have grown from 18.1 million in 2009-10 to 19.1 million in 2012-13. An estimated £800 million will have been generated by the franchise for the taxpayer by April 2014. All that has resulted in a £40 million surplus: money that would otherwise be providing the profit to shareholders, if the line were privatised, and which East Coast has reinvested in its greatest asset, its staff. The fruits of that investment are clear to see: employee engagement is now at an all-time high of 71%—up from 66% in 2011 and 62% in 2010—which is the highest score of the eight train operators that is currently available. The average number of sick days has fallen from 14 to nine. Investors in People accreditation has risen from “standard” in 2009 to “silver” in 2012. Impressively, East Coast was the only train company to have achieved “Britain’s top employer” status in 2012 and 2013. Most importantly, on-board passenger-attributed accidents have reduced by 20% and staff accidents by 23% in the past year.

East Coast has also introduced a new timetable—the biggest change on the east coast main line in 20 years—seamlessly launched in May 2011. It introduced 117 extra services a week; a four-hour Flying Scotsman express from Edinburgh to London, calling only at Newcastle; and new direct services between London and Lincoln and Harrogate, and I hope that it will soon restore the link to Middlesbrough, the largest conurbation in the country without a direct link to the capital.

[Karl MᶜCartney (Lincoln) (Con)]

Does the hon. Gentleman not see that it is a shame that the seven daily services that Lincoln was promised ended up being only one service?

[Andy McDonald]

I am not sure that I have picked up on that seven turning into one, but I will mention the performance issues, so an answer may emerge as we proceed.

[Mr Stephen Hepburn (Jarrow) (Lab)]

My hon. Friend is making a persuasive case. The east coast main line has flourished since it came back into public ownership. This is an example of privatisation for privatisation’s sake. The only people who will benefit from it are that small number of Tory pals—those profiteers who will bung their pockets with taxpayers’ money.

[Andy McDonald]

I thank my hon. Friend. He makes a valid point, and I hope to return to it.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

rose—

[Andy McDonald]

If I can make some progress, I will come back to the hon. and learned Gentleman.

I have laid out reforms that it might be thought would cause disruption. In oral evidence to members of the Transport Committee on 24 April this year, the Minister made the following comment about punctuality on the east coast main line:

“If you look at the latest monthly figures for reliability and punctuality, it is the worst of the 19 franchises.”

Were that the whole story, it would be extremely concerning, but East Coast during the latter half of 2012 achieved the best train punctuality on the east coast franchise since records began in 1999. In recent months, some challenging external circumstances, such as the weather and overhead wire problems on the southern part of the route, affected performance, and East Coast is implementing a joint action plan with Network Rail to ensure that operational performance on the line returns to the record levels achieved in the autumn. The results the Minister cited are completely atypical. One has only to look at Network Rail’s moving annual average for punctuality, which puts the east coast main line in the top three of the seven long-distance franchises, to see that. The encouraging performance improvements in period 1 and to date in period 2 of this year are an early reflection of that collaboration with Network Rail. The latest available figures show that nine out of every 10 East Coast trains were on time, according to the industry’s public performance measure—up considerably on the previous quarter and up year on year.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my hon. Friend and near neighbour on Teesside for giving way and I congratulate him on securing the debate. Does he have any idea why the new managers who were put in by the state to run the east coast main line have done so well? They are using the same people, the same equipment and the same everything else as the private company, National Express, which failed miserably, reneged on its contract and walked away.

[Andy McDonald]

I wish I could put my finger on it. My hon. Friend highlights a key issue, but it is useful to note that the way East Coast operates is a good comparator for the other services operating in this country.

The improvements are reflected in two key metrics. First, under public ownership East Coast achieved a record-breaking 92% overall customer satisfaction rating in the autumn 2012 national passenger survey conducted by the independent transport watchdog, Passenger Focus. That is the highest score on the franchise since the survey was launched in autumn 1999. It is 5% ahead of the score achieved in 2011 and three percentage points higher than the 89% average for all long-distance train operators. Indeed, in 2012, East Coast received the highest customer satisfaction score of any long-distance franchise operator.

Secondly, complaints stand at a rate of 150 per 100,000 journeys according to the Office of Rail Regulation’s latest available figures—down considerably on the previous quarter and back to the level prior to the disruption from the end of last year. Although that figure is relatively high compared with those of other train operating companies, it is just one third of where it stood when the east coast main line was in private ownership in 2007-08. A higher-than-average complainant rate might be due, in part, to the nature of the line regardless of its ownership, but since it is the publicly owned and publicly operated London Overground that has the lowest rate, at just two complaints per 100,000 journeys, it is difficult to claim a direct relationship between public ownership and complaints.

In addition, perhaps because of the unprecedented investment in staff that I have mentioned, there has been a 78% reduction in threats to staff in the past year. The apparent contradiction between a rise in customer satisfaction and a relatively high complaint rate dissolves entirely when we look at the Office of Rail Regulation’s breakdown of the reasons behind the grievances. Complaints about train service performance are down, year on year, from 38% to 29%, but what are on the increase and make up more than a fifth of all complaints are criticisms of the quality of the trains themselves. That comes directly from the fact that the rolling stock, which East Coast inherited from National Express, is eight years older than the industry average, at 27 years as opposed to 19.

That East Coast has achieved better customer satisfaction than any of its long-distance rivals, while running the oldest rolling stock of any franchise bar Merseyrail Electrics, is a testament to the workers and the management, and that the trains are still running at all after 30 years or more of continuous use is a testament to the brilliance of the engineers of British Rail Engineering Ltd who designed them and the factory workers of the north of England who built them.

Some elements of on-train comfort have also seen a marked increase. Of particular interest to certain hon. Members will be the new first-class complimentary at-seat food and drinks service, which has reversed historical losses of £20 million per annum and which contributed to a 21% rise in the number of first-class journeys in 2011-12, compared with the preceding 12 months. East Coast now serves a million meals per annum, which is a tenfold increase on the previous service, and its first class has certainly looked very nice on the occasions when I have walked through it.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am very pleased that my hon. Friend succeeded in securing this debate. The first-class service, which, as MPs, we do not of course use, is important because of the environment. For many business travellers, it can make a considerable difference to their choice between flying—certainly from Scotland—and travelling by train. If we want to make the modal shift that we need for our environment, we need a service that will attract that kind of business traveller.

[Andy McDonald]

I agree entirely with my hon. Friend. The carbon footprint that we all imprint upon this planet is a vital issue, and she makes that point eloquently.

Ministers have admitted in the House of Commons that new investment in both rail infrastructure and new rolling stock on the east coast will come through taxpayer-funded support and not from franchisees. Funding for the 2014-19 upgrade of the east coast main line will be delivered through the Office of Rail Regulation approving a £240 million increase in the value of Network Rail’s regulatory access base. Regardless of whether the refranchising of the east coast main line goes ahead, the public, through Network Rail, will still be paying for the track. We will still be paying for the rolling stock, and we will still be paying for any upgrades, extensions or electrification that might ensue. None of the upgrades is dependent on whether the trains going along the track are painted Virgin red or Stagecoach orange. There is no deadline by which the franchise must take place, except, of course, the next election.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I congratulate the hon. Gentleman on bringing this matter forward. The Labour Government set a deadline for re-privatising the line, and even when they were unable to meet it, they continued to have it as their policy that the line should be re-privatised. Has the Labour party changed that policy?

[Andy McDonald]

I thank the right hon. Gentleman for his intervention. We are where we are, and we have to look at the matter on the facts of this specific franchise, examining it carefully to see whether it is working, right at this moment. Comments have been made in the context of reports that had only half the story, so when we have better information we should read it, consider it and judge accordingly, but I hear what the right hon. Gentleman says.

It is absurd for the Government to be pressing ahead with another franchise proposal when the previous franchise offering, of the west coast main line, was such a debacle and will have cost the taxpayer £100 million by the time it is resolved.

[Karl MᶜCartney]

I thank the hon. Gentleman for giving way to me once again, and I take this opportunity to congratulate him on securing the debate and on the fact that so many of his colleagues—from both sides of the House—who have an interest in the franchise are present. Thank you, Dr McCrea, for chairing—I forgot to say that the first time I intervened.

The Labour Government before 2010—in fact, before 2005—acted perhaps with undue haste, in desperately getting back into the private sector the southern franchise that had been taken off Connex. They made many mistakes at that time. Does the hon. Gentleman not feel that this Government should be credited with ensuring that such mistakes are not made in re-awarding this franchise to the private sector?

[Andy McDonald]

I am grateful to the hon. Gentleman for highlighting the weaknesses of the entire structure of these private franchises. He does so eloquently.

A serious overhaul of the franchise process is necessary. The Minister may well claim that, following the Brown review, a new process is indeed in place. In that case, one has to wonder why existing private sector franchises, which would be the ideal testing ground for the process, are instead receiving extensions of up to 50 months. The Government’s haste to extricate themselves from running trains is all the more baffling when more than half the rail franchises in Britain are to some extent state-controlled already; it is just not the British state that is in control.

[Ian Murray (Edinburgh South) (Lab)]

Will my hon. Friend give way?

[Andy McDonald]

I will in a moment.

Putting aside East Coast and London Overground, there are 17 franchises in the UK, of which 10 are operated, to a greater or lesser extent, by the Governments of our European neighbours. Chiltern, CrossCountry and Wales & Borders franchises are operated by Arriva—a wholly owned subsidiary of Deutsche Bahn, the majority shareholder of which is the German Government. Greater Anglia is run by Abellio, the international arm of the Dutch Government’s rail operator Nederlandse Spoorwegen, which also runs Merseyrail Electrics and the aforementioned Northern franchise in partnership with Serco. The South Eastern, Southern and West Midlands franchises appear at first sight to be privately run and are operated by Govia—a joint venture between Go-Ahead Group and Keolis. Keolis, the largest private sector French transport group, is, however, majority owned by SNCF, the French state rail operator. Keolis also runs TransPennine Express, in collaboration with First Group. Are hon. Members, particularly those of a Eurosceptic bent, content that when they pay an extortionate sum for a ticket on Southern, South Eastern, TransPennine or West Midlands trains, their money is on the TGV to Monsieur Hollande? Why does this Government believe that other countries can run our rail services, but that Britain cannot?

The remaining seven franchises are hardly a model of laissez-faire, split as they are between three and a half private companies: Stagecoach, National Express, FirstGroup, and Virgin Trains, which is half-owned by its alleged competitor Stagecoach. New entrants cannot possibly afford to take on these mammoth projects and the risks that may accrue. The original 25 franchises offered in 1995 have shrunk to just 17 today, following mergers, making the barriers even higher.

The previous Conservative Government themselves recognised the barriers to new entrants when they banned British Rail from bidding for franchises in the wake of privatisation. The then Minister for Public Transport, now Baron Freeman, said:

“I am concerned that it would be very difficult to have a fair and equal competition if British Rail was a bidder.”—[Official Report, 26 July 1993; Vol. 229, c. 578W.]

The current debate is about not a free market versus a state monopoly, but whether a public asset, for which the taxpayer will remain liable, should be managed by the British Government, a foreign Government or one of a handful of private companies that are large enough to meet the criteria of the bid.

Such companies will always underestimate costs and overestimate revenue when they bid for contracts, because they know that, if they do not, their competitors will win the bid. They are looking to their next set of quarterly reports and their next shareholder annual general meeting; Governments are looking to the next century. The truth is that no Government can afford to let the rail network go to rack and ruin. The state will always have to intervene to protect that vital national asset and the lives of its citizens. As the saying goes, it is too big to fail.

Train operating companies know that, and they also know that if it all goes wrong, the taxpayer will be left holding the line. Christopher Garnett, the former chief executive of the train operator Great North Eastern Railway—the first franchise operators of the east coast main line—said during the failure of that company:

“The market will self-destruct as bidders bid to win on ever-tighter margins. When it goes wrong, it’s going to come right back to the Department for Transport.”

Since privatisation in 1996, both companies that have run inter-city services on the east coast have failed or walked away from the franchise mid-contract. Passengers will rightly be worried that history might repeat itself under a re-privatised service.

Many of those who are now Government Members once supported keeping the east coast main line in public hands. Before he held his current office, the Deputy Prime Minister said in 2009:

“Our railways should not be a plaything for private companies and we think giving it the stability of public ownership during the next franchise period would be much better”.

He added that

“it’s not an industry, it’s a public service. Our rail services are public services.”

If you will forgive the phrase, Dr McCrea, “I agree with Nick,” but as is ever the case nowadays, we are unsure whether the Deputy Prime Minister agrees with himself.

As many hon. Members whose constituents have lobbied against High Speed 2 know, railways do not affect just those whom the Government call “customers”. Stan Higgins, the chief executive of the North East of England Process Industry Cluster—the hon. Member for Redcar (Ian Swales) knows that confederation of the leading process businesses in our region well—told me the view of his members:

“We’re running railways for profit, as opposed to as a service to our industries and our communities.”

By the franchising process, the public are being disfranchised.

I want to quote the Conservative Secretary of State for Transport who moved the Second Reading of the Railways Bill that carved up and sold off British Rail. He said that that company had

“too little responsiveness to customers’ needs, whether passenger or freight; no real competition; and too little diversity and innovation…; an insufficiently sharp awareness on the part of employees that their success depends on satisfying the customer—indeed, on attracting more customers; and an instinctive tendency to ask for more taxpayers’ subsidy and to feel that public subsidy will always be there as a crutch whenever things look difficult.”—[Official Report, 2 February 1993; Vol. 218, c. 156.]

Those were the reasons for privatisation, and I will look at them one by one. East Coast has increased services in response to customer demand. It has successfully increased revenue in the face of competition from not only road transport, but domestic flights that are far cheaper than anything faced by British Rail. It has innovated with new services for first-class carriages and sold more than 1 million e-tickets. It has the highest rates of customer satisfaction of any long-distance franchise, and staff who are engaged with the company and with passengers. A million more journeys take place on East Coast now than when the franchise became public. Far from crying for subsidy, it makes the lowest demands on the public purse of any rail franchise.

Mr George Strauss, the Parliamentary Secretary to the Ministry of Transport at the time of nationalisation in 1946, said:

“I am sure that Parliament would not tolerate paying a permanent subsidy to a particular section of privately owned industry when, plainly, that industry as a whole, if properly organised, could be self-supporting.”—[Official Report, 18 December 1946; Vol. 431, c. 1975.]

The choice before us is between an unending subsidy to private interests and continued public ownership of a line that, in public hands, is 99% self-supporting. The question that I must ask the Government, and Members who oppose keeping the line in the hands of those who have managed it so well, is whether any evidence would get them to drop their prejudice that private is always better than public.

[Several hon. Members]

rose—

--- Later in debate ---

[Lilian Greenwood]

I last spoke to my colleague probably two weeks ago. Certainly, he has changed his mind.

[Andy McDonald]

Does my hon. Friend recognise that Lord Adonis made his remarks some years ago on the basis of a National Audit Office report that looked at only eight franchises? That report underestimated the 2011-12 subsidy necessary from the taxpayer to those eight franchises by £224 million. We cannot rely on those comments, which were made in good faith at that time on false information.

[Lilian Greenwood]

The noble Lord is not here to set out his position, but I am sure that we will hear from him in due course.