East Midlands Rail Franchise

Debate between Andy McDonald and Andrew Jones

Tuesday 7th May 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)(Urgent Question)]

To ask the Secretary of State for Transport to update the House on the bidding process for the East Midlands rail franchise.

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

As has previously been confirmed in a written ministerial statement and at the Dispatch Box on several occasions, Abellio was awarded the contract after presenting the Department with a compliant bid, following a rigorous competition that was consistent with public procurement rules. Our assessment of bids has been comprehensive and fair and I have absolute confidence in the process. It was a fair, open competition and Abellio provided the best bid for passengers, in which it demonstrated that it would not only meet but exceed the Department’s specifications. The Department’s procurement process is absolutely clear: submitting a non-compliant bid that rejected the commercial terms on offer, as Stagecoach chose to do, can lead to disqualification.

We have a winner. Abellio won the competition with a compliant bid. We are currently in the standstill period, which is a standard part of procurement practice. Within that period, the Department is able to answer unsuccessful or disqualified bidders’ questions, enabling them fully to understand the details of the decision that has been made. Towards the end of the standstill period, the Department received a request for further information from one of the bidders and, in view of that, we decided to extend the period until tomorrow, 8 May. After that, we will be looking forward to the mobilisation from the successful bidder, which will lead to improved services for those who use the East Midlands franchise. Abellio will invest more than £600 million in trains and stations between August this year and 2027. Meanwhile, the Government will continue their £1.5 billion upgrade of the midland main line, which is the biggest upgrade since its completion in 1870. That is part of our £48 billion investment to modernise our railways over the next five years.

[Andy McDonald]

During Transport questions last Thursday, the shadow rail Minister, my hon. Friend the Member for York Central (Rachael Maskell), asked about the non-compliance of bidders for the East Midlands rail franchise. The Transport Secretary, who is not present, dismissed her questions as inaccurate and incorrect. However, according to a formal legal disclosure from the Department for Transport, which was published on 15 April and sent with the full authority of the Secretary of State,

“All bids contained some non-compliances.”

The ministerial code requires Ministers to make truthful and accurate statements to Parliament, so will the Transport Secretary now correct the record and rectify the inaccurate and incorrect statement that he made to the House last week?

Given that all bidders for East Midlands were non-compliant, will the Minister tell us how the non-compliances of the respective bidders were assessed? The Department has mandatory and discretionary levers over non- compliances in franchise bids. Can the Minister explain how the criteria were applied during the evaluation of bids for East Midlands?

The leak of the Stagecoach bid details to Abellio during the bidding casts further doubt on the integrity of the process. Why did it take months for the data-breach investigation to start and why was it so limited? Given last week’s cancellation of the ferry contracts and now this latest debacle, is there not serious doubt about the Transport Secretary’s ability to procure services? Will the Minister’s boss sign off the East Midlands franchise contract this week, in view of the serious concerns about the transparency of the process? Given the appalling record of defending legal challenges to failed procurement decisions—Eurotunnel and P&O being cases in point—what contingency plans are there to defend future legal action against the East Midlands award?

In 2012, rail franchising went into meltdown on the west coast main line. Seven years on, it has never been clearer that it is not working and will never work. It needs to end, and to end now.

[Andrew Jones]

Let me deal with the hon. Gentleman’s questions one at a time. In a complex procurement process such as this, or indeed in other complex public sector procurements, it is a matter of course that there may be small technical non-compliances. These could include, for example, incorrect font sizes or submitting bids in the wrong format—in docx rather than in PDF, or vice versa. This does not constitute a material non-compliance, which would affect the compliance of the bid as a whole. What would be a serious issue would be something like the reallocation of risk, or acceptance or non-acceptance of the commercial terms that have been offered. That is where the difference between material and non-material would come in.

We have been clear at the outset that non-compliance risks exclusion and Stagecoach chose to put in a materially non-compliant bid rejecting the commercial terms on offer. In doing so, it is responsible for its own disqualification.

On the bid leak, I am aware that an email was sent incorrectly by Network Rail, which was received by one of the bidders, but that has been investigated and it was proved in that investigation that the email was not opened and none of the information that was possibly within it was accessed, so it has not been material to this award.

The hon. Gentleman said that franchising is dead and buried. I could not disagree more. Franchising has been a significant part of the turnaround of our rail industry. It has led to more entrants into the market. It has led to investment from the private sector. It has led to over £10 billion of investment. It has led to a renewal of focus on customers in the rail sector. It has been an ingredient in the turnaround we have seen, with the more than doubling of passenger journeys on our railways over the past 20 and a bit years. So franchising has been a success. We of course need to evolve it because what we face now is how to take the process on to the next stages. That is the question that the Williams review has been tasked to solve.

Mr Williams is starting to give us some of his thinking. He has made speeches at various rail conferences. We look forward to receiving his report in the early summer, with a view to a White Paper in the autumn.

The comment from the hon. Gentleman was that the Secretary of State had misled the House. The Abellio bid was won in a competitive franchise process and it won with a compliant bid. The comments by the Secretary of State were, therefore, accurate. I am aware of the media story, but it is wrong. He does not need to correct the record. The Abellio bid was compliant and has been won in an open, fair and consistent way. We look forward to seeing the benefits of that for the passengers on the East Midlands network.

East Midlands Rail Franchise

Debate between Andy McDonald and Andrew Jones

Thursday 11th April 2019 Commons Chamber

[Andrew Jones]

There were a number of points in my right hon. Friend’s question. As soon as the decision was taken on this franchise, all the bidders were notified. That is entirely standard. He has a great track record of delivering improvements across our rail network. Bidders were notified, of course, across all competitions, so that they did not incur extra costs. These things are expensive to operate, so this was awarded in a fair and consistent way.

Obviously, the contract to deliver the rolling stock will be between the successful bidder and its rolling stock provider, but we expect to see significant improvement in the rolling stock, and the feedback I have had from passengers along the line and from colleagues who serve along the line is that they are looking forward to seeing the benefits that those will bring.

[Andy McDonald (Middlesbrough) (Lab)]

Clearly, the franchise system is in complete disarray. It seems that Stagecoach boss Martin Griffiths and Richard Branson have been taken completely by surprise by the announcement of the decision to disqualify Stagecoach from the discredited franchise process, seemingly for failing to provide sufficient commitments in terms of the pension scheme, bidders having been asked to bear full long-term funding risks on relevant sections of the railways pension scheme. Can the Minister inform the House about the pension commitments made by Abellio that warranted the award of the east midlands franchise and the extent to which any such commitments were distinct and more acceptable to the Department for Transport?

Is not this really payback for the east coast collapse, two years ago? The question on the airwaves today was whether this decision would propel Richard Branson back into his favourite hobby of suing Her Majesty’s Government over the awarding of contracts, which has served him so profitably over the years. What preparations has the Minister’s Department made in readiness for potential costly litigation flowing from this decision?

Why did the Department change the pension rules in the middle of the bids? On south eastern, that was only made clear after two rebids. Is not that moving the goalposts?

The real issue is that this Government, by sleight of hand, are trying to reduce their support for the railways pension scheme. They are trying to pass these costs on to the private sector. That is why both Stagecoach and Arriva defaulted on their bids for the east midlands franchise. The rail industry has a plan to reduce the deficits in its pension schemes, yet the Government have ignored that and are attempting to bulldoze through changes without consultation. That is reckless. It will concern rail workers and worsen the rail service for passengers. What discussions were there with the trade unions? Moreover, given that Keith Williams has been instructed to conduct a root-and-branch review of the operation of our railway, why has such a lengthy franchise been awarded before the Williams review reports later this year?

The announcement is accompanied by the decision to extend the franchise award on south eastern to Govia. How can it be right for that company to be given the nod to continue when it has delivered such a miserable service and completely failed its passengers? Is that not further reward for failure? Surely even this beleaguered Government can see what is staring them in the face: the franchise system is in total collapse. They need to respond to long-suffering passengers and do what the next Labour Government will do: bring track and train back together in state ownership—this state.

[Andrew Jones]

The hon. Gentleman asked a number of questions. Is the franchising system in disarray? Of course it is not. If we look at what has happened to our railways over the past 25 years, we see unprecedented passenger growth. We now have more people travelling on our railways and more services run on our railways, and at a greater level of safety than ever before. The franchising system has been a key ingredient in that delivery. Do I think the franchising system is over? Absolutely not. I think we need to look at how it will evolve in future, and that is what the Williams review is doing. Franchising has helped get the system from A to B, reversing years of decline. We now need to see what system we will have as we take it through to the next stage.

Stagecoach knew that its bid was non-compliant—it acknowledged that to the Department. The hon. Gentleman asked about litigation. The Government are completely confident that the bid was evaluated and decided fairly. It is business as usual in the awarding of a franchise on our rail network. He asked whether the decision on the east coast main line was payback. That question is absolute nonsense. This is an entirely separate matter. The bid was won on merit by the strongest bidder. It offered the best bid, with new trains and more services, including more Sunday services and more early and late services. It was won on merit. If a company chooses to bid non-compliantly, that is its fault.

With regard to passing the costs on to the private sector, that is also nonsense, because these are private sector pension schemes. The rail operating companies have a section of the rail pension scheme. Their trustees will meet the Pensions Regulator to discuss that. Is this a question of the Government seeking to remove responsibility? No, this is a private matter and the trustees will be dealing with that in their own way.

The hon. Gentleman asked whether I have met the trade unions. I have met the National Union of Rail, Maritime and Transport Workers and ASLEF, and on this occasion I have written to them to highlight the award today.

Oral Answers to Questions

Debate between Andy McDonald and Andrew Jones

Thursday 21st March 2019 Commons Chamber

[Andrew Jones]

I will certainly make sure that officials are fully engaged on this issue.

[Andy McDonald (Middlesbrough) (Lab)]

On a point of order, Mr Speaker. It was said by the Minister, the hon. Member for Hereford and South Herefordshire (Jesse Norman), that I had made no mention of cycling in my speech to the Institute for Government yesterday. I made five mentions of it, and there were 300 words devoted to the subject. The Secretary of State then added that yesterday Labour announced hiking the cost of going on holiday. Mr Speaker, I do not want to stray into using unparliamentary language, but that is not true. I seek your guidance as to what we can do to ensure that Ministers come to the Dispatch Box to correct the record.

High Speed Rail (London - West Midlands) Bill

Debate between Andy McDonald and Andrew Jones

Monday 20th February 2017 Commons Chamber

[Andrew Jones]

The Bill certainly does give the Secretary of State the power, if required, to make TROs himself and to prohibit or revoke TROs that unnecessarily hinder the delivery of the railway. The answer to the right hon. Gentleman’s question is therefore yes, but we cannot allow a significant national project to be held up over the small matter of a TRO. As I have said, the best thing to do is to work with the highways authorities; these are some backstop powers, just in case that does not deliver the consensus required.

The powers were subject to significant debate and amendment in the House of Lords, and I am glad to say that the powers we are considering this evening represent the correct balance between giving the Secretary of State the powers necessary to construct HS2 and providing reassurance to local highways authorities about how they will used. Clearly, we hope there will be little or no need to rely on them, as the regular meetings established with local highways authorities will be used to consult, agree, monitor and generally supervise the local traffic management plans. However, the powers are needed to ensure that, if those arrangements fail, HS2 can be delivered in an efficient manner.

The remainder of the amendments make technical clarifications in relation to the changes to the Housing and Planning Act 2016, update references and make corrections. I urge the House to agree to the Lords amendments.

[Andy McDonald (Middlesbrough) (Lab)]

I am pleased to contribute to the progress of the Bill once again. I was fortunate enough to have been able to contribute to it in Committee, and I know the Minister will share my enthusiasm for the fact that this Bill will soon receive Royal Assent. High Speed 2 is, of course, the brainchild of a Labour Government, but I give credit to the coalition Government and the present Government for providing continuing support.

Oral Answers to Questions

Debate between Andy McDonald and Andrew Jones

Thursday 17th November 2016 Commons Chamber

[Andrew Jones]

Transport investments around the country are not necessarily happening at the same pace, but I suggest to the hon. Lady that £340 million is being spent on rail in the Liverpool city region right now, and nobody could really doubt our commitment to the north after this week’s announcements on HS2.

[Andy McDonald (Middlesbrough) (Lab)]

I do not want to prick the bubble of self-congratulation, but new analysis published yesterday by the TUC reveals that the UK ranks towards the bottom of the table of OECD countries for capital investment in important areas of economic development, and worst of all is transport. As a percentage of 2014 GDP—these are the latest figures—UK investment was the lowest ranking, in last place out of 34 countries. With pauses and unpauses, and shunting programmes off into the distant future—be it HS3, northern powerhouse rail, or whatever we want to call it—is it not time that the Government started delivering instead of continually breaking their promises?

[Andrew Jones]

I remind the hon. Gentleman how we collapsed in OECD league tables under the last Labour Government, and that we are spending £13 billion on transport investment in the north during this Parliament, as I outlined earlier.

HS2: North-west of England

Debate between Andy McDonald and Andrew Jones

Tuesday 11th October 2016 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen. I thank my hon. Friend the Member for City of Chester (Christian Matheson) for securing the debate. He passionately put forward his case on how HS2 can serve the interests of his constituents and the wider north-west. I echo his sentiment that HS2 has Labour’s backing. We welcome infrastructure investment, but part of the case for HS2 that convinced so many was that it was not simply another project designed for the benefit of the south-east but that it would benefit regions across the country.

Crewe is already a gateway station for the north-west, with regional and long-distance connections to the wider north-west, the east midlands and Wales, but there are significant capacity constraints that have an impact on reliability, which has been below industry targets, and there are bottlenecks at Colwich junction and around Stafford. This is also a problem for national freight operators, with much freight traffic on the west coast main line routed through Basford Hall yard, south of Crewe, and 43% of rail freight journeys using the west coast main line at some point.

The phase 2a link will help provide much needed additional capacity for freight and will improve reliability for commuter services, so it should be welcomed that the Government have brought forward the opening of the phase 2a link to 2027 as that will provide benefits to the north-west and beyond. However, it would be disappointing if a Crewe hub were not developed, as the fact that it is already a regional hub provides a springboard for further developing and improving connectivity with conventional rail. The benefits of stopping more trains at Crewe are clear, as expressed in David Higgins’s “HS2 Plus” report.

We welcomed the Government’s decision to accelerate the section of route from the west midlands to Crewe so that it opens six years earlier than planned in 2027, bringing benefits to the north sooner than initially thought, but the primary concerns are the rumours that phases 2a and 2b might be downgraded or delayed as the project increasingly comes under budgetary strain.

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

indicated dissent.

[Andy McDonald]

I see the Minister shaking his head—he can give me that assurance, then. In the words of the Public Accounts Committee report,

“the cost estimates for phase 2 are still volatile”.

There was a cost estimate from the Department for Transport that was £7 billion over the agreed £28.5 billion funding, and then £9 billion of potential savings were subsequently identified. We know that much of the savings are a result of more detailed and accurate estimates being applied, but the worry is that without a confirmed route and a firm cost estimate, and with budgetary pressures, the planned savings on phase 2 will be delivered by adversely affecting the expected benefits of the programme to the north, including the north-west.

I know the Minister will wish to reassure the House that he intends to preserve the integrity of HS2 to the north, because that will tackle the lack of capacity south of Birmingham and the poor connectivity not just between the region and London but within the north. It is crucial that we ensure that HS2 remains an infrastructure project that delivers for the whole country.

We have seen the uncertainty surrounding the proposed route changes in south Yorkshire. We do not want to see the same uncertainty on the western leg. It has been rumoured that if costs for the existing scheme cannot be brought down, one option under consideration is to delay or abandon altogether the section to Manchester and build the line only as far as Crewe, or to delay the line—an HS2 spokesperson said that the Treasury is taking the position that that nothing is ruled out.

I echo the concerns of my hon. Friend the Member for City of Chester and stress the importance of delivering a hub station at Crewe, which will benefit the sub-region, the north-west and the country as a whole, and of phase 2b, which ought to transform connectivity in the north and through the country. It would be disastrous for the north-west and make a mockery of the so-called northern powerhouse if phase 2 were to be downgraded.

We eagerly await the Government’s proposals for HS2 phase 2, but whatever the forthcoming route proposals, they must ensure that HS2 is an infrastructure project that delivers for the whole country. I hope the Minister can provide reassurances to that effect.

--- Later in debate ---

[Andrew Jones]

I have absolutely no doubt that when we consider those services we are all thinking ahead. I entirely buy the argument that transport investment is a driver of economic growth and, indeed, social progress—whichever mode of transport we are talking about. The Government are not buying trains because we like trains; we are buying them because they facilitate economic growth. That is the same with buses and social progress.

Taking HS2 to Crewe will play an important part in turning the town around. It is already a hub and it is also a town that is in need of investment, but HS2 is not a silver bullet in itself. We need to ensure that HS2 drives regeneration, not only in the places that it serves directly but far more widely. For the economic growth benefits of HS2 to be realised and to spread, local partners have an important role to play.

It is fantastic to see the north-west making such excellent progress in its plans for the region. The northern gateway partnership is already developing its growth strategy. That work, which is aiming to deliver around 100,000 homes and 120,000 jobs, will ensure the regeneration benefits of HS2 are felt right across the region. I have met with the combined authority, Transport for Greater Manchester, on a number of occasions, and I have done the same with the west midlands. It has been fantastic to see the ambition that those areas have for regeneration, recognising that, when HS2 arrives, it will present them with significant opportunities.

[Andy McDonald]

The Minister said it is too early to “lock down” the level of service, but he will undoubtedly appreciate that, if we cannot establish a bare minimum level of service, this becomes a rather pointless and redundant exercise. If he is not able to do that now, will he give some indication of when he will be able to give a little bit more detail about the basic minimum level of service we have been discussing this afternoon?

[Andrew Jones]

I will come on to timing a little later on. I turn to the matter of the north Wales main line and the work that is being carried out by the North Wales and Mersey Dee rail task force. I welcome its establishment and it is doing a good job of making the case for rail modernisation in north Wales and of developing wider growth plans for the region. This is an opportunity for north Wales to make the best case for investment in rail infrastructure and services. It is vital that a shared local vision is brought together with a defined set of prioritised outcomes based on economic growth, journey times, connectivity and modal shift. We will continue to work closely with that taskforce and with the Welsh Government to provide advice and assistance and to consider what can be jointly accomplished. We want the taskforce to advise us effectively on options for enhancements, including electrification, to address the regional economic needs and, of course, on the value of those options.

Many hon. Members have commented today. I will first respond to my hon. Friend the Member for Eddisbury (Antoinette Sandbach), who has raised concerns with me previously regarding the route north of Crewe, given the ground instability problems associated with the route crossing the Cheshire saltfield. I have been down that salt mine as part of looking at the winter preparations for the road network last year. I have to say it was a very interesting place to visit. I am aware of the scale of this enormous undertaking and I reassure my hon. Friend and other hon. Members that we are not ignoring that risk. HS2 Ltd has carried out surveys to better understand the geological issues in Cheshire and has commissioned further studies from third-party organisations. We are looking at a range of options in that area.

At this stage, I cannot provide any further information about where that part of the route will run. My right hon. Friend the Secretary of State will make an announcement on that during the autumn. My hon. Friend the Member for Eddisbury also made a further point about blight for residents affected by the potential routes. I will look at those cases with every sympathy, and I know she will write to me so I will look out for her letter.

I thoroughly agree with the points made by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) on transport being a driver of economic growth, on how capacity is necessary and on how, looking not too far ahead, we will have a rail network that is full, which is something we have discussed previously. He will not be surprised that we are in further agreement. To my hon. Friend the Member for Weaver Vale (Graham Evans), I say this is not a white elephant: it is a scheme that is a fundamental and critical part of our national infrastructure and it will happen.

To my hon. Friend the Member for Cheadle (Mary Robinson), I say yes, the debate really has moved on; it is not if but when this happens. The debate we should be having is on how we maximise the benefits that will flow from HS2 when it arrives. To the hon. Member for Wythenshawe and Sale East (Mike Kane), I say that I completely recognise that Manchester airport is thoroughly important, not just for Manchester but for the whole of the north of England with its power to connect it. I can also confirm that we are developing plans for HS3 alongside HS2; they are not separate schemes being developed in isolation. We are looking at integration of the two.

I can confirm that we have had absolutely no loss of ambition. I will run through some timing: on phase 1, we hope the Bill will complete its passage through the Lords very soon and we hope to start the build in the spring. The necessary work to prepare the Bill for phase 2a is underway and we intend for it to start its parliamentary journey next year. On phase 2b, the Government will announce our proposed route from Crewe to Manchester and from Birmingham to Leeds, south Yorkshire and the east midlands later this year. That will be an important moment and will begin to make the project far more tangible.

This is a project that is from the UK and for the UK. It is all about national benefits, including extra capacity on the network and developing skills, and companies from right across the UK will be able to benefit from the significant amount of work required. We view this as a critical part of our national infrastructure and of building a transport network and an economy that works for all. We have had a positive debate today. Though it has been focused on the north-west—and it is clearly right that this presents a huge opportunity for the north-west, for the city of Chester and for the whole region—it is a national project and we have to view it in that way.