Department for Transport

Debate between Catherine McKinnell and Diana Johnson

1st reading: House of Commons
Tuesday 27th February 2018 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

I thank Members from on both sides of the House for their support for this debate, including my hon. Friends the Members for Harrow West (Gareth Thomas) and for Hammersmith (Andy Slaughter), who so ably gave the presentation on the debate before the Backbench Business Committee, as I was not able to attend. The range of support confirms that the Department for Transport’s spending priorities are of national concern across party lines and in every region of the United Kingdom. Whether it is on rail franchising or transport investment, I think that the Department is giving passengers and taxpayers a raw deal.

Given this breadth of interest, I am disappointed that the Transport Secretary has not come to the Chamber to hear this afternoon’s debate. I recall that he was also unable to attend our Back-Bench debate on transport in the north on 6 November. I am, however, very pleased to see the shadow Secretary of State, my hon. Friend the Member for Middlesbrough (Andy McDonald), in the Chamber, and it is also good to see the Minister of State, Department for Transport, the hon. Member for Orpington (Joseph Johnson), who will respond for the Government. As well as representing the London seat of Orpington, he serves as the Minister for London, and I note in passing that not one Minister in the Department represents a northern seat, and not one represents a seat outside England.

I want to highlight the significant, long-standing problems with how we run our transport services and invest in transport infrastructure. I also want to press the case for a bolder, more ambitious approach to transport spending that leaves no citizen, no nation and, crucially, no region behind, and that will boost economic efficiency and growth post Brexit.

The international evidence paints a stark and disappointing picture. Britain’s infrastructure spending is the lowest of any developed country in the OECD. The inequality between our regions, measured according to gross valued added, is the widest in Europe, and our national productivity, as we all know, is low compared with other countries. These problems cannot be solved without better transport investment, and without better north-south and—very importantly—east-west connectivity.

Experts from the Institute for Public Policy Research North to the Centre for Cities, and from the National Infrastructure Commission to the authors of the northern powerhouse independent economic review, are all agreed that we cannot increase productivity and close the gap between our regions unless we dramatically upgrade our transport infrastructure and make up for decades of under-investment. This requires an ambitious investment programme for every corner of the country. In northern England, that means investing in bus services, not cutting them; dramatically reducing rail journey times; increasing rail capacity for passengers and freight; and modernising our rolling stock.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I congratulate my hon. Friend on securing this important debate. The north-east received just 2.7% of overall public spending on transport from 2012 to 2017, compared with the 38.3% that London and the south-east received. Does she agree that the north has little chance of fulfilling its true potential if that unacceptable imbalance continues?

[Diana Johnson]

I thank my hon. Friend for that point—I was just about to come to it—and agree absolutely.

If we are serious, such an ambitious investment programme means plugging what IPPR North has calculated to be a £36 billion gap in transport spending between London and the north, and accepting and building on Transport for the North’s plans for our region. Those plans would, by 2050, not only create 850,000 jobs, but partly pay for themselves by reducing the north’s fiscal deficit by 47% compared with business as usual.

A new approach to running transport services is also required. We need an approach on managing transport that works for fare-paying passengers, not dividend-troughing shareholders. Rail operators that mismanage services and threaten to default on their franchises cannot get away with it. Taxpayers’ money and fare revenues should be spent on transport investment, not on bailing out private companies that recklessly over-bid. Regions outside London need statutory, sub-national transport bodies with the same clout and borrowing powers as Transport for London. To be fair, the problems I have just outlined are not all the fault of the Transport Secretary or the Department for Transport, as many relate to the actions of successive Governments of all colours stretching back over many decades. However, the Secretary of State is responsible for what happens on his watch, and we are entitled to hold Ministers to account for the steps they take—or fail to take—to tackle these problems.

I have four questions for the Minister. First, how does he intend to act on auditors’ criticism of the effectiveness of a range of transport bodies and projects? The National Audit Office has been scathing about the performance of Highways England’s 2015 to 2020 road investment strategy, highlighting the fact that many of the promised road investments are considerably behind schedule. Network Rail’s operations have also been subject to long-standing NAO criticism. The NAO has also turned its sights on the Department’s role in a range of projects and franchises, not least the Thames garden bridge in October 2016. What will the Government do about these criticisms?

Secondly, in the wake of the east coast debacle, the Government need to answer pressing questions about the state of our rail franchising system. The recent problems with the Stagecoach-Virgin Trains east coast franchise risk undermining the whole franchising process. The situation sends a message to future bidders that they can get their sums wrong and over-bid, but still get a bail-out to the tune of perhaps more than £1 billion. The Secretary of State’s subsequent decision to extend Virgin Trains’ west coast franchise only reinforces that concern.

Last month, the NAO rightly announced an independent investigation of what had happened. Subsequently, on 5 February, the Transport Secretary came to the House with stern words about Stagecoach, but no concrete assurances that it would not win a future bid. I must say to the Minister that that stands in stark contrast to the swift, decisive action taken by Lord Adonis after National Express threatened to default on the same franchise in 2009.

This debacle also exposes huge problems with the broken franchising system. As has been shown by the answers to parliamentary questions that I have tabled, there have been fewer bids for rail franchises in recent years than was the case at the start of the decade. Since 2012, 13 franchises have been directly awarded without the promised competition.

Thirdly, if the Transport Secretary is so confident about the benefits of his transport upgrade programme and the scrapping of electrification, why will he not spell out the exact benefits it will bring? Last year, when he scrapped all electrification plans—outside the south-east, of course—in favour of bimodal diesel-electric technology, he assured Members in a written ministerial statement that

“we no longer need to electrify every line to achieve the same significant improvements to journeys”.—[Official Report, 20 July 2017; Vol. 627, c. 71WS.]

So why have Transport Ministers proved unable to answer my very specific written questions about the exact travel speed improvements, ongoing financial costs and emissions that passengers can expect from the new bimodal trains?

Transport in the North

Debate between Catherine McKinnell and Diana Johnson

Monday 6th November 2017 Commons Chamber

[Diana Johnson]

I do not want this issue to be party political; I want it to be cross-party. This is in the interests of Britain, so we in Parliament should work together.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Will my hon. Friend give way?

[Diana Johnson]

I will, but one last time. I am conscious that there is not much time.

[Catherine McKinnell]

I thank my hon. Friend for giving way and I pay tribute to her for securing the debate. Does she agree that for far too long, improving equality between the north and the south in terms of transport infrastructure has meant improving links between the north and the south, rather than the links within regions, which is what will really boost our regional economy?

[Diana Johnson]

My hon. Friend makes that point very well and I absolutely agree with it.

I want to pursue the issue of regional inequalities. One core goal of public spending should be to tackle the deep-rooted inequalities between our regions, but all too often our transport and infrastructure spending has reflected those inequalities, or, even worse, compounded them. The gap in transport investment between the north and the capital is stark and widening. Nowhere is this divide more apparent than in Yorkshire and the Humber. We are to get just £190 a head in future transport investment over the next few years, the lowest of any UK region. London will get £1,943 a head—10 times as much. Transport for the North, with new statutory powers, is to get £60 million to develop transport plans for the whole of the north of England. That sounds impressive until we note that as long ago as 2008 Transport for London was spending £50 million just on advertising.

I welcome the £13 billion available for northern transport over the next five years, which I am sure the Minister will talk about, but I want to put that in the context of the London Crossrail projects. Crossrail 1, a single project in London, cost more, at £14.8 billion, than the north will get in this entire Parliament. The new Crossrail station at Tottenham Court Road cost £1 billion. Crossrail 2, with an initial budget of £31.2 billion, could yet dwarf it even further. Crossrail 2 was given backing from the Secretary of State this summer, at the same time as he was cancelling investment in the north. In backing Crossrail 2, I do not recall the Transport Secretary saying that London had to have bimodal trains—it is getting electric trains.

The practical consequences of this divide are clear for all to see. It takes longer to travel from Liverpool to Hull than it does from London to Paris, and that is without the frequent delays. As IPPR North has highlighted, if the north had received the same transport investment as London over the past decade, we would have received an additional £59 billion. We cannot afford to ignore three regions with a population almost twice that of London and an economy larger than the three devolved nations put together.

There are immense economic gains to be realised if we plug the gap in transport investment. As the Northern Powerhouse Independent Economic Review highlighted, a proper investment plan for the north, including major transport investment, would create an additional 850,000 jobs and add £97 billion to the economy by 2050. I admit that priorities need to be reordered, but it does not have to be an either/or choice between London and the south-east, and the rest. The underlying problem is that Britain spends well below the international OECD average on infrastructure. All political parties must acknowledge that this is a national concern that requires urgent attention.

The previous Chancellor recognised the potential of the northern powerhouse—indeed he coined the phrase—and set out some ambitious promises for the region. In the short to medium term, we were promised dramatic improvements in our existing railways and stations. In the longer term, he expressed support for the £25 billion to £30 billion Crossrail for the north project, promising to halve journey times between Leeds, Manchester and Sheffield to 30 minutes. We were told that our strategic road network would get unprecedented levels of new investment, spearheaded through a new organisation, Highways England, including promised investment in 43 road improvements across northern England, among them the A63 at Castle Street, in Hull, on which work was scheduled to begin by 2018. Finally, he promised new powers, devolved to northern England, to help realise all these gains. Transport for the North, created in 2015, was eventually to become a statutory subnational transport body and assume similar powers to those of Transport for London. It was to work alongside stronger local councils, a network of local enterprise partnerships and powerful elected Mayors.

Sadly, the reality has not lived up to these promises, so I ask the Transport Minister to make the following five commitments. First, the Government should spell out exactly how they expect bimodal, diesel-electric trains to realise the same benefits as electrified ones. A short written ministerial statement will not cut it. All the evidence suggests that they are the inferior option. They will be the first bimodal trains built in Britain since the 1960s. In Britain, diesel cars are being phased out at a time when diesel trains seem to be being phased back in. All those European countries that still have non-electric lines are all pursuing electrification. There is strong evidence that in diesel mode bimodal intercity express trains will be slower than the ones they replace. Great Western Railway has admitted as much in the case of the intercity trains on its line. No rail system that is not electrified can be described as “high speed”, which is ironic given that previous Whitehall statements have referred to the north as getting “High Speed 3”.

Network Rail promised electrification, saying that it would deliver shorter journey times, 20% to 30% lower CO₂ emissions and 33% lower maintenance costs, but all these gains might now never be realised. Journey times from Manchester to Liverpool look set to be 30 minutes longer than promised and journeys from Leeds to Newcastle 20 minutes longer. Where does this leave plans for future rail investment, especially Crossrail for the north? Northern leaders and Transport for the North had always been clear that short to medium-term rail improvements ran hand in hand with longer-term plans. In developing Crossrail for the north, Transport for the North is still working from the baseline assumption that these rail upgrades will deliver the journey time improvements promised.

If the Transport Secretary is so confident in his approach, he should publish an independent expert assessment of exactly what kinds of travel times, CO₂ emissions, upfront costs and maintenance costs we can expect from the bimodal trains that he is so keen on. This assessment should state whether they will meet Transport for the North’s baseline assumptions and assess their impact on realising longer-term investments, such as Crossrail for the north. All those years he was boasting about electrification, he must have known that bimodal technology existed. Instead, bimodal technology is one of the excuses, alongside the discovery of Victorian rail tunnels in the north, for dropping investment plans.

Secondly, the Minister must urgently address the uncertainty caused by the Transport Secretary’s recent announcements and recommit to the investment that the previous Chancellor promised. He must commit to electrification of the trans-Pennine line, the midlands main line, the Hull to Selby line and those parts of the north-west triangle still due for completion, and in order to realise key economic benefits for our region, he must give Crossrail for the north priority over Crossrail 2 for London.

Thirdly, the Government should provide Transport for the North with the powers it was promised, along the same lines as those in London. We now know that, in the statutory instrument to be laid shortly in Parliament, Transport for the North will not have nearly the same powers as Transport for London. In the north, we need to be able to finance infrastructure projects and drive forward private investment, but rather than embracing these opportunities, the Government have given us the worst of all worlds: neither the money to fund our transport projects and lever in private investment, nor the power to raise funds and promote the north ourselves.

Fourthly, we need the road investment promised. In March 2017, the National Audit Office strongly criticised Highways England and cast doubt on whether existing commitments would be met. It has already pushed back the start dates of 16 road investment schemes and paused six others. The A63 improvement in Hull has since been delayed to at least 2020. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has had to fight hard just to get a pedestrian footbridge built over the A63—for safety reasons—before the main work starts in 2020.

I must mention bus services. Northern bus services have been hit hard: between 2010-11 and 2016-17, bus budgets were cut by 22% in the north-east, by 23% in the north-west and by 37% in Yorkshire and the Humber; and seven in 10 councils have cut bus services since 2010. The Government must reaffirm the commitments they had made, commit to funding the road network properly and to delivering those and future improvements to a proper timescale.

Finally, and most fundamentally, we need a long-term, cross-party commitment to addressing Britain’s regional inequalities and plugging the gap in investment between London and the rest. This needs to be a long-term commitment from both sides of the House. Future Budgets could, and should, be judged by how they reduce these inequalities.

In conclusion, the north’s problems are Britain’s problems. If we are to stand any chance of solving the deep-rooted challenges our country faces—solving our productivity crisis, addressing inequality, increasing our exports post-Brexit, creating stronger UK GDP growth overall—the north must fire on all cylinders. This means rebalancing the economy. Indeed, many of the challenges in our capital—skyrocketing rents and house prices, the chronic congestion that is economically inefficient and bad for people’s health and quality of life—would be much easier to solve if we rebalanced our economy.

I do not wish to deny London the transport investment it requires as the capital city, but the logic of rebalancing the economy was as much about taking pressure off London and the south-east by investing in regenerating the north as it was about keeping up with the incessant demand for massive schemes in and around London. In the digital age, many industries no longer need to cluster in the south-east. The Government have accepted the arguments for rebalancing the economy; now their actions need to follow their words. It is in the national interest that the north—our taxpayers, our fare payers, our businesses—gets its fair share of investment.

Finance Bill

Debate between Catherine McKinnell and Diana Johnson

Tuesday 3rd July 2012 Commons Chamber

[Catherine McKinnell]

I thank my hon. Friend for that intervention and think that the response from Government Members is deeply worrying, as it shows worrying complacency about the direction in which they are taking this country and about the decisions they are making on the economy, which are making things worse, not better.

Our new clause 12 would reverse the VAT rise immediately and prevent it from rising again—I emphasise this point—until the Government can show that our economy is growing strongly again. That is the right move to get our economy back into growth and out of this double-dip recession. I also want to put on the record that we will oppose the Government’s new schedule 1, which would bring in ill-thought-through and unwelcome VAT changes that, despite the concessions, are still wholly unsatisfactory.

[Diana Johnson]

Does my hon. Friend share my concern that the proposals in schedule 1, especially those on the caravan tax, seem to have taken no account of job losses or of the effect on demand when we are in a double-dip recession and will cost the Exchequer more than it would gain in revenue?

[Catherine McKinnell]

I thank my hon. Friend for that intervention and her focus on the subject of the debate—that is, these deeply worrying and shambolic VAT changes. We have discussed at some length the new proposals that followed the Government’s concessions and we have had the opportunity to question the Minister on them. I share my hon. Friend’s concern at the failure to provide costings for some of the changes and the lack of consideration of the concern about jobs and growth that our new clauses aim to deal with. Those factors need to be given proper consideration and the Government do not appear to have done their homework.

--- Later in debate ---

[Catherine McKinnell]

I am pleased that the industry is “delighted” with a 5% increase in VAT on its products. That is surprising in the circumstances.

[Diana Johnson]

rose—

[Brandon Lewis (Great Yarmouth) (Con)]

rose—

[Catherine McKinnell]

I give way to my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), who wanted to intervene earlier.

[Diana Johnson]

I would not say that the industry is “delighted.” I think that it accepts the measure, on the basis that it was very concerned about the 20% figure. My concern as a constituency MP, with 90% of static caravans being built in Hull and the surrounding area, is that there are 43.6 people chasing every vacancy in my constituency. That is the highest figure in the UK, and any job losses are going to be very difficult for my constituents, so that is why I am pressing the Minister to be very clear about the number of job losses that the 5% imposition will bring about. Will the shadow Minister comment on my concerns?

[Catherine McKinnell]

I thank my hon. Friend for that rational and considered intervention and appreciate that the industry is willing to accept the change, as it is much easier to bear than the original suggestion of 20%, but that is the point I seek to make. The Minister in his opening remarks confirmed that no assessment has been made of the impact of the 5% increase on the industry, and that is gravely concerning, because, as the hon. Member for Brigg and Goole (Andrew Percy) suggested, the industry needs certainty, security and stability to create the jobs that my hon. Friend is so concerned about.

The fact that the proposal is being put in place without a proper assessment of what is a lesser impact but still one of 5% is deeply concerning, because the last thing the industry needs is for the measure to be reviewed 12 months down the line, be seen to have had a detrimental impact, and for it to have to go through the whole process all over again.