Haulage Permits and Trailer Registration Bill [Lords]

Chris Grayling Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Monday 14th May 2018 Commons Chamber

[The Secretary of State for Transport (Chris Grayling)]

I beg to move, That the Bill be now read a Second time.

The United Kingdom’s road haulage sector plays a major role in keeping our economy on the move. Each year, UK-registered heavy goods vehicles carry around £30 billion in goods between the UK and the EU, and around 300,000 people are directly employed within the industry. I saw a snapshot of the UK logistics sector’s importance this morning when I visited and opened the new United Parcel Service sorting and delivery centre at the DP World London Gateway logistics site. It is a strong and positive new investment in the sector that is helping British businesses to become more efficient and is, crucially, a vote of confidence in our future as a trading nation. The Bill is important because it is about our future as a trading nation.

The Bill provides a framework that should reassure hauliers that the final Brexit deal agreed with the European Union will be able to be implemented smoothly and will support the continued movement of goods by truck between the UK and Europe. We are committed to maintaining the existing liberalised access for commercial haulage. It is in everyone’s interest that there should be a mutually beneficial road freight agreement with the EU that secures our objective of frictionless trade and is in the interest of both parties.

The Government are moving ahead with the negotiations with the EU, and I expect us to move towards a proper agreement later this year—I am very confident about that. However, it would be irresponsible of this Government not to plan for all eventualities. I stress again that it is in everyone’s interest to secure liberalised access, which is by far the most probable result of the negotiations, but this Bill is prudent planning for the future. It forms part of the Government’s broader EU exit legislation programme and, as set out in the other place, the haulage permits aspect of the Bill provides a framework for the UK to manage permits in all eventualities, including if they are needed as part of our agreement with the EU.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

The Secretary of State might be putting a gloss on what is potentially a catastrophic situation. I give him the opportunity, from the Dispatch Box, to give a categorical guarantee that, after exit day, the licences of 318,000 HGV drivers will still be valid to deliver goods across the European Union. Is that right?

[Chris Grayling]

I cannot give the hon. Gentleman final details of the negotiations at this stage, but let me tell him some straightforward facts: 80% of the trucks that come through the channel ports and the channel tunnel are carrying EU exports to the United Kingdom, so it is pretty evident that it is in everyone’s interest that we reach a sensible agreement for the future. This Bill ensures that we have the legal mechanisms in place to deliver the registration framework that is needed for all eventualities, which is prudent and sensible.

The hon. Gentleman asked me a straightforward question, and I say to him straightforwardly that 80% of those trucks are EU hauliers bringing goods to the UK. I struggle to imagine other EU countries not wanting that to continue.

[Mr Leslie]

I am sorry to interrupt the Secretary of State, but this is quite important. He acknowledges that I asked a straight question about the guarantee. Is it not the case that, even in that worst-case situation, some sort of bilateral agreement with other EU countries would be required and there is no guarantee that such an agreement will come forward? Is that not the truth?

[Chris Grayling]

I cannot guarantee that EU countries and their businesses will want to continue selling goods to UK consumers, but my best guess is that French farmers will still want to sell their produce through our supermarkets and that German car makers will still want to sell their cars in our car showrooms. No, I cannot guarantee that it will rain or be sunny tomorrow, nor can I guarantee that EU countries will want to continue selling their products to us, but do you know what, I think they probably will.

[John Redwood (Wokingham) (Con)]

I congratulate my right hon. Friend on introducing a timely and good Bill to deal with all eventualities, and on so politely answering idiotic interventions that are trying to create fear where there is no need for it because, of course, goods will move smoothly with or without a deal.

[Chris Grayling]

My right hon. Friend is right. The fact that this morning, just to the east of London, I visited a £120 million investment in the future of the United Kingdom as a trading nation by a major United States-based company says that I am not alone in believing that trade will continue and flourish in the future, because it will.

There are two parts to the Bill, the first of which is all about the permits. It enables us to introduce a scheme that simply allows trucks to cross borders in a variety of scenarios—this is, basically, like a truck having its own international driving licence. In many circumstances, through a variety of international agreements, that is a necessity in order to carry goods from one nation to another. We are simply making sure that we put in place the legal framework for the Government to establish a system for issuing permits if, after we have concluded the negotiations, it proves necessary to do so. We have designed the legislation to be flexible in response to different circumstances. We do not want to place any undue regulatory or financial requirements on the industry.

Permits are a feature of almost all international road freight agreements outside free-trade areas. The UK already has several permit-based agreements with non-EU countries, including Belarus, Georgia, Kazakhstan, Morocco, Russia, Tunisia and Ukraine. The UK also has liberal, non-permit agreements with Albania and Turkey. The Bill will also cover non-EU agreements relating to permits, which means that there will be one simple, straightforward administration system that is designed to be as easy as possible for haulage firms to use.

[Sammy Wilson (East Antrim) (DUP)]

I, too, welcome the Bill. The Government are right to make it clear that in the event of no deal we will still have made preparations. The Bill makes a distinction between international permits with other EU countries, and permits and agreements with the Irish Republic. Why is such a distinction made?

[Chris Grayling]

We worked on this carefully. The important thing to say is that this is not in any way related to broader discussions about border matters. We are aware that some hauliers travel from Belfast to Dublin to Holyhead to deliver their goods within the UK—we are talking about a UK business delivering its produce within the UK—so this provision is simply designed to ensure that that will not be impeded in any way by the regulatory system. I will say a bit more about that later in my remarks, but we want to ensure that nothing can undermine the integrity of the UK and people who travel from point A to point B within it. That is very important to me.

The final details of the scheme will, of course, depend on the agreements that we reach, and the Bill allows for that. It creates flexibility and allows us to make regulations on the allocation of permits to best meet the needs of the economy. Guidance on the allocation process will be issued to hauliers.

This aspect of the Bill also allows the Government to charge fees in relation to applications for permits and the grant of permits. I stress that our aim is purely to set those fees on a cost-recovery basis so that we minimise the impact on hauliers; this is not designed to be a revenue-raising mechanism. The system is simply designed to cover its own costs, and the amounts involved will be relatively small for anyone seeking a permit. The fees will recover only the day-to-day cost of administering the scheme. The set-up costs of the scheme are being funded as part of a £75.8 million grant from the Treasury to the Department for Transport as part of our preparations for all the different Brexit scenarios.

The Bill provides for the first set of regulations made under clauses 1 and 2 to be subject to the affirmative procedure, which means that the House will be able to scrutinise the new permitting system fully and properly. The first regulations will set out the overarching framework that will be used for the provision of permits under any future agreements. As I have outlined, we are confident that we can maintain our existing liberalised access with the EU, but the Bill will help to cater for any possible future permit arrangement with the EU.

On timing, we plan to have the system for a permit scheme ready by the end of the year. It is important that we make sure that we are prepared for all eventualities. Any applications for permits after the relevant regulations are in force will be dealt with under this system. The first regulations made under clauses 1 and 2 will cover the permits required under existing international agreements, including provisions relating to Armenia and Ukraine. If we then agree a permit-based arrangement with the EU, we will make further changes to the regulations to cover the agreement reached. In the unlikely scenario that we end up with a restricted number of permits to the EU as part of a future relationship, we have committed to providing a report to Parliament. That report must assess the effects of such restrictions on the UK haulage industry during that year. That assessment is, of course, vital, but I reiterate that this is about a flow that is more inward than outward, both in goods terms and in haulage terms, so I remain confident that we will reach a sensible agreement for the future. The permit scheme is necessary to make sure that trucks have their equivalent of the international driving licence to cross borders. I will not allow us to get into a position in which the industry does not have the administrative basis to take its business forward in all eventualities.

Before I move on to part 2 of the Bill, let me touch briefly on the 1968 Vienna convention on road traffic, which the UK signed 50 years ago and which the Government have recently ratified. The convention will come into force here before 29 March 2019. It was introduced by the United Nations to enable international road travel and to increase safety by establishing common rules for roads around the world. It builds on the earlier 1949 Geneva convention on road traffic and, indeed, the 1926 Paris convention, which was the first in this policy area and which the UK has already ratified. Why does it matter? Because we need to make sure not only that trucks can come across borders, but that we are able to line up with the rules in other countries, such as Germany, on trailer registration.

The second part of the Bill gives the Government powers to establish a trailer registration scheme to meet the standards in the 1968 Vienna convention. Many EU countries have similar schemes. It will mean that UK operators will be able to register trailers before entering countries that require trailer registration for travel on their roads. By trailers, I mean not the trailer on the back of a car that carries a tent, but full HGV trailers that cross borders to carry goods from point A to point B. The Bill will allow us to set the scope of such a scheme’s coverage.

The detail will be set out in regulations, but our intention is to require only users travelling abroad to register their trailers. It is not UK-only, but purely about those travelling internationally. Only commercial trailers weighing more than 750 kg and all trailers weighing more than 3.5 tonnes will need to be registered. As was clearly set out in the other House, the duty to register will apply almost exclusively to international hauliers. Virtually all private-use trailers, such as caravans and horse trailers, will not fall within the scope of mandatory registration, because it is rare that trailers of that kind weigh more than 3.5 tonnes.

We will consult on the scope of the trailer registration scheme over the next few months, and we will try to make sure that we are in good shape later this year to put in place the right scheme, depending on the nature of our agreements and what is required to ensure the smooth flow of trade across borders. We plan to recover the costs of running the scheme by charging fees, which we expect to be lower than those currently set out for the registration of motor vehicles. It is of course important that the new arrangements are complied with; if they are not, we will apply existing penalties to those who transgress.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Many hauliers hire trailers for specific uses. If trailers are used predominantly in the UK, they obviously will not be registered. What sort of timescale does the Secretary of State think would be reasonable for registering a trailer before it embarks on an international journey?

[Chris Grayling]

In all this, we will want the process to be as rapid as possible. There will inevitably be a surge at the start when hauliers look to register trailers that will be used internationally, but my hope is that once that initial surge is over, it will be possible to carry out the registration very quickly when there is a change of circumstance. We do not expect to have a system that is so expensive that it deters somebody who wants to register a trailer in case it is used internationally. We want to ensure that there is only a small cost to businesses. Many people will want to register their trailers in case what my right hon. Friend highlights happens.

We listened carefully to the debate in the other place and we are working on a report on trailer safety, which is a policy area in which proper analysis will be beneficial and will help safety on our roads. Off the back of the report, we will be able to offer a clear and comprehensive analysis of the complex issue of trailer safety and towing-related accidents. That was a constructive element that came out of the debate in the other place, and we will certainly engage with it.

On the question of the island of Ireland, the Bill covers the whole United Kingdom, other than two provisions that amend legislation in Great Britain and Northern Ireland respectively. Road haulage policy and trailer registration are devolved in Northern Ireland, but not in Scotland and Wales. We have been working with all the devolved Administrations as the Bill has developed. With regard to the Republic of Ireland and Northern Ireland, the Bill supports the commitments made in the December 2017 joint report to avoid a hard land border. This is an enabling Bill, and the Government will preserve the constitutional and economic integrity of the United Kingdom.

The Government are committed to ensuring that trade and everyday movements over the land border continue as they do now. The Bill does not create a permit regime in relation to the Republic of Ireland and Northern Ireland, nor does it create a hard border between them. It means that trailers travelling only between the UK and Ireland will not need to be registered. It also avoids the situation that I described earlier in which someone who chooses to go via Dublin to come over to the UK finds themselves needing a permit even if they are moving purely within the United Kingdom. I can confirm that the Bill will not impact on border arrangements and that there will not be, as a result, any new transport-related checks at our borders.

[Sammy Wilson]

Will the Secretary of State clarify whether there will have to be a separate agreement between the UK Government and the Irish Government covering people who are taking lorries across the border, whether through Ireland to the rest of GB, or simply carrying loads from Northern Ireland into the Irish Republic?

[Chris Grayling]

The right hon. Gentleman will understand that I cannot speak for the Irish Government. We are putting in place a mechanism that ensures that there is no issue on our part. The Irish Government, like any other Government, are of course perfectly able to put barriers in the way of trade, but we will not do that. We will not create a regime that affects those travelling into the Republic of Ireland or those travelling through the Republic of Ireland into the United Kingdom. I cannot give guarantees on behalf of the Republic of Ireland, but I cannot for a moment believe that people there will want to put in place administrative systems that we do not put in place.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I understand that the Secretary of State cannot speak for the Irish Government, but can he tell us what discussions he has had with the Irish Government about this, and therefore give us an indication of what the position might be?

[Chris Grayling]

The hon. Gentleman will know that the Irish Government are part of the European Union negotiations. We continue to discuss this and other transport issues as part of those negotiations, and I am entirely confident that we will reach a sensible place at their conclusion.

Let me sum up. As I have outlined, we are committed to ensuring that the road haulage industry can continue to prosper as we leave the European Union. As part of our programme of EU exit legislation, this Bill prepares us for a range of scenarios. It will ensure that the UK can fulfil its international obligations and will be ready when we leave the EU.

The Government have been supported by the industry in bringing forward these sensible measures, and we have talked extensively with it over the past few months. I believe that this represents prudent planning for different eventualities. I personally want to lead a Department that is prepared for all those eventualities and that can deal with whatever circumstance lies ahead, notwithstanding my view that we will reach a sensible partnership agreement for the future this autumn that will enable us to remain good friends and neighbours of the European Union, and that will allow the trade between us to carry on flowing as it does today. I commend the Bill to the House.

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[Chris Grayling]

May I ask the hon. Gentleman a simple question? If business shares the pessimism that he is laying before the House, can he explain the string of positive announcements of investment in the United Kingdom that we have seen in the past few months by Vauxhall, Toyota and others? If things are so bleak, why are they choosing to make substantial investments in their future in the United Kingdom?

[Andy McDonald]

If the Secretary of State had looked at the papers over the weekend, he would have seen exactly why. A lot of people are making their plans to get out of the UK if necessary. That is exactly what has happened. He is playing with fire on this, and he really should wake up and smell the coffee.

The Government have done little to help the road haulage industry. They have made a complete and utter dog’s breakfast of contingency planning for the M20 motorway. A lorry park off the motorway has been desperately needed to help alleviate problems during Operation Stack, and it is all the more needed ahead of Brexit next March. Yet the Department for Transport failed properly to undertake the critically important environmental risk assessment before the planning process for the £250 million project and had to scrap it last September. This incompetence will have disastrous consequences. If this Government cannot successfully plan how to build a lorry park in Kent, how do they expect anyone to believe that they are capable of introducing an alternative haulage permit scheme?

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to follow the right hon. Member for Scarborough and Whitby (Mr Goodwill), who must be one of the very few of us in this place to have a class 1 licence.

I think I will continue the theme of Opposition Members expressing their genuine concerns about what is happening and about how we go forward, while Conservative Members just continue to tell us, “Everything will be all right on the night. Why should we worry? Just believe us. It will all be okay.” The Government’s confidence is indicated by the fact that a Parliamentary Private Secretary has been going round the Government Benches giving out a crib sheet and lobbying for support. I think that tells us how confident the Government really feel.

I understand the need for the Bill, which is a back-up in case there is no deal. For that reason, I certainly would not vote against it, but I hope that the UK Government are doing their best to ensure that part 1 is not required and that the existing streamlined operations we enjoy under the Community licence scheme remain in place. However, we have to look at the current reality. We have a Brexit Cabinet that cannot agree a customs arrangement. The Tories are determined to pull out of the customs union and the single market. They are absolutely all over the place, and the clock is ticking away, so the prospect of a seamless transition becomes more and more unlikely.

In many ways, the Bill is symptomatic of the Government and their approach to Brexit. It is mainly superficial. There is a statement of intent, but we do not know the detail behind the Bill. We do not know what the permit system will look like or how it will operate. We do not know what fees will be applied. We do not even know whether limits will be applied to the number of permits. Like the Brexit process in general, the Bill is just the equivalent of talk but no action.

There is a further irony. The Bill is another example of primary legislation formulated in the other place. When it suits the UK Government they tell us that the House of Lords is only a revising chamber and that it should not get in the way of the business of the Government, yet if it is willing to do the Government’s bidding, we are supposed to laud its expertise. However, when it applies its expertise and says there is a need for a customs union, a vote to stay in the single market and a meaningful parliamentary vote in this place, somehow we have to ignore that expertise and wisdom. That shows the hypocrisy of Government Members when it comes to the House of Lords.

Another aspect of the Bill is that it is a part of the no deal preparations. The Brexiteer argument is that preparing for no deal will show the EU we are ready to walk away, thus strengthening our negotiating position. However, I am pretty sure that the Bill is not going to have Michel Barnier quaking in his boots. This is the first Bill going through Parliament in preparation for no deal. I suggest there is a long way to go to strengthen the Government’s hand. We are only a couple of months away from summer recess and a whole load of other legislation will be required for the Government to be in a competent place in terms of no deal arrangements. There is no way that the Government are strengthening their hand. If anybody thinks that we are in a stronger negotiating position, they are kidding themselves.

The Government have not even published their transport priorities in a single policy or place, so we do not really know their overall hoped for direction of travel. We know in theory that they want frictionless trade. They want extensive free trade agreements without any meaningful show of what that means in reality and how it would be implemented—that is a key issue.

On haulage, we know that the supposed preference is for things to remain much as they are under the Community licence arrangements, but where are we on those negotiations? If agreement is reached for arrangements to continue as is, or if a reciprocal licence arrangement is agreed, that means few extra checks will be required. There is still, however, the fundamental issue of the customs and border arrangements, which is far more relevant to hauliers and businesses reliant on the import and export of fresh goods.

What will be the timescale for a new IT system? Has any work actually started on it? How much of the £75.8 million allocation for transport Brexit preparation has been spent so far and what has it been spent on? What is the planned programme of work for the fund for the rest of the financial year? Is the renting of Manston airfield as an emergency lorry park part of the Brexit preparations and expenditure? As the shadow Minister said, they cannot even get their plans for a car park correctly in place. That is £13 million down the drain.

[Chris Grayling]

It may be helpful to the House if I say that the preparations for any disruption, not necessarily Brexit-related, of the Channel ports are well under way. Work on the M20 will begin in a matter of weeks, either late this month or early next month, to ensure that we have greater capability than we did in 2015 to store more lorries. We are not relying on Manston airport. It remains available to us in the short term, but it is not included in our long-term plans.

[Alan Brown]

The Transport Secretary says that the work is going to start shortly. Can he give me a timescale for the completion of the lorry park?

[Chris Grayling]

I will go into detail another time, but we are putting in place plans that will enable us to store at least as many lorries as we did at the worst of the situation in 2015 without creating a situation where the motorway cannot flow in both directions. Those plans are well advanced and we will have them in place before next March.

[Alan Brown]

I remain to be convinced. That seems to be another example of, “Believe me, it will be okay. We’re dealing with it, just trust me.”

Points of Order

Chris Grayling Excerpts

Thursday 19th April 2018 Commons Chamber

[Mr Speaker]

The Secretary of State is now poised, like a panther ready to pounce, so the hon. Gentleman may have secured, if not pre-empted, at any rate, early gratification, in that the Secretary of State is marching towards the Dispatch Box.

[The Secretary of State for Transport (Chris Grayling)]

Further to that point of order, Mr Speaker. It is self-evident that last January, when we discussed these issues, the trains that will run on the midland main line had not been ordered and therefore did not exist. As things stand today—as things stood last summer and last April—there are already 120 mph-plus bi-mode trains operating on the Great Western main line. I have manufacturers beating a path to my door to build the trains for the midland main line; of course they are going to run.

Oral Answers to Questions

Chris Grayling Excerpts

Thursday 19th April 2018 Commons Chamber

[Michael Fabricant (Lichfield) (Con)]

2. What his policy is on the operation of passenger services on the west coast main line after the completion of High Speed 2; and if he will make a statement.

[The Secretary of State for Transport (Chris Grayling)]

As my hon. Friend knows, once High Speed 2 comes into operation it will move the express trains off the existing west coast main line and on to the new route. That will provide a great opportunity to improve services to intermediate stops such as Lichfield that do not have a good enough service at the moment.

[Michael Fabricant]

I am slightly reassured by that answer. The Secretary of State talks about moving express trains off the west coast main line, but of course we currently have a very good Pendolino service and the slower West Midlands trains. Several hundred of my constituents commute to London every single day. What assurance can the Secretary of State give them that the Pendolino service—a fast, express service—will continue, and indeed that the Pendolinos will be replaced with equally fast trains when they come to the end of their life cycle?

[Chris Grayling]

The Pendolinos have many years to go, and I have no doubt that they will be replaced by a high-quality fast train in the future. My hon. Friend will have stood on the platform at Lichfield station and seen trains to Liverpool, Manchester and Scotland zooming past at high speed. The new plans will provide an opportunity for more trains to stop at Lichfield.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Secretary of State knows well that I believe that HS2 is a vanity project that will never come to fruition. He knows that my constituents in the booming town of Huddersfield, which he visited recently, have access to the west coast line and the east coast line, but most of all they want a good trans-Pennine connection everywhere.

[Chris Grayling]

Absolutely, which is why I have already announced that the £2.9 billion upgrade of the trans-Pennine line will begin this time next year, as the start of a transformation that is vital to the north. In the coming months we will also see the arrival of the first of a complete new set of trains across the north of England that will transform passengers’ experience.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Previously I have raised concerns that, under the Department’s current proposals, high-speed classic-compatible trains will run slower north of Crewe than existing trains on the west coast main line just now. The Secretary of State said that we need to address that as we go through the 2020s. That is clearly not good enough. We need certainty now. If he will not commit to upgrading the west coast main line north of Crewe, will he look into procuring trains that can tilt and travel on the high-speed network?

[Chris Grayling]

The new classic-compatible trains and the arrival of HS2 up to the north-west of England will of course mean more speedy journey times to Scotland. I know the hon. Gentleman’s party’s view. We want to see further improvements through the 2020s to the west coast main line north of Crewe to ensure that we improve journey times. We want the best possible journey times across the whole network, and will continue to work for that.

[Toby Perkins (Chesterfield) (Lab)]

3. What information his Department holds on plans by HS2 Ltd to purchase land close to Chesterfield canal; and if he will make a statement.

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[Adam Afriyie (Windsor) (Con)]

11. What plans his Department has to reduce the number of people affected by aircraft noise near Heathrow airport.

[The Secretary of State for Transport (Chris Grayling)]

The Government set noise controls at Heathrow airport, including total noise limits and aircraft movement limits for night flights. These controls, in conjunction with stricter aircraft noise standards negotiated by the UK at the international level, have resulted in a long-term reduction in the number of people affected by aircraft noise near the airport.

[Ruth Cadbury]

A freedom of information request revealed Government analysis that expects nearly a million households to face increased daytime noise if Heathrow is allowed to build a third runway. Will the Secretary of State visit my constituents, tens of thousands of whom will face significantly worse noise if the third runway goes ahead, and for whom no amount of noise insulation will be acceptable?

[Chris Grayling]

I have been in the hon. Lady’s constituency on many occasions and heard the noise there, and I am very pleased that, over the last 20 years, we have seen a steady reduction in aircraft noise. That is expected to continue as a new generation of aircraft appear in greater numbers. The projections show that, as we enter the 2030s with that change in aircraft fleet, we do not expect an overall noise impact on people around the airport. Nor do we expect an increase in the number of people within the 54 dB bracket, precisely because a new generation of lower-noise aircraft—they will also be lower-emission and lower-fuel consuming aircraft—will mean a quieter airport generally.

[Adam Afriyie]

The aviation national policy statement states that about 93,000 more people will be significantly affected by noise if the third runway goes ahead, yet Civil Aviation Authority figures indicate that more than 2 million people will be affected. Will the Government acknowledge that vast disparity in numbers, and will they update the aviation national policy statement?

[Chris Grayling]

Before the aviation national policy statement is brought to the House, it will be updated off the back of work done by the Transport Committee and the public consultations that have taken place—it will be a refreshed document when it comes before the House. The impact of noise on residents around Heathrow depends on an assessment of the rate of arrival of that new generation of aircraft. As we get into the 2030s, we expect no overall increase in the number of people in the 54 dB noise barrier because of the arrival of those new aircraft. There may be a short period in the mid-2020s when there is a small increase, depending on the airport’s rate of growth and the development of the aircraft fleet, but any such increase will be a short-term one.

[Nick Smith (Blaenau Gwent) (Lab)]

When will we get a new train service between Reading and Heathrow? That will help to reduce noise and get Welsh travellers to the airport.

[Chris Grayling]

Western rail access to Heathrow is part of our plans for control period 6, and I expect construction to start between 2019 and 2024. The hon. Gentleman will be aware that I recently invited the private sector to bring forward proposals for southern access as well, as part of a land and surface access package that will bring substantial increases to the capacity of rail links to Heathrow airport.

[Jeremy Quin (Horsham) (Con)]

These problems are not unique to Heathrow; they also affect areas around Gatwick, which has a lower level of ambient noise. Will the Secretary of State assure the House that any further lessons learned about how we reduce noise at Heathrow can be applied more generally?

[Chris Grayling]

They can be, and the point I did not make in my response to the hon. Member for Brentford and Isleworth (Ruth Cadbury) and my hon. Friend the Member for Windsor (Adam Afriyie) is that we are in the process of modernising the use of airspace in this country. I hope and believe that that will allow us to manage much more carefully respite for airports, and flight paths into and out of airports, and to do the best we can to minimise the impact of aviation on communities. There can be no situation where there is no impact, but I want us to do our best to ensure that that impact is as carefully managed and minimised as possible.

[Wera Hobhouse (Bath) (LD)]

7. What steps he is taking to increase the number of public charging points for electric vehicles at commercial and industrial centres.

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[Peter Grant (Glenrothes) (SNP)]

23. What recent discussions he has had with Cabinet colleagues on the future of the aviation industry after the UK leaves the EU.

[The Secretary of State for Transport (Chris Grayling)]

I meet my right hon. Friends and Cabinet colleagues on a regular basis to discuss the UK’s exit from the EU. Ministers and officials across Departments are working closely to consider carefully the implications for the aviation sector after we leave the EU.

[Carol Monaghan]

Last month we heard that the first formal talks on a post-Brexit open skies deal with the US were cut short after US negotiators offered an inferior deal to the one we currently enjoy, so when does the Secretary of State plan to return to the negotiating table, and will he do so with a sense of reality about the impact that hard Brexit is having on the aviation industry?

[Chris Grayling]

The hon. Lady should not believe everything she reads in the papers. The discussions taking place between my Department and our counterparts in the United States have been cordial and have been going well. There are no issues that would act as an impediment towards a sensible post-Brexit agreement between the two countries.

[Stuart C. McDonald]

A key requirement in any deal with the US may well be that UK airlines are required to be UK majority owned, yet very few would be able to meet that standard. What are the realistic chances of the US ditching that long-standing policy for the sake of the UK?

[Chris Grayling]

Clearly, airline ownership is more complex as part of the European Union than it was in the pre-EU days, but nobody is seriously suggesting that we are not going to continue with the same kind of transatlantic partnerships we have at the moment. British Airways and American Airlines, for example, operate in lockstep with each other. We will progress in due time towards a sensible agreement that continues the extremely prosperous, important and successful transatlantic aviation routes.

[Peter Grant]

We have less than a year to sort this out. Already people who are attempting to book foreign holidays for next Easter, less than a year from now, are finding that they are having to accept a clause in the contract that waives any right to compensation if their holiday is cancelled because of problems with the lack of an open skies agreement. Is the Secretary of State trying to tell us that those reports from reputable travel agents are myths that we should not believe? Is it not a fact that the travel industry and the aviation industry understand how serious this problem is becoming and the Government, in their complacency, do not?

[Chris Grayling]

That is not accurate at all, as the hon. Gentleman will find if he listens to the chief executives of the International Airlines Group, EasyJet or a number of other airlines. I have had no airline, bar one, come to my desk and suggest that they are concerned about the situation. I think we know which the one is, and no other airline believes there is any likelihood of any impediment to aviation next year. Indeed, there will not be. Can you imagine, Mr Speaker, a situation where the Spanish, Italian, Portuguese or Greek Governments did not want holidaymakers to arrive from the United Kingdom in 2019? I have spoken to my counterparts and they snort with derision at the idea that the planes will not fly.

[Thangam Debbonaire (Bristol West) (Lab)]

Snorting with derision may be the response the Secretary of State has had, but people in my constituency who work in the aviation industry are really concerned about how we are going to function outwith the European Aviation Safety Agency. Will he please tell us a bit more about how we are going to function outwith the EASA?

[Chris Grayling]

The Civil Aviation Authority is making all preparations necessary if it needs to return to operating as a body in the form that it used to be in. However, it is the Government’s policy and our intent to remain part of EASA. There is no reason not to: countries inside and outside the European Union are part of it, and we supply a substantial proportion of its expertise. The leadership of EASA wants us to stay, and I am confident that, as we get through the process of negotiation, that is where we will end up.

[Kelvin Hopkins (Luton North) (Ind)]

9. What plans he has to increase the proportion of freight carried by rail. [R]

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

12. What discussions he has had with the Prime Minister on the cancellation of the electrification of the Great Western main line between Cardiff and Swansea.

[The Secretary of State for Transport (Chris Grayling)]

The Prime Minister and I discussed Cardiff to Swansea at the time, and reached the view that spending hundreds of millions of pounds of taxpayers’ money and causing massive disruption to passengers to enable the same trains to travel on the same route at the same speed to the same timetable as they do today was not actually a sensible thing to do.

[Jonathan Edwards]

We know from press reports issued during the Easter break that the Prime Minister personally made the decision to renege on an election promise to electrify the main line to Swansea on the basis of cost. Is not the reality that the British Government do not consider the west of my country worthy of investment?

[Chris Grayling]

We made the decisions about electrification on the midland main line and the line between Cardiff and Swansea on the simple basis that spending hundreds of millions or billions of pounds to achieve the same journey times in the same trains was not sensible. The trains on the Great Western route are already in operation, delivering services to people in Swansea, for whom it is a great and important investment. Trains on the midland main line require the addition of one engine to provide a little bit of extra acceleration, but they already exist, and will be great for that line as well. So let us hear none of this nonsense from Opposition Members. In fact, during the years when they were in government, this was their policy: they believed that what was important was capacity and delivery, not electrification, and I agreed with them.

[Rachael Maskell (York Central) (Lab/Co-op)]

Facts matter. In a written statement on 20 July last year, the Secretary of State said that with bi-mode trains it would be possible to

“achieve the same significant improvements to journeys”.—[Official Report, 20 July 2017; Vol. 627, c. 72WS.]

However, as we have heard from my hon. Friends the Members for Sheffield South East (Mr Betts) and for Sheffield Central (Paul Blomfield), it is clear from National Audit Office reports that that statement cannot be correct.

[Rachael Maskell]

No, this was about the Cardiff to Swansea route as well.

Why did the Secretary of State give those assurances? Now that he has come to the Dispatch Box, will he apologise?

[Chris Grayling]

Let us be clear. I stand by every word that I said then. We will deliver smart new trains and improved journey times for passengers on the midland main line, as we are currently doing and will continue to do on the Great Western main line, and as we will do on the east coast main line and the transpennine route. [Interruption.] As I have said, we will also deliver new trains providing better services for passengers on the midland main line. The only difference made by £1 billion of spending would be a one-minute saving in the journey time, and that is not good value for taxpayers’ money.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

On a point of order, Mr Speaker. Given that this is such an important matter, surely we should have a point of order on it.

--- Later in debate ---

[Maggie Throup (Erewash) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Transport (Chris Grayling)]

We spend a lot of time talking about planes, trains and automobiles in these sessions, but we do not spend much time talking about ships. I want to pay tribute to all those involved in the talks that took place in London last week, particularly those from my Department. They paved the way for an historic agreement in the maritime sector on cutting carbon emissions from shipping. It is a really important step forward and I commend all those involved.

[Maggie Throup]

Will the Secretary of State visit Long Eaton as a matter of urgency to visit those property owners directly affected by HS2, some of whom are facing the prospect of being tens of thousands of pounds out of pocket? Will he reaffirm his commitment to the House today that no one will lose out as a result of HS2?

[Chris Grayling]

I know that we have particular issues with some of the properties in Long Eaton, particularly the railway cottages. I have worked and will continue to work closely with my hon. Friend to ensure that HS2 does the right thing by those people.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

On “Question Time”, the Secretary of State intimated that, post Brexit, trucks will not be checked and will move freely through the border, as happens in Canada and the US. I have an official document that confirms that all lorries are stopped on the US-Canada border. Will he apologise for giving out duff information, do his homework and tell the House what the concrete plans will be post Brexit?

[Chris Grayling]

As I have said before—I say it again today—there will not be physical checks that require every lorry to be stopped at Dover. It is not physically possible to do it, and in today’s world of trusted trader systems and electronic processing of customs information, there is no need for that to happen. I would also say that we are confident that we will deliver, as is our intention, a sensible free trade agreement with the European Union that will make all this an irrelevant discussion.

[Damien Moore (Southport) (Con)]

T5. Following the delays to electrification, Arriva has announced a new timetable downgrading the train service between my constituency of Southport and south Manchester, which will have significant consequences for Southport’s residents and its local economy. What reassurances can my right hon. Friend provide to my constituents and rail passengers along that line who are now having to make difficult choices about where they live and work as a result of this downgrading?

[Chris Grayling]

My hon. Friend knows that I have been to Southport and talked to some of those affected. As a result of those recent discussions, we have been able to put back in two extra services to Manchester Piccadilly. Of course, the original franchise plan was for the services to go to Manchester Victoria, but I have listened carefully to what has been said. Timetable changes cannot happen quickly and easily, but I will do my best to work with my hon. Friend to ensure that there is a better mix of services for the future.

[Matt Rodda (Reading East) (Lab)]

With free bus travel for the under-25s estimated at £1.4 billion a year, why is the Minister opposing a scheme that could benefit up to 13 million young people, saving them up to £1,000 each a year, at a time when they face significant financial hardship due to tuition fees and the high cost of living?

--- Later in debate ---

[Matt Warman (Boston and Skegness) (Con)]

The Secretary of State has long taken a personal interest in the Boston bypass. Will he join me in commending the excellent campaign being run by my local paper, the Boston Standard, which is gathering evidence from local hauliers, in particular? Does he agree that it bolsters an already compelling case for an application to be made to his bypass fund for this road in due course?

[Chris Grayling]

As my hon. Friend knows, I have visited the proposed site of the Boston bypass on more than one occasion over the years. I know that a vigorous campaign has been run by his local paper, local activists and himself. You will know, Mr Speaker, that we will shortly be bringing forward the next stage of our proposals for what I have dubbed the “bypass fund”, and there will be opportunities to build bypasses in the not-too-distant future.

[Dan Carden (Liverpool, Walton) (Lab)]

T9. Evidence shows that regulating bus services can improve the service and boost passenger numbers, so why are this Government siding with bus companies, rather than bus passengers, by refusing councils the powers to take back control of local buses?

--- Later in debate ---

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend the Secretary of State is a renowned blue-sky thinker, so does he imagine that any time soon, or even some day in the future, people will be able to get on an HS2 train in Manchester or Glasgow and go non-stop to the European continent?

[Chris Grayling]

For a moment, I thought my hon. Friend was going to ask me whether people would be able to get on an HS2 train in Manchester and travel to Lichfield. Of course, it always depends on the market. When the first trains started to operate through the channel tunnel, a fleet of trains was bought to provide links from the north of England through to the continent, but the market was never there—although one never says never.

Laser Misuse (Vehicles) Bill [Lords]

Chris Grayling Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Wednesday 18th April 2018 Commons Chamber

[The Secretary of State for Transport (Chris Grayling)]

I beg to move, That the Bill be now read a Second time.

We can be proud of the safety culture across our transport sector in recent years, but we cannot be complacent and we want to maintain and improve safety standards. That is why we have to look at new areas where legislation is needed, and one of them is strengthening the rules against the minority of thoroughly irresponsible people who shine lasers at aircraft. At the same time, we will make it an offence to shine a laser at cars, trains, ships and air traffic control for the first time.

[Sir Greg Knight (East Yorkshire) (Con)]

Will not the Bill throw into doubt the long-established police practice of an officer on foot jumping into the highway and waving a torch at a motorist in order to stop a vehicle? Would that not be an offence under the Bill because a strict liability offence is proposed, as I understand it, or does my right hon. Friend expect the police to have to pray for salvation and to rely on clause 1(2) to argue that they have a defence?

[Chris Grayling]

I thank my right hon. Friend for raising that point, which may have been a request to join the Committee and argue about it in great detail. I argue that any potential law and order intervention would judge there to be a key difference between a torch and the modern laser pen that is causing such issues and on which, particularly in relation to aircraft, we need the law to be substantially strengthened.

[Sir Greg Knight]

I am sorry to labour the point, and I am most grateful to my right hon. Friend for giving way. That is what I initially thought would be the answer, but if we look at the Bill, we can see that a laser beam is defined in clause 3 as

“a beam of coherent light produced by a device of any kind”—

in other words, a torch.

[Chris Grayling]

I am not a physicist, but I think the key word is “coherent”, in that a beam is coherent if it focuses the light in a way that represents a danger to the public. As I have said, I encourage my right hon. Friend to join the Bill Committee—this may be one of the issues that are well worth debating—and I have no doubt that my colleagues on the Treasury Bench will be delighted to offer him such an opportunity. It is a serious point, however, and we will double-check.

I am very grateful to the other place, which has done a detailed job of scrutiny. Amendments made there have removed ambiguity and extended the provisions beyond vehicles to include air traffic control facilities. I thank my noble Friend Baroness Sugg and those in the Lords who took part in debates on the Bill, and the external stakeholders, particularly the UK Laser Working Group, that have made an important contribution to shaping the legislation.

It is important to say that there are legitimate uses for lasers. They are used as alignment aids in the construction industry, by lecturers in classrooms and by astronomers in the course of their work. We intend to legislate not against the use of laser pointers at all, but instead against their illegitimate use. They can dazzle, distract or blind those in charge of a vehicle, with serious and even fatal consequences. We know that, in aviation, such incidents take place during take-off or landing, or when aircraft such as police helicopters are carrying out civil safety duties.

Back in 2003, 15 years ago, there had never been a reported case of a laser being shone at an aircraft. The following year there were six cases, and by 2008 there were 200. There are now 1,000 a year, as indeed there were last year. Thankfully no aircraft, train or road vehicle in this country has had an accident as a result of these dangerous and senseless acts, but it is all too easy to imagine the potential consequences—for instance, a pilot being blinded by a laser when trying to land a passenger jet, or a train driver being dazzled from a bridge and missing a signal as a result.

It is already an offence, under the Air Navigation Order 2016, to shine a light at an aircraft to dazzle or distract a pilot. However, the maximum penalty is a £2,500 fine, and we do not think the fact that this is a summary offence gives the police adequate powers to investigate and pursue it effectively. Offenders can also be prosecuted, under another air navigation order, for the offence of endangering an aircraft. That carries a maximum prison sentence of five years and a £5,000 fine, but it involves legal complications. It is sometimes difficult to prove the endangerment of an aircraft.

The Bill will simplify the position. It is a straightforward measure, which will make it an offence for a person to shine or direct a laser beam towards a vehicle if it dazzles or distracts, or if the action is likely to dazzle or distract a person in control of a vehicle. It will extend to all transport modes, will give the police the powers they need to investigate, and will provide penalties that reflect the seriousness of the offence. This will be an either-way offence, which means that it can be dealt with in the magistrates courts or, as an indictable offence, in the Crown court. It gives the police powers, under the Police and Criminal Evidence Act 1984, to enter a property for the purposes of arrest and to search a property after an arrest. Those powers are not currently available to the authorities in respect of existing aviation offences. The maximum fine will be unlimited, and the maximum prison sentence will be five years. The Bill will extend to the whole United Kingdom. We have been working with the devolved Administrations, who are very supportive, and I am grateful to them for their co-operation.

As I said at the start of my speech, the Bill has already faced scrutiny in the other place, where it received strong cross-party support. It reaches us in much better shape as a result. One of the positive additions in the other place was the extension of the provisions to air traffic control, which has a key role in our aviation sector. It is right and proper for those who attempt to shine one of these devices at an air traffic control point to be treated in the same way. That is a constructive example of the way in which debate on such Bills can improve them.

The Bill has received widespread support from both the authorities and the transport industry. The British Airline Pilots Association has welcomed its reintroduction—it was, of course, debated before the general election, but had to be set aside because there was not enough time to proceed—saying that it is good news for transport safety. It has also been welcomed by airlines and airports, the National Police Chiefs Council, the National Police Air Service, the Military Aviation Authority, the Maritime and Coastguard Agency, the Rail Delivery Group, Public Health England and the Royal College of Ophthalmologists. That is a pretty good list of supporters.

Everyone agrees that we need to do something about this problem, and everyone agrees that the actions of the small number of individuals who behave in this way are utterly unacceptable. We must give our police the powers to deal with them in the toughest appropriate manner. I hope and believe that today, in the House, we can give our support to a measure that I believe is absolutely necessary for public safety, and whose time has come.

Rail Announcement

Chris Grayling Excerpts

Tuesday 27th March 2018 Commons Chamber

[The Secretary of State for Transport (Chris Grayling)]

With your permission, Mr Speaker, I would like to make a statement about the future of the west coast main line, our plans for the integration of track and train on our railways and our plans for the transition to the operation of High Speed 2 as it opens up in 2026.

I have already set out for the House our plans to bring the operation of track and train together on a day-to-day operational basis around the country, with the creation of new alliances between Network Rail and the train operators on south eastern and midland main line and the strengthening of the existing alliance arrangements on south western and southern. I have also set out our plans for a new partnership between the public and private sectors to operate the east coast main line.

Today I want to explain how this approach could start to inform the development of the west coast main line and HS2. I am also today publishing the invitation to tender to be the new west coast partner, which, subject to their delivering on their commitments, will operate the route until 2031 and will work with HS2 Ltd to pave the way for the opening of HS2. The west coast main line is one of the busiest mixed rail routes, if not the busiest, in Europe: it carries commuter traffic to six of our biggest cities and express trains between them; it provides essential intermediate services to places such as Milton Keynes, Coventry, Warrington and Preston; it is an essential link to north Wales, Scotland and Ireland; and it is also one of our busiest freight routes. It is this complex mix of traffic that is a key part of the case for building HS2 so that we have the capacity to meet these growing needs in the future.

The west coast franchise has been very successful in recent years, with high passenger satisfaction and substantial revenue growth for the taxpayer. I intend the new contract to build on that, up to and including 2026. There is already a close working relationship between Network Rail and the train operator, and I intend that to deepen under the new contract with the new operator. After that, however, the way in which we run the railway will change. After 2026, the express services will start to move off an increasingly congested part of the existing network and on to HS2. Brand-new and more frequent trains will provide additional capacity on faster services, and space will be freed up on the existing routes for improved services to other destinations. That will require a carefully managed transition as initial services provide travel to Birmingham and then, gradually, the HS2 network provides more and more of the inter-city service.

I want to explain today how the new contract will ensure that that smooth transition takes place, and to set out what we are working towards. I should emphasise that final decisions on the transition and the operational details are years away, but I think it right that, as we publish this new invitation to tender, we start to look towards what that end point could be. For example, HS2 could be an integrated railway operation, in charge of both its infrastructure and its services. That would be akin to what is provided on some Japanese high-speed lines, and would accord with the Government’s strategy of bringing together track and train. It could also be structured as a public-private partnership. There will be other options that we should explore before final decisions are made.

The exact shape and end state of the organisation does not need to be decided now, but I am very clear about one thing. I want HS2 Ltd to become a strong British organisation, potentially capable of not just building but operating a successful railway here. It should also become a strong international champion for the United Kingdom, as the organisation that runs Manchester Airport has done. Manchester Airports Group is a strong and effective organisation that has expanded in the UK, running first-rate operations here, and is now doing so internationally. It has proved itself to be effective at managing major projects and delivering good customer service. Today’s announcement, however, is not about creating a long-term organisational model for HS2. As we move into the 2020s we will need to prepare for the introduction of services, and through this new arrangement my Department is paving the way for that introduction.

The winner of the competition will help to design the new HS2 services, develop a new customer offering to take advantage of 21st-century technology and revolutionise the way we travel on high-speed rail, and provide input for my Department and HS2. It will run the existing west coast main line services until HS2 passenger services are introduced. After that it will continue to run successor services on the west coast main line until 2031, albeit to a different set of timetables and priorities, with a refocused service aimed at those intermediate locations. Between now and the start of HS2 services, it will also help to plan the introduction of the express trains to the new line and the move from one line to another, and help to put in place all the customer-facing resources that are necessary for the delivery of an excellent service on day one. If it performs strongly, it will also operate services on behalf of HS2 for a limited period after 2026. During that period, my Department will be closely involved with operations to ensure that the envisaged connectivity benefits of HS2 are realised.

The contract also includes a number of safeguards such as restrictions on branding, transfer of intellectual property and requirements for collaboration with HS2. That means that, while we will harness the innovative thinking of the private sector, no one bidder will be able to create something that only it could run in the future. The operator will also work with the Department and HS2 to consider the options for the end state, including what would be required for the transition to fully integrated operations undertaken by an eventual combined organisation. That short-term arrangement will be very similar to the modus operandi on Crossrail next year after it formally begins services as the Elizabeth line for Transport for London.

Throughout this period, the new operator will also deliver a high-quality experience for passengers and continue to drive growth on the existing west coast main line. Passengers will benefit from enhanced compensation for delays of more than 15 minutes, fares and ticketing systems that are simpler to understand, and the introduction of an accessibility panel to advise on all aspects of the way in which the railway is operated. It is important to ensure that all passengers are placed firmly at the heart of all planning decisions.

What I am setting in train today for the West Coast Partnership are our plans to keep industry-leading services on the west coast until HS2 enters operation, to ensure that the first HS2 services are delivered with the help of an experienced operator that has been working hard to plan for their introduction, and to use that approach to help to inform decisions on what the final shape of the organisation should be. I believe that that is the best way of ensuring a smooth transition to what will be an exciting new future for our railways, and I commend my statement to the House.

[Rachael Maskell (York Central) (Lab/Co-op)]

I thank the Secretary of State for advance sight of his statement, but I am perplexed as to why he has come to Parliament to announce a set of administrative arrangements. There are so many pressing rail issues that the Secretary of State should be bringing to the House, not least the promise to come back to the House about future arrangements on the east coast, which was of course due weeks ago, rather than to announce invitations to tender for rail franchises. If this House spent all its time looking at every franchise, we would not get through any other business. The statement is simply thin gruel. Once again it sets out vague aspirations and possible options. Yet again it is evidence that the Government will not set out a strategic direction, but instead just delegate decisions to the private sector.

There are huge questions about the recent history of track and train alliances. That did not work on the south-western railway; it failed. Why will it be any different under this partnership? Today’s announcement about an announcement is setting the course of the Government’s real priority, which is privatisation of the infrastructure: a partnership with a private company, but extending its grip into the infrastructure, too.

Why would the Secretary of State bring the profit motive back into safety-critical parts of the railway? We must never forget why Labour brought Railtrack back into public ownership: it was for the safety of the great British public. None of us on the Labour Benches will ever forget the past, and how private profit was the objective. With private, we know that the objective is to put money into the shareholders’ pockets, not to invest in the public. This is why Labour’s plan to rescue the railways and bring them back into public ownership is more imperative than ever; the public demand it. Labour would never take such a risk with public safety, nor with public money.

Last month’s supplementary estimate report said that the Department for Transport’s rail revenue from train operators was down nearly £250 million this year and a Treasury bail-out of £60 million was needed. That is hardly evidence of a system working, is it?

Franchising has completely failed, with 13 direct awards and extensions to contracts. The west coast, however, is the jewel in the crown of the rail network. The Labour Government spent £9 billion upgrading it, but now the Secretary of State wants to flog off the family silver before it is even in public hands.

The UK railways have the best safety record in Europe; will the Secretary of State’s plans guarantee this excellent safety record? The UK railways’ safety record has been based on a rigorous risk management system; how will these plans ensure that the risk management approach will continue across the whole network? Is this not a return to the bad old days of Railtrack?

Of course, the railway is about the growth of our economy, and the Secretary of State is handing over responsibility for the economy of the north to these private companies; no wonder people do not believe in the northern powerhouse. Why will the Secretary of State not do what the last Labour Government did in 2009 and take this franchise back into public ownership? That is the best way to preserve the taxpayers’ money and the public interest.

Labour’s integrated public rail will benefit the economy, the environment, the Treasury and the public. We look forward to the right to run our railways again.

[Chris Grayling]

This is the first time that I have been told off for being informative to the House about what we are doing. We are publishing today a pathfinding franchise agreement that will pave the way for Britain’s most expensive and most substantial new railway for more than 100 years, and I am explaining to the House how we are approaching the issue of making that transition. This does not seem to me to be something I should not be informing the House about, but I am always surprised in this place.

The trouble with Labour is that it just thinks everything private is bad; it seems to be a completely ideological statement. After many years when the Labour party took a relatively common-sense approach to the balance between public and private, it has now walked a million miles away from that: everything private is bad, and it wants to nationalise everything and drive investment out of this country. Let us take an example. Labour cannot explain to us, in its plans to renationalise the railways, what it would do with what will by then be approximately £19 billion of privately owned trains on the network. All the new trains that are coming now and all the new trains that are being delivered in the future are privately owned. Where will the money come from to pay for those, and to pay for the new trains in the future? We get no answer at all from Labour on any of that.

The hon. Lady talked about safety, and safety is paramount in this country. We have an excellent regulator, and an excellent chief inspector of railways who does a very effective job, in my view, of holding the public and private sectors’ feet to the fire to ensure that we maintain safety standards on the railways. That is something that will continue for the future. She also asked about the northern powerhouse. Let us look at how little investment in the railways took place in the north when Labour was in power. We are replacing every single train in the north, and I have just announced a £3 billion upgrade to the trans-Pennine rail line. We have done upgrades to the Calder Valley line and electrified the line between Liverpool and Manchester. We are currently electrifying the line to Preston. Those are things that never happened under Labour. The replacement of every single train in the north of England is something new or nearly new. None of that happened during Labour’s 13 years in power.

The hon. Lady wants to take the west coast main line back into public ownership, but that is a railway line that is performing well and has very high levels of passenger satisfaction. The last thing we would want to do is to hand it back to the Government. Let us allow it to carry on succeeding. That is what we are aiming to do. We are setting a path that will lead us to what I hope will be a fantastic new world for Britain’s railways when HS2 opens after 2026.

[Trudy Harrison (Copeland) (Con)]

I thank the Secretary of State for his statement. It will be welcomed across my constituency and throughout Cumbria, as will the introduction of Sunday services, starting in May, which will connect us to the west coast main line. Will he tell me what economic advantages this will bring to Copeland and to Cumbria?

[Chris Grayling]

The difference that HS2 will make is that it will provide far more capacity and better connections across the whole country. Whether you are coming to London from Cumbria, Manchester, Liverpool or Birmingham, or travelling to points in between, there will be more capacity, faster trains and better connections between intermediate places. That is so important. I am delighted about the arrival of the Sunday services in my hon. Friend’s constituency. She and I stood at Seascale station while a Pacer train chugged past, and she will be delighted to know that in a few months’ time that Pacer train will be in the scrapyard.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thank the Secretary of State for giving me advance sight of his statement, but it really is lacking in detail. He said that he had already set out plans for a new partnership for the east coast main line, but I suggest that the plans for that line are still unclear. We need a lot more information on that. He also said that the congestion on the west coast main line and its links to Scotland and other areas underpinned the business case for HS2. That raises the question of why HS2 is being built only as far as Crewe, and why a north-south link is not being constructed at the same time.

The Secretary of State has detailed possible methods of operation, but he has said that they do not need to be decided on now, so what are the timescales for deciding future methods of operation? Will he confirm that the public sector will be involved and will be allowed to bid? When will we know the new timetables and priorities for the west coast main line? What will be the bid status for companies that have failed in existing franchises? The existing west coast main line contract was supposed to look at the remodelling of Carstairs Junction, so will he give us a progress report on that? Will he also tell us what discussions he has had with the Scottish Government on the existing underfunding of the rail settlement to Scotland, and on the impact that that could have on the west coast main line?

What tender appraisal lessons has the Secretary of State learned from existing failed franchises? What checks and balances will there be to ensure that we do not see further compensation disputes, conflicts of interest and armies of cost consultants involved in these franchises? What west coast main line upgrades will there be north of Crewe? I note that the current proposals will mean that new HS2 trains will run more slowly north of Crewe than the existing Virgin trains do. That would be an unacceptable performance measure, so will he tell us what upgrades are planned for north of Crewe? Lastly, his Department has already needed £60 million from the Treasury to balance the books this year because of the failures in the existing franchise system. How sustainable will the future franchises be?

[Chris Grayling]

On that last point, there was a revenue issue last year around Govia Thameslink Railway and the completely unnecessary strike action taken by the unions. I am happy that that railway is now mostly back to normal and I hope that we will not have that issue again. The hon. Gentleman asked about the east coast main line. I will come back to the House when it is the right moment to do so, when we are ready to set out the approach that we are going to take. It is important to ensure that that is dealt with on a value-for-money basis but also on an operational basis, to ensure that passengers are not affected by the trouble on that route at the moment.

The hon. Gentleman asked about timetables on the west coast main line. That will come from the bids that are tabled for that particular route, depending on how the bidders plan to enhance services. The invitation to tender starts today, and we will start to get the proposals back during the course of this year. Of course, no one can bid for a franchise without a passport, and that will continue to be the case. He also asked about the funding level for Scotland. I simply remind him that the Government have provided more than would have been provided under the Barnett formula. Scottish Members normally argue for the Barnett formula, except when it is inconvenient for them to do so. The reality is that they should be glad to get anything more than the Barnett formula, because that is what they always argue that Scotland should receive.

The hon. Gentleman asked about learning lessons from failure. As I said in my previous statement on the east coast main line, we have tightened the risk-sharing mechanisms and we will be watching this particular franchise like a hawk to ensure that it is financially solid and robust. He also asked about the speed of journeys to Scotland. Of course, HS2 will reduce journey times to Scotland. There is an issue north of Crewe because the new classic-compatible trains are not tilting trains, and that is something we will have to address as we go through the 2020s, but the reality is that journey times to Scotland will be reduced as a result of HS2 arriving. That is part of delivering better services right across the country and, crucially, delivering jobs right across the country. That will happen all across Scotland, Wales, Northern Ireland and England.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on his statement. What he has outlined will mean a smooth transition to the national network upgrade that HS2 will deliver. Will he give the House a little more information about what the announcement will mean for passenger rail fares on the west coast main line?

[Chris Grayling]

It is really important that HS2 does not become a premium service that today’s passengers cannot afford to travel on. Our expectation is that fare structures will stay broadly similar, and it is certainly not my intention to create a situation where HS2 suddenly becomes much more expensive than the west coast main line is today.

[Lilian Greenwood (Nottingham South) (Lab)]

There was not actually much new information in the Secretary of State’s statement, but it is clear that this invitation to tender is late, because it was expected in November last year. Will he explain the reason for the delay and its implications? Can he confirm that the award date is still November 2018, and that the new franchise will still start on 1 April 2019? Will he tell us whether the delay will have any wider impact on the Department’s rail franchise schedule?

[Chris Grayling]

We do not expect this to have a significant impact on the franchise schedule. As the hon. Lady knows, we have just put in place a direct award to tide us over because of the delay. Things might be slightly late, but we are broadly in line with our original timetabling plans. It is important to get these things right. Also, given that the franchising team has had quite a lot to deal with lately, it is important to ensure that they have the time to get the detail right. That is what we have been seeking to do.

[Mary Robinson (Cheadle) (Con)]

I am grateful to my right hon. Friend for his statement. Will he explain how, as the plans proceed, the economy of the north-west will benefit from the improved connectivity, particularly around the hub at Manchester airport? Will he tell us how that will improve the economy in the Greater Manchester area as well?

[Chris Grayling]

The hub around the airport is going to be particularly important, and it is very much on my mind as we develop phase 2b of HS2 and move towards the development of Northern Powerhouse Rail, where there must be a strong connection with the airport. The other benefit of the investment will be that it will create the space for more commuter services around Manchester. I know that there is significant congestion there—I have seen it in my hon. Friend’s constituency—and we need to provide better commuter services into Manchester, and indeed into Birmingham, Leeds and London. That is one of the things that HS2 will do, by taking the existing express trains off the existing routes.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is the Secretary of State aware that if no changes are made to the proposals for HS2 as it goes through Derbyshire, 1,000 jobs will be lost at McArthurGlen, which is not far from South Normanton, and that more than 30 houses will be knocked down at Newton in my constituency? I have been working with the people at Newton in order to find alternatives, so will the Secretary of State meet the Newton people with a view to seeing whether there are any decent proposals for tunnelling, rather than knocking the houses down, and for ensuring that the jobs at McArthurGlen are safe? Will he give us that assurance today, so that I can make arrangements with the Newton people to come and take part in discussions?

[Chris Grayling]

As I have said all the way through, it is not possible to do something on this scale without having an adverse effect somewhere, but we will always do our best to minimise the impact. We are also always willing to have a dialogue with Members from across the House about such situations, so I will of course have that dialogue. I want to try to ensure that we do not adversely affect centres of major employment, so either the HS2 Minister or I will happily pursue a conversation with the hon. Gentleman.

[Jeremy Lefroy (Stafford) (Con)]

Stafford and Stoke-on-Trent currently have direct, high-speed services to Liverpool and Manchester respectively. However, the HS2 proposals mean that high-speed services from Stafford and Stoke will end at Macclesfield, so we will lose our direct connection with the northern powerhouse. That is unacceptable. Will the Secretary of State consider the situation again and see how its effects can be alleviated?

[Chris Grayling]

I am aware of the situation, and the important thing to say is that we are a long way away from detailed timetabling. I share my hon. Friend’s view about terminating at Macclesfield, and I have told HS2 Ltd to do some work on that. We have to get the timetabling and the flow of services right, and I do not want anywhere to be disadvantaged by the transition.

[Graham Stringer (Blackley and Broughton) (Lab)]

As a former chair of Manchester airport, I thank the Secretary of State for his kind words about how it has been run. One reason for the airport’s success is that it has been careful in choosing its private sector partners over the years. Will the Secretary of State therefore explain why he is allowing private companies that have not honoured their contractual obligations in franchises to compete for important lines?

[Chris Grayling]

There are two points to make when talking about potential long-term private partners. First, the arrangements at Manchester airport have worked well. It is still majority-owned by local authorities, but it actually operates as an independent business with private shareholders. It is a good example of a public-private partnership, which may well be the way forward for HS2 Ltd. That does not mean that the organisations that are running franchises are those that might end up as private partners in the future, because we are looking at a different type of model for the future. Secondly, as for future bidding, as I have said before, I will fulfil my legal obligations, but I will also be as careful as possible to protect the interests of the railways and of passengers.

[Maria Caulfield (Lewes) (Con)]

I welcome the announcement of the invitation to tender for HS2 and the benefits that HS2 will be bring the region. Will the new model be used when the Southern franchise is broken up and re-tendered? Is there a timescale for that?

[Chris Grayling]

The current Southern franchise will continue until 2021, and we are working through what the structure should be when it is re-let in a different form. I intend there to be a much closer alliance between Network Rail and the private sector, following a similar kind of model to that which we are using with Southeastern. It is necessary to bring the day-to-day operation of the track and trains together to improve performance. We have done some of that already on the Southern franchise, which has helped to make a difference, and that should continue.

[Derek Twigg (Halton) (Lab)]

When the Secretary of State talked about Labour spending, he seemed to forget the £8 billion invested in the west coast main line. When Labour took over back in 1997, the line was in a dreadful state, and it is so good today because of that Labour investment. The Secretary of State said several times during his statement that public satisfaction is high, that it is doing well and that it is well run, so what are his reasons for wanting to change it?

[Chris Grayling]

The hon. Gentleman asks, “What are the reasons for wanting to change it?”, but we are moving from one franchise to another; we are not looking to make massive changes to how the west coast main line currently operates. When it comes to 2026 and the arrival of HS2, that is a different situation. I am not talking about selling or privatising the infrastructure. Post-2026, we will have a separate network with its own infrastructure, and the question—it is not one for me, but for my successors—will be, “What is the best way of running that railway?” I have set out several strong options today, but the Government’s policy is that bringing together the operation of the track and trains—integration on the railway—is the best way of creating an efficient and effective railway.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

We know that the Secretary of State is desperate to get from his home in Surrey to his seat at Old Trafford more quickly, so why are the Government dragging their feet when it comes to funding for the station at Manchester airport and the east-west alignment negotiations at Manchester Piccadilly station?

[Chris Grayling]

The biggest challenge in getting to Old Trafford on a match day are all the roadworks on the M60, which are due to our investment in the motorway network, and all the roadworks around Old Trafford, which are down to the support we are providing to Manchester to invest in the extension of the Metrolink.

The hon. Gentleman will be aware that Network Rail and Manchester City Council are in detailed discussions about Piccadilly, and we are close to moving forward with desperately needed improvements to the two platforms, and I want that to start soon. As for the airport, we need a really good hub station at the airport, and we are now working through how best to take the Transport for the North proposals for Northern Powerhouse Rail and create a deliverable programme. The first bit of that starts next year with the upgrade of the TransPennine route.

[Bim Afolami (Hitchin and Harpenden) (Con)]

Does the Secretary of State agree that working with private sector partners on the west coast main line has delivered huge improvements to reliability and customer service? Will he reassure my constituents that any operational changes that have been outlined or envisaged today will not have a negative impact on their service?

[Chris Grayling]

That is my goal. The thing is that I am very much in favour of the public sector and the private sector working together in partnership, and I have talked about that in other parts of the rail network. The difficulty is that the Opposition do not seem to want the “private” bit at all—everything has to be public. Both sectors bring strengths to the party, and the working partnership that exists today between Network Rail and Virgin Trains on the west coast main line has delivered significant performance and customer satisfaction improvements over the past few years.

[Mary Creagh (Wakefield) (Lab)]

Virgin-Stagecoach is not the first, not the second, but the third train company to walk away from the east coast franchise mid-contract, stating that it could only run it for a short number of months. I came running over to the Chamber today in eager anticipation of hearing the Secretary of State say that he was going to set up a directly operated rail company along the lines of the model we had in 2009, which delivered £1 billion back to the taxpayer over six short years. Will he tell the House what he is doing to get the east coast main line franchise back on track, delivering for passengers, staff and taxpayers? Will he ensure that no announcement is snuck out in the middle of the recess?

[Chris Grayling]

When we are ready to make an announcement about the future, I will come to the House to do so, and I have said that several times. We are ensuring that we get things right. As I have said before, we have been preparing the alternative operator of last resort for some months. When we are ready to take things forward, I will say so.

The hon. Lady compares the situation with what was there previously, and I simply remind her that, notwithstanding the financial problems in the franchise, it has a high level of passenger satisfaction and is running more trains, employing more people and delivering more money to the taxpayer. The problem is that there has been not enough success, not a lack of it.

[Peter Kyle (Hove) (Lab)]

In the previous Parliament, the Department was so focused on HS2 that it took its eye off the real challenge facing our country: getting people to and from work in the south-east of England. Will the Secretary of State guarantee that he will not make the same mistake again and that the Southern rail fiasco will never be repeated?

[Chris Grayling]

We are slightly in the hands of militant trade unions deciding whether they want to cause trouble, because the analysis of what went wrong showed it was almost entirely down to the action of the trade unions. However, I have also said on many occasions that the unions were not the only issue on that line, and I hope he accepts that performance has improved, but it needs to carry on improving. We need a broad-ranging programme of renewals, because there are still too many track and signal failures, which is why we have set aside the biggest block of funding—£20 billion—for renewals in the next control period. Some of that will flow to the hon. Gentleman’s line, but it will also go around the country to deal with similar issues elsewhere.

[Rachel Reeves (Leeds West) (Lab)]

Following the excellent question from my hon. Friend the Member for Wakefield (Mary Creagh), may I pick up on the issue of Virgin-Stagecoach and the east coast main line? In a matter of weeks or months the Government will have to make a decision for passengers in our constituencies in Yorkshire and elsewhere, so can the Secretary of State tell us when a decision will be made, whether there will be penalties for Virgin-Stagecoach for walking away from the contract, and whether he will keep on the table the very sensible option of bringing the line back into public ownership?

[Chris Grayling]

I have said clearly that I am not simply evaluating, but preparing for two options: one is an operator of last resort controlled by my Department, and the other is a not-for-profit direct award. I will make that decision shortly, and when I do I will come back to the House. It is not just about being ready to make a decision; it is also about knowing whether whichever option I choose is ready to happen. It is as much about preparation as it is about deciding. When we are ready to take that step, we will do so. The reason I am taking the time to get this right is that I do not want passengers—the hon. Lady’s constituents—to notice any change from one day to the next. They are the most important people in this.

[Layla Moran (Oxford West and Abingdon) (LD)]

We of course welcome any investment in rail, but HS2 must not be allowed to soak it all up. The Government have an incoherent approach to electrification, which has been indefinitely delayed in Oxford and abandoned on the lakes line and the midland main line. Meanwhile, the Government have been pulled up again on air pollution. Why do they not follow their own lead on cars and move away faster from polluting diesel engines?

[Chris Grayling]

A central part of our strategy on the roads is hybrid cars, and a central part of our strategy on the railways is hybrid trains. The biggest difference we can make in getting people off the roads and on to rail is to ensure that we expand capacity, and that is what we are doing, with longer trains, new and reopened routes and new stations across the country, creating a better environment for people who want to travel by rail. It is the biggest programme of investment in our railways since the steam age.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State lauds the benefits of reduced journey times between London and Glasgow, but that is not the full picture, because we know that, as a result of the HS2 investment, journey times between Glasgow and Manchester will actually increase. How can this be benefiting all regions of the UK when journey times between Britain’s second and third biggest cities will be increased? Is it not yet another example of putting the profit motive over the real national interest?

[Chris Grayling]

This has nothing to do with the profit motive; it has to do with whether or not trains tilt. We need to ensure, through timetabling and planning after HS2 is opened, that we deliver the best possible outcome for all the services and all the destinations it serves. It is not a question of the profit motive or the private sector; it is a question of technical capabilities and how we deliver the best possible outcome.

[Paula Sherriff (Dewsbury) (Lab)]

Further to the question from my hon. Friend the Member for Wakefield (Mary Creagh), my constituency neighbour, can the Secretary of State confirm that Virgin-Stagecoach will be allowed to rebid for the east coast franchise when the contract is put out to tender, because that appears to be verging on the ridiculous?

[Chris Grayling]

I think that the hon. Lady has misunderstood our plans. From 2020 we are going to do things completely differently on the east coast main line; we will not be using the current bidding process. We are shaping a public-private partnership. It might be a public-private partnership that brings investment in digital rail, and it might have a completely different corporate structure. We are working through that longer -term plan now while preparing to put in place the intermediate arrangements. It is not a question of who will or will not be allowed to bid, because we have not even decided what the process will be.

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

It is disappointing that the Secretary of State has today said nothing about the burning issue in the north: poor connectivity between east and west. I am sure that he shares my concern that there is no direct service between Hull and Liverpool, or between Hull and Manchester airport, and that from May trans-Pennine services running from Hull to Manchester will be slower. Will he agree to meet me and key stakeholders from Hull to discuss what he can do to improve connectivity in the north?

[Chris Grayling]

I and my ministerial team are always happy to meet to discuss services to the great city of Hull. The hon. Lady is not entirely accurate, because I did refer to the announcement I made a month ago about the start of the £2.9 billion investment in the trans-Pennine upgrade, which will start next spring.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Minister will know that £1.2 billion was overspent on electrification between London Paddington and Swansea, and he knows that is not the only transport infrastructure project in relation to which the National Audit Office has found overspending. How confident is he that safeguards are in place for future infrastructure contracts for the east and west coast main lines, along with HS2, to prevent overspending that needlessly costs taxpayers millions?

[Chris Grayling]

It is always possible for technical problems to arise, as we are seeing in Bolton at the moment, but I think that lessons are being learned. Lessons are certainly being learned from the Great Western main line, which has not been run on an acceptable basis—it has been subject to reviews by the NAO, the Public Accounts Committee and the Transport Committee. I can assure the hon. Gentleman that Network Rail and my Department are seized of the need to ensure that that does not happen in future.

Rail Update

Chris Grayling Excerpts

Tuesday 20th March 2018 Written Statements

[The Secretary of State for Transport (Chris Grayling)]

I have today launched an invitation for investors who want to invest in rail infrastructure to bring forward proposals for the new southern rail link to Heathrow. In addition they are being invited to propose schemes around the country that could enhance and expand the rail network. Promoters and investors now have two months to start working up proposals which are financially credible without Government support.

This Government are already making the biggest investment in the railway since the Victorian era, delivering better journeys for passengers across the network. However, I want to go further by unlocking new private sector funding to invest in railway infrastructure across the country. This will be in addition to the Government’s significant commitment to invest £48 billion in railway infrastructure in the next funding period.

Governments do not have a monopoly on good ideas for the railways. I have been clear that I want the knowledge and expertise of investors and local partners to contribute to delivering new connections, more services and better journeys for passengers.

This approach has already proved effective on a number of roads schemes in the UK. By encouraging innovative ideas and new investment on our railways, we can relieve the burden on taxpayers and fare payers with schemes that match our transport needs, support our economic and housing aspirations and ensure everyone benefits from an enhanced rail network.

Heathrow is a perfect example of how this approach can make a real difference. The Department is continuing to work on a western rail link to Heathrow. The proposed southern rail link to Heathrow is an exciting opportunity to harness new and innovative ideas from the private sector and there are already a number of consortia looking to construct it. I am certain that there are other opportunities nationwide for third parties to work with the Government to improve the railway.

I have published my guidance for market-led proposals to provide clarity on what Government are looking for from these ideas and the process by which it will consider them. I have also published the “Rail Network Enhancements Pipeline”.

When I published my high level output specification and statement of funds available for the railway in England and Wales for the next investment period, I made clear that the Government were developing a new process for rail enhancements—the “Rail Network Enhancements Pipeline” provides this. This is designed to ensure that future rail projects are planned and scrutinised to deliver maximum value and benefit to rail users and taxpayers.

Taken together this provides a clear framework for how we will improve the way we enhance our railway.

The changes I have outlined today lay the foundations for improving rail access to Heathrow. They also set in motion ambitious proposals on new rail schemes that could deliver significant improvements for passengers across the network and to maintain the record levels of investment this Government are delivering in our railways.

[HCWS562]

HS2 Update

Chris Grayling Excerpts

Monday 12th March 2018 Written Statements

[The Secretary of State for Transport (Chris Grayling)]

I am pleased to inform the House that we have published our consultation response on taking forward the vision of a Crewe hub.

This response signals how our plans will support that vision and allow for the introduction of an additional HS2 service to Stoke-on-Trent.



To enable this, we will amend our plans for HS2 Phase 2A, from Birmingham to Crewe. This includes 400 metre platforms at Crewe, which allow longer HS2 trains to split and join, opening up opportunities to serve more destinations including Stoke-on-Trent and enabling more people to access high-speed, long-distance services.

We also intend to ask the franchise operator, West Coast Partnership, to include a high-speed service to Stoke- on-Trent in its market development and service plans.

A Crewe hub could generate significant opportunities— not only for Crewe, but also for the surrounding region. To fully realise that vision will need central and local government to work together and require future decisions to be taken as part of Phase 2B.

We welcome the progress being made by Cheshire East Council and the local enterprise partnership in identifying how they could invest in the scheme to ensure the benefits are fully realised.

The steps we are taking today will ensure Crewe and Stoke-on-Trent can benefit fully from HS2 and build on the earlier decision to bring the benefits of HS2 to Crewe from 2027, six years earlier than originally planned.

HS2 will become the new backbone of our national rail network. It will increase capacity on our busy railways and improve connections between our biggest cities and regions. It will support our industrial strategy, generating jobs, skills and economic growth to help build an economy that works for all.

[HCWS534]

Oral Answers to Questions

Chris Grayling Excerpts

Thursday 1st March 2018 Commons Chamber

[Paula Sherriff (Dewsbury) (Lab)]

1. What assessment he has made of the equity of levels of transport spending by region.

[The Secretary of State for Transport (Chris Grayling)]

We do not allocate transport funding on a per head of population basis; our decisions are based on a rigorous and fair appraisal process that ensures that spending goes where it is most needed and where it delivers the greatest value for money. Recent analysis by the Infrastructure and Projects Authority shows that planned central Government transport investment over the next four years is evenly balanced, with £1,039 per head of population in the north, compared with £1,029 in the south.

[Paula Sherriff]

May I first take this opportunity to thank all those involved in keeping our transport systems going in this inclement weather? I am sure that fellow Yorkshire MPs will have shared my surprise at the Secretary of State’s recent article in The Yorkshire Post, in which he claimed that spending in the north was somehow greater than that in the south—if, through a rather imaginative calculation, we ignore London. Does he agree that simply spinning figures will not fix our archaic northern railway systems or get northern commuters to work on time?

[Chris Grayling]

I echo the hon. Lady’s comments about those who are working hard to keep the transport system open today; we are very grateful to them all. In a week when the Labour party has already had issues with its use of statistics, she should look up the official statistics from the independent Infrastructure and Projects Authority, which show that planned central Government spending is higher in the north than it is in the south.

[Mr Philip Hollobone (Kettering) (Con)]

I am sure that we could spend more Government money on transport in the east midlands, particularly in Northamptonshire, and especially in Kettering. The new franchise for the midland main line is currently being negotiated. Will the Secretary of State ensure that Kettering’s rail services are better after the franchise is awarded than they are now?

[Chris Grayling]

My hon. Friend, who is a strong champion of Kettering, will be delighted to know that the expansion in capacity to Corby means that there will be a much better commuter service in the mornings and evenings through Corby down to Kettering, and to Wellingborough and beyond. That is one of the benefits of the biggest investment in the midland main line since the 1870s.

[Mr Clive Betts (Sheffield South East) (Lab)]

Just to give the Secretary of State an example of unequal treatment, is it true that for the new east midlands rail franchise in 2020 the current HST—high-speed trains—carriages will be scrapped, because they are disability non-compliant, and the power cars will then be matched with second-hand, cast-off carriages from the east coast main line? Instead of the brand new, hybrid hydrogen trains that we were promised, we will be getting hybrid trains composed of 30-year-old power cars and 30-year-old discarded carriages from another line.

[Chris Grayling]

I do not know what stories the Labour party has been listening to. The midland main line will have brand new, bi-mode trains delivered as soon as possible—

[Mr Betts]

When?

[Chris Grayling]

In the early 2020s, which is years ahead of what would otherwise have been the case under the original scheme.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Within the context of equity of spending, I wonder whether, after this snow event is over, my right hon. Friend will ask some serious questions about, or even have a review of, why we still seem to be in no way prepared for such events. For example, I discovered yesterday that Heathrow is busy offloading flights because it cannot cope, whereas—[Interruption.]

[Mr Duncan Smith]

Yes, regional flights. What I am saying is that, given all of that, airports such as Gatwick and others are able to cope. Does my right hon. Friend not think that it is ridiculous that some airports are simply unable to cope while others across the UK can?

[Chris Grayling]

I know that a number of Members are here today because their flights to regional airports have not been able to take off. I hope and expect that we will be able to sort that out as quickly as possible today, although it is really important that the transport system is run safely. Of course, one of the benefits of the expansion of Heathrow is that the airport would become more resilient to such difficult situations, and connections to regional airports would be more reliable.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I, too, pay tribute to those transport workers who are keeping the system going at this difficult time. The Secretary of State said in his first answer that the allocation of funding is a rigorous and fair process, so can he explain why the Government have ignored the Office of Rail Regulation’s recommendations by underfunding Scotland by £600 million? Since then his Department has been able to cope with a £240 million loss of revenue as a result of the situation with Southern rail and found £245 million for High Speed 2. The Government have been ignoring the Scottish Government since last July, so will they now meet the Scottish Government, or are these just weasel words about equity of funding?

[Chris Grayling]

Once again, the Scottish National party is arguing against the use of the Barnett formula. SNP Members love the Barnett formula when they think it is advantageous to them, but when they do not like the Barnett formula, they want to get rid of it. I simply say to them that this Government have followed the principles of the Barnett formula, and actually the Treasury has given Scotland a bit more money above that. I wish the SNP would stop complaining. The reality is that Scotland is now better represented, with a group of Conservative MPs who are much more effective than the SNP ever was in getting this Government to do that bit extra for Scotland.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

2. What assessment he has made of the timescale required for the electrification of the Reading to Basingstoke line.

--- Later in debate ---

[Imran Hussain (Bradford East) (Lab)]

17. What assessment he has made of the potential merits of the early termination of the Virgin Trains East Coast franchise.

[The Secretary of State for Transport (Chris Grayling)]

I am not sure I see any merit in the early termination of the Virgin Trains East Coast franchise. That is not something I would wish to happen, but we have to deal with the world as it is, rather than as how we would like it to be.

My priority is to ensure the continued smooth running of the east coast franchise for its passengers and employees, and to make sure that the trains run and deliver the service that people need. As I told the House on 5 February 2018, a new arrangement to operate the railway prior to the new east coast partnership in 2020 needs to be put in place. We are currently conducting a full appraisal of the options, and I will return to the House in due course.

[Ian Mearns]

I am afraid to say that service standards have deteriorated on the east coast line since Virgin-Stagecoach took the franchise—I am a regular customer on that line—despite the best efforts of the excellent staff on board trains and at stations. Those staff face having their sixth employer in a decade and a half. Will the Secretary of State meet me and some of those staff, so that they can express their concerns about the way in which the franchise has been conducted? Will he give the House an undertaking that there is a genuine public sector operator ready to take over should that be required—or has Directly Operated Railways been outsourced already?

[Chris Grayling]

On the last point, I can give an absolute guarantee that that is the case; we have been making preparations for different eventualities for some time and there is a genuine alternative, if that is deemed to be best for the passenger and best value for the taxpayer. My ministerial colleagues and I are happy to talk to staff, but I would correct the hon. Gentleman on one point: the reality is that the independent assessments have shown a higher level of passenger satisfaction on that route since the change of franchise, not a lower one.

[Karen Lee]

I, too, wish to say a huge thank you to the staff who have been involved in keeping the trains running. As has been said, the current Virgin Trains east coast line franchise agreement will end three years early, making it the third franchise failure in about a decade. As someone who uses the line, I do not agree with the Secretary of State’s assessment of it. But will he recognise that there is a problem and see this as the perfect opportunity to bring the contracts back in house?

[Chris Grayling]

As I have said in this House before, I need to do what is best for passengers and for the taxpayer. The reality is that since the transition, regardless of the fact that Stagecoach clearly got its numbers wrong, passenger satisfaction has risen, more people are being employed by this railway and it is delivering more money to the taxpayer. [Interruption.] That is the reality. Labour Members can say it is not true, but it is; it is a fact that they just have to deal with.

[Liz Twist]

I assure the Secretary of State that after three failed franchises and the experiences of a directly operated railway my constituents would much prefer a directly operated railway. Will he commit to providing a directly operated railway service, in the public interest?

[Chris Grayling]

As I have said, I am going to do what is best for the passenger and for the taxpayer. I am sorry that the Labour party does not seem to get this, but the reality is that passenger satisfaction levels are higher today than they were three years ago—that is what the independent research shows. Labour Members may not like it, but it is true.

[Imran Hussain]

Next year, Bradford would have seen a marked increase in the number of much-needed direct inter-city trains serving the city, but the chaos with the east coast line has put that in serious doubt. These extra trains are vital to improving Bradford’s connection to the rest of the country, so will the Minister commit to ensuring that, whatever happens to the east coast franchise, Bradford will see an increase in the number of direct trains?

[Chris Grayling]

This is an important point, so let us be clear: it is my intention that, whatever arrangements are put in place for the next few years, the service improvements that have been promised will be delivered. We face an issue on infrastructure and additional capacities on the northern part of the route, which will have to be resolved and may mean some amendments to the timetable for new services, but that will not stop us delivering those new services. In Bradford’s case, I am expecting to be able to fulfil the commitments that were made.

[Martin Vickers (Cleethorpes) (Con)]

I agree with my right hon. Friend that there are no merits in the early termination of the franchise, but there are opportunities from the new partnership. My constituency has 10 railway stations, none of which have a direct rail service to London. Does he agree that this is an opportunity to look at providing services to those towns not currently served?

[Chris Grayling]

As I know, my hon. Friend has been a regular advocate for direct services, and I would like to see those happen. I am looking to see whether we can maximise the capacity on the east coast main line to make additional services possible. Of course the arrival of HS2 will allow many services that cannot be run now because of capacity constraints to happen, because of the additional capacity it will create on routes to the north and Scotland.

[Jeremy Quin (Horsham) (Con)]

rose—

--- Later in debate ---

[Jeremy Quin]

I am absolutely going to. In respect of the proposed alternatives to the current east coast franchise, has the Secretary of State seen President Macron’s recent remarks about the nationalised French railways, and has he any remarks to make on them?

[Chris Grayling]

Wisdom sometimes comes from our allies across the channel. I did see those remarks, and they are a timely reminder that a nationalised railway is not the panacea that some believe it is.

[Mr Speaker]

It was not the Horsham perspective, but the international perspective. Why would I expect anything less from someone so illustrious as a man who served as my constituency chairman for three years, for which he deserved a medal?

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Secretary of State says that Stagecoach got its sums wrong, but clearly his Department got its sums wrong, too, when it awarded the franchise to Stagecoach. Surely one merit of this situation should be that failing franchise holders should not be allowed to bid for future franchises. Does the Secretary of State agree that this gives us the opportunity to put the franchise into the public sector, allow further public sector involvement across all franchises, and review and improve the franchise tender process?

[Chris Grayling]

We certainly keep the franchise process under continual review to work to improve it but, as I said a moment ago, a public railway is not the panacea that everyone on the Opposition Benches claims it is. I intend to do two things: to take the right decisions for the taxpayer and the travelling public on that route, which is really important, and to act within the law, which is also important.

[Andy McDonald (Middlesbrough) (Lab)]

On Monday, the chief executive of Stagecoach said that he knew there was a problem with the east coast franchise’s finances just weeks after taking over the contract in March 2015, and that he had been talking to the Department about it for two years. Given that the Department was in dialogue with the operator about the difficulties, why did the Secretary of State not put together a contingency plan for the route? The Secretary of State has had two years to sort out this mess; is it not simply incredible that he still does not know what to do?

[Chris Grayling]

The shadow Secretary of State clearly cannot do his sums, because I have not been Secretary of State for two years. We have been planning—

[Andy McDonald]

From 2016 to 2018.

[Chris Grayling]

I have been Secretary of State for 18 months; the shadow Secretary of State cannot do his sums. Since I became aware that there was a problem on the east coast route, we have been doing careful contingency planning, so we have a long-term plan and short-term options for the route. We cannot put those short-term options into place until the appropriate moment arises at which they are necessary. We are prepared for when that moment arises and will deliver the alternatives.

[Andy McDonald]

Given that the taxpayer has already lost out on more than £2 billion of premium payments, can the Secretary of State advise the House as to whether the financial ramifications of the termination of the franchise are now completely known and concluded? If not, what sums of money are earmarked to settle any further system-gaming demands from Messrs Branson and Souter through litigation or arbitration?

[Chris Grayling]

Again, the Labour party cannot do its sums. We have no more written off £2 billion than Labour wrote off £1.4 billion when National Express collapsed. The reality is that the east coast is and always has been in recent times a profitable railway. Whatever happens, it will continue to generate a substantial return for the taxpayer. It is about time that Labour did its sums properly, rather than misrepresenting the reality.

[Jack Brereton (Stoke-on-Trent South) (Con)]

5. What assessment he has made of the need to mitigate the effects of congestion resulting from the construction of HS2 phase 2a.

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[Damian Green (Ashford) (Con)]

7. What steps his Department is taking to identify emergency parking sites for lorries when travel across the channel is disrupted.

[The Secretary of State for Transport (Chris Grayling)]

As my right hon. Friend knows, I have asked Highways England to progress plans to promote a lorry holding area through the normal planning process as a potential permanent solution to Operation Stack. Highways England intends to undertake an initial public consultation on this in the spring, which will consider the scope, scale and function of the lorry area. As he knows, I am frustrated that we have not been able to do this sooner, but the commitment to it is strong.

[Damian Green]

The Secretary of State is, I know, aware of the extreme urgency of finding a solution to this matter. Even if we assume a full implementation period after Brexit, we could be less than two years away from new customs arrangements at Dover, and problems there could be disastrous not just for roads across Kent, but for the national road haulage industry. Can he assure us that, by the time of Brexit, sufficient off-road parking spaces will be available to avoid a recurrence of Operation Stack?

[Chris Grayling]

There are two points that I should make. First, on the border, it is absolutely the intent of this Government to maintain a free-flowing border; that is of paramount importance. The other point, be absolutely clear, is that we will have a solution in place for next March which keeps the M20 flowing in both directions and provides a solution if there is congestion at the ports; and that we intend to move beyond that and deliver a long-term solution, which will not only deal with the issue of trouble at the ports, but provide some respite to Kent residents, who I know are fed up with having lorries simply parking on their local roads.

[Stephen Timms (East Ham) (Lab)]

Eighty per cent. of the road freight to and from the UK goes through Dover. There is surely no realistic chance of all those lorries being checked from March next year. Is not the reality that, if we leave the EU without a deal, utter chaos on the road network within miles of Dover is completely unavoidable?

[Chris Grayling]

No, I do not think that at all. It is for this country to decide how we manage our borders and what checks we put in place. The Government are absolutely committed to ensuring that there is a free-flowing border at Dover, and we will deliver that.

[Patrick Grady (Glasgow North) (SNP)]

Is it the Department’s policy that a new fixed link across the channel would help to ease disruption?

[Chris Grayling]

We should have some big, bold visions for the future. That is the way that we plan properly in transport terms. Our big, bold visions for the country right now are HS2, the potential expansion of Heathrow airport, the lower Thames crossing, the trans-Pennine tunnel, the A303 dualling and the Stonehenge tunnel. This Government have and are delivering lots of big visions for Britain.

[Karl Turner (Kingston upon Hull East) (Lab)]

The chairman of Maritime UK has said that, if a deal is not reached on Brexit, lorry drivers could be stuck on the main roads to Dover for up to two days. Even if a deal is reached, with a hard border at vital ferry ports, the industry is warning that customs and port health checks will cause massive disruptions. What concrete assurances can the Secretary of State give us that that will not be the case?

[Chris Grayling]

As I have said before, I have regular dialogue with the haulage industry and the ports sector. I have been very clear to them, as I am being clear in this House today and as the Prime Minister has made clear, that we do not intend to impose a fixed border. We want a free-flowing border and that is what we will deliver.

[Clive Efford (Eltham) (Lab)]

9. Whether his Department can prevent a rail operating company from bidding to retain its franchise as a result of that company’s performance.

[The Secretary of State for Transport (Chris Grayling)]

All franchise operators are required to obtain a pre-qualification passport. The Department may suspend or withdraw a passport in the event that the passport holder triggers certain requirements within the passport application. This would place restrictions on or remove the passport holder from bidding for franchise competitions.

[Clive Efford]

I take it from that answer that it is possible for the Secretary of State to deny an existing franchise holder the right to rebid in a new tendering process. Govia, which has had the south eastern franchise for a long time, has consistently been a poor performer, so can he remove Govia from the service? If it were to get the franchise, what guarantees can he give to my constituents that they will get the improved service that they deserve?

[Chris Grayling]

In the case of the south eastern franchise, we will accept the bid that is going to deliver the best possible outcome for the hon. Gentleman’s constituents, with longer trains and better services. This is a competitive process. I will not hesitate to remove a passport from a firm when that is required. I also have to operate within European procurement law—something that the Labour party is still very keen on—and that requires me to take a proportionate approach. I will always seek to do that and I will always seek to operate within the law.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Last year, no fewer than 67 million rail journeys were cancelled or severely curtailed. I raised this matter with the Prime Minister yesterday. Most of the compensation paid by Network Rail was trousered by the train operating companies. When they bid to renew their franchises, will the way in which they have treated their passengers with compensation be a key consideration, as it should be?

[Chris Grayling]

My hon. Friend is absolutely right that we need to ensure that passengers get the compensation payments to which they are entitled. Of course, the compensation structure is much more complex and there are far more issues than those that have been highlighted in the media in recent days. I am very clear that the move that we are going through this year to provide digital ticketing across the whole network will make it much more straightforward to give passengers the compensation that they deserve and need, and enable them to do so simply, without having to fill out long, complicated forms.

[Rachael Maskell (York Central) (Lab/Co-op)]

The estimates report was very revealing, showing how hundreds of millions of pounds have been spent on compensation, underwriting failure and bail-outs. In control period 4 alone, a staggering £339.4 million of public money—our constituents’ money—was handed over to private operators, while passengers were forced to pay over the odds to travel. How much more public money will the Secretary of State pass to these failed rail operators?

[Chris Grayling]

The Opposition keep talking about the huge amounts that are paid, but they fail to understand that less than £3 in every £100 that is spent on the railways remains with the companies. The rest is going into the biggest infrastructure investment programme, better services and newer trains—the kind of improvements that people could only dream of in 13 years of Labour Government, but which they are getting under a Conservative Government.

[Rachael Maskell]

That is certainly no apology to our constituents. The Secretary of State’s lack of due diligence has caused chief exec David Brown, of embattled Southern rail fame, to announce that he has done a—expletive deleted—good job, and that he will bid again for the next franchise contracts. Virgin and Stagecoach will do the same. These companies are on a huge gravy train at the expense of taxpayers, so why is the Secretary of State being held to ransom and why he is even prepared to consider rewarding their failure?

[Chris Grayling]

The hon. Lady talks about a privatised gravy train. I would encourage her to look at the conversation that the French Prime Minister had about a state railway, where he said:

“The dilapidated network, delays, abysmal debt…The situation is alarming, not to say untenable. The French, whether they take the train or not, pay more and more for a public service that works less and less well”.

I would say to her constituents that I am delighted that over the next 12 to 18 months the people of York are going to see every single train, pretty much, that serves their station replaced as new, or brand new trains—trains that they have not seen for decades.

[Luke Graham (Ochil and South Perthshire) (Con)]

During the franchise process, business cases get a lot of focus. The hon. Member for Middlesbrough (Andy McDonald) mentioned the Virgin Trains east coast contract and the franchise holder criticising some of the figures he had been passed. As a member of the Public Accounts Committee who was present at that hearing, I can say that the franchise holder actually said that, although the figures were not what he was expecting, they were not an insurmountable barrier to the franchise working. He quoted the Scottish referendum and Brexit, and a declining trend in passenger figures, as the real reason why the franchise failed. When franchises across the companies are being bid for, will my right hon. Friend encourage those companies to have a broader range of dynamic scenario planning so that they get accurate figures?

[Chris Grayling]

My hon. Friend makes a very important point. We are now migrating the franchise system to being much more focused on quality. The quality of service is going to drive revenues as much as anything else. People will see a very different approach where we do not necessarily take the highest bid, we look for high quality in the bids, and we look to be prudent about the risk-sharing mechanisms so that hopefully this does not happen again.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

10. When he plans to meet representatives of the road safety sector to discuss road safety policy. [R]

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[Sir Henry Bellingham (North West Norfolk) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Transport (Chris Grayling)]

Briefly, let me inform the House that the Space Bill has completed its passage through Parliament, and I extend my thanks to all Members involved in the debate. That debate was conducted in good humour by Members from across the House, and we all share the aspiration for this Bill to pave the way for a thriving commercial space sector in the United Kingdom.

[Sir Henry Bellingham]

Is the Secretary of State aware that Network Rail and Govia Thameslink have committed to ensuring that eight-carriage trains are introduced between Cambridge and King’s Lynn by the end of the year, which is vital to relieving unacceptable levels of congestion? Will he help to ensure that that commitment is honoured?

[Chris Grayling]

I will certainly do that, and I also recommit to the improvements needed in Ely, which are essential over the next control period to unlocking those capacity improvements that are needed for the growth and development of those parts of Cambridgeshire.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

T2. Since 1979 the distinctive yellow and green minibuses of Ealing Community Transport have provided a vital lifeline for the disabled and elderly of the borough, but changed Government guidance now threatens the existence of that award-winning social enterprise. A delegation of volunteer drivers came to see me nearly in tears. They are mostly pensioners and they do not have the time, resources or inclination to retrain for the passenger carrying vehicle licence that is now demanded. Will the Minister think again?

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[Jeremy Quin (Horsham) (Con)]

T7. Last weekend, and so completely unrelated to the current weather, Southern rail passengers at Redhill suffered the most appalling, shambolic and potentially dangerous scenes. I appreciate that underlying that situation might be the extremely good investment programme, but what assurances has the Minister received that these awful scenes will not be repeated?

[Chris Grayling]

Let me say very clearly and unequivocally that what took place last Sunday was unacceptable. On behalf of the Government, I apologise for it and the company has already done so. We have made our views known to the company in the strongest possible terms. It was unacceptable and lessons have to be learned. The company is putting in place arrangements to make sure people receive appropriate financial compensation. It must not happen again.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

T5. Last Friday, I arranged a site meeting between Network Rail and the YMCA for south London to talk about an abandoned strip of land owned by Network Rail on Rialto road in Mitcham, close to Eastfields station, in the hope that they can together provide some great prefab housing for young people. Will the Minister meet me to discuss how we can encourage Network Rail to use all its scraps of land to the benefit of everyone?

--- Later in debate ---

[Jack Brereton (Stoke-on-Trent South) (Con)]

T10. I am extremely grateful to the Secretary of State for visiting my constituency recently. On that occasion, I was pleased to give him the Stoke-on-Trent HS2 masterplan. Will my right hon. Friend update the House on his plans to make Stoke-on-Trent HS2-ready?

[Chris Grayling]

First, I want to put on the record again my commitment to making sure that Stoke is in receipt of an HS2 service when the route opens. The local authority’s plans for Stoke station are very exciting and I want to work on them with my hon. Friend and the local authority.

[Tony Lloyd (Rochdale) (Lab)]

T9. The western side of the M60, in the process of the upgrading to the smart motorway system, has seen congestion, gridlock and horror for commuting traffic on a daily basis. Even now, the 50 mph limit remains in place. When will we see progress?

[Chris Grayling]

I know that these works have taken longer than intended. I have spoken to Highways England and we want to get this situation resolved as quickly as possible. It is certainly the case—I speak as somebody who travels from time to time to Old Trafford—that the area is surrounded by roadworks on the motorway and the work on the new extension to the Metrolink. I hope the hon. Gentleman will acknowledge, however, that this is a sign that the Government are making sure there is investment in, and resource provided to, Manchester, where transport investment on this scale has not happened for a long time.

[Johnny Mercer (Plymouth, Moor View) (Con)]

My right hon. Friend will know from our many previous conversations that the people of Plymouth have waited too long to see improvements on their rail link, so I am grateful for his Department’s response yesterday, but when can they expect to see something delivered—some work completed—on Dawlish, which I know is his No. 1 responsibility?

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[Peter Kyle (Hove) (Lab)]

Thank you so much, Mr Speaker. There is one set of tracks and one franchise operator between London and Brighton, but there are three separate pricing structures. I urge the Secretary of State and the Rail Minister to think about implementing the Gibb recommendation to lower the pricing to the lowest possible one—the Thameslink one—for a two-year period. That could be done with no technical changes whatever, and it would have a transformative impact on passengers who have suffered so much in the last few years.

[Chris Grayling]

We are working our way through the recommendations of the Gibb report, and we are working our way through the automation of ticketing, which I think is a prerequisite of the broader fares reform that is necessary. The hon. Gentleman will be aware that the keyGo card has just launched across the Govia Thameslink Railway network, and that smart ticketing is progressing. That will provide the opportunity for fares reform in a way that has not been there previously.

[Rachel Maclean (Redditch) (Con)]

During the recent appalling weather, Worcestershire County Council has been sharing information about where the nearest grit bin can be found, and getting the gritters out on the road. Will the Secretary of State join me in praising them for helping residents to prepare for the recent appalling conditions?

[Ian C. Lucas (Wrexham) (Lab)]

The Secretary of State will be aware that no money was spent in control period 5 on supporting enhancements to the rail infrastructure in north Wales. Having seen the unanimity in north Wales and in north-west England on Monday this week, does he not accept that our time has come for cross-border rail investment?

[Chris Grayling]

As the hon. Gentleman knows, I went to that event and made a commitment. I praise my right hon. Friend the Member for Clwyd West (Mr Jones) for bringing the event together and thank all the Members from north Wales who attended. I gave a clear indication of the Government’s sympathy with the need for the Crewe hub. I talked about the re-signalling on parts of the route, which will improve performance on the line. The hon. Gentleman will be aware, as the Member of Parliament for Wrexham, that we are now carrying out the study on how we deliver a proper service on the Wrexham to Bidston line. Under this Government, the time has certainly come for transport improvements.

[Peter Aldous (Waveney) (Con)]

BACT—Beccles and Bungay area community transport—plays a key strategic role in north Suffolk in serving remote rural areas and many vulnerable people. Will the Minister assure me that in assessing the feedback from his current consultation, his No. 1 objective will be to put the future of organisations such as BACT on a sustainable, long-term financial footing?

--- Later in debate ---

[Chris Grayling]

The A40 is one of the roads that could benefit from the creation of the major roads network. It is precisely designed to deal with those second-tier roads that were detrunked by the last Labour Government and tend to fall through the cracks between decision making in local communities and the national work done on the strategic road network. My expectation is that my hon. Friend and his local authority will be beating a path to my door when that funding is first released. However, I would say that his railway line is getting new trains much sooner than that, which I hope will be a benefit to his constituents.

[Bill Esterson (Sefton Central) (Lab)]

Ministers say that they want to reduce roadside emissions. The road leading from the port of Liverpool has some of the biggest air quality problems in the country. Will the Secretary of State listen to calls for investment in rail freight as an answer to the problem?

[Chris Grayling]

This is precisely why I am so pleased to have started feasibility work on the reopening of the Skipton to Colne railway line, a route that could provide an important link across the Pennines. It is no doubt a matter of real frustration that it takes eight to nine hours for a freight train to travel from the port of Liverpool to the power station at Drax, and it is clear to me that we need additional transpennine capacity. This is one route that could deliver it. I look forward to seeing the conclusions from that study at the end of the year, which I think is the likely timetable.

[Robert Neill (Bromley and Chislehurst) (Con)]

This week of all weeks, rail passengers want up-to-date information about delays and cancellations, but Southeastern’s website has failed to provide any live-time updates in any single rush hour this week, today included. Will Ministers bear that in mind when the franchise comes up for renewal?

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

My constituent Jim Irvine, who was active all his life, now suffers from motor neurone disease, and, like many other people, relies on his mobility scooter for independence. Scooters are currently banned from the Tyne and Wear metro. What will the Secretary of State do to remedy the situation, and will he give assurances that our promised new rolling stock will include provision for mobility scooters?

[Chris Grayling]

As the hon. Lady says, it is time that we had new rolling stock on the Newcastle-upon-Tyne metro. I expect to see updated, modern rolling stock that can provide proper accessibility for people with disabilities. The decision about the configuration will of course be made locally, but I certainly expect the money that is available to be spent on disability-compliant rolling stock.

[Jeremy Lefroy (Stafford) (Con)]

Will my right hon. Friend give us an update on the progress of the negotiations on air connections with the European Union after we leave in March next year?

[Chris Grayling]

The European Commission has published its negotiating position on aviation links. There have been a lot of scare stories around over the last few months, but the Commission has said that in all circumstances—whether or not we have a trade deal, and whether or not we have an implementation period—there must be an aviation agreement. There is a recognition on the Commission’s side that the flights need to continue, and there is an absolute commitment on our side. I met my Spanish counterpart yesterday, and we agreed that it was essential for flights to continue. We will all work to ensure that there is absolutely no interruption in services.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Does the Secretary of State understand the severe disappointment and anger in the far south-west about the sham of a south-west rail strategy that was published yesterday? Will he now do the right thing, and, instead of re-spinning the £50 million that has already been announced, match Labour’s £2.5 billion rail investment plan for the south-west?

[Chris Grayling]

I will take no lessons from the party that did nothing for transport in the south-west over a long period. This Government are doing things that Labour never did—dualling the A303, providing brand-new trains, and resignalling in Cornwall to increase the number of rail services. The hon. Gentleman should be embarrassed about his party’s record.

[Several hon. Members rose—]

Rail Update

Chris Grayling Excerpts

Monday 5th February 2018 Commons Chamber

[The Secretary of State for Transport (Chris Grayling)]

With your consent, Mr Speaker, I will make a statement on rail franchising. I apologise to the two Opposition Front-Bench spokespeople for the slightly late delivery of copies of the statement—the speed with which we took this afternoon’s urgent questions caught us all a bit by surprise.

I informed the House on 10 January that my Department was preparing contingency plans for running train services on the east coast main line in the event of the existing franchise failing. Despite delivering significant returns to the taxpayer and having some of the highest passenger satisfaction scores in the country, the lead operator of the franchise, Stagecoach, has been incurring significant losses. During that debate, I promised to return to the House to provide an update on the situation, and I am doing so today.

Since 2015, the franchise has met all its financial commitments to the taxpayer, returning nearly £1 billion to the public purse, but that has come at a substantial cost of nearly £200 million to Stagecoach. I have already informed the House that the franchise will, in due course, run out of money and will not last until 2020, but it has now been confirmed that the situation is much more urgent. It is now clear that the franchise will be able to continue in its current form for only a very small number of months and no more.

Last week, following detailed analysis, my Department issued the franchisee with notification that the franchise has breached a key financial covenant. It is important to make it clear to the House, and indeed to the public, that that will not affect the railway’s day-to-day operations. The business will continue to operate as usual, with no impact on services or staff on the east coast, but it does mean that in the very near future, I need to put in place a successor arrangement for operating the railway and to end the current contract.

Given the imminent financial pressure that the existing franchise is under, I am taking action now to protect passengers who depend on these train services and to ensure continued value for taxpayers’ money. Given the urgency of the situation, I would like to take this opportunity to update the House on my plans.

It is worth remembering that our franchising system, as a whole, has delivered great benefits to passengers. New private investment has totalled £6.4 billion over the past 11 years, passenger journeys on the rail network have more than doubled and the private sector is paying for new trains all around the country. There are those who want that to stop, because of a dogma that the state could run the railway better, but we see the fruits of private investment all around the network.

There has also been much misinformation about the franchise, so it is worth stressing again at the outset that, because payments to the Government have been subsidised by Stagecoach, the taxpayer has continued to profit financially from this franchise. Passenger satisfaction is high, and preparations are well under way to deliver state-of-the-art new trains on this railway.

The problem is very straightforward: Stagecoach got its numbers wrong. It overbid and it is now paying the price. Contrary to widespread speculation and rumour, no deal has been done on this railway, and I have not yet made a decision on the successor operator to run the east coast railway until the longer-term plans for the integration of track and train can begin in 2020. There is no question of anyone receiving a bail-out. Stagecoach will be held to all its contractual obligations in full. But, as the Brown review said five years ago, this is what we expect in a competitive franchise system: private businesses risk substantial amounts of their own capital, and if they fail to live up to their stretching targets, they lose out, not the taxpayer. For anyone who thinks that the nearly £200 million that Stagecoach will lose is insignificant, let me put it into context: the combined profit of every train operator in the country was only £271 million last year, and the loss equates to more than 20% of Stagecoach’s total market value. So this is a significant amount of money by any measure, and it should also act as a stark warning to any company tempted to overbid in future. Moreover, the franchising system has now been adjusted to deter further optimism when bidding.

The priority now is to ensure the continued smooth running of the east coast franchise for its passengers. I have therefore asked my officials to conduct a full appraisal of the options available to the Government to ensure continuity of service until we implement the east coast partnership on the route from 2020. My decision on which option to choose will be made in accordance with the key principles set out in the statement on how I use my rail franchising powers. These include: protecting the interests of passengers; preserving the interests of taxpayers by ensuring value for money; and supporting investment and improvement in the railway, including through the deployment of new inter-city express trains on the east coast line.

In order to inform this decision, the Department will assess the extent to which each option performs against those principles. Our value-for-money assessment will be based on a number of criteria, including which option returns most money to the taxpayer, the risks attached to each, and the value of any improvements in passenger services. I will also have regard to the effect of my decision on other franchises. The decision will be taken in a transparent way; the Department’s assessment of the option will be published and it will be properly validated.

At this stage, one of the options is to consider the possibility of Stagecoach continuing to operate services on the east coast line under a very strictly designed short-term arrangement. The current management has a strong record of customer service and to rule out its involvement now would go against the principles I have outlined. However, given the circumstances in which the Government are having to step in to protect passengers on this line, I am prepared to consider that option only on the basis that the franchise would be operated on a short-term, not-for-profit basis. The only acceptable financial reward for Stagecoach could be received at the end of the contract—and only in return for the delivery of clearly specified passenger benefits and improvements. The company cannot be allowed to continue to run this franchise and simply make a profit, given what has happened. It got its sums wrong, and it will pay the price for that, not the taxpayer.

The second alternative is for the east coast franchise to be directly operated by the Department for Transport through an operator of last resort. My Department will subject that option to the same rigorous assessment to establish whether it would deliver value for money for taxpayers and protect the interests of passengers. This option is very much on the table and will be selected if the assessment that I have set out determines that it offers a better deal for passengers and taxpayers than the alternative.

In either scenario, the east coast main line is expected to deliver substantial revenue to the taxpayer. The line will also continue to deliver premium payments to the Government once the east coast partnership is in place in 2020. So let me be clear that the east coast franchise will continue to offer and deliver a healthy operating profit for taxpayers. It has done so over the course of this franchise so far and it will do so in future.

There will be those who claim that because Stagecoach overbid, it should be excluded from bidding for future franchises. I have to be clear that the legal advice on this is clear. As the company is meeting its financial obligations to support the franchise, including with the full parent company’s support, and because it has operated services on the east coast line successfully, the Department has concluded that there are no adequate legal grounds to restrict it from bidding on current and future franchise competitions on this basis. Members will understand that it is my duty to follow legal advice, but let me be clear that we will keep its eligibility for current and future bids under close scrutiny and constant review.

It is vital that we continue to focus our attention on delivering benefits for passengers across the network and on securing the genuine benefits of privatisation, so in addition to the transparent, rigorous process for the east coast line that I have set out, I am making some additional franchising announcements that will deliver benefits to passengers on the west coast and east midlands routes. In December 2016, we set out our plans to award the west coast partnership—the franchise that will deliver the first High Speed 2 passenger services. In that announcement, we made clear our intention to agree a short direct award with the current incumbent to allow the time necessary to design the west coast partnership. The negotiations have been completed and we have agreed a direct award with the existing operator, Virgin Trains west coast.

Let me be absolutely clear that the east coast and west coast franchises should not be confused. As with the east coast franchise, the west coast operator is meeting all its financial obligations, but the west coast franchise has a completely different corporate structure, in which Virgin Trains is the majority shareholder. As was set out 14 months ago, the direct award is a sensible bridge between the existing contract and the west coast partnership. Once that partnership is ready, the direct award will cease to exist.

Virgin has transformed the west coast franchise from a poorly performing service that required a subsidy of more than £75 million a year into a franchise that has one of the highest passenger satisfaction rates, at 91%, and which returns more than £200 million per year to the taxpayer. The transformation has included: the introduction of trains every 20 minutes between London and Manchester and between London and Birmingham, and hourly services between London and Scotland; the installation of wi-fi on every train; the lengthening of the Pendolinos to 11 carriages to accommodate growing passenger numbers; and the introduction of free at-seat entertainment services.

My decision is in keeping with the three key principles that I set out earlier: protecting passengers, ensuring value for money and supporting investment. I look forward to the release of the invitation to tender for the west coast partnership in due course and am confident that we will see strong competition for this exciting new franchise, which will help to transform rail travel in this country through to and including the delivery of the first HS2 services.

In the coming years, we will also transform the east midlands franchise, with the biggest investment in the midland main line since it was completed in 1870. Passengers will benefit from more seats, new trains and dramatically reduced journey times from Nottingham and Sheffield to London. Once the work is complete, there will be almost twice as many seats into London St Pancras during the peak compared with today.

The next operator will be required to deliver many of the improvements, so I shall set out today the next step of the competition that will award the contract. Abellio, Arriva, Stagecoach—the incumbent—and a joint venture between First and Trenitalia have all been shortlisted to run the east midlands franchise that will deliver improved services. As I have said, the Government have no adequate legal grounds to restrict Stagecoach from bidding, but the completion will be run on a fair and transparent basis, with new safeguards against over-bidding. Ultimately, the winner will be the firm that offers the best service to passengers and the best value to the taxpayer.

In a competitive market, franchises will sometimes fail. When that happens, my duty is to protect passengers and taxpayers, and to ensure continued investment in the railway. Stagecoach has paid the price for failure, as stipulated in its contract. Passengers on the east coast main line can be assured that services will continue as normal. The Government will undertake a transparent appraisal of the options available to ensure that passengers and taxpayers are protected.

I know that I will hear a lot about nationalising everything. It is worth remembering that, as we have heard today, renationalising our water companies would cost £90 billion. We have heard nothing about the cost of renationalising the railways—due to not just losing the private investment that is bringing in all those new trains, but the billions that would have to be spent to bring those trains back on to the public books. We remain committed to the success of a private railway. Over the past 20 years, passenger numbers have doubled. We have one of the safest railways in Europe, passenger satisfaction is high across the network and other countries are now adopting Britain’s model for running the railways. The plans I have set out will allow the British public to continue to benefit into the future from an ever-improving railway. We have challenges to meet, but we will meet them. I commend this statement to the House.

--- Later in debate ---

[Mr Speaker]

Order. Just before the Secretary of State responds to the shadow Secretary of State, I must say to the hon. Member for Kingston upon Hull East (Karl Turner), who, in his usual fashion, yelled, “It’s a disgrace,” from a sedentary position, that this morning I conducted my weekly Skype session with school students from the Education Centre. They were students of the Herne Bay primary school, one of whom asked me, “Mr Speaker, is there a Member who is particularly cheeky in terms of loud and repeated heckling?” I said, “Well, seeing as you ask, there is a chap called Karl Turner, who is a very agreeable fellow, but he does tend to go from nought to 60 in about five seconds.” I proceeded to educate the pupils of that primary school class in the favoured expressions of the hon. Gentleman—“Shocking” and “It’s a disgrace”—and his ritual exhortation, which fortunately I have not heard today to a Minister, to wit “be’ave”, which he makes while conspicuously failing to do so himself.

[Chris Grayling]

As we were caught short by the speed of the urgent questions, I know that the hon. Gentleman did not have as much time as he might have wished to prepare, but I am not sure that he listened to a word I was saying. He talked about a bail-out culture, gifts and standing up to people, but I have just announced that we will terminate a contract and that we may bring the operation of this railway back into the system of operator of last resort, which is, if I recall correctly, what Labour did in 2009.

I intend to ensure that I do what offers the best value for the taxpayer and the best option for the passenger at a time when exciting things are happening on this railway. New trains arriving in the coming months will transform the journey for passengers on the route, and that is long overdue. In the next control period, there will be investment in different parts of the route in order to improve performance in places where it is desperately overdue. The future is promising for the passengers on this railway, as they will have a better travel experience in the months to come.

The hon. Gentleman talked about long-term thinking, which is precisely what the east coast partnership is about. It is about unifying track and train in a way that I believe the public of this country want, and people on the railway believe that this will lead to a more efficient railway. The more that we can reunite the day-to-day operation of the track and trains right across the network, the more reliable a railway we will have.

[Andy McDonald]

Nationalise it.

[Chris Grayling]

The hon. Gentleman says from a sedentary position, “Nationalise it” but this country has done that before. It was called British Rail and it became a national laughing stock. Whatever else we may do, I have no intention of leading our railway system back into the days of British Rail, when lines were closed, routes were axed and the system received a lack of investment year on year because it was competing with schools and hospitals for the capital available. I have no intention of recreating British Rail, although Labour may do. I have a strategy that involves bringing together track and train, a long-term vision of investment, expanding our network and new trains. That is what passengers want.

[Iain Stewart (Milton Keynes South) (Con)]

The west coast main line is a vital railway service for my constituency. Virgin has indeed transformed that service over the duration of its franchise. Will my right hon. Friend say a little bit more about the duration of this direct award? What additional features can my constituents expect during that time?

[Chris Grayling]

My expectation is that it will last no more than two years—possibly only one year. It is important to get the west coast partnership structure in place to go through the bidding process, and we will shortly be issuing the invitation to tender. I can only reiterate that there is a clear corporate difference between the east coast main line, which is 90% owned by Stagecoach, and the west coast main line, which performs well and is majority owned by a different company, Virgin Trains. Whether the brand is used on both is neither here nor there; it is a different corporate entity. There is no possible legal benefit or passenger benefit from somehow ripping this up for an interim period, rather than moving seamlessly into the future and the path towards HS2.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Despite what the Transport Secretary says, the franchising system is quite clearly not working, especially given today’s further announcement. When all these announcements are made, we keep hearing about the private investment that privatisation of the railways has brought in with the increasing passenger numbers. The reality is that all that new investment is paid for by the rail users. Sure, it might make the railways more attractive, but it is being paid for by those who use the railway. It is not magic money; it comes out of our pockets. It is quite clear that the parent company guarantee system is not working. If it were working properly, the east coast franchise would continue until the end, so there is clearly a failure in the system.

The Secretary of State did the usual bluster, but he mentioned water companies when he was talking about nationalisation. Well, I have news for him: in Scotland, the water company is a national company. It is owned by the public and operates successfully. The Scottish Government are also looking into a public sector rail bid, so these things can work. If the Transport Secretary’s defence is that Stagecoach got its sums wrong, what does that say about the Government’s due diligence on the tenders that were submitted? The fact is that the Government followed through and awarded the tender to a company that got its sums wrong. That is another reflection on his Department.

All this follows the west coast main line tender farce—the franchise deal collapsed in 2012, resulting in the direct award to Virgin, which is now going to get another direct award. There are way too many direct awards in the franchise system, and that kind of goes against the ethos of competition that a franchise is supposed to bring, which again highlights that the system is not working. What will be the duration of the next award and what impact will that have on the timescales for HS2? Will the Secretary of State give us accurate timescales for the HS2 tender process?

On the east coast and west coast awards, will the Secretary of State follow the Scottish Government’s lead? All employees on the ScotRail franchise are paid the real living wage, there are no compulsory redundancies and ScotRail is operating at a higher satisfaction level than the companies in the rest of the UK. For once, will he seriously consider the devolution of Network Rail to Scotland? That would save his Department money, take away some responsibility—given that it is a failing Department—and perhaps make up for a £600 million shortfall in maintenance monies allocated for the next control period in Scotland.

I have one final question. [Hon. Members: “Oh!”] How is the Secretary of State’s new railcard system working? What funding has been put in place for it? Does the inflation-level rise he has agreed cover the new railcard?

--- Later in debate ---

[Mr Speaker]

I do not know how long it seemed to the right hon. Gentleman, who is usually quite a patient fellow. Not everybody, I am afraid, is as succinct as the right hon. Gentleman, who has developed it into an art form, but the hon. Member for Kilmarnock and Loudoun (Alan Brown) must do better.

[Chris Grayling]

We are going to hear a lot today about the public versus private argument. What SNP Members, and indeed Labour Members, have not remembered is that if the investment has to come from the public sector, it competes with money for schools, hospitals and the armed forces. That means that, as happened in the days of British Rail, our rail network is starved of investment, and we saw the consequences. By contrast, the new trains that are shortly going to be arriving in Edinburgh Waverley and going up the east coast to Aberdeen are paid for by the private sector.

[Andy McDonald]

They are paid for by the customers!

[Chris Grayling]

Of course they are paid for by the customers. The private companies make the investment and they make the return on that investment because the passengers pay for fares. That is the way that business works. Perhaps Labour Members do not understand the way that business works. Customers buy something they want to buy. I am absolutely certain that customers want to travel in brand-new trains. That is long overdue on the east coast main line, where they have regularly failed to do so. However, there are clearly lessons to learn on this. That is why we have moved much more towards a quality basis for new franchises. I want an increased quality of service delivered to be the basis for the allocation of new franchises.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) asked about the west coast main line direct award. As I said, it will run for between one and two years. It will finish as soon as possible. I want this up and running. We are going to issue the ITT for the west coast partnership very shortly.

The hon. Gentleman raised the issue of staffing. The private sector-run east coast main line is today employing more people than it did in the public sector. As somebody who believes passionately that we need more customer service staff on the railway rather than fewer, I think that is a good thing.

The hon. Gentleman asked again about the devolution of Network Rail. I simply reiterate that I think that the SNP Government have quite enough to do without going beyond the devolution recommendations that we have put in place.

As regards the travelcard, it is being issued by the industry, which is moving ahead quickly with preparations for it.

[John Penrose (Weston-super-Mare) (Con)]

The last time the Secretary of State stood at the Dispatch Box, I asked him about open-access rail and competing rail firms. He rightly waxed lyrical about the benefits to customers in terms of choice and value that open-access rail can produce. As he looks at the options for the east coast main line, will he consider, in addition to the two options he has laid out for the House, an open-access alternative so that we can get away from the state-led and potentially even nationalised set of alternatives that we are otherwise being pushed towards?

[Chris Grayling]

I know that my hon. Friend feels very strongly about this. He is right about the benefits of open access. My view is that open access holds the existing operator’s feet to the customer service fire to make sure that it delivers. It would not be realistic to do this in timeframes available to me for making the change that we are going to need. However, I am very clear that the rules around the creation of the east coast partnership must and will leave room for open access.

[Melanie Onn (Great Grimsby) (Lab)]

The reason given for not providing residents of Grimsby and Cleethorpes on the east coast a direct service to London was the impact on Virgin’s profits. Will today’s announcement see any progress on a direct rail link line for my constituents, or perhaps a cut in the amount they are shelling out for their fares?

[Chris Grayling]

I very much hope and believe that we will be able to create opportunities for more direct services to east coast towns in the years ahead. There is no reason why this route cannot be used for further open access, if the Office of Rail Regulation judges that the capacity is there. It is very much down to the regulator to decide what is realistic and what is not. It is as much about whether it can be done logistically as anything to do with profitability. [Interruption.] The hon. Member for Middlesbrough (Andy McDonald) says, “Easy get-out.” There is only so much capacity available. I hope, however, that the investment going into the east coast main line during the next control period will free up additional train paths and additional capacity. Of course, when HS2 arrives it will create a complete step change for the east coast main line and allow for services to a whole range of new destinations.

[Maggie Throup (Erewash) (Con)]

With Stagecoach remaining on the shortlist for the East Midlands franchise, which serves my constituents, will my right hon. Friend keep the bid under review and revisit the legal advice he has received over the coming months?

[Chris Grayling]

I will be immensely careful about both the legal position and what is right for the midland main line. We will take the bid that will deliver the best outcome for passengers, and we will do so in a way that fulfils the legal advice. I am not interested in a second-rate solution for passengers. We will be providing much upgraded services and new trains, and the people who operate those new trains have to be the right ones.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Secretary of State aware that I am very disappointed he did not inform me he was attending a well-publicised meeting in the centre of Huddersfield in my constituency on Friday? He had the opportunity to talk to me and some of my constituents about the deterioration of the east coast line over recent years and the fact that not only the east coast line but the network across the north of England is a very great concern for my constituents who use it to get to work.

[Chris Grayling]

Just to reiterate, I did make sure that my office contacted the hon. Gentleman’s office on Friday morning to tell them I was going later in the day to meet Conservative councillors ahead of the council elections—an event that I would not normally invite him to. I was particularly struck by how thoughtful the Conservative team in Huddersfield is about the potential transport improvements for that area. It was a very valuable set of discussions.

[Mr Sheerman]

On a point of order, Mr Speaker.

--- Later in debate ---

[Sir Desmond Swayne (New Forest West) (Con)]

How good is Lord Adonis’s memory?

[Chris Grayling]

I am not a doctor, but I know that there is no record whatever of any ban on National Express continuing to bid for franchises after 2009. I am sure that the legal advice then was the legal advice I have now. Whatever one may say in public, the reality is that no legal constraint was placed on National Express from further bidding for franchises.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I think it is the Secretary of State who has the short memory, so I will remind him that this is the third time in 11 years that a private sector franchise on the east coast line has failed. Can he explain to the House why his Department prevented East Coast, a public company that ran the railway superbly for both passengers and the taxpayer, from bidding for this contract? Will he today commit to changing the rules so that public sector companies can bid for these franchises?

[Chris Grayling]

The key point to remember is that this is a franchise that has increased the number of services, increased the number of staff it employs, improved its passenger satisfaction rating and is providing a larger payment to the taxpayer, notwithstanding the troubles I have set out today. That, to me, suggests that it is getting something right. I want to be absolutely clear—[Interruption] Notwithstanding the sedentary comments, it is really important for me to pay tribute to the hard work of the staff who work on the east coast main line, who have done a good job in improving the quality of service for passengers. It is not their fault that their company got the financing of this wrong.

[Luke Graham (Ochil and South Perthshire) (Con)]

Can my right hon. Friend confirm that every penny of the £165 million guarantee that was insisted on in the franchise agreement will be reclaimed by the taxpayer?

[Chris Grayling]

Absolutely, and indeed, that has already happened. I am absolutely clear that Virgin-Stagecoach will fulfil this contract to the letter.

[Andy McDonald]

What about the £2 billion?

[Chris Grayling]

The shadow Secretary of State has failed to understand what I keep saying, which is that this railway every year continues to generate a substantial contribution to the taxpayer, and that will continue right the way through until 2023 and beyond.

[Heidi Alexander (Lewisham East) (Lab)]

May I ask the Transport Secretary for an update on station accessibility improvements? Hither Green in my constituency was due for a major upgrade in this control period, but that was kicked into the long grass by his predecessor. How much has been allocated for these improvement projects in the next control period, and will projects that were priorities last time around but lost out continue to be priorities?

[Chris Grayling]

There will be a continuation of the accessibility fund in the next control period. We have not decided exactly how much it will be, but I can give the hon. Lady an assurance that I will want to make sure that where commitments have been given in the past, we will seek to fulfil them in the next control period.

[Robert Courts (Witney) (Con)]

Will the Secretary of State confirm that privatisation has brought investment of £6.4 billion to our railways over the past 10 years, and that when awarding franchises both on the east coast main line and on the Cotswolds line—the GWR franchise, which is being consulted on at the moment—his guiding light will always be the quality of service provided to passengers?

[Chris Grayling]

This is now very much my approach. My view is that if the service is really good, revenues will follow. While it is absolutely essential that one seeks to achieve best value for the taxpayer in a bidding process, there is already a different balance between the amount of money bid and quality, and the balance will continue to evolve towards quality. That is what matters to passengers, and what drives revenues.

[David Hanson (Delyn) (Lab)]

If the Secretary of State rushed, he would just about get the 6.10 from Euston to Flint in north Wales, and it would cost him £283 for a return ticket. In the next two years of the direct award franchise for the west coast main line, does he expect prices to stabilise, or indeed fall?

[Chris Grayling]

The right hon. Gentleman is an astute Member of the House, and I have no doubt that he would have bought an advance ticket for a fraction of the sum he mentioned. Really good value is available on the west coast main line, although for those who turn up at the last minute—as, indeed, is the case with airlines and many other forms of transport—there is a higher price to pay. I believe that since the passenger numbers on the west coast main line continue to rise and services continue to be rated good, the current operators must be doing something right.

[Alex Chalk (Cheltenham) (Con)]

It seems clear that Stagecoach miscalculated, overbid and is now paying a £200 million price. Can anything more be done to avoid private sector companies overbidding and setting themselves up to fail, and can those lessons be learned in time for the GWR extension, which will affect my constituents in Cheltenham?

[Chris Grayling]

It is really important that we do so. We have in fact already changed the way the franchising structure works for the most recent franchise. The south-eastern franchise, which is out to tender at the moment, has a different approach to the issue of risk sharing. We have to be careful: on the one hand, we must seek to get best value from the franchises, but on the other hand, we need to make sure that they are resilient. It is a balance, and we have to try to get this right, but we are seeking to improve the balance between the risk to quality and the revenue we receive.

[Paula Sherriff (Dewsbury) (Lab)]

While the east coast main line was under public ownership between 2009 and 2015, passenger satisfaction, punctuality and reliability reached record high levels. Has the case not therefore been made for renationalisation based on these principles?

[Chris Grayling]

Except that since the line returned to being operated by Stagecoach, passenger satisfaction levels have risen, the number of employees has risen, the return to the taxpayer has risen and the number of services has risen. In my judgment, the day-to-day operation of this railway has proved very successful over the past two or three years, even though its finances have been disastrous.

[Stephen Kerr (Stirling) (Con)]

In my right hon. Friend’s statement, he said that the financial reward for Stagecoach at the end of its contract would be set on the basis of the achievement of “specified passenger benefits”. What does he have in mind?

[Chris Grayling]

I want continued improvements of the kinds committed to in the original franchise documents —better services, more services. If there is to be any payment at all at the end of this direct award, it has to be on the basis of an improved situation for passengers and better services. As far as I am concerned, this will be a not-for-profit award on a year-by-year basis if—if—we go down this route. Such a decision has not been taken, and I will not take it until I have seen the evidence on either side; and I will be completely transparent about it. Any payment at the end of a direct award has to be linked to a much better deal for passengers.

[Tom Brake (Carshalton and Wallington) (LD)]

Can the Secretary of State confirm that if any Virgin or Stagecoach directors receive any bonuses in relation to the east coast project, they will have them clawed back?

[Chris Grayling]

Given that the company has lost nearly £200 million over time and has, I believe, effectively wiped out all its profits from rail operations for the past four years, I would be extremely surprised if its management wanted to pay any bonuses at all. If they do, they will not be paid for by the taxpayer, but out of the company’s reserves, but I will be gobsmacked if they are paying bonuses on this at the moment.

[Kevin Foster (Torbay) (Con)]

I welcome the general tone of the Secretary of State’s statement, in particular the emphasis on Stagecoach taking the hit rather than the taxpayer. Can he tell me what lessons will be learned for the great western railway franchise from what has happened with the east coast franchise?

[Chris Grayling]

I am very clear that when the great western franchise is let, it has got to be based to a much greater degree on quality. As my hon. Friend will be aware, we are consulting on the possibility of having a separate south-western franchise. I am looking forward to hearing responses on that—I am open-minded about it—but I am clear that the next great western franchise has got to deliver better and more innovative services for people in the south-west. It is why, for example, we are now working with Great Western with a view to reintroducing a passenger service to Okehampton, which is something there is a clear opportunity for.

[Tony Lloyd (Rochdale) (Lab)]

The Secretary of State was very casual in dismissing the comment of my right hon. Friend the Member for Delyn (David Hanson). People who use the west coast main line feel that it is very expensive, because there is so little competition. During this period, when he has imposed a new contract, what will he do to guarantee that there is value for money and that we will not simply see ticket prices go up, when they should be going down?

[Chris Grayling]

All I can say, again, is that this railway line is well used and has seen an increase in passenger growth and customer satisfaction—it is the highest-rated railway in the country. I never want to see fares go up, but pay rises happen each year and there are costs to meet. Therefore, I am not offering a cut in fares, but we will operate a tight regime around the franchise to make sure it is not abused.

[Mr Philip Hollobone (Kettering) (Con)]

May I thank the Rail Minister for agreeing to meet the formidable Kettering rail users group this coming Wednesday in his office? They are going to bring with them constructive proposals for how the rail service to and from Kettering might be improved. May I urge the Secretary of State to recognise that Kettering is the most northerly junction from London between the Corby-to-St Pancras service and the midland main line itself? Thus, Kettering’s status during the next franchise should be enhanced.

[Chris Grayling]

Both my hon. Friend and the Kettering rail users group are powerful advocates for Kettering. I am sure they will be pleased by the investment going in. I was on the line the other day, and I could see all the engineering work taking place north and south of Kettering. There will be much better train links into London and, importantly, far more seats at peak times from Kettering, and we will be looking carefully at how we can ensure that passengers from Kettering have the best possible experience.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

With the collapse of this contract and the collapse of Carillion recently, is this not a moment for us to be clear with the public that we are learning the lessons of these contracting exercises? People are coming in, overbidding or undercutting —or however one likes to put it—to kill off the competition and yet cannot afford to provide these public services. We need to be really clear with people that we have learnt the lessons and understand and that this will not happen going forward.

[Chris Grayling]

Actually, I absolutely agree with the hon. Lady. We do need to learn the lessons—that is absolutely clear. That is one reason why we have shifted much more clearly towards a different risk-based approach on current franchises and why we are moving towards a greater element of quality on current franchises. It is worth saying that the winning bid for the new south-western railway franchise was not the highest bid; it was the highest-quality bid. That is important. We can never militate against corporate failure. What has happened with Carillion has been tragic, but we took a lot of precautions on the rail network and HS2 to make sure there was not a significant impact if the worst happened, which it did; but, yes, of course lessons have to be learned.

[Martin Vickers (Cleethorpes) (Con)]

While privatisation has certainly resulted in more investment in the network, it is also clear that the existing franchise system needs reform. At the moment, we have competition for gaining the franchise, but very little competition in the actual provision of rail services. If we are to have improvements to services such as the direct service to Grimsby and Cleethorpes, which has already been referred to, we need to look again at the franchise system. Does my right hon. Friend have any plans for longer term reform?

[Chris Grayling]

We are looking at the way the franchise system works to try to make sure it is as effective as possible for the future. However, as I discovered, things I would like to do at a number of places on the network are constrained just by the limitations of what is there. My hon. Friend would be surprised by how often it is impossible to deliver a service improvement I would like to deliver, because, in the days of British Rail, a length of track was taken out, a station was closed or whatever. I would not want to go back to the days when services were being axed; I want to be part of a railway and a transport system that is actually expanding and growing, and that is our ambition.

[Jenny Chapman (Darlington) (Lab)]

On passenger satisfaction, is the Secretary of State aware that, this morning, every service on the east coast main line from my constituency to London was either delayed or cancelled? There is no competition on the line, and this is the third time the franchise has failed. Does he not understand that passengers and staff on the line just want certainty, and that is why they are keen on having a public sector body managing the franchise?

[Chris Grayling]

I do not know for certain the cause of this morning’s incident—

[Jenny Chapman]

Signalling.

[Chris Grayling]

Of course, signalling is the responsibility of the public sector Network Rail, so there is a gentle suggestion that the hon. Lady’s proposal may not be the all-encompassing panacea. What our signalling needs is what we are giving it, which is £20 billion of investment over the next four years to renew infrastructure that is old and, in many places, worn out. We are still dealing with the years of under-investment before this Government took office.

[David Linden (Glasgow East) (SNP)]

rose—

--- Later in debate ---

[David Linden]

Thank you very much, Mr Speaker. You are far too kind.

The Secretary of State spoke in his statement about protecting the interests of passengers and taxpayers. When will he look at the example being taken forward in Scotland, where Scottish Government Minister Humza Yousaf has said he is minded to accept a public sector bid to run the railways? What is the Secretary of State’s objection to that? Is it ideology or just an obsession with corporate recklessness?

[Chris Grayling]

As I said earlier, my ideology is very straightforward: I want more investment in the railways, I want more trains and I want newer trains and new opportunities. Of course, the model the hon. Gentleman is articulating would mean less investment in the railways, because we would lose all the private investment in new trains, for example. I do not believe that that is what the public want.

[Sir Edward Davey]

rose—

[Sir Edward Davey]

Thank you, Mr Speaker—that was a difficult choice for you.

The Secretary of State has today acted when a franchiser overpaid, hitting its shareholders. Will he commit to the House that when a franchiser under-delivers, hitting the passengers, he will also act?

[Chris Grayling]

If a company is systematically failing to deliver, yes. However, in many cases—indeed, I suspect I know precisely what the right hon. Gentleman is talking about—the infrastructure is the problem, rather than the train company. I cannot blame one person for another person’s failings; what I can do is try to sort out the failings that lead to these problems in the first place. If we look at the Waterloo line, for example, where the problems last autumn were caused by a technical problem around the Waterloo works, which took about two months to get rid of, that is a good example of where Network Rail problems caused the issues. That is why we need that £20 billion investment in renewing those parts of the infrastructure that are too prone to fail.

Points of Order

Chris Grayling Excerpts

Monday 5th February 2018 Commons Chamber

[Mr Speaker]

I am very grateful to the hon. Lady for her point of order and for her courtesy in giving me advance notice that she wished to raise this issue.

What I would say—and it is very commonplace for me to get points of order of this type—is that I understand her concern to achieve a meeting with Ministers on a matter which is of importance to her constituents. Clearly, she had that prior commitment. It is customary, but not to be guaranteed, that a commitment by a Minister will tend to be honoured by his or her successor. While I would hope that Ministers would be even-handed in their response to Back-Bench Members on both sides of the House, I have nevertheless to say to the hon. Lady that it is not for me to tell Ministers whom they should meet; it is for an incoming Minister to decide whether to continue with a meeting arranged by his or her predecessor.

If a Minister goes to an area and is principally concerned to have what would be called a political meeting with members of his or her party, that may be exceptionally irritating to a Member who is not a member of that party, but it is not, of itself, illegitimate. There is no bar on Ministers undertaking party political activity alongside their ministerial duties.

All that said, I think that this place works best when there is a basic courtesy and respect from one Member to another. The hon. Member for Blackpool North and Cleveleys (Paul Maynard), who was previously the serving Minister, has always struck me as a most courteous fellow, but, looking at the Treasury Bench, I have known the Secretary of State for at least two decades, and we have always enjoyed very cordial relations—he is a most courteous chap. As for the hon. Member for Orpington (Joseph Johnson), well, I think my cup runneth over—the hon. Gentleman is personable to a fault. I cannot understand why neither of them is willing to meet the hon. Lady—I would have thought that they would think it a most worthwhile enterprise.

[The Secretary of State for Transport (Chris Grayling)]

rose—

[Mr Speaker]

It looks as though an explanation is in the offing, because the Secretary of State is perched like a panther ready to pounce. Let us hear from the fella.

[Chris Grayling]

Mr Speaker, as you know, I am regularly around this House. I am sure there will be plenty of opportunities for the hon. Lady to tap me on the shoulder and say, “Would it be possible to have a meeting? There has been a reshuffle.” I would be delighted to organise a meeting with the Department. However, what I cannot offer her is a commitment that, when I attend a meeting with Conservative councillors in a constituency, I will invite the Member from the neighbouring constituency at the same time. I am afraid that that issue is completely separate, but I am very happy to ensure that she has a meeting with Ministers.