Great Northern Great Eastern Upgrade: Compensation

Daniel Zeichner Excerpts

Thursday 5th May 2016 Westminster Hall

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) on securing this debate. In passing, I also commend his courageous stance on child refugees. He made a powerful statement on behalf of his constituents today, and I look forward to the Minister’s response to the important points raised in relation to Network Rail and compensation for local residents.

The Opposition support investment in rail freight. There can be no doubt about its economic and environmental benefits. More than £30 billion-worth of goods a year are carried by freight, generating £1.6 billion for the wider economy. Each freight movement produces 76% less carbon dioxide than the equivalent lorry journeys would produce. I should mention briefly that the loss of coal and steel traffic is a matter of deep concern in the industry, and should be in this House too, especially as the trade in biomass has not met expectations due to the policy decisions made by different Departments.

We can support freight by investing in dedicated infrastructure and upgrading existing routes to free up space on our main lines. Such was the intention behind the Great Northern Great Eastern joint line. I am proud that in government, Labour spearheaded the development of the strategic freight network. It is welcome that some investment has been made in freight, although it is worrying that other projects, such as freight electrification schemes, have dropped by the wayside. However, we must take proper account of the impact that such projects have on local communities. I am sure that all hon. Members sympathise with the position of the hon. and learned Gentleman’s constituents.

Many areas of the country are not well served by rail, and Lincolnshire’s passenger services are certainly inadequate. It is famously home to the Brigg line, which I am told operates passenger services only on Saturdays. Rail funding in the east midlands is proportionately the lowest in the country at just £34 per head, down from £45 per head in 2010. In other words, investment in the region has fallen by a quarter, while fares have risen by the same percentage. It is no wonder that residents and passengers feel aggrieved when they face increases in noise, and yet passenger services are not up to scratch.

In the last 24 hours, freight trains were scheduled to run along the line in question at least once an hour between midnight and 6 o’clock this morning. We have heard today from the hon. and learned Gentleman about the impact of those movements on local residents. He told us that Network Rail was not offering local residents compensation, but compensation is partly a matter for the courts if material loss can be demonstrated—an issue that I know is top of the Minister’s to-do list in relation to diesel emissions. I am sure we all hope it will not come to that.

I would like to a make a few points in relation to Network Rail’s position. Network Rail’s actions have perhaps been referred to in isolation so far, but its spending plans for 2014 to 2019 are part of a plan specified and approved by Ministers in the Department for Transport. Indeed, the completion of the joint line upgrade is commemorated by a ministerial plaque at Ruskington station. The financial consequences of decisions taken in 2012 are well known, after the costs of some projects escalated, and I will return to that.

It is worth emphasising that in September 2014, Network Rail became a full subsidiary of the Department for Transport and is now directly accountable to Ministers in a way that was not previously the case. Conversely, Ministers are also directly accountable in this place for the actions of Network Rail. The Secretary of State has a personal representative on the company’s board, in the form of the Department’s special director. With the Under-Secretary of State for Transport, the hon. Member for Devizes (Claire Perry) chairing the monthly meeting of the Department’s performance delivery group, which brings together Network Rail and train operators, there is no shortage of channels for Ministers to make their opinions known. The Minister present may reasonably say that it is not his or his colleagues’ place to interfere in operational matters, but they can speak about Network Rail’s corporate policies, and I hope he will do so today.

It is clear that the issues raised by the hon. and learned Gentleman could affect the constituency of any Member with a railway line in their patch. I am sure we all want assurance that if our constituents were to raise reasonable requests for compensation or mitigation, Network Rail would give them a fair hearing. When this issue was previously raised, a spokesperson for the company said:

“I do appreciate the concerns of local residents but Network Rail is not funded to offer any form of compensation for carrying out our statutory obligations in maintaining or enhancing the railway.”

Something important might have been said there. We know that Network Rail is facing a serious budget shortfall. Essential projects have been delayed by up to four years in relation to the electrification of the midland main-line and the trans-pennine route, which were euphemistically paused last June and then mysteriously un-paused a week before the Conservative party conference.

The cost of the great western main line electrification programme has increased from an estimated £548 million in 2011 to £2.8 billion last year. As a result, the company is selling £1.8 billion-worth of assets, including some of our best-known stations, and assuming an extra £700 million of borrowing. Maintenance works are being pushed back, which, according to the regulator, has contributed to the 65% increase in temporary speed restrictions on the national rail network over the past year.

There is a certain irony in the fact that freight sites that were acquired by Network Rail at a cost of £220 million just two years ago are now back on the market as part of the wider fire sale, at a potential loss to the tax- payer. We need clarity. Is Network Rail unable to offer compensation or fund mitigation measures because of some point of legal principle, or is the more prosaic explanation that the company simply cannot afford it? If that is the case, I hope the Minister will enlighten the House, because it is clear that there is more to come into the public domain in relation to Network Rail’s financial position.

The hon. and learned Gentleman has raised an important issue that is clearly of acute interest to his constituents who live adjacent to the line. While we want to see more freight on the rail network, his description of Network Rail’s interactions with the local community gives cause for concern, and I look forward to hearing the Minister’s response to those points when he sums up.