Rolling Stock (North of England)

David Mowat Excerpts

Wednesday 12th March 2014 Westminster Hall

[Angela Smith]

Yes. I thank my hon. Friend for that intervention, and I will refer to the situation relating to the Pacer trains later. She is absolutely right that the leasing agreements for franchises such as Northern Rail and TransPennine Express end in 2015. TransPennine Express has been unable to secure leases for trains beyond then, because other operators can offer longer and more financially secure tenures to the rolling stock company, Porterbrook. That issue is at the heart of this debate.

[David Mowat (Warrington South) (Con)]

The hon. Lady is completely right in saying that the 10-month extension period is at the heart of the problem and the commercial issues that it creates for the leasers of trains. However, I do not quite follow in her logic flow how that is related to the east coast main line. Perhaps she could explain that.

[Angela Smith]

It is because the decision to prioritise the privatisation of the east coast main line has led to a delay in the refranchising process for TransPennine Express, which has put it on a short lease—a short-term life—and it cannot plan beyond 2015-16.

--- Later in debate ---

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

As the debate so far has shown, rail in the north has long-standing problems that affect constituencies across the whole region. The problems include the rolling stock: in the north, the average age is 24 years compared with London Overground, whose rolling stock is, on average, 2.8 years old, and with C2C—the London to Essex line—where the average is 12 years. Those figures tell quite a tale. As hon. Members have mentioned, another issue is the availability of appropriate rolling stock after the welcome electrification, on which there is still no clarity.

In the short time available I want to focus on the key issue raised by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), which is the totally unacceptable situation of First TransPennine Express, which serves people across the north with an already overcrowded service, being set to lose 13% of its fleet to Chiltern Railways. It is a consequence of the west coast main line debacle and the way that franchises were changed and decisions were made for directly negotiated extensions of existing franchises. It appears that the interests of the leasing company, Porterbrook, rests with moving the trains to Chiltern Railways, rather than leaving them for the 10-month extension that has been awarded to First TransPennine Express.

That issue has been raised at the Select Committee, which has already written to the Secretary of State to ask several important questions. I want to focus on two of them. First, did Ministers know what was happening? We understand that they did. If they did not, they should have known that something so important was going on. Secondly, what will Ministers do about the situation? It cannot be right that the interests of a leasing company are put above those of passengers. There are other, more general issues about how rolling stock and franchises are organised, but that is the nub of the problem. The interests of the leasing company appear to be in moving these much needed carriages from the north to the south, because it can get a better financial deal.

[David Mowat]

I congratulate the hon. Lady on mentioning Porterbrook, because its role is crucial. I will be interested to hear from the Minister why Porterbrook has taken this decision. I understand that it was offered only a 10-month extension, but it is and has been customary for leasers to give trains to the next company that takes over the lease. Porterbrook was not at risk had it persevered with the 10-month extension and it really does seem an odd decision. Has the Transport Committee had any sight of the commercial terms of the earlier deal with First TransPennine Express?

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

I want to start by saying that the moving of 13% of TransPennine Express trains is an unacceptable outcome. However, we need to understand why it has happened. It is still not clear to me whether it is an intended or unintended consequence—the tail-end result of a number of actions.

I want to respond to the north-south divide issue, on which the hon. Member for Southport (John Pugh) made an excellent speech. There are things that the Government have done that were not happening before, in relation to the northern hub and the electrification of the north; but that only partially rebalances the vast difference in spending per head mentioned just now by the hon. Member for Hartlepool (Mr Wright). That is not something that happened under the present Government; it happened under the previous Government as well, and it is an endemic issue to do with the way the Department for Transport evaluates projects. That is what we need to think about in the next few years.

To return to the main issue, the 13% of TPE trains are being moved because a 10-month extension has been piled on. Porterbrook apparently takes the view that it can get more money by moving the trains to Chiltern Railways, away from TPE. The first question is whether the decision was predictable. I do not fully understand the reason for the 10-month extension, which is why I intervened earlier, to ask how that was related to the east coast main line. However, given the fact of the 10-month extension, perhaps Porterbrook is trying to protect its commercial interests by its actions. In that case, normally what happens, apparently, is that the owner of the trains leases them to the next winner of the franchise; so if TPE lost the franchise, the normal custom and practice would be for Porterbrook still to be protected, because the trains could remain in the north. I ask the Minister why that did not happen in this case, to what extent it was predictable by the Minister or officials, and whether it is only the officials who are accountable in that sense.

Is the contract that has now apparently been signed by Porterbrook and Chiltern Railways irrevocable? Can it be changed? If it cannot, another issue arises. I heard mention of powers under section 54 of the Railways Act 1993 earlier; would they allow the contract to be reopened and re-examined? As I said when I began, the outcome, whether intended or not, is unacceptable.

Porterbrook’s role needs a lot more examination. We shall not have time for that today, but I hope that the Select Committee will understand, when it investigates, what drove Porterbrook to make a decision that is not, on the face of it, rational, given the custom and practice that I mentioned—that whoever might win the future franchise, if there is a change, would in any event use the same trains. Finally, I want to ask whether the Department for Transport has sight of the full commercial terms of the Porterbrook and Chiltern Railways contract, vis-à-vis the Porterbrook TPE contract that is apparently being replaced.

Putting all that to one side, the outcome is unacceptable, and something needs to happen.