Network Rail

Debate between Douglas Carswell and Mark Reckless

Tuesday 13th January 2015 Westminster Hall

[Mark Reckless]

The hon. Gentleman makes a good point, which comes back to how these people are held accountable and whether that is through the withholding of a bonus or some other form of discipline, such as a reduction in salary. I do not know whether we are talking about fines, perhaps on a regulatory basis, or whether he is suggesting that it should be on a criminal basis—that would be very strong for such a management role. What I think my constituents and his want is accountability, and we simply do not have that with the current structure.

From 1 September 2014, we have had a new agreement between the Department and Network Rail, but there is, I believe at least, a lack of clarity about what difference that agreement is making in how Network Rail is held to account. Why do we still have these 46 public members and a similar number of industry members, ostensibly playing a part akin to shareholders in this organisation? There was a vote back in, I believe, November 2009. Thirty-six of those members—I do not know whether turkeys voting for Christmas is a fair comparison here—voted to decrease their numbers, but 36 voted against that, and that has remained the situation ever since, despite the Government saying again in March 2012:

“We therefore welcome the governance proposals that Network Rail is announcing, including: reducing the number of members to a more sensible level, thereby improving the quality of decision-making.”

Has that happened?

In the same report, “Reforming our Railways: Putting the Customer First”, the Government said:

“Network Rail is a private-sector, not-for-dividend company, limited by guarantee…we believe the existing structure is capable of delivering the outcomes and the savings we need without disruptive and unnecessary organisational change... equity is a strong driver of efficiency and value for money.”

How in this unique, convoluted, labyrinthine governance structure does equity operate as a driver of efficiency? We have these industry members that the board reports to, to a degree. One might think it is useful perhaps to have that reporting line to the customer, but whenever those customers’ interests are involved, that member steps aside on the basis of there being a conflict of interest, so how can that governance structure work and is it really a sensible way for us to proceed?

In my constituency of Rochester and Strood, we have had the impact of the London Bridge changes. The disruption has affected some people. The sheer length of the closure of London Bridge station for Charing Cross-bound trains that we are currently dealing with is an enormous issue. We have to hold Network Rail to account for the costs that it applies, which are largely passed on in fares to the customer, but also for the length of time that these projects take. I would be interested to hear the Minister’s view. Could she tell us what she has done to ensure that that closure period is as short as possible and the costs are as low as possible? I just have an innate suspicion of an organisation that is not accountable, or at least not in a way that I can understand or in the way in which other organisations are.

The Minister will no doubt refer to the report, published yesterday by Dr Francis Paonessa, explaining away, defending and, to an extent, putting Network Rail’s side of the story in terms of the disruption that we saw immediately after Christmas, but that report is not addressed to anyone. I do not know: is it for the board of Network Rail, for its members, for the Secretary of State or for Parliament? It does not say. There is a foreword by Mark Carne and a whole series of explanations and, to some extent, excuses, but who ultimately holds Network Rail to account for that? Why is it being paid so much money? Why is that disruption allowed, and do we really believe that this labyrinthine governance structure and the costs that we see in this industry are the best we can do? I believe that this country can do it better, and it is time we got on with that and dealt with some of the governance issues at Network Rail and ensured that it works better.

[Douglas Carswell (Clacton) (UKIP)]

rose—

--- Later in debate ---

[Douglas Carswell (Clacton) (UKIP)]

I am most grateful, Mr Crausby. I think that we have a serious problem with Network Rail. Certainly, on the Clacton line, which affects my constituency, weekend works have overrun several times, which has been very disruptive to commuters trying to get to work on Monday mornings. We routinely have problems and failures on the line and we have seen a lot of weekend closures. That is not very helpful to a seaside town that depends on a lot of weekend seaside tourists coming to visit it. We have seen the problems affecting London stations over Christmas.

My main concern is not so much the rail operators, although I think that in the case of Abellio, they have been insufficiently robust in dealing with their supplier, Network Rail. My main concern is with Network Rail. It is to all intents and purposes a public body, which has recourse to public funds and socialised costs, yet it does not seem to be accountable to the public. It seems to have the structure of a public quango, but the bonuses of a bank. What is fundamentally missing is accountability.

Before Christmas, I wrote a letter to the Secretary of State for Transport, asking whether there were any plans to revisit the Network Rail’s governance structure, because it is not working the way it should and, when errors happen, they are not corrected the way they should be. I got a response that I think was probably drafted, if I can put this kindly, by a private secretary who did not understand the question. I then raised the issue on the Floor of the House last week, and I got a response from the Secretary of State that was perhaps dismissive, perhaps contemptuous, but he is not running a Whips Office any more; these are grown-up questions that demand proper, considered, grown-up answers.

There needs to be a rethink of this organisation’s governance structure. I would be interested to hear whether the Minister has given serious thought to how we might change the governance structure of Network Rail. My suggestion is that it should have greater accountability to Parliament. We could perhaps give a role to the Select Committee on Transport, which could confirm the appointment of senior management to this body. Perhaps this body might appear annually before the Select Committee to appeal for its budget. I do not claim to have all the answers. What I know is that the status quo is not working. There is a lack of accountability, and we need real reform. I would love to hear from the Minister how we can do that. How can we ensure that there is real accountability?

[Mark Reckless]

The Government said in March 2012 that Network Rail would invite other companies to compete against its core business. That contestability is perhaps one way to bring market disciplines to the operator. In the same document, the Government said that we could have vertical integration between operators. Perhaps in an area such as Kent, where Southeastern is the main operator, they could work more closely together or even become an alliance or a single body. I just wonder why that is not taken forward. Has my hon. Friend any insights?

[Douglas Carswell]

My hon. Friend’s suggestion is a good one. There are all sorts of models of accountability. There is the proposal for parliamentary accountability. There is the proposal for restructuring in the way that he suggests, which would provide greater accountability. My fear is that we may have spent longer this afternoon discussing new models of corporate governance in this Chamber than the Minister may have done in the Department over the years. I would like to hear from the Minister what specific thoughts she has about changes to Network Rail’s accountability and governance structure.

Network Rail is a corporatist organisation. It lacks accountability. People who try to do the right thing but who have to travel by rail, who have to buy season tickets and travel on the railway to get to work find that the fares go up but the level of service remains poor. Ordinary people feel an incredible sense of frustration that, for all that they do and all that they are forced to do, the people at the top of Network Rail do not seem to be held accountable for mistakes that their organisation makes. We often hear Ministers talking in this place about accountability to Parliament through the Minister. I suggest that that model of accountability is not working and we need a fundamentally different way to ensure that Network Rail is properly publicly accountable. I would love to hear what that is.

Energy Bill

Debate between Douglas Carswell and Mark Reckless

Tuesday 4th June 2013 Commons Chamber

[Mark Reckless]

I am pleased to follow the hon. Member for Southampton, Test (Dr Whitehead), but I am not sure whether I agree with him about the logic, let alone the coherence, of the Bill or the amendment. He says that many hon. Members will want to vote for the amendment for logical and coherent reasons, but I do not believe that that is so. Many hon. Members—a very high proportion—although rather less of my constituents vote almost always on the green side of any argument. They vote almost ideologically—they support the greener side of any issue under discussion. The problem with that approach is that it has led to a network of legislation and other commitments in this country that are internally incoherent and make no sense. Instead of hon. Members looking at the matter in the round and seeing how they could best obtain their overall objective, be that decarbonisation or otherwise, they support each and every of various, disparate initiatives that add up to a whole that does not make sense, even in terms of those objectives.

Those promoting the amendment say that they want to bring certainty for investors, and yet the Minister, too, says that that is his objective. The Minister mentioned that he wanted to protect and insulate consumers from price spikes. The problem is that the method by which he seeks to do so, and administers in the Bill, locks in high prices, so that for a very long period, whatever the uncertainties, our consumers will be locked in.

The primary purpose of the Bill is not the decarbonisation of electricity, but to set up the contract for difference model that allows the Government to sign long-term and very expensive contracts with all manner of energy producers—the Government will pick winners through an opaque process—and give certainty to investors that our consumers will be forced to pay those prices and have them added to their electricity bills throughout the length of contracts that could contain a change-of-law clause that it might not be possible to unpick in future should we want to do so. That is what worries me about the Bill. We are changing the pie-in-the-sky, Alice in Wonderland policy objectives that the previous Government proposed—only four or five current Government Members voted against them—but we can undo a Government policy objective for 2050 if we find that it does not make sense or is overly expensive. This Bill, however, essentially makes such a reverse undoable because it moves the policy from the sphere of legislation to that of contractual commitments.

It is sensible that the control levy framework is scored as public spending—I welcome the fact that the Government and the statistics office have ensured that. However, under the framework, the plan is to increase the cap on spending from £2.35 billion to £9.8 billion by 2020. All hon. Members who have spoken in the debate have said that the sum is £7.6 billion, but it is not. The sum is £9.8 billion, unless we say, “It’s £7.6 billion in real terms from a previous year.” Our constituents will pay £9.8 billion in 2020. For most of our constituents for the past few years, wage increases have been lower than price increases.

[Mr Douglas Carswell (Clacton) (Con)]

Does my hon. Friend agree that there is a danger that the Bill could mean that poor folk in constituencies such as mine are priced out of heating their homes in order that rich people in London can feel good about supposedly saving the planet?

[Mark Reckless]

Yes, there is an element of that. Moreover, we will be unable to do anything about it, because a future Parliament will be stuck with the contracts.

I fear that the sum might be larger than the £9.8 billion. Policy Exchange has released a well-considered analysis that adds up the total additions to gas and electricity bills within the levy control framework to £16.3 billion. Even that does not take into account two significant factors: first, the carbon tax floor, which is a tax and not in the levy control framework, which applies to spending; and secondly, the cost of banning coal production—coal production will be banned by shutting down plants through the EU directive, and through the domestic and unilateral legislation to ban the construction of new coal-fired plants. We could be looking at amounts equivalent to 4p, 5p or 6p on income tax.

Almost all hon. Members seem to be prepared to drive that measure through, but almost all of my constituents that I speak to do not want to pay those amounts on their electricity bills. We are forcing the measure through. Obviously, lobbyists and the industry understand this complex area, but it is important that Members get to grips with the Bill and the extent to which CFDs will drive higher prices. The more I understand the Bill from the point of view of my constituents, the less keen I am on it.

The amendment confuses two issues, the first of which is the Climate Change Act 2008 commitment to an 80% reduction in carbon gases by 2050. The commitment applies to the whole economy, but the amendment seeks an electricity decarbonisation target. The Minister persuasively drew attention to that inconsistency. If we are looking to hit the 80% reduction target in 2050—the target strikes me as an enormously ambitious and costly one, and I doubt it will be met—we need to decarbonise large sections of the economy, and not just the electricity sector. As part of that, we must persuade significant sections of the heating and transport sectors to convert from current fossil fuels to electricity. However, the amendment would accelerate the decarbonisation of electricity still more, which will shove up the cost of electricity so much that it will be hugely unattractive for those sectors to switch to electricity from their current fossil fuels. Therefore, even on its own terms, the electricity decarbonisation target risks setting back its avowed goal of helping towards the purported 2050 target for the decarbonisation of the economy as a whole.

None the less, one might say in the amendment’s favour that it potentially exposes the contradictions in current policy. We have heard a lot of the “grand bargain”. The hon. Member for Edinburgh West (Mike Crockart) was honest in setting out how much the Lib Dems have gained from it and how little they have given up in consequence. I do not, on balance, support the amendment, but I am not sure why the pass has been sold on so many other issues to avoid having to make a decision in 2014—we are quite happy to kick it down the road and make it in 2016.

The inconsistencies in the proposals are significant. The hon. Member for Brent North (Barry Gardiner)—I am pleased he is still in his seat—suggested that it would be cheaper to go down the route of renewable electricity rather than electricity largely from gas. He cited a Committee on Climate Change report, but did not mention the basis of its calculation. The report states:

“Beyond 2030, bills would fall in a low-carbon system as new low-carbon capacity is commissioned at lower cost than the older capacity (assuming learning in deployment leads to cost reductions). In contrast, for a system with a major share of generation from unabated gas, bills would continue to increase as carbon prices continue to rise.”

The basis of his argument is predicated on the assumption that the massive carbon tax will rise—that is within the system, but also endogenous to his own model.

European Communities Act 1972 (Repeal) Bill

Debate between Douglas Carswell and Mark Reckless

Friday 26th October 2012 Commons Chamber

[Mr Douglas Carswell (Clacton) (Con)]

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

I promote this Bill to repeal the European Communities Act 1972 not merely supported by many outside the House but as explicitly directed by more than 5,000 readers of the Guido Fawkes blog site. This is the first ever crowd-sourced private Member’s Bill. MPs are sometimes accused of not sharing the concerns of ordinary voters or the priorities of those outside the Westminster village, but this Bill was voted on by those outside Westminster.

Withdrawing from the EU can no longer be dismissed as unthinkable. It is no longer a marginal view confined to mavericks, but a legitimate point that is starting to go mainstream. It might have been many months since the House had a frank and open discussion about the merits of our EU membership, but perhaps that tells us more about the shortcomings of the Westminster system than about the cost benefits of being part of the EU club. According to a recent poll by Survation, a majority of voters—more than at any time in the past three decades—now want Britain to leave the EU. Some 51% are in favour of leaving and only 34% want to remain in. That is the highest level of discontent for a generation.

The idea that we should leave the EU might find few champions among the Sir Humphreys in King Charles street, but that just tells us how out of touch the Whitehall establishment has become. If we cannot get new people, perhaps we should try getting new Sir Humphreys. It is not just the people who want out; we hear that members of the Cabinet have started to come round to the view that Britain might, indeed, be better off out.

Britain joined the Common Market because, the people were told at the time, it would be good for the economy. What we lost in political sovereignty would be compensated for by material gain. Looking back, I can understand that view. We joined at a time when western Europe had been growing spectacularly. The Common Market that we joined in the early ’70s could look back at two and a half decades of the most spectacular growth. It seemed that we were joining a prosperous trade bloc. In 1973, western Europe accounted for 38% of total world output, but in 2010 that figure had shrunk to 24%, and in 2020 it will be 15%.

[Mark Reckless (Rochester and Strood) (Con)]

I congratulate my hon. Friend on once again making history in the House. Given what he has just said, how would he respond to the Financial Secretary to the Treasury, who, on the Order Paper today, is inviting us to agree that “tough decisions” are

“being taken…in countries across Europe to…stimulate economic growth”?

[Mr Carswell]

I would be more than a little sceptical of such claims. I am no Keynesian, but the idea that measures being taken across Europe, particularly southern Europe, are producing prosperity and growth seems absurd.

Far from joining a growing and prosperous free trade area, it turns out that we joined a cramped and declining customs union. Far from joining a rising economic powerhouse, we have shackled ourselves to a corpse. Being part of the EU hinders us, rather than helping us to prosper. The common agricultural policy obliges us to subsidise our farmers’ competitors in continental Europe, raising food prices and penalising the poor. The common fisheries policy has caused an ecological catastrophe in the seas around us. The EU social and employment rules have made us uncompetitive. EU directives have struck at our industries, art dealers, slaughtermen, cheese makers, temping agencies and fund managers.

On the EU’s own statistics, the cost of regulation outweighs the benefits of being in the single market by 5:1. According to the European Commission’s own statistics, the cost of regulatory compliance amounts to €600 billion, while the benefits of being in the single market are €120 billion. The common external tariff has forced us behind protectionist walls. Far from giving us free trade, these tariffs of between 5% and 9% are higher now than they were a century ago. At a time when the non-western world is enjoying an extraordinary boom and an extraordinary surge of prosperity and growth, we are forced to watch. Rather than join in, we are cut off by the EU’s mercantilist mindset.

The absurdity is that we pay for the privilege of being members of this poverty-producing club. Britain has paid more into the EU budget than she has received back in every year bar one since we joined. It is not just that we pay; our membership fee for being part of the club has risen by 70% within the past three years. In 2009, our net contribution to the Brussels budget was £5.3 billion; in 2010, it rose to £9.2 billion, and our gross contribution is nearly £20 billion.

European Union (UK Permanent Representative)

Debate between Douglas Carswell and Mark Reckless

Tuesday 10th May 2011 Westminster Hall

[Mr Carswell]

Absolutely. When the chairman of the BBC Trust was appointed recently, it was made clear that he would be appointed only following a confirmation hearing. It is one of those great things—it does not actually require primary legislation, or even a change in the Standing Orders of the House, to bring into effect.

The Liberal Democrats have supported measures to strengthen the legislature over the Executive for as long as anyone can remember; I hope that they remain as committed now that they have joined the Executive. In opposition, the Prime Minister specifically championed the idea of reforming Crown prerogative. In government, he threw his weight behind the idea of confirmation hearings, insisting that Chris Patten face such a hearing before being confirmed as chairman of the BBC Trust. Why not hold a similar confirmation hearing for the man who, more than any other, will be responsible for negotiating our future in Europe? As its own website states, UKRep

“represents the UK in negotiations that take place at the EU level, ensuring that Britain’s interests are heard”.

Kim Darroch, the current head of UKRep, apparently

“represents the UK’s interests at weekly meetings of heads of mission from all 27 Member States.”

At what point do those who profess to represent our national interests answer to the nation for the deals that they strike in our name?

We fight general elections with politicians promising, to one degree or another, to change policy on Europe, yet in what sense are those who make European policy answerable to the people’s tribunes? The conventional model of accountability for European policy via Ministers no longer works. The Brussels agenda is too vast and all embracing, and the scope of deal making too wide for Ministers to track how it works two or three days a week from London. That leaves too many Ministers signing deals that they did not actually author, and nodding through agreements that they have not properly considered.

Ministers in Brussels might make key decisions about what is on the wine list, but in Brussels the real business is conducted all too often by permanent officials. As the great diarist Alan Clark—some of us may have read his books—commented about a Council of Ministers meeting run by UKRep, way back in 1983:

“A succession of meetings, but no possibility of getting anything changed…Everything is fixed by officials in advance. Ministers shaking hands are just window dressing”.

I suspect that very little has improved in the past 28 years.

[Mark Reckless (Rochester and Strood) (Con)]

My hon. Friend speaks as if the appointment of Mr Cunliffe as our next ambassador to Brussels is a done deal. Did he not read two weeks ago in The Sunday Times a profile of the Prime Minister by Anthony Seldon, which said that the Prime Minister was taking a close, personal interest in this appointment?

[Mr Carswell]

I did, and I glean the pages of the newspapers for little hints and Whitehall leaks as to who may fill that vital role. Precisely because we are led to believe that the Prime Minister takes such a keen interest, I have every hope that he may do the right thing and allow the people’s legislature to have the final say on whether that man should indeed occupy that important position.

I suspect that if Ministers and ex-Ministers today were as honest and candid as Alan Clark, they would perhaps admit that much the same happened at the two ECOFIN meetings last May, with officials making key decisions that Ministers nodded through. The Economic Secretary to the Treasury, my hon. Friend the Member for Putney (Justine Greening), wrote candidly in a letter dated 18 July to a Lords Select Committee about the decision to participate in a bail-out mechanism:

“While these decisions were taken by the previous Government, this Government judges them to be an appropriate response to the crisis.”

I am not sure how easily that sits with the Government’s claims that we are necessarily reluctant participants in the bail-outs. Perhaps that conveys the impression that Ministers may change, but the permanent officials and the policy that they determine remain the same.

Requiring Mr Cunliffe—or Sir Jon, I should say—to appear before the Foreign Affairs Committee to explain why he is the best man to negotiate for Britain in Brussels begins a process of changing all that. Regardless of whether Sir Jon is given the job, the process of confirmation hearings would end the appointment and promotion of senior Europe diplomats without scrutiny.

When George Shultz was US Secretary of State in the 1980s, he had a routine for appointing US ambassadors. He would ask them to come into his office and to point to their country on a large map in his office. They would duly point to Kenya, Uganda, Guinea Bissau or wherever. “Nope,” he would tell them while tapping the USA, “this is your country.”

It is perhaps no coincidence that the US, which has always had a degree of legislative control over both appointments and treaties, has a clearly defined strategic vision and a readiness to deploy proportionate force in defence of its interests. Nor can it be entirely coincidental that, when Parliament was supreme and our diplomatic service small and subordinate, we, too, were willing to project our interests. Without effective parliamentary oversight, however, our salaried officials negotiating with Brussels last May managed to make us liable to bailing out a common currency of which we are not even a part.

For too long, Westminster politicians have contracted out large chunks of international relations to the permanent functionaries in Whitehall. Regardless of whether they come from a background in the Treasury, the Cabinet Office or indeed the Foreign Office, we should no longer defer key policy making to unelected officials.

Hugo Young, not a man I quote often, was a convicted —sorry, convinced—Europhile, Guardian journalist, author of “This Blessed Plot” and perhaps the foremost federalist of his generation. He understood how contracting out policy to permanent officials had profound consequences for the development of Britain’s Europe policy. As he perceptively grasped, it meant that Britain’s Europe policy was driven by diplomats rather than by their elected, albeit nominal, masters or bosses:

“By 1963, a corpus of diplomats was present in and around the Foreign Office who saw the future for both themselves and their country inside Europe. The interests of their country and their careers coincided. It was an appealing symbiosis.”

Sir Oliver Wright, who served as ambassador to Germany and the United States, describes the phenomenon as “déformation professionelle”—the skewing of someone’s outlook by his career imperatives. It happens to Whitehall officials as much as to us politicians. The Europeanism of the Whitehall grandee is just one manifestation of his déformation professionelle.

Unchecked by the people’s tribunes, our salaried officials negotiating with Brussels have brought home a succession of dreadful deals. If Sir Jon is to get the role of chief deal maker with Brussels, he must come before this House to explain why he is the best man for the job. In doing so, he might at last start to realign the policy that officials pursue in our name with the kind of Europe policy that the rest of the country would like to see.