High Speed 2

Graham Stringer Excerpts

Thursday 13th October 2011 Commons Chamber

[Esther McVey (Wirral West) (Con)]

The temperature of this debate is running high. In a densely populated country such as England, it will never be easy to come to a decision about transport infrastructure going right the way through the country. That said, just because a decision is hard and opposition is loud does not mean we should shy away from hearing the points made and coming to that decision.

I have listened to a lot of what has been said about the differences between the north and the south, with Members saying that High Speed 2 will not help—but it will. I come to this debate as an MP from the north-west and, in particular, as an MP from Merseyside. This, to us, is infrastructure we need. We are not going to develop because of this infrastructure, but without it our growth will be stymied. As Government Members, we have all voted for a redistribution of wealth—a change from dependence on the public sector to the private sector. We in the north-west need this infrastructure to allow our private sector to grow so that we stop being overly reliant on the public sector. To all intents and purposes, High Speed 2 was meant to aid the decentralisation of that economic power base.

Let me turn to the figures. Yes, the cost of High Speed 2 at £30 billion is a huge amount of money. However, the fare revenue will bring down that cost to £17 billion. Private sector investment is expected to cover a lot of the cost on key parts of the network such as station developments. In response to a recent question of mine, the Secretary of State said that High Speed 2 in its entirety will bring in £44 billion. The latest review from KPMG puts tax receipts alone at between £6 billion and £10 billion per year. That means that High Speed 2 will easily pay for itself. We have not heard about any of that today.

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

The previous three speakers said that one of the disadvantages of the project is that it has come out of a political agreement among the three parties. I think that that is a massive advantage. It is because we do not have political agreement that we have the lowest motorway density in western Europe, a lack of airport capacity where we need it, and in the north-west a railway system running on timetables worse than in Gladstonian times. The country will benefit from this project because the three parties agree with it. Does the hon. Lady agree?

[Esther McVey]

I agree entirely with the hon. Gentleman. We need cross-party support and we also need cross-country support.

I appreciate that infrastructure is not an end in itself, but it is a means to an end. It opens up areas to opportunity and it is for those areas to seize upon that opportunity and capitalise on it. In considering the High Speed 2 development, we must look at the northern hub and connectivity across the north. We must look at the Y shape of the line and link in not just Manchester and Leeds, but Liverpool.

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[Frank Dobson (Holborn and St Pancras) (Lab)]

Besides being the Member for Holborn and St Pancras, I am the Member for King’s Cross and Euston. I feel like I have been here before. About 20 years ago, the sort of people who are now proposing HS2 were proposing that the channel tunnel link should come into a vast concrete cavern to be excavated under King’s Cross station. Many local people opposed it, and when the project team asked what I suggested, I said, “You could use St Pancras, it would be a much better idea.” That was denounced as ridiculous for a time, but in due course St Pancras International was opened and is probably the most magnificent station in the whole world.

Now we have the proposition of HS2. I say to those who are in favour of it that to bring it in to Euston is just about as stupid as the King’s Cross concrete box idea. Euston is already overcrowded, and getting to and from it by either bus or tube is extremely difficult. There are no proposals to improve that. Also, Euston is not on the Heathrow Express line and is not going to be on Crossrail. In recognition of that, the people behind HS2 are proposing the parkway station at Wormwood Scrubs, hereinafter to be known as Old Oak Common, which is on the Heathrow Express and will be on Crossrail. That suggests that they accept that it would be a good idea to have that station as the terminus if HS2 is built. I say that from a strategic and passenger point of view, but I do not pretend that it is my basic point of view. I try to represent the people in the constituency that I have represented for 30-odd years, which I am proud to do.

The proposal involves the demolition of the houses and homes of more than 350 of my constituents. Their attitude, and mine, is not nimby—“not in my back yard”—but “not through my front room”, because that is what is being proposed. If HS2 is to be built, it would be totally unacceptable from a local point of view, and silly from a national point of view, to bring it into Euston.

[Graham Stringer]

Will my right hon. Friend give way?

[Frank Dobson]

No, I shall not, because I want other people to get their speeches in.

I am particularly concerned to end the planning blight that now afflicts the people who live in the area affected and those in the area behind it, Primrose Hill, who may also be disturbed by the developments. I therefore wrote to the Secretary of State asking what guarantees he was willing to give about suitable alternative accommodation for the people affected. I asked whether it would be in the neighbourhood; whether they would remain tenants of the council; how soon such alternative accommodation would be provided; whether people would have to live in temporary accommodation while permanent accommodation was built; what security of tenure they would have; and what the effect would be on their rents and service charges. I got a letter back from him saying, “Oh, all that will need to be looked into in the fullness of time.” As far as I am concerned, that leaves 350 of my constituents on planning blight death row, and we have to do something about that. There is absolutely no reason why the Minister could not say today that she can offer all the guarantees that those people want, and that those guarantees will be one of the conditions of any agreement if the mad proposal finally goes ahead and HS2 comes into Euston.

Bus Industry

Graham Stringer Excerpts

Tuesday 6th September 2011 Westminster Hall

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

It is a pleasure to serve under your chairmanship again, Mr Streeter. It is now 25 years, a quarter of a century, since buses outside London were deregulated following the Transport Act 1985. We have a great deal of experience of what the implementation of the Act meant. By and large, it has been a very poor experience. It is sensible to call it a disaster for the bus-travelling public. In Greater Manchester, in the past 20 years, approximately 30% of the number of people who travelled by bus no longer do so. Bus deregulation has meant higher fares in real terms, a reduction in the networks and less reliability. It is not surprising, therefore, that the number of passengers has reduced.

I will not say that everything about bus deregulation has been awful—most of it has been. If I had to put a figure on it, it would be approximately 80%. A great deal of it has been bad. Bus deregulation has been successful on radial routes in major urban conurbations, where the service in peak times is often better than it was. The old transport authorities and county councils were guilty of having inflexible bus routes and of sending buses to where people lived 30, 40 or 50 years previously, before areas were demolished and rebuilt elsewhere. The commercial flexibility of the deregulated system has had some benefits, but overall the impact has been negative.

How does one disaggregate that from the natural trends in bus ridership in the past 25 years or so? Well, that is fairly easy because we have a precise comparison. When bus services were deregulated in the rest of England and Wales, they were not deregulated in London. Between 1986 and when the office of the Mayor of London was introduced in 1998, the regulated franchise system in London retained its passengers with very little subsidy. From the time of the election of Ken Livingstone in 1998, the number of bus passengers in London increased and the network became more extensive because a considerable increase in subsidy was put into the system. The period after 1998 does not offer an exact comparison, but the period between 1986 and 1998 offers a very good comparison. Bus passengers were retained in this city, but they were not retained elsewhere. The simple conclusion is that that is because of bus deregulation.

Behind all the statistics that I will use in my speech, there are real people. If people want to get a sense of the damage that has been done to individual lives by the loss of bus services—it affects family life and the ability to get into employment—I suggest that they read the recent Transport Committee report, “Bus Services after the Spending Review”. That report has example after example of people’s lives being blighted, their ability to obtain employment diminished and their ability to see their families reduced because bus services have disappeared.

I thank the officials at the Passenger Transport Executive Group, Sir Howard Bernstein, chief executive of Manchester city council, and his officials at Transport for Greater Manchester. They provided a lot of the statistics in this speech about transport in Manchester and transport nationally. Two thirds of all public journeys take place by bus, even after the reduction in numbers following deregulation. We are therefore talking about something that is important to many people’s lives, often the poorest people in our communities, and something that is vital to the economy.

My main point in this speech is that there will be cuts to an already reduced system. I do not want a sterile debate in which the Government say that it is all the fault of the previous Government that they are making cuts, and we on this side of the Chamber say that the cuts are too fast and too deep. Both those points have their place. What is interesting is that, because we are dealing with cuts to a deregulated system, it is possible to diminish the impact of those cuts by looking carefully at what are likely to be the recommendations of the Competition Commission, and by trying to use more effectively and directly the facilities in the Local Transport Act 2008. That is what I want to concentrate on.

To get some sense of the size of the impact of the cuts that are likely to happen, I will go through what the bus system is faced with. First, there is the 28% reduction in local authority grants, which will affect buses. Then there are changes in the formula for concessionary travel. Estimates on the impact that that will have on the bus system vary between £50 million and £100 million. The best estimate is approximately £77 million. From 1 April 2012, there will be a 20% reduction in the bus service operator grant. In passing, I say to the Minister that BSOG is not used in the most effective way. As a general grant to the bus industry it is fine—it helps. However, it would be better if it were given to transport authorities and passenger transport executives so that they could direct it to environmental improvements or particular enhancements to transport, rather than it just being given generally to bus companies.

Those are the three big areas where there will be cuts, but there is also the abolition of the rural bus grant and the 50% reduction for small and medium-sized public transport schemes from the integrated transport block. There will, therefore, be major changes and reductions in bus services in the coming years. PTEG has tried to estimate what will happen and its conclusions are pretty stark and frightening. It estimates that by 2014 fares will have gone up by 24%—nearly a quarter—in real terms, there will be a decline in service levels of 19%, which is nearly a fifth, and patronage will be down by about a fifth. That is in metropolitan areas, which is what is covered by PTEG.

According to the Transport Committee report, 70% of local authorities in non-urban areas have already cut their grants for buses and transport. My hon. Friend the Member for Hartlepool (Mr Wright) is present and I look forward to listening to his contribution later, but in Hartlepool 100% of the bus services subsidy has been removed, as is the case in Cambridgeshire, although I understand that that is currently subject to legal challenge. In Somerset, North Yorkshire, Shropshire and Northamptonshire, there have also been significant cuts, while in Luton and Peterborough there have been no cuts. The situation around the country is varied but, overall, it looks pretty bleak, given the PTEG projections for urban areas and the known cuts identified in non-urban areas by the Transport Committee.

Transport is a function devolved to local transport authorities but, I ask the Minister as the Transport Committee did, surely central Government have a responsibility, not to make local decisions but to know what is happening in every area, so that when the Government make decisions about their grants and where they spend their money, they can do so as accurately and effectively as possible, and that requires knowledge.

The Office of Fair Trading decided that it would refer the bus industry to the Competition Commission. There was already a great deal of evidence from Greater Manchester and other places that monopoly behaviour was effectively taking place. It has taken the competition authorities a long time to get around to looking into it. More than 10 years ago I wrote to the competition authorities and asked them to investigate—I was not the only person who did that—and they said, “Please produce written documentation of unlawful agreements between different bus operators.” Of course I could not do that—those documents would not be available to a Member of Parliament or anyone else, if indeed they existed—but by looking statistically at what is happening, we can see all the signs of real monopoly behaviour, and that is what the Competition Commission has found.

I will go through some statistics for Greater Manchester. In Oldham, for instance, 85% of the services are provided by First. In my own constituency the figure is about 67%, in Salford 77% and in the whole of north Manchester 70%. In south Manchester, we can see a mirror image of those figures, with Stagecoach monopolising: in Stockport it provides 82% of services, and in the whole of south Manchester about 74%.

My constituents suffer a real disadvantage in fare levels. I was told when I put my case to First that not many people buy the one-off fare, but that people buy weekly tickets. Even the weekly tickets bought from First by people in north Manchester are 47% higher—£17, compared with £11.50—than the price people pay in parts of south Manchester, where the average income is about £10,000 higher than for my constituents. So if they need to use buses, they are paying twice the percentage of their income on fares. Frankly, there is little on-road competition, which is what was originally intended to be the driver of better, more effective and more responsive services under bus deregulation.

Another indication of monopoly or anti-competitive behaviour is what in the system is called gaming the market, where bus companies use the fact that two different transport systems are in operation—the deregulated system, under which anyone can operate a bus service having given a small length of notice, and the subsidised, tendered services. In designed deregistration, the bus company is really saying, “We can make more money from this service, because it is an important service for the public, if we deregister it and then get the transport authority to tender it out.” Then, if it loses the tender, and a tendered service is running, the company reregisters the services, or parts of them, to undermine the subsidised service. An awful lot of such anti-competitive behaviour goes on.

As I said, the competition authorities were slow to get off the mark and to look at the area, but they have got off the mark, and credit to them for that. They have found that profits are much higher in the deregulated area than in London. In the past 24 hours Go-Ahead, for its out-of-London services, has just announced record profit levels of up to 10.4%.

[Mike Weatherley (Hove) (Con)]

The hon. Gentleman mentioned that anyone may enter the bus market, but does he agree that one of the faults of deregulation was that it did not create a perfect market? There are significant barriers to entry, even if one does not go through the subsidised route but sets up an independent service.

[Graham Stringer]

The hon. Gentleman makes a perfectly sound point, which I will come to in my conclusions. The large operators own the garages and can afford to subsidise competition if there are new entrants to the market—it is a long way from being perfect competition.

I was talking about the profits of Go-Ahead but the profits of Stagecoach are truly staggering, especially when the economy is flatlining and we have been in recession. They are up to £153 million from £126 million, which is an increase from 14.4% to 17.1%. In the friendly debates I have with Brian Souter of Stagecoach, he once called Gwyneth Dunwoody and me “dinosaurs” because we believe in going back to a sane system of regulated buses—he even set up little models of dinosaurs. I do not know how many people in the Chamber remember the film made of the James Clavell book, “King Rat”. When the Japanese prisoner-of-war camp in Singapore was liberated by allied forces, there was one very fat prisoner among all the other prisoners, whose ribs were showing—they were starving to death. At a time of austerity and the economy not doing well, Brian Souter and Stagecoach are the King Rats of the British economy, doing enormously well out of public subsidy when everyone else is struggling to get to work and make a living. They are, in effect, subsidy junkies.

The figures in the Transport Committee’s report show that the bus industry outside London receives from the fare pot about £1.8 billion in a total income of £3.4 billion, so 47% of the bus industry’s income comes from taxpayers. It is as simple as that. Whenever a bus leaves a depot, an average of 50% of its costs are paid by taxpayers. Given what has happened with deregulation, is that sensible use of taxpayers’ money? Are we receiving the best possible value?

[Mr Andrew Turner (Isle of Wight) (Con)]

The hon. Gentleman may not know that in my constituency there is only one bus company for the whole island, and there is no competition. What prevents large companies from competing in the parts of Manchester that he mentioned, where that seems not to happen?

[Graham Stringer]

I am the wrong person to ask, but my view is that companies do not compete because then they can exploit the market using informal agreements or in nods and winks, by putting up fares in their own areas without the cost of competing. The statistical evidence in their profits and fare levels is that they are exploiting the market compared with what happens in the London market. That is voluntary. Companies are happier operating in their own areas. They say that they do not like the extra dead mileage if buses must be driven into areas where other companies operate from their depots, but that is a weak argument. They simply do not want to compete because it is more profitable for them not to.

The making of high profits was the first major finding in the Competition Commission’s interim report. The second was that many operators face little or no competition. It is welcome that the commission finally got around to writing the report, but it is flawed in many ways, as such reports tend to be because they look at statistics over the past five years, but the economic world is now different and more difficult. They estimate that anti-competitive behaviour costs £70 million, but they do not include the cost when people abandon buses; if that were included the real cost to the public would be much higher. In addition, they do not look at how the current bus system inhibits the use of simple integrated ticketing, which would drive up the number of passengers using buses.

I have a few requests for the Minister. First, when the Competition Commission’s report is published and he is considering what to do about buses, will he bear in mind that there is a lot of information out there, but it has to be culled at great expense from surveys and other sources, because the bus companies keep much of their information private, despite receiving 50% subsidy? Good-quality information is vital for local transport authorities when planning their services.

My second request is for through-ticketing. We know what brings people back on to buses: a simple, low-fare structure with through-ticketing. It is estimated that if fares are cut by 20%, passenger numbers increase by 13%, with a further increase if the ticket structure is simplified with through-ticketing. What can the Minister do to help that?

My main question, which goes back to the beginning of my speech, is how can the Minister support and help to build on the powers and structures in the 2008 Act? I know that he understands the legislation thoroughly, because he and I served on the scrutiny Committee. There are many barriers facing South Yorkshire, West Yorkshire, and Tyne and Wear passenger transport authorities. They are considering moving back to a regulated system of quality contracts, because the buses, bus drivers and depots are in the hands of the bus companies, which have rubbished the Competition Commission’s interim report—well, they would—and are threatening a scorched earth policy for any passenger transport executive or authority that decides on re-regulation. What help can the Minister give those transport authorities?

Everyone knows that we are dealing with a coalition Government. The Minister’s views are well known from the time before he was a Minister, as are the Secretary of State’s. The Secretary of State is more of a free marketeer, and the Minister believes in the instruments in the 2008 Act, but when the bus industry is declining, the balance between the two parts of the coalition, resulting in a watching brief and agnosticism on the industry’s future, is not satisfactory. I should be grateful if the Minister told us his view.

My final point is that the present Government and Governments for the past 25 years have not done enough for the quarter to one third of people who do not have access to a car and rely completely on buses. One of the most appalling sarcastic comments made by the last Prime Minister, in response to a Birmingham Member who asked what he would do about the loss of a bus service in Birmingham, was that he would immediately call a Cabinet meeting. He said that sarcastically, but Cabinet Ministers should discuss bus services. They are vital for many millions of people in this country and they have been neglected or given too low a priority for long enough. I look forward to the Minister’s support in protecting and helping the bus industry at a time of inevitable cuts. That is possible.

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[Mr Wright]

The hon. Gentleman makes an interesting point, but I would suggest that we have had more or less the possibility of open competition and certainly deregulation since the mid-1980s. I accept the point that perhaps that has not meant free and open competition and there may be barriers to entry because of the structure—the way in which the legislative framework has been put in place. However, looking at the examples from my constituency, I would suggest that there has been market failure and, as a Labour politician, I would suggest that where there is market failure, the state should intervene. The hon. Gentleman and I will possibly disagree in our analysis of the reasons for that, but certainly we would agree that there has been market failure. I will ask the Minister, in trying to respond to the issue of market failure, to consider a number of things.

[Graham Stringer]

I acknowledge the weight of my hon. Friend’s remarks. Does he agree that where serious competition has taken place in Glasgow, Edinburgh, Preston and Manchester, where bus companies have set about competing with one another and where, in the short term, bus fares have dropped and there has been a conveyor belt of buses, the consequences have been worse congestion and pollution and then one bus company withdraws?

[Mr Wright]

That is one of the fears because of the way in which the bus market currently operates, with the dominance of four or five big players in the market. They have the bargaining power and, frankly, the cash to be able to hound smaller operators out of business. For example, in the north-east a number of years ago, a new and ambitious operator wanted to come into the market, but the big dominant operator of the time, which was Stagecoach, hounded it out by providing zero fares—free fares—at certain times. Stagecoach had the cash flow to be able to do that, so there is market failure, with domination by big players.

I hope that the Minister will respond to a number of points. I urge him to be bold when considering the Competition Commission’s report on bus services. He needs to examine why there has been so little take-up of the quality contract partnerships introduced by the previous Government. I urge him to undertake further work to see whether such partnerships need to be made easier to operate and enforce. To help with that, the Minister should consider whether franchising of local bus services within an area such as Hartlepool could provide a better quality of service and ensure that local authorities can determine the priorities on behalf of their residents. The Government need to be bold and radical for the good of passengers in Hartlepool and elsewhere. I strongly believe that they should re-regulate the market to ensure that local bus services are run for the benefit of passengers and communities, rather than purely for shareholders.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I thank the hon. Member for Blackley and Broughton (Graham Stringer) for raising this important subject and doing so in his usual measured and thoughtful way. His knowledge is considerable, as I discovered when we served in Committee on the Local Transport Act 2008. I am delighted to have rather more time than I thought I might to respond to the debate.

The Government are committed to supporting local bus services and markets through concessionary travel reimbursement, direct operator subsidy and our funding of local government. However, as I have made clear before, with those significant amounts of public expenditure invested in the bus market, it is only right to consider whether it is delivering the best service for bus passengers and best value for the taxpayer. The Competition Commission has identified, in its provisional findings, aspects of the local bus market where competition is restricted, prevented or distorted. That cannot be good for passengers if it means that they enjoy less frequent services and have to pay higher fares as a result. If that in turn means that fewer people are able to make use of their local bus, and instead have to travel by other means or cannot travel at all, that has wider, and unwelcome, societal and environmental impacts.

Of course, bus markets are local in nature. Many of the effects will be localised, and I have encouraged the Competition Commission to set out where and in what circumstances it believes competition is failing to materialise. It is important that it should be specific in its comments in the final report. One of the concerns raised by the Competition Commission, which I share, relates to profitability—a point raised by the hon. Members for Blackley and Broughton and for Hartlepool (Mr Wright). Excess profitability is an important indicator of ineffective competition. Evidence commissioned by the Department for Transport suggests that profits are particularly high in the largest metropolitan areas, so I have asked the commission to consider whether it can identify specific areas where ineffective competition is most prevalent. A key test of potential remedies will be whether they result in more people travelling on buses and bring about wider benefits to society by helping to create growth and cut carbon emissions.

The inquiry is ongoing, and with representatives of local government and passenger and bus operators, my Department continues to engage with the commission as it prepares to publish its provisional remedies later this month. Hon. Members will understand why I do not propose to anticipate those remedies in my remarks today: it is important that we let the commission, as an independent body, come to its conclusions on the basis of the evidence placed before it. However, I will take this opportunity to respond to the points raised during this debate.

The Local Transport Act 2008 made changes to the provisions of quality contract schemes and partnerships and introduced new forms of legal partnership working. It came into force only in 2009, and the Competition Commission has indicated that quality contracts and quality partnerships may be remedies for the competition problems that it has identified. It is therefore sensible to wait for the final outcome of the inquiry at the end of the year before deciding whether further changes to the regulatory regime are needed.

The hon. Member for Blackley and Broughton asked about the coalition policy as it relates to the 2008 Act. It is on the public record and therefore no secret that the two coalition parties, when in opposition, had differing views on the Act. The Conservatives were more sceptical about the value of quality contracts than were the Liberal Democrats. When the coalition was formed, the decision was taken that, as the process was already under way, the sensible course of action was to wait for the Competition Commission to analyse the market and produce its findings, so that we could proceed on a sound basis, free of prejudice, relying on proper analysis and collated evidence. That remains the position. I do not accept that that is agnosticism—the term used by the hon. Gentleman. It is a sensible decision to wait for the evidence, at which stage we shall analyse it internally and decide what action, if any, we should take in response to the findings of the commission. That process is under way in relation to the structure and landscape of the market.

The hon. Gentleman no doubt expects me to make the point that the landscape about which he and his colleagues complain is largely the one that their party’s Government created, which we inherited. He and the hon. Members for Hartlepool and for Denton and Reddish (Andrew Gwynne) will also be aware that it is on the record of the Local Transport Bill Committee that, had the amendment that I tabled been accepted, many of the actions that Opposition Members now ask for would be unnecessary—the measures would already be law. We did not make more progress at that time because of the then Government’s reluctance to go further.

Before the Competition Commission report is published, however, I want to encourage joint working between bus operators and local authorities. We have seen good results, with local authorities and operators working effectively in partnership to improve bus services in places such as Birmingham, Brighton and Oxford.

My hon. Friend the Member for Hove (Mike Weatherley) and I are lucky in having good bus services in our area. I too pay tribute to Roger French, who has been most effective in driving up bus patronage. He has shown that it can work and that the moaning Minnies who say that bus patronage is going into decline are wrong, as the examples of Brighton, Hove and other places prove. My hon. Friend complained about the effective monopoly that operates in Brighton and Hove and the difficulties faced by the Big Lemon service; he clearly wants to give the Big Lemon aid in some form. The monopoly of which he complains is not terribly different from that which the hon. Members for Hartlepool and for Blackley and Broughton complained about. One operator having an 85% to 90% market share inevitably makes it difficult for other companies to enter the market, and it can be difficult to challenge. My hon. Friend is right to say that the cost of fuel does not relate to the route on which it is used and that differential pricing is clearly a result of competition along those routes. The absence of competition clearly enables Brighton and Hove to charge a higher rate for its bus services. That is a striking example, but I shall ask my officials to ensure that the entire report of our debate is passed to the Competition Commission so that it can see what has been said and take it into account, albeit quite late in its deliberations.

I want to encourage more of that sort of partnership activity so that bus passengers get the services that they deserve and expect. More partnerships need to tackle punctuality, which is the No. 1 priority for passengers and which can be compromised by any number of issues, from road works to poor planning. It is not clear whether the 81% punctuality figure referred to by the hon. Member for Hartlepool was the result of a failure of the bus company or of, for example, congestion, which is a problem for the local authority. Punctuality is not a matter only for the bus companies; there is also a local authority aspect. That demonstrates the need for authorities to be fully involved and to work sensibly with bus companies in their areas.

The Government are looking for operators and local authorities to work in partnership, sharing punctuality and traffic management data to benchmark and improve performance. To facilitate this, a significant number of Vehicle and Operator Services Agency examiners are being trained to engage proactively with operators and local transport authorities to ensure that proper procedures and lines of communication are in place. That new approach is being introduced gradually and has been in place in the north-west since June. I assure hon. Members that traffic commissioners will continue to take effective enforcement action when performance is poor, and that any lessons learned from the north-west will be absorbed before full roll-out takes place. The hon. Member for Hartlepool may want to contact his local traffic commissioner if he is concerned about punctuality in his area.

As the hon. Member for Blackley and Broughton said, another important concern for passengers is integration, especially in fares and ticketing. I share his view that what he described as a simple fare and ticketing structure, with through-ticketing, can be effective in driving up passenger numbers. I absolutely agree and the Department is focusing on that aspect. My vision is of seamless end-to-end journeys, with tickets being available at a decent price and being valid on all services in a city, not only those of the dominant operator.

I shall continue to encourage the development of integrated multi-operator ticketing schemes, and my officials are actively engaged with the Competition Commission and bus operators in helping to remove barriers to their successful implementation. I firmly believe that bus tickets should be valid with more than one operator, but they should also be valid over much wider areas and easy to use. That will be of clear benefit to passengers. That is why I am committed, with operators and public sector bodies, to delivering the infrastructure necessary to enable most public transport journeys to be undertaken using smart ticketing by December 2014.

In many places, including in Greater Manchester and other large metropolitan areas, smart ticketing is already being introduced by local authorities and major national bus operators. It is fuelled by the smartcard incentive offered by the Government through the bus service operators grant and other pump-priming schemes that we have offered since the election. The hon. Member for Blackley and Broughton referred to the use of BSOG, saying that there was a better way of targeting it. If I understand him correctly, he believes that it may be more effective to hand it to local authorities to be used for general transport uses. However, it is difficult to square the complaint that the money being made available for buses is diminishing with the argument that what is available should be deployed for wider transport purposes.

[Graham Stringer]

I apologise to the Minister if I did not make my position clear. I suggested handing the money to PTEs and local transport authorities, not for general transport use but for the targeted improvement of bus services. It should be used to help particular bus services, not for other transport schemes.

[Norman Baker]

I am grateful to the hon. Gentleman for that clarification; he wants the money to be ring-fenced for bus services.

My right hon. Friend the Secretary of State has asked me to initiate a review of BSOG to see whether it is deployed to the best advantage. As far as possible, our time scale is designed to coincide with the Competition Commission report, so that if changes are necessary to the landscape of the industry or to that form of financial help, things could be combined at that stage. To that end, I have been in discussion with the industry and local authorities to hear their aspirations and views on the matter. I shall try to come up with a solution that is satisfactory for both parties—I shall then go on to deal with the Israel-Palestine problem. I hope that we might make some progress. It is in the interests of local authorities and bus operators to come to a sensible arrangement on BSOG.

We understand that good bus services can contribute to both of the Government’s key transport priorities—creating growth and cutting carbon emissions. By providing an attractive alternative to the car, not only can we cut carbon but we can unclog the congestion that chokes off our local economies. However, it must be remembered that we also have to deal with the budget deficit.

I do not want this to be a sterile debate—a phrase used by the hon. Member for Blackley and Broughton—about why we are where we are, but I have to respond to the comments of the hon. Member for Denton and Reddish, the Opposition spokesman. It would have been helpful if he and his colleagues had acknowledged some responsibility for the financial situation in which we find ourselves, rather than pretending that the cuts are somehow malicious and optional, and could have been avoided. That is not the case. I would like to think that we could work across the House to ensure that the impact on bus services is minimised in the constructive way suggested by the hon. Member for Blackley and Broughton.

I shall deal briefly with the three elements of funding referred to earlier. About 80% of bus services are run commercially. I will leave aside questions about the consequences of that for the market and for local government support. The money from the Department for Communities and Local Government is not relevant to those services. At present, local authorities rely on BSOG. The reduction in that grant was trailed long in advance, at the time of the spending review, and it will not take effect until April next year. There has been an 18-month lead in, and the cut was much less than the bus industry anticipated—and much less than Members of Parliament expected. At the time, the Confederation of Passenger Transport, which represents the bus industry, indicated that the cut was manageable and could be introduced without a diminution of services or general fare increases. That is what it said. It is important to point out that bus companies can take the BSOG arrangements in their stride. That should not, therefore, lead to cuts in services.

The basis of the reimbursement arrangements has not changed one iota. The hon. Gentleman will know that primary legislation stipulates that bus companies should be no better and no worse off from handling concessionary travel. That legislative requirement has not changed, and local authorities are required to reimburse bus companies accordingly. All that has happened is that the Department for Transport has issued some guidance to help local authorities to calculate how they should reimburse bus companies, and that, as Members will appreciate, is quite a complicated business. The ultimate test remains the same. If bus companies are unhappy with the reimbursement they have received from a local authority, it is open to them to appeal and their case will be handled independently.

One of the changes that I have made is to ensure that, if there is an appeal, it is possible for a local authority to win. Hitherto, when bus companies have appealed, their contribution has either been reduced or it has stayed the same. Now the appeal process can assess whether local authorities have had to pay too much and reduce the costs to them. That seems to be a much fairer way of dealing with those matters. The appeal process is open, fair and independent and can deal with any complaints that people have.

As for cuts in funding to local authorities, we all accept that local authorities have a challenging settlement. That is particularly the case, may I say for the benefit of the Member who has disappeared, for rural areas and for those services that are supported by local authority funding because they are not commercial to run. Having said that, the pattern of responses from local authorities across the country is varied. Unfortunately, some councils have taken something of an axe to local services, while others have made very few cuts. That is a matter for localism. It is up to local councils to exercise their increased freedom and to decide how they are going to spend their pot of money. We will increasingly see a situation in which one person living in an area will say, “Why is it that my county council has cut these bus services when the county council next door has not cut bus services at all?” That is a perfectly proper question to ask and one that we are trying to encourage in our drive towards localism.

[Norman Baker]

I well understand why my hon. Friend made that point, which has been made by a number of others. All I can say is that the Prime Minister has made it clear that the concessionary fares regime for local bus travel is not to be compromised and that requiring a charge would do just that. All I can undertake to do is to ensure that my hon. Friend’s comments are passed up the chain so that others are aware of that view.

The hon. Member for Blackley and Broughton mentioned the monitoring of cuts. Let me assure him that we are taking steps to establish the picture. I have asked my officials to do so on a rolling basis. We are checking where services are being significantly cut and where they are being protected. Ultimately, it is a matter for localism, but we have to understand what is happening.

The hon. Gentleman failed to mention the introduction of a £560 million grant, a significant amount, from the local sustainable transport fund, which can be used to drive up the number of bus services in a particular area as part of an integrated package to create growth and cut carbon. That has been well received. If we take the total package of measures under the loose heading of sustainable travel, the £560 million represents an increase in funding compared with what was available under the previous Government. Therefore, despite the difficult economic circumstances and the budget cuts that have taken place, we have made an increase in funding, which has been well received by councils. Every council that could qualify under that scheme, with the exception of the Isles of Scilly, has applied for funding. We had a good first round. I am happy to say that, in Manchester, the key component bid was approved, which is a cycling project for the city. Moreover, a large project from Manchester has applied for a significant amount of money and it has been shortlisted for the final approval process. Therefore, steps are being taken to address the issue of sustainable transport more widely as well.

[Graham Stringer]

I am not sure whether the Minister is referring to the cross-city bus scheme in Greater Manchester. If he is, will he agree to have a meeting with me to discuss it, because the scheme is not as good as it could be and it is not well thought out?

[Norman Baker]

I am happy to say that I was referring to an entirely different amount of Government funding that may be forthcoming depending on the outcome as regards the local sustainable transport fund. However, I am happy to meet the hon. Gentleman to discuss the particular scheme. He just needs to contact my office to arrange a time.

I am interested that both Conservative and Labour Members have indicated unhappiness—perhaps for different reasons—with the present arrangements in the bus market. Their comments are useful and timely given the nature of the Competition Commission inquiry and its report. I will pass on to the commission a copy of the transcript of this debate from Hansard so that it is aware of the comments that Members have made. I will continue to study carefully the representations not just from hon. Members but from people outside to ensure that we proceed in a sensible way.

[Graham Stringer]

The Minister is being generous with his time. Both he and I have had a lot of time in this debate because it has not been as well attended as it might have been and that is because it clashed with the Transport Committee, so some of the hon. Members who would have been most interested in contributing are on duty elsewhere. Mr Streeter, I wonder whether we could tell Mr Speaker that this has happened and in future scheduling of these debates, we could look to avoid such clashes of obvious interest.

[Norman Baker]

That is not a matter for me, but the comments have been heard and will no doubt be passed on.

The hon. Member for Denton and Reddish mentioned the situation in London. He was advocating that the powers that are held by TFL might be extended to the rest of the country, which would be quite a change in the arrangements. I am not quite sure whether that is official Labour party policy. If it is, I am interested that he has put it forward today. Although his argument interests me, it is not quite the panacea that some people think. For example, when competition started in Manchester, we heard how there were queues of buses down the main street. I have to say that we get queues of buses in London, many of which are empty, because they have, in some cases, been overprovided, so similar problems arise with one operator—TFL. It is also the case that London buses are much more expensive to run overall and there is quite a cost to the public purse. Although I am not negating the argument in total, I am just making the point that counter-arguments have to be taken into account when we consider the landscape after the Competition Commission has reported.

To conclude, buses matter to this Government. My focus is on ensuring that the right funding and regulatory framework are in place to ensure that passengers receive the best possible service, and that taxpayers receive the best possible value from public expenditure.

Oral Answers to Questions

Graham Stringer Excerpts

Thursday 23rd June 2011 Commons Chamber

[Mr Hammond]

I think my hon. Friend’s question betrays the fact that he has already made his own assessment. I believe that this suggestion was made in a response by regional airports to a consultation on APD conducted by my right hon. Friend the Chancellor. No doubt the Chancellor will respond to those suggestions in due course.

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

I think it is an excellent suggestion. There is huge capacity in the regional airports and since there has been complete freedom to fly anywhere in Europe, it has been difficult for Governments to use that capacity. Does the Secretary of State have any ideas how that extra capacity in regional airports can be used to the benefit of the UK economy?

[Mr Hammond]

The hon. Gentleman is absolutely right: there is significant capacity in our regional airport runways. We have to recognise that the demand for aviation growth in the UK is not just an aggregate demand—it has a certain geographical distribution—but I am keen that the regional airports play a role in meeting that demand. I believe that the high-speed rail project will help them to do so.

Railway Expansion

Graham Stringer Excerpts

Wednesday 27th April 2011 Westminster Hall

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

The hon. Gentleman makes an interesting case and might be getting to the point that I want to make. Is the real reason why there has been little investment in new lines over the past 30 years or so because of the methodology used for new investment? A terrific amount of investment is going into the railways at the moment, but nearly all of it is for the south-east, because the criteria used are about capacity and overcrowding, not about economic development, which is the point he was making. Does he agree that a rebalancing of the criteria of economic development and of overcrowding is needed because otherwise all the money will go to the south-east?

[John Pugh]

I heartily endorse that sentiment, as well as the hon. Gentleman’s point about methodology. He makes a very good case. However, the Government are in favour of rebalancing the economy, and they accept that one of the ways of doing so is through infrastructure capital projects, particularly on something such as rail. It is sad that really big rail schemes are being progressed in the south yet very little is happening up north, apart from such necessary developments as the Manchester hub.

It is fair presumption that if we want to move people around the country, laying down metal track and then shifting people around in large, uncomfortable iron boxes need not automatically be seen as the best approach. However, if we took that presumption to its logical conclusion, it would debar any tram schemes, although in places such as Manchester they have been extraordinarily successful. Even if that presumption is in place, it has to be tested, although that rarely happens. It is contested, however, when we come to the really large schemes such as Crossrail, high-speed rail and the Thames Gateway, on which the Government seem to be prepared to proceed—most hon. Members would support that.

To be fair, the Government have looked at the area I am speaking about: restoring curves. During the passage of railways legislation under the previous Government, Tony McNulty, the then Transport Minister, let it slip that the Department for Transport was looking closely at some of the schemes to see if they had any value. The Government were taking the folders out of the cupboard, dusting them down and seeing what worked and what did not. However, since that inadvertent confession of what the Government were up to, none of the research has seen the light of day, as far as I know. There is a presumption against such development, and that presumption is not argued but insidious. It was actually contested just before the general election by my hon. Friend the Member for Lewes (Norman Baker), who is now Under-Secretary of State for Transport. He expressed his support for a range of smaller schemes, some of which I have mentioned already.

Being completely fair, there is evidence that rail travel is more expensive than it looks, given that it has a hidden public subsidy, as the Minister will no doubt say at some point. However, there is rather less evidence than there used to be that empty carriages are being carried around unnecessarily. I remember the right hon. Member for Edinburgh South West (Mr Darling), during his short spell as Secretary of State for Transport, calming things down by suggesting that he was going to contract the network further because parts of it were full of carriages of fresh air. No one is saying that any more. However, a man would never lose money by betting against the Department for Transport’s dismal projections on rail use. I recently looked at some statistics that demonstrated that even branch lines, which are one of the archaic aspects of our structure, are showing increased use.

There is a case that needs to be answered. Many hon. Members during their time in Parliament make cases for specific schemes, but what happens when we question the institutional inertia on the topic and when rational people bring forward considerations? Whether or not it is because of the methodology used, which the hon. Member for Blackley and Broughton (Graham Stringer) mentioned, hurdles get put in place.

In the past, the Department for Transport has asked me for a business case. Sensibly, I have asked what needs to go into a business case, but the Department is completely incapable of telling me, so I do not know what a good business case should look like. There simply has never been a good business case for a project such as I am suggesting that has been accepted by the Department. Demand studies have been carried out, but they are not so much optimised as—if this is a word—pessimised. People always assume the worst-case scenario, and that if the track is laid and the trains are built, no one will use them. Prices, however, are always maximised, without any indication of how competitive they are by international standards. I point out again that if we had adopted the same approach for trams that we have for small-scale railway infrastructure development, we would never have got a tram scheme off the ground.

If the Department for Transport puts in place the demand and the business case hurdles yet enthusiasm is still not dimmed, it is normally then suggested that the obvious way to promote the scheme would be under some local funding solution. However, there is always an underestimate of what a hard ask that is. Promoters of any substantial scheme would certainly have to talk to local councils to get them lined up, as well as dealing with passenger transport authorities and regional development authorities, when there were such organisations. All such organisations, by and large, have erratic, on-off funding streams. Their strategies have been revised over recent years and then changed again. The demands made of them have also changed, and even the labels of the organisations have changed, given that PTAs became integrated transport authorities. They are subject to changing mandates and central directives, some of which come from the Department for Transport. The promoters are then expected to pull all those organisations together and to work with national bodies such as Network Rail, which are also subject to prescriptions from the Government and the Office of Rail Regulation. Granted, Network Rail is more approachable than the disaster that was Railtrack, but it is still hard to deal with it. Had doing so been easier, we would have got to the yes-or-no stage for a scheme before now. What actually happens is that most schemes exist in limbo—they are simply around; neither in nor out, and neither done nor not done. Periodically, there are outbursts of activity in connection with them, but nothing that would represent substantial progress.

We can ask whether that is a problem, because no progress means that no money is spent, which means that no money is lost. People have a horror of losing money on railway schemes—of spending money futilely. We can look with equanimity on an unused road, but an unused railway is a different proposition. However, I agree with the hon. Member for Blackley and Broughton that this does matter. If any such schemes represent economic opportunities missed, they are largely economic opportunities missed in areas that need them: in the north, and outside the south-east and the London area.

Not to progress such schemes leaves in place a transport structure that, post-Beeching, does not make much sense, would never have been designed like that, and has been vandalised. Investigation of such schemes and why some people are keen advocates of them shows that they were often attempts to deal with a huge transport anomaly in their area. The third reason for requiring clarity is that while schemes remain in limbo, the land is preserved, the track bed is kept, and the aspiration and hope is retained—but for what, if there is no case for implementing them?

Many post-Beeching schemes that are still alive and kicking today are not based on pure nostalgia, and there is normally not a case for never implementing them, but there is also no clarity about when all the boxes for implementing them will be ticked. The situation is strange and Kafka-like, and we cannot get out of it. The Government have been honourable and clear in saying that such schemes are off the books for four years, although I understand that some are an exception, but while they are in that strange transport limbo we may be missing serious economic opportunities that we should investigate to a conclusion.

I want to pick up a point made by the hon. Member for Blackley and Broughton about the London parallel. The Chair of the Select Committee on Transport constantly recites figures—they elude me for the moment—on how much is spent on transport in London compared with elsewhere.

[Graham Stringer]

Nearly all.

[John Pugh]

I suggest that the ratio is 10:1, and perhaps an hon. Member will correct me if I am wrong. I speak with some bitterness, because I spent two years discussing the Crossrail Bill. Its Committee stage was one of the longest in the past 50 years, and it was pure endurance, but one could not help being impressed by the scale of what was being attempted, although there were days when one thought there were better uses for one’s time. It is an engineering marvel, and will link the bankers of Canary Wharf with their planes at Heathrow. I am not against that, but London is already probably the best connected capital in the world, and it already has a tube and bus network that is the envy of every other city in the UK. I genuinely doubt whether London’s contribution to UK plc will be massively affected whether or not we build Crossrail on the most expensive real estate on the planet, with all that is involved. If the bankers of Canary Wharf, like their Venetian counterparts, are forced to take a vaporetto along the Thames, life would not be greatly worse for the nation or the economy.

--- Later in debate ---

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

I came to this debate to listen, rather than to participate, but that was such an interesting speech and I would like to make three simple points. I congratulate the hon. Member for Southport (John Pugh) on securing this important debate. He made an excellent speech with many important points.

My first point is a bit of a boast. It might come as a surprise to the hon. Gentleman to know that, when I was chair of Manchester airport, I was responsible for creating two new railway lines in the north of England. One was to the south of Manchester airport, and one to the north, and they connected the airport to the main rail network. It was tough getting those lines. At the time there was Railtrack—there is much to say about Railtrack and some of the current problems that we have in the railway system of too much money going in and not enough coming out. Turning the railways into a property company was one of the worst mistakes of the 1990s. Having first created a link to the rail network to the north of Manchester airport, we agreed with Railtrack to create a link to the south and the west coast main line. As we reached an agreement, Railtrack withdrew all the funding and Manchester airport had to put in the money. That was a difficult problem.

My second point is to expand on my intervention. If looked at over a period of 10 or 15 years, the amount of money that enters the transport system in the south-east of England and London is unjustifiable on a national basis, given that we are one country with huge regional disparities. Some statistics are worth quoting. The overrun of costs on the Jubilee line extension came to more than the total investment in rail and transport in the rest of England over the 18 months that it took to finish that extension. I am not talking about the cost of the Jubilee line extension itself, which was built partly to connect south-east London and partly to justify the money spent on the enterprise zone in the docklands. That statistic is an outrageous imbalance, and if we take that example, it is not surprising that we have such regional disparities.

If we add up the public-private partnership, which is sometimes left out of the equation, Thameslink, Crossrail and the investment going into the Olympics and transport into east London, the rest of England is left with only about 4% or 5% of that investment—the figure varies depending on how the sums are done. It is interesting to note that whatever area is looked at, such as education or health, London receives more per capita than the rest of the country, probably for good reasons. Nevertheless, the one block of expenditure where the gap between London and the south-east and the rest of the country has been growing is in transport. Ministers have never been able to justify such disparities—I am not talking specifically about the current Minister; I am referring to those in the previous Government—and to explain why that change took place when the London economy was doing better. That comes back to the methodology used for investment in the capacity of the system in terms of carriages, and for new investment in signalling and tracks.

The arguments based on capacity and overcrowding are not stupid. If people have to sit on top of each other there is a case for making platforms longer and putting on extra coaches. However, if that is the main—or only—criterion, we end up with a final result that means that 90% of investment goes to the south-east. Because that investment is put into transport, which is economically vital and important and helps the economy to grow, more congestion is created. The best way to put that argument is to say that investment is provided to support congestion. As the hon. Member for Southport said, we should not get rid of criteria on overcrowding, but we should balance them up so that investment is also made in places where it will have an economic benefit. That will probably involve a lower cost-benefit ratio than one would get in the south-east, but if we do otherwise, we will create more congestion. As the hon. Gentleman said, London probably has one of the best transport systems of any capital city in the world. It can certainly compare with most, but there is still a lot of congestion because there is an imbalance in the country.

My third point was to compliment the Government—not something I do regularly—on their commitment to High Speed 2. That is a generational project for rail expansion, but it will happen only if all three parties are committed to it. Not long ago, along with other members of the Transport Committee, I questioned Minister after Minister about High Speed 2, and they all gave good reasons for why it was not going to happen. To be fair, the Liberal Democrats have always been in favour of it. The Conservatives came out in favour of it because they thought it was a way of answering the question about capacity in the London airport system and winning the London mayoralty, which was a bad reason, although the outcome was good. The Labour party also came to support High Speed 2, partly because we eventually had a Secretary of State who understood something about transport before he took up his post, which has been unusual over the past 50 years or so. He was committed to High Speed 2, and the Labour party came to support it.

High Speed 2 is vital for the country’s future. It is one of the key measures that will rebalance the economy in the way I described. If it does not happen, the economy will become unbalanced in the opposite direction. At some point in the next 10 or 15 years—I cannot give the exact date, and the projections are never that accurate anyway—the west coast main line, even though it is much improved and has extra capacity, will reach full capacity. That is the best case that can be made to doubters in the Conservative and Labour parties. There will have to be extra capacity on the west coast main line at some time, and it might as well come in the form of High Speed 2, which would link this country to the continent and make us feel like the rest of Europe, with excellent train services. That is the basic case for High Speed 2, and it has nothing to do with the environment or getting people off aeroplanes; it is an economic case and it relates to the north of England.

There are two other things I would like to say. If we are going to build extra capacity down the west coast main line, we also have to build extra capacity into the ordinary rail system in the north of England. It is a shame that we have to wait for control period 5 for that increase in capacity to take place, but I hope that it will be there before High Speed 2 happens. The rail system in the north of England—this is another great statistic that I often use—runs on schedules that are slower than they were 130 years ago. The schedules for the trains running between Blackburn and Manchester, between Bolton and Manchester and in the rest of the north-west would have shamed Gladstone; they are quite shameful. It takes as long to get from Doncaster to Manchester in round terms—there are a few minutes difference—as it does to get from Doncaster to London, and that illustrates the imbalance in the transport system. By and large, someone can get to London very quickly, but it will take them quite a long time to get anywhere else, and that is true not just in the north of England. We therefore need extra capacity, whether or not that involves electrification. I welcome the commitment to the Ordsall chord. I also hope that we can have the northern hub as soon as possible in control period 5 and that we can really improve the capacity and speed of trains.

I have one final point about high-speed rail. As I said, the case for it is economic. The case for the connection between Birmingham and London is based on capacity. However, High Speed 2 will be a failure if it goes only between London and Birmingham. What is the point of that? It really must go to Manchester and Leeds, and I hope that it will go beyond, to Edinburgh and Glasgow. That will really bring the country together and bring economic benefits to the west and east sides of the country. Although I do not expect this to happen—things have probably gone too far—I would have started building the lines from the north to the south. That is partly because we would have had support for that. I understand why Conservative MPs have done what they have, and they have every right, and the responsibility, to represent their constituents’ interests and to oppose what is going on, but I suspect that it would have been much easier politically to start high-speed lines in the north, given the enthusiasm and support for them in Yorkshire, Lancashire, Manchester and Merseyside. I have tilted at many windmills in my political life, however, and that is not one that I will tilt at too much.

If High Speed 2 cannot be started in the north of England, however, there must be a solid commitment as the hybrid Bill dealing with this issue goes through the House that the lines will go at least to Manchester and Leeds, if not further. Those of us who are long enough in the tooth to have been talking about regional disparities in transport for 25 or 30 years remember the commitments given regarding the Channel Tunnel Bill. There were commitments that trains would come through the tunnel and go to cities in the north of England, including Manchester. Those trains were built, and they were in sheds outside Manchester for years before they were scrapped; indeed, every time anyone got on the west coast main line in Manchester, they would have gone past those sheds.

I will support High Speed 2, and I want the Labour party to stay committed to it. However, in keeping the three parties together, which will be a national project that might take 25 or 30 years, there must be an absolutely solid, unbreakable legal commitment to build the line to the north of England and beyond, if possible. I hope that the Minister can respond to those points.

High Speed Rail

Graham Stringer Excerpts

Monday 20th December 2010 Commons Chamber

[Mr Hammond]

A full business case showing the economic benefits of the proposed railway will now be updated on the basis of the route that I have set out today. That will be published at the commencement of the consultation in February.

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

I am suspicious, even though I do not want to be. I want to give the Secretary of State complete support, but 90% of investment in railways already goes into the south-east. As he said, £2 billion a year goes into Crossrail and £2 billion a year into Thameslink. Now he is suggesting that another £2 billion a year should go into the Birmingham-London link. It would partially remedy the north-south divide if the work was started in the north and moved to the south. If he cannot do that and really wants the support of northern MPs, the hybrid Bill should cover the lines to the north, too. Will he consider that?

[Mr Hammond]

I understand the hon. Gentleman’s suspicion. It is in the blood, I suspect. I also understand his point, and it would help to allay these concerns if, in some way, we could include in the first hybrid Bill specific commitments to Manchester and Leeds. We cannot include detailed route alignments and land acquisition because that would make the Bill vast and it would probably be in Committee for about five years. I take on board his points, and also any suggestions he might have about how we might do that practically, which is something that I have also discussed with my predecessor. Everyone who wishes this project well understands the need to give strong reassurance to those communities around Manchester, Leeds, South Yorkshire and the east midlands that stand to benefit from the second phase.

Oral Answers to Questions

Graham Stringer Excerpts

Thursday 2nd December 2010 Commons Chamber

[Mr Hammond]

I understand that the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), has already met local authority leaders in the area. If I could give my hon. Friend the Member for Torbay (Mr Sanders) a piece of advice, it would be that he and his local authority colleagues need to work on the scheme with a view to getting the cost down, so that the total cost-benefit ratio improves. That will make it much more likely that the scheme will be able to be funded from central Government funds.

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

Unlike other spending blocs, the gap between spending in the south-east and the rest of the regions has been increasing over the past 10 years. If there is to be real investment in major schemes in our major regional cities, that gap will have to be closed. What plans does the Secretary of State have to close that gap?

[Mr Hammond]

As the hon. Gentleman will know, the Government have committed themselves to a public consultation in the new year on the High Speed 2 rail scheme. They have allocated £750 million-worth of funding to take that scheme forward during the current spending review period.

That project—a strategic investment project—will more effectively close the gap between north and south and address the issues of differential economic growth rates than any other regional initiative that has been taken in the past couple of decades. I hope that the hon. Gentleman will welcome the commitment that the Government are making to that project, despite strong opposition to it in the southern half of the country.

High Speed Rail

Graham Stringer Excerpts

Wednesday 9th June 2010 Westminster Hall

[Mark Lazarowicz]

The hon. Gentleman is correct. Indeed, there has been increased use of the Manchester to London service as a result of the upgrade to the west coast main line, and we have seen the same with the London to Paris and Brussels services as well.

The point that the hon. Gentleman made about the benefits from reducing journey times particularly applies in respect of cities that are further away from London. The greatest journey time reductions will allow the greatest benefits in environmental and economic terms—and, indeed, in terms of convenience to passengers. That is why I hope that the Government will give a definite commitment to extend high speed rail to the north of England and to Scotland.

As the hon. Gentleman said, environmental benefits will be particularly important. Transport currently accounts for more than 20% of UK carbon emissions, so high speed rail has a role to play in that respect as well. Reducing journey times from London to Edinburgh to just over two hours could result in 80% of the current travel market between Scotland and London being captured by high speed rail. Even at three hours, with a partial high speed rail network, 67% of the travel between Scotland and London could be captured by high speed rail, so there are certainly environmental and transport benefits as well as economic ones.

In that respect, I have two other questions that I hope the Minister will address today or at another time. First, what is the Government’s view on whether the line should run to Heathrow or a connector station at Heathrow, or simply offer a connecting service, as the previous Government advocated? I am aware that there were criticisms of that decision, and I believe that she shared them. Certainly she made such criticisms before she was a Minister, so I would be interested to hear her current view on whether the line should serve Heathrow directly.

I would also like to hear the Minister’s views on whether there should be a link from a new high speed line north of London to the existing line from London to the south-east, France, Belgium and beyond. If there were no link—I hope there will be one—passengers from Scotland and the north would be less likely to use the high speed rail line for journeys to the continent, and travellers from the continent would be less likely to use it to travel north. Clearly, if there were no direct link, there would be less use of those services as well.

I hope that today the Minister can give some indication of how the Government will take the plans forward, and to answer the questions in their entirety, or at least to a great extent. I would like to hear a reiteration of the commitments that were given before the general election. I hope that today we will not hear from the Government any excuses that, because of the financial situation they claim to have inherited—we had all those excuses yesterday in the debate on the Queen’s Speech—they cannot make any further commitment to high speed rail at this stage.

I hope that we will not get that line later this morning. It would be unacceptable for several reasons. First, it should hardly surprise the Government parties that a high speed line would require major expense. If they did not realise that, they should not have made such sweeping promises in their manifestos. Secondly, the spending on high speed rail would, of course, be some time in the future. There will be many years of preparation involving planning, legal and parliamentary approval and so on. We are talking about commitments that will last for 10, 20 or 30 years, and I do not believe that anyone—not even those in the Government parties who make the most pessimistic forecasts—would suggest that the current economic circumstances will last for 10, 20 or 30 years.

Thirdly, the commitments, although large in their totality, are not actually as substantial as many other Government commitments. The cost of a line from London to Birmingham, Manchester and Leeds is estimated at £30 billion spread over 10 years. Compared with many other Government commitments, that is not as expensive as might be thought at first. And, of course, there are the wider economic benefits that I have already set out and the fact that the costs of high speed rail do not all have to come from public subsidy. Some of the public subsidy would be recouped from commercial income from passenger and goods traffic if the traffic projections and estimates are reflected in reality.

On the extension to Scotland, there are issues around the role in linking up services and the financial commitment from the Scottish Government as part of the devolution arrangements. I would be interested in hearing from the Minister about what discussions the coalition and her Department are having with the Scottish Government on how high speed rail could be funded in Scotland, and on how it would link up with existing rail services in Scotland.

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

My hon. Friend makes a powerful case, and I look forward to the Minister’s reply. The economic, transport and environmental benefits of a working high speed system are well known, but the gap between transport investment in the south-east and London and that in the rest of the country has been growing. It is not just that there is a gap but that it has been growing. Does he think that there is a case for starting to invest in the system not in London but much farther north, and then building south, rather than building north from the south?

[Mark Lazarowicz]

My hon. Friend makes a good case and raises valid points. He is right to point out that there has been a concentration of transport investment in the south-east of England. The Scottish Government have a role to play in developing services beyond Edinburgh and Glasgow, but, bluntly, it would be wrong for Scotland to pay for the bit from the border northward because, after all, it is part of the same UK-wide service. The same would apply to Manchester and the regions of England as well.

In this debate, I have avoided getting too involved in the exact details of routes, apart from the important exception of Heathrow, and exactly when and where they will start, because the case for high speed rail as a whole is in danger of being undermined by discussion of some of the detail. However, I accept my hon. Friend’s fundamental point: there is no reason why work should start from London and move northward, or why it cannot start from some other city at the same time. Clearly, phasing would allow benefits to be brought to other places en route, and I would be interested to hear the Minister’s views on that in due course.

The method of securing funding for a new line also has a bearing on another important issue in this debate, which is the environmental case to which the hon. Member for Edinburgh West (Mike Crockart) referred. By itself, high speed rail does not guarantee substantial carbon reductions. Certain arguments and research make that clear. Carbon reductions depend partly on the energy source providing the electricity, how the route is to be constructed and, to a great extent, on the degree to which there is a modal shift from air and road to rail as a result of high speed rail services being developed.

A modal shift can be encouraged by shifting expenditure from new roads to high speed rail, which I support, and by using transport taxation to encourage that shift and raise the funds for public investment in high speed rail. The Liberal Democrat wing of the coalition suggested in its election manifesto that it would raise an extra £9 billion a year from airline and passenger taxation, and if that is taken forward in the agreement between the coalition parties it could provide substantial funds for high speed rail. I am interested in hearing the Minister, or any Liberal Democrat colleagues, respond to that point.

I am sure that the Minister is not surprised that I have asked a lot of questions. I hope that she will respond as far as she can. I pay tribute to her commitment to high speed rail before the election. Like all Ministers, she will no doubt have battles to fight in her Department and beyond to keep high speed rail firmly at the top of the Government’s agenda, and I am sure that she expects me and other colleagues to pursue these matters vigorously if she does not. I hope that she gives us good news today—reaffirms the Government’s commitment to high speed rail and tells right hon. and hon. Members how she will bring it about.

--- Later in debate ---

[Sir Peter Soulsby (Leicester South) (Lab)]

I congratulate my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) on obtaining this timely debate on an undoubtedly important issue. Those of us who use the midland main line—I know that you do, Mr Betts—are well aware of the enormous success of High Speed 1, not least because when we arrive at St Pancras we must fight our way through the crowds disgorged from trains from Paris and Brussels.

The prospect of another high-speed line in the United Kingdom is exciting, and I join my hon. Friend in welcoming that prospect and the fact that the new Government have picked up the previous Government’s commitment to construct such a line. However, as the hon. Member for Banbury (Tony Baldry) said, it will have an environmental price, and he was right to remind us that there will be a trade-off between speed and the environmental damage that that might cause. I urge the Government to examine that trade-off carefully, and to consider whether there are prospects for using existing transport corridors to achieve the same results at a lower environmental cost.

My hon. Friend the Member for Edinburgh North and Leith referred to the difference between this Government’s proposals and those of the previous one for the service to Heathrow. There are serious doubts about whether it is sensible to use Heathrow as a terminus for the high-speed line instead of somewhere that is well served with a link to the high-speed line. It is unlikely that someone travelling from London to Birmingham or Manchester would want their journey to be diverted via Heathrow. That would not make much sense to them. The benefits of serving Heathrow may be achieved in another way by ensuring an adequate link to the airport instead of diverting the line.

I want to take this opportunity, when welcoming the Government’s commitment to high-speed rail, to press them for an assurance that construction of such a line in phases at some time in the future—who knows when it will be constructed?—should not be at the expense of continuing investment in the existing classic or conventional network. Parts of that network are undoubtedly under desperate strain and people who travel on it—often those who commute daily—must stand for much of their journey. Much could be done to relieve their suffering with continued investment in rolling stock, on which the previous Government had made a commitment, and in longer platforms and a generally better service.

[Graham Stringer]

My hon. Friend is going to the nub of the debate on future investment in the rail service. Given the time required for the development of high-speed rail, I do not believe that it is a threat to regional services. Does he agree that the real choice before the Government and the country is whether to continue with Crossrail or with regional services, and that we simply cannot afford Crossrail at the moment?

[Sir Peter Soulsby]

Having served for some 18 months on the Select Committee that considered the Crossrail Bill, I have a personal commitment to its completion. My hon. Friend argued earlier that investment in rail has been skewed towards London and the south-east at the expense of other parts of the country, but that is not an argument for ditching what is an important part of the transport infrastructure in our capital city.

There is concern that high-speed rail may be seen as a panacea. It should not be built at the expense of the investment that the Association of Train Operating Companies argued for to open lines that are unused or used for goods, and the opportunities that would be generated thereby for reconnecting to the rail network communities that are currently unconnected. Above all, it should not be used as a pretext for not continuing the investment in electrification of the main line network.

Like you, Mr Betts, I am keen that electrification of the midland main line should be completed as soon as possible. It is already electrified as far as Bedford, and completion of electrification through to my city of Leicester and to Derby, Nottingham and your city of Sheffield, Mr Betts, will provide considerable positive cost benefits to rail users, and to the economies of the east midlands and your area of south Yorkshire, with a boost to the economy and general environment of those areas. I am worried that even if the second high-speed link is ultimately achieved and goes to somewhere in the east midlands, it will be of little benefit to those who are currently served by the midland main line if electrification of that line has not taken place and there is no link to St Pancras International and High Speed 1.

I doubt whether anyone would oppose investment in further high-speed rail in the UK. There are doubts about whether its fares will be affordable and attract a significant proportion of air passengers who would otherwise pass through Heathrow. My real concern is that it should not draw funding that would otherwise go to the conventional network. It must not lead to postponement of electrification of the existing mainline network, it must not leave rail commuters standing in unacceptable conditions on their daily commute to work, it must not leave unconnected communities that could be connected to the network, and it must not leave passengers and the environment with the prospect of old and smelly diesel traction for many years to come when relatively environmentally friendly electrification is a real possibility.

In brief, users of the existing network are unlikely to be impressed by half-promises of high-speed rail in phases, perhaps a decade and a half away, while they continue to struggle to use an existing network that is overstretched, overused and in desperate need of continued investment.