Rail Franchising

Grahame Morris Excerpts

Wednesday 10th January 2018 Commons Chamber

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

May I begin with the one thing on which we agree this afternoon? I thank the hon. Member for Middlesbrough (Andy McDonald) for his generous comments about my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), who has been a great servant of my Department and other Departments for a very long period. He has been on the Front Bench for 19 years, in government and in opposition. That is an epic career, and we all very much appreciate the work that he has done, particularly on legislation and on building bilateral discussions and so on, so I pay tribute to him for all that he did. I am grateful for the warm words from the hon. Member for Middlesbrough.

Apart from that, we have just heard about 25 minutes of complete nonsense from the Opposition. I suspect that you would say it would be unparliamentary of me to call them hypocritical, Madam Deputy Speaker, so I will not do so, but I have no doubt that others in the know will be astonished by the gall with which they simply forget their actions in government; with which they pretend that their ideas will not cost a penny—I keep hearing that, but it is absolutely untrue—and with which they make inaccurate claims based on a lack of facts about subjects they appear not to understand.

Let me set out why the Opposition’s ideas do not stack up and why their positions do not add up.

[Grahame Morris (Easington) (Lab)]

rose—

[Chris Grayling]

I will make some progress and then take interventions.

I shall also set out why the Opposition’s policies make no sense for the travelling public and why their pronouncements on the east coast main line are wrong. I shall also explain why it is this Government who have set about the task of modernising and upgrading our railways—the biggest programme of investment since the steam age—after 13 years of a Labour Government who quite simply failed to deliver the infrastructure improvements that this country needed. It has taken Conservatives to begin to change that.

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[Chris Grayling]

I will take one more intervention and then make some progress.

[Grahame Morris]

It is an interesting concept that the travelling public have got a good deal that is paid for by the private train operating companies. I just checked what it would cost me if I left the House of Commons and went to Durham now. It would cost me £153 standard class—or £236 first class, but of course we are not allowed to do that. A similar journey at the same time of day from Frankfurt to Munich in Germany would cost £39 and tuppence. How is it that our travelling public are getting a good deal from this fragmented privatised system?

[Chris Grayling]

In this country, under Governments of both persuasions, we have taken decisions about the right balance between the cost of the railways being borne by those who use the railways and those who do not. Yes, the hon. Gentleman may be quoting walk -up fares, but he can go and buy an advance ticket for the east coast route at a fraction of the cost that he described.

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[Martin Vickers (Cleethorpes) (Con)]

We have rightly heard from the Secretary of State that there is record investment in the railways and a record number of passengers, yet Opposition Members are here to criticise the running of the railways. I am sure we will hear many tales of woe from Opposition Back Benchers, but the reality is very different. There are problems, and we have heard from my right hon. Friend about the Virgin Trains East Coast situation, which is not desirable, but of course, to some extent Virgin predicated its income projections on improvements to be made by Network Rail, and of course Network Rail, being a nationalised organisation, usually delivers late and over budget. The Secretary of State was somewhat critical of Virgin, and it clearly should have taken note of the fact that Network Rail failed to deliver on the promises made on the west coast route some years ago, so there is some legitimate blame on both sides.

Regrettably, I am old enough to remember the days of British Rail, a failed nationalised monolith and a watchword for failure. Until 1992 there were direct train services to my constituency, but British Rail cut them, and the new Minister, whom I welcome to his place, will be hearing a lot from me about the need for through services to Grimsby and Cleethorpes.

The Government support the rail network to an enormous extent. Many of the figures cited in an article in the 13 October edition of Rail magazine were repeated in The Times last week, including that £925 million was invested by the private sector in the rail network in 2016-17. The shadow Secretary of State failed to identify how any Labour proposal would bring forth that money. The reality is that cuts are made under all Governments and usually the first thing that goes is capital infrastructure expenditure. There is no way that a renationalised network under a Labour Government would be able to raise the approaching £1 billion that the private sector is currently investing.

[Grahame Morris]

What does the hon. Gentleman think the state-owned German rail company that owns a substantial chunk of our franchises does with the profit it makes here in our privatised system? It invests that profit in its own system, through subsidised fares there. That seems ludicrous to me and most of the travelling public.

[Martin Vickers]

Perhaps they are a little more free-market and capitalist-minded over in Germany.

At present, competition is for the franchise; what we want is more competition in the running of services, and one way we can achieve that is through open access operators. Hull Trains and Grand Central both run on the east coast main line and provide services to areas that in the main do not get a service from the main franchise holder. Indeed, I understand that Grand Central will shortly put forward a proposal for direct trains from King’s Cross through to Scunthorpe, Grimsby and Cleethorpes. I hope that the Minister will be supportive of that, because it would be a great boost to the local economy.

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[Grahame Morris (Easington) (Lab)]

I have had to take the Beeching axe to my speech, but I will make a couple of points in the few minutes available to me.

I wanted to take up some of the points made by previous speakers, including the Secretary of State, with which I completely disagreed and which, frankly, were fake news. If we look at the evidence and compare train fares in the United Kingdom and European countries—their state operators own many of our franchises—the difference is stark. I do not accept that this is about particular fares in peak periods.

It is worth looking at the German-owned operators. Deutsche Bahn owns Northern Rail, which is the principal operator in my region. Some 42% of Deutsche Bahn’s revenue is made outside Germany, much of it here in the UK, but 93% of its investment is in the German railway, so the company is creating profits here to improve services back in Germany.

It is clear that regulated rail fares have risen by an average of 32% since 2010, which is three times faster than the average median wage has grown. The Secretary of State said that fares increased more rapidly, or to higher levels, under the previous Labour Government, but we have to factor in average wages. The Conservative policy of raising regulated fares by the retail prices index ensures above-inflation fare increases every year. Compare that with Labour’s stance as set out in the motion, which I support. We would peg fare rises to the consumer prices index, which would save the average season ticket holder £500 over the course of a year. That would affect everyone’s constituents. Indeed, the annual cost of a season ticket for one of the Prime Minister’s constituents travelling between Maidenhead and Paddington has risen by £732 since 2010.

Passengers on our railways pay some of the highest fares in Europe for increasingly unreliable and crowded services, and that has been my experience. Passengers, our economy and our environment need affordable fares and reliable services, which I do not think the Tories’ policy is capable of delivering. Labour would take back our railways into public ownership as franchises expire and use the savings to cap fares, and we would upgrade and extend the rail network.