East Coast Main Line Franchise

Grahame Morris Excerpts

Thursday 20th June 2013 Commons Chamber

[Mr Jackson]

No, I want to make some progress, but I will give way later to the hon. Gentleman, whom I know has a special interest in the subject.

The Labour Government accepted that public service provision by this train operating company was always going to be a short-term expedient because of a special set of circumstances on the east coast main line. As the Minister has said, in order to leverage key, private sector capital, it is important that we have a new, long-term private partner to innovate and drive up standards on the east coast main line.

It is all very well for Lord Adonis to have a road-to-Damascus conversion. Obviously, being in opposition concentrates one’s mind, but when he was a Minister he spoke out strongly for private sector provision on this particular line. I challenge the Labour party: is its policy now wholesale renationalisation of the railways, or is that just for the east coast main line? I know that the hon. Member for Blyth Valley (Mr Campbell) would definitely give me a clear answer, but I am not sure that he and the hon. Member for Nottingham South (Lilian Greenwood) would have a meeting of minds on the issue.

[Grahame M. Morris (Easington) (Lab)]

The hon. Gentleman is being generous in giving way. Although he is ridiculing us on the Labour Benches for supporting the concept of public ownership, most of the travelling public—70% of them—and even those of them who vote Conservative, support the idea of renationalising the railway industry.

[Mr Jackson]

If it is such a popular idea, why has the hon. Gentleman’s party not put it in its manifesto? Why in 13 years did it not repeal the Railways Act 1993 and go back to the good old days of British Rail, which did not get us to our destination very often or on time?

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[Andrew Jones (Harrogate and Knaresborough) (Con)]

A couple of weeks ago at Transport Question Time I asked about the timetable for the re-letting of the franchise, and I received a clear, extremely positive answer. I was told it would not be long before the franchise was let again.

I want to talk about two areas: public—or not public—ownership, and the franchise itself. Perhaps unusually among my colleagues, I was against the privatisation of our railways, not because I had a fond memory of British Rail. I used to catch the train to school in Bradford every day, and it was not a pleasant experience. Parts of British Rail were good, but parts of it were not, and overall the customer experience was poor. I remember an advertising campaign at the time saying, “We’re getting there.” It was launched to general ridicule from the public, who obviously knew better. It was not because I thought there was an important principle between public and private ownership. Across the world, we can see examples of successful railways in both public and private ownership. I simply thought it would be hard to bring in effective competition.

When it came to managing our railways, there was a sense that we were managing decline, and in many ways of course we were: customers were choosing other modes of travel. I have checked the data on this. I am sure the Minister will be aware, but I might take the opportunity to remind him that when our railways were nationalised—I am talking not about one year’s or one month’s comparison, but about decades of data—more than 1,200 million annual journeys were made each year, and by the time of privatisation, that figure had declined steadily, year on year, to 700 million. There were a series of huge declines and the data were bad, however we look at them.

I changed my mind about rail privatisation for two reasons, the first being passenger growth. Again, it is slightly geeky, but I will remind the Minister of the data. Since privatisation, passenger numbers have gone from 700 million to 1,300 million-plus, which is a fantastic change. Level of usage on the rail network is now comparable with that in the 1920s. Privatisation saw a change of decades of usage, which was a good thing. I want to encourage more use of public transport, with more freight off the roads. The second reason I changed my mind was personal experience. While travelling around the country, I could see a steady change of attitude in the businesses towards being more focused on their customers—improving customer experience and developing new services and timetables. The customer became more central to the industry.

I agree with many of the comments made by hon. Members on both sides of the House about the quality and friendliness of the East Coast staff, which is absolutely first class. I use it, as I am sure do all the speakers in this debate.

[Grahame M. Morris]

You don’t use first class, though, do you?

[Andrew Jones]

No, I do not use first class—the hon. Gentleman is absolutely right. Extreme caution is required for any Member using first class, and I do not risk it.

The question is not whether the line should be in private or public ownership; it is about getting the franchise right. I want to see the franchise taken forward promptly, with customers right at the heart of the railway. That means listening to what they want and responding to it. For my own area, in the past three years we have seen the first direct London to Harrogate service for 30 years. I remind the House that this service was removed under nationalisation, alongside the downgrading of services for Hull, Bradford, Cleethorpes and Teesside. The new service is fantastic. Our area has an important visitor economy and is hosting part of the Tour de France next year.

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[Grahame M. Morris (Easington) (Lab)]

I congratulate those who managed to secure a debate that is very timely, given some of the announcements that have been made lately. I also thank the Backbench Business Committee for allowing us time to discuss this important issue.

The Government now have yet another opportunity to listen to the overwhelming majority of the British public, including people on both sides of the political spectrum. I think that the logic of the arguments for allowing the east coast main line to remain in public hands is powerful. The Minister likes to call me a dinosaur for believing that public services should be run for the benefit and in the interests of the public. [Interruption.] Members will see, if they check the record, that the Minister called me a dinosaur during a debate in Westminster Hall.

I support the renationalisation of the railways, especially when we see Directly Operated Railways delivering a better service and returning more money to the taxpayer than the private sector—which, let us not forget, has failed to deliver twice on the east coast main line. If that makes me a dinosaur, so be it. However, I think that we should look at the recent polling evidence. The average finding is that 70% of the public regularly support calls for the railways to be run publicly, although some polls produce larger percentages. I think that those people would be offended by the contempt and, indeed, total disregard that the Minister and his party have shown for their views and the concern that they have expressed about the failure of the privatised rail system. [Interruption.] It is certainly a failure when compared with the success that the publicly run public service operator has been able to deliver on the east coast main line. If the Minister will bear with me, I shall explain shortly why I think that the system has been a failure, not least on grounds of price.

As other Members have already pointed out today, Directly Operated Railways has returned £640 million to the Treasury in premium payments—I believe that £40 million of that has been invested in improving the service—and it is estimated that it will have paid back £800 million in premiums by April 2014. That is a tremendous success story, which should be noted by Government Members who malign the performance of public industries. Directly Operated Railways also receives the lowest net subsidy: 1%, compared with an industry average of 32%. We should not forget that a shining example of privatisation cost the public purse £4 billion a year in subsidy.

Let us consider the performance of National Express, the failing private operator. It returned only £370 million in premium payments before turning its back on the franchise, leaving the taxpayer to face not only the shortfall referred to by my hon. Friend the Member for Blyth Valley (Mr Campbell), but the disruption that it had caused. Incredibly, despite National Express having failed to deliver on its commitments, the Government will not stop it or other failed operators bidding for the rail franchise, should they decide to go ahead. In a written answer to my good and hon. Friend the Member for Islington North (Jeremy Corbyn), the Minister confirmed:

“National Express and its subsidiaries are permitted to submit for the pre-qualification process (PQQ) to run passenger rail services in all franchise competitions including the East Coast Main Line.”—[Official Report, 3 June 2013; Vol. 563, c. 970W.]

That is incredible.

[Bob Stewart (Beckenham) (Con)]

If the company is permitted to bid, surely its past record will be taken into account? Is that not the way it will work?

[Grahame M. Morris]

I suspect the Minister may be able to clarify the criteria, but judging by the answer he gave my hon. Friend the Member for Islington North, I suspect that will not be the case. Past performance does not seem to be an impediment, although perhaps it should be—and perhaps the Minister will take more notice of such a suggestion from his own side.

Whether in the public or private sector, companies that fail to deliver on their commitments or promises to the taxpayer should not be allowed to take over franchises that they have shown they are not competent to run. It is not that National Express failed on one franchise and is bidding for another; it has already failed to deliver on the east coast line.

The public understandably have concerns about the Government position in relation to this matter, and they must not reward failure. If the Minister goes ahead with the privatisation, how will he guarantee that any future operator awarded the east coast main line franchise will be able to fulfil its contract, and what assurances can he provide that the taxpayer will see a similar rate of return in respect of premium payments as they received from Directly Operated Railways? It has been said that DOR is a not-for-profit service, but that is not quite true, as it is hugely profitable, but all the profits go to the taxpayer. That is the position, and I am sure various private train operating companies would relish getting their hands on that level of turnover.

[Mr Ronnie Campbell]

I wonder who.

[Grahame M. Morris]

Yes, we can speculate about who might take on the franchise, but it is incredibly profitable and I am sure there will be no shortage of takers. That money should be going into the Treasury at this time of austerity, however.

[Mr Reid]

I have been listening carefully to the hon. Gentleman’s speech, but I am still not sure whether he is arguing for the east coast main line to be operated by a publicly owned company permanently or just for a temporary period that happens to be longer than the Government propose?

[Grahame M. Morris]

I can give a direct answer to that: yes, I am arguing for permanent public ownership. I am in favour of directly delivered public services, and although I do not want to take up too much time, I have some pretty powerful arguments on why that should be the case.

The hon. Member for Harrogate and Knaresborough (Andrew Jones) talked about competition. Even if someone could not support the entire network being in public ownership, I think a reasonable person might be able to say that, for reasons of having a comparator, we should keep the very successful public provision through DOR, to act as a test and yardstick for us to assess how the private sector is doing. Instead we have the preposterous position of a failed private operator of the franchise not being barred from bidding, but instead being allowed to rebid to operate it. The Government seem quite happy to allow that.

Another perversity is that the Government seem to have this ideological, dogmatic hatred of nationalisation and publicly provided services. They are against the idea of a directly operated public service on the east coast. They are quite happy for public sector companies based in Germany, France and Holland to operate such franchises, but not UK public sector companies. That seems completely inconsistent.

The hon. Member for Peterborough (Mr Jackson) gave some interesting statistics about the cost of season tickets. It is interesting to look at the costs in some European countries. Research shows that a 24-mile commute into Paris costs about £924 a year, a similar commute into Berlin costs some £700, and a similar commute into Madrid costs £654. A similar commute into London costs £3,268 a year. How can anybody suggest that the privately operated service is a huge success and stands international comparison? This follows a decade of inflation-busting fare increases which, although never welcome, are putting an unbearable strain on family budgets at a time of austerity, with wages frozen and in many cases falling.

I understand that the rail Minister is a regular user of the network—after being persuaded to swap his chauffeur-driven ministerial limousine for the train. Has he had a chance to explain to other commuters exactly what privatised rail has delivered for the taxpayer—other than the highest fares in Europe? It certainly has not delivered investment. Sir David Higgins, the head of Network Rail, has warned that it would take

“30 years of continuous investment to ensure our railways get to the level of some of the European railways that we admire”.

Dividends to shareholders of the big five transport companies that are contracted to run the UK rail service have reached nearly £2.5 billion since 2000, and there are plenty of examples of excessive boardroom pay; some of the highest paid directors have received in excess of £1 million.

However, East Coast and Directly Operated Railways offer a genuine alternative, with all profits being reinvested in services or in the Treasury—money which otherwise would have been used as dividends for shareholders or bonuses for fat cats. According to the “Rebuilding Rail” report, the cost of running the railway has more than doubled in real terms since privatisation. It is estimated that privatisation costs the equivalent of £1.2 billion a year—more than the cost of public ownership.

In the face of multiple market failures, higher costs to the public in fares and subsidies, and lower premium payments, there is nothing more ideological than the Minister and the Tory party remaining wedded to this disastrous railway privatisation policy. I hope he will listen to the concerns expressed today by Members, and by the British public, and end this failed franchise policy.

[Several hon. Members]

rose—

East Coast Main Line

Grahame Morris Excerpts

Wednesday 5th June 2013 Westminster Hall

[Martin Vickers (Cleethorpes) (Con)]

It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate the hon. Member for Middlesbrough (Andy McDonald) on securing this useful debate. We can sing the praises of East Coast—I am happy to do so as someone who uses its services every week; it does not provide a bad service at all—but the idea that this is some way towards being a golden age compared with GNER, which first took over the line and provided an excellent service, is a myth.

As I have said, I am happy to congratulate East Coast, which gets us here every week, usually on time. Passengers want a clean, reliable, safe and reasonably priced service. When they sit back in their seat, they do not care whether the track is operated by Railtrack, Network Rail or a private operator, or whether their seat is in a private coach or a publicly owned one.

[Grahame M. Morris (Easington) (Lab)]

To set the record straight, is it not the case that both GNER and National Express had to hand back the franchise, but this nationalised, directly operated rail service has handed £602 million back to the Treasury?

[Martin Vickers]

The fact that there is one failure—whether in the private sector, the public sector or wherever—does not automatically indicate a flaw in the system. The hon. Member for Jarrow (Mr Hepburn) said that the change would be privatisation for privatisation’s sake, but the opposite is equally true: do we want nationalisation for nationalisation’s sake? That is certainly what Opposition Members seem to want.

In his opening remarks, the hon. Member for Middlesbrough referred to Northern Rail, but to compare it with East Coast is to compare apples with oranges—a regional operator with an inter-city one. Northern Rail provides a perfectly adequate service in my constituency, between Cleethorpes and Barton-on-Humber, but it does not serve such great metropolises as York, Darlington and Doncaster. The station at Thornton Abbey—in a beautiful, idyllic setting—actually serves two farms and an ancient ruin, and I think it had 13 passengers during 2009. East Coast is fine; it provides a perfectly adequate service, but it does not dash up and down between Newcastle and King’s Cross, so there is no comparison whatever.

I am happy to criticise East Coast when it makes mistakes, which it did when it redesigned its timetable last year.

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[Stephen McPartland]

I was disappointed to hear my hon. Friend say that he passes through Stevenage without stopping—I would prefer him to stop an awful lot more. However, I, too, congratulate the Government. This Government and the previous Government have done a lot of good work on the rail industry, and we could look at the way in which King’s Cross is being changed.

[Grahame M. Morris]

Will the hon. Gentleman acknowledge that the privatised rail operators are costing the public purse—the taxpayer—£4 billion a year in subsidy? Since the east coast service has been nationalised, it has cost only £1 billion a year.

[Stephen McPartland]

I would not be able to acknowledge that, because I do not know the figures, but I can take the hon. Gentleman’s word for it.

Many people have said that the private sector ethos is not something we want to introduce to East Coast. In May 2011, I was fortunate enough to persuade East Coast to increase the number of services stopping in Stevenage by 18 per day. The number of services rose from 40 to 58 a day, which means an extra 9,000 seats a year. That all sounds great. It was the biggest rise in services to any location on the east coast main line. I did an awful lot of work on that. The individual I spoke to, who was the chairman of East Coast at the time, was previously the chief executive of First Capital Connect, and she took the private sector ethos that she received and learned at First Capital Connect and introduced it to the east coast main line. The reason First Capital Connect is important is that it shares the Stevenage station, effectively, with East Coast, and one of the main problems on a franchise that is 960-odd miles long is that it deals with so many other local operators. The point has been made that an interaction with local services would be hugely important and beneficial to many of our constituents. Fortunately for us, it works well in Stevenage.

Stevenage is only 30 miles from London, and the debate seems focused very much on services between London and the constituencies of some Opposition Members, and London and my constituency. A couple of years ago there were almost 40,000 journeys a year from Stevenage to Newcastle; a year ago there were nearly 50,000 journeys from Stevenage to Leeds; there are 11 services a day from Leeds to Stevenage and back. Stevenage is the capital of the UK space industry. We employ more than 10,000 scientists and engineers and build 25% of the world’s telecommunications satellites. A couple of days ago a satellite built in Stevenage went up, which will be responsible for broadcasting everything back to the UK. Interacting with a high-technology area such as Stevenage is important. People who engage in debate about this issue always seem to focus on the idea of a long-distance operator running the service, with Peterborough as the closest place people could get to—where they would have to change. As my hon. Friends have explained, that gives rise to the question whether it is cheaper to do that, or just to go on a plane or drive. Many of my constituents will drive to Heathrow airport and fly to Scotland, because that is cheaper than going by East Coast train. That is ridiculous. Sadly, it is faster. That is another problem. The debate and our efforts should focus on passenger satisfaction. Whether the service remains private or becomes public, or a mutual, that should be the whole idea.

In my final 30 seconds I have something to put to the Minister. Wherever the future of east coast ownership lies, it should include a mechanism for the removal—or, in today’s language, the recall—of the rail franchises, if any rail passengers are dissatisfied.

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[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Dr McCrea, and I congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on the timely and comprehensive speech that he gave on this very important subject.

Government Members have accused Labour Members of making this an issue of ideology. Well, in Westminster Hall today we have a Minister who oversaw the architecture to privatise the NHS and who is now overseeing the privatisation of a successful publicly owned rail franchise in the north-east. Indeed, this process is an experiment. Under the previous Conservative Government, the rail network was broken up and a new model devised in a way that any objective commentator must acknowledge was a failure.

We have seen a decline in the quality of service, a lack of investment, higher public subsidies and inflation-busting fare increases since privatisation. In fact, a report by Just Economics showed that UK rail services were less affordable, less comfortable, slower and more inefficient than publicly owned rail services in Germany, France, Italy and Spain. British train tickets are now the most expensive in Europe. A typical season ticket in the UK now costs 14p per kilometre, compared with just 8p per kilometre in Germany, Holland and France, which are the next most expensive countries in Europe. So, if we are making comparisons on price or value for money, the privatised franchise model that we have here just does not stack up.

I do not wish to go off the rails in terms of time, Dr McCrea, but I am under a bit of pressure and we have had some first-class contributions from Members. I do not want to repeat what has been said. However, I am perplexed about why, after four years of stability, rising passenger satisfaction and significant returns to the Treasury, the Government are rushing through the privatisation of the east coast main line, if not for reasons of ideology and dogma, ignoring the evidence. Conservative Members ask, “Would you nationalise the industry?” Well, in public polling, not just of Labour voters, but generally, those in favour of nationalisation poll in excess of 70%, by MSN and NOP and 93% in The Guardian. There is nothing more ideological than privatisation for privatisation’s sake. This is a privatisation too far, and it is not fit for purpose.

[Dr William McCrea (in the Chair)]

Order.

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[Mr Burns]

I will return the compliment the hon. Gentleman gave me earlier by saying that he is on the reasonable wing of the parliamentary Labour party. I have to tell him, though, that Members from the more exotic wing of the Labour party were not saying that in their speeches; they want the east coast main line to be permanently in the public sector, not the private sector.

[Grahame M. Morris]

That is what the public want.

[Mr Burns]

The hon. Gentleman is a dinosaur in health, and he has now moved to transport. I hope he is not following me around.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 29th November 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

My hon. Friend is right to highlight the congestion on this junction, and I would be delighted to meet him and a delegation of his constituents to discuss it.

[Grahame M. Morris (Easington) (Lab)]

T2. I was interested to hear the Minister’s reply to Government Members about projects in the south, but I hope that he is aware of the huge disparity in public transport infrastructure investment: £5 per head in the north-east compared with £2,700 in London. Will he confirm, therefore, how many carriages will be built under the intercity express programme contract and how many carriages my constituents on the east coast main line can expect to see operating?

[Norman Baker]

It is not fair to talk about the disparity as the hon. Gentleman describes it. He might be relying on the Institute for Public Policy Research North report, but that report is incomplete—for example, it did not take into account the December 2011 local majors announcement. Of the local major schemes announced in the 2011 autumn statement, 62% by value were in the north and midlands and 35% were in the north alone, while 40% of projects in the 2010 spending review were in the north alone. It is a misrepresentation, therefore, to describe the investment as he has done. On the railway matters, I will ensure that he receives a written reply.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 19th April 2012 Commons Chamber

[Justine Greening]

I want to ensure that motoring is affordable for everybody. I think my hon. Friend’s question perhaps relates more to Treasury questions than to Transport questions and I know that my right hon. Friend the Chancellor has introduced and put in place plans to pilot such a rural fuel duty discount. I am sure that she will make her case to him on whether it could, in time, be extended to her community, too.

[Grahame M. Morris (Easington) (Lab)]

8. What assessment she has made of the effect on jobseekers of rail fare increases.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

No specific assessment has been made of the effect on jobseekers by my Department. The Department for Work and Pensions has a scheme in place to assist jobseekers. Jobcentre Plus issues a discount card to eligible jobseekers to help them travel more cheaply on train services to job interviews and for vocational training. The card offers a 50% discount on a wide variety of fares including London travelcards.

[Grahame M. Morris]

A previous Conservative Secretary of State advised people to get on their bike to find work; it seems that the Department for Transport has taken that advice to heart given the rapid increases in rail fares, particularly over the next two years. Can the Minister confirm that the Government will now allow train companies to increase fares by as much as 8% above inflation over the next two years, and will she at least consider limiting the cost for those people in constituencies such as mine for whom this is very difficult?

East Coast Main Line Call Centre

Grahame Morris Excerpts

Thursday 19th May 2011 Commons Chamber

[Ian Mearns]

The accent is regarded as reliable and trustworthy when it comes to providing call centre services, and that is why the north-east has become a centre for call centre operations. Conversely, it is sad to reflect that unfortunately British customers are averse to call centres based offshore.

[Grahame M. Morris (Easington) (Lab)]

I, too, compliment my hon. Friend on securing a debate on this issue, which is important to the north-east and has some national significance. In view of today’s statement on the McNulty report and the arguments being made by Ministers about needing to reduce the public subsidy to the rail industry, is this not another example of false economy if the method of reducing the subsidy is to transfer overseas UK jobs that support the economy, particularly in areas such as the north-east?

[Ian Mearns]

My hon. Friend makes a very good point. At a time when the Government claim that supporting growth in the UK economy is their priority, surely exporting good quality jobs from the north-east to India cannot be defended. There is also the issue of the public’s perception of the level of service they will get as a result.

The Secretary of State denies responsibility for this while passing on millions in public subsidy. The company received £40 million in direct funding from the taxpayer in the nine months to 31 March 2010 by way of a working capital loan facility agreed with the Secretary of State. Given the investment from the UK taxpayer, surely there must be a moral obligation for a state-owned company to retain jobs in the UK. There should at least be some consideration given to those jobs being taken in-house by the operator. That work is not going to go away. It is a much-needed, public-facing aspect of the train service operation and there is no evidence that the transfer will improve the service afforded to the public.

The Government’s stance could be regarded as hypocritical. They declare their commitment to growth and rebalancing the economy, and day after day they preach to private business about the need to help the economy to recover by creating new jobs, but in the case of East Coast—a company that we fully own—they sit back and permit the export of jobs from a company that belongs to the taxpayer. Let me be clear: my primary concern is for the people whose lives are affected by this, but equally important is the impact on industry of exporting real jobs, particularly customer contact jobs, to another country, which represents a retrograde step away from an integrated transport policy. Despite the McNulty report’s failure seriously to consider the benefits of reintegrating the railways under public ownership, many in the House are convinced that the evidence demonstrates that the reason why railways in Europe are cheaper for the taxpayer and the fare payer is that on the whole they are in public ownership and are less fragmented.

There is a wealth of evidence to show that overseas call centres are not the answer for companies that are looking to cut costs. In May 2004, a Department of Trade and Industry study found that work force costs that had not been fully factored into business evaluations of offshoring included the additional costs of employing local law specialists, consultants and accountants, as well as the cost of redundancies, redeployment and reskilling displaced UK workers. It revealed that staff turnover at Indian call centres in particular was about 25% compared with about 15% in the UK, with an average job tenure of about 12 months compared with three years in the UK. Higher attrition rates surely cannot be beneficial to good-quality customer service.

In July 2009, there was a huge outcry when the Association of Train Operating Companies moved 200 National Rail inquiries jobs from the UK to India. Subsequently, it was widely believed that the quality of service to the British travelling public had decreased. At the same time, BT decided to move 2,000 call-centre jobs back from India to the UK as part of a long-term strategy to cut costs by £1 billion and to reduce dependency on third parties. In 2005, the Select Committee on Trade and Industry reported that customer satisfaction surveys found that UK consumers did not like businesses they believed had offshored their services, preferring to deal with call centres in the UK.

In subcontracting jobs abroad, the company has made a narrow, short-term financial decision. No account has been taken of the impact that the loss of skills and jobs will have on the north-east region, its community and the local economy. Nor has any account been taken of the obvious cost to the UK in benefits of whose who will be made redundant as a result or of the reduction in tax revenue for the Exchequer. The McNulty report states that value for money is not just about pounds and pence, but about how the railway realises its wider benefits to society. Through fragmentation and privatisation, those benefits will be lost.

The industry’s most valuable asset is its work force. These redundancies mark a wasteful loss of knowledge and skills that have been honed through years of experience. They damage the shared commitment to the overall service that a proper public service ethos can bring. They impose a hidden cost of increased interfaces in the industry, blur transparency and accountability and de-clarify lines of responsibility, which would be the hallmark of a more efficient railway.

The blow to the economy of the north-east cannot be overestimated. The loss of these jobs to the region is yet another blow to the local economy and to our local communities. Tyneside already suffers a level of unemployment above the national average. The growth in call centre work has been an important factor in providing new employment in the north-east after the decline of manufacturing and, in particular, heavy industry, which arguably was caused mainly by a previous Government of the same nature.

As we all know, the Government are determined to reduce workers’ rights in the UK. They call it removing red tape and are strongly tempted to try to remove the rights of workers through Transfer of Undertakings (Protection of Employment) Regulations. However, TUPE has been rendered irrelevant in this situation. A worker having the right to follow their work to the new company is simply not a realistic or viable option for those at Baron house, who now face the complete closure of their workplace, with a move for a few possibly to Plymouth or the bulk to India of course being impractical.

The awarding of this customer contact centre contract to a company with operations in Mumbai should not be seen in isolation. It is the next stage in trying to make the company more attractive to potential bidders in preparation for the eventual re-privatisation of the franchise in 2013. Already this week we have witnessed the end of a buffet car service on the east coast main line and the direct service from London to Glasgow has already been greatly reduced. Clearly the aim of the game is not customer service, or even value for money.

Despite the overwhelming social, environmental and economic benefits of retaining services from London King’s Cross to Glasgow, the direct services have been dramatically scaled back from 13 trains a day to just two, one in each direction—the 6.50 am service from Glasgow to King’s Cross and the 3 pm service heading in the opposite direction.

In the context of the McNulty report, clearly the east coast main line has a troubled history. I will not go into that now, but it is important that we think about the Government’s responsibility to manage that franchise. They do have a responsibility and they can change this decision.

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[Mrs Villiers]

Absolutely, in the north-east and right across the country.

Before responding to the hon. Member’s questions, I must first clarify and reiterate the relationship between the Government and the east coast main line operator. East Coast Main Line Ltd is wholly owned by Directly Operated Railways Ltd, which is, as he pointed out, owned by the Government. East Coast and DOR are companies registered under the Companies Act and operate in accordance with their own articles of association and governance. This provides a framework for the operation of the franchise as a free-standing entity in readiness for the return of the franchise to the private sector, a return that was envisaged by the previous Government as well as the current one.

[Grahame M. Morris]

I am slightly perplexed by that explanation and tempted to think of the situation with the banks. The Chancellor and the Prime Minister have told us that influence is being exerted on the state-owned banks to ensure that they lend to small and medium-sized enterprises. Is the Minister suggesting that such influence cannot be applied on this company with regard to jobs?

[Mrs Villiers]

I will explain the relationship between East Coast and the Secretary of State. The aim is for that relationship to replicate the arrangements for franchises elsewhere on the network in order to ensure that the principles of private sector operation are embraced and maintained. The reason for that approach is so that the Secretary of State is able to protect the value of the franchise and the taxpayer gets value for money when the franchise returns to the private sector.

If the Department or my right hon. Friend the Secretary of State were to start intervening in the way the operator runs East Coast, for example by overturning decisions based on commercial considerations, they might well have to answer for their decisions in front of the Public Accounts Committee. I am afraid that we do not believe it a viable option to intervene on the basis of political or non-commercial considerations, even if the Secretary of State were minded to do so.

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[Mrs Villiers]

As I have made clear, the coalition Government’s adopted approach, which the previous Labour Government espoused, is that the franchise should be operated on a commercial basis by East Coast Ltd. It should not be the subject of political direction from the Secretary of State.

[Grahame M. Morris]

That is a crucial point if we are arguing about commercial decisions. As my hon. Friend the Member for Gateshead (Ian Mearns) said in an excellent speech, is there not a weight of evidence from banks, insurance companies and various private sector companies that overseas call centres are becoming less and less popular, including with customers, and that therefore any move would damage the potential to sell the franchise to the private sector? Is there not an argument that it would be beneficial to the future sale of the company to keep the call centre at least in the UK, but certainly in the north-east, where it is?

[Mrs Villiers]

The people best placed to make the decision about what is best for the East Coast operation are the specialist practitioners who run East Coast Ltd, not Ministers, not Members. Those practitioners are the best people to make the best decision about what is in the interests of fare payers and taxpayers. East Coast is confident that the new arrangements will deliver better services for passengers and far better value for money.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 5th May 2011 Commons Chamber

[Grahame M. Morris (Easington) (Lab)]

Will the Secretary of State commit, as the previous Labour Government did, to legislate for a high-speed rail line all the way to the north, and in so doing convince the sceptics that the Government have a credible economic policy that would benefit all the regions?

[Mr Philip Hammond]

As I have said many times at the Dispatch Box, the Government’s programme is for a Y-shaped network that will take the high-speed railway all the way to Manchester and Leeds. I am aware of the scepticism among some Members and others outside the House about our commitment to that programme. I have discussed this matter with Members of all parties interested in securing this programme, and I have given a commitment to find a way of getting into the first hybrid Bill a commitment to the Y-shaped network sufficient to reassure those Members. However, it simply is not practical from a parliamentary point of view to have a single hybrid Bill dealing with the whole line, so it will have to be done as two hybrid Bills. We will ensure that the first Bill contains a commitment sufficient to satisfy the hon. Gentleman and his hon. Friends.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 27th January 2011 Commons Chamber

[Mrs Villiers]

I know that my hon. Friend has championed this cause, and I enjoyed my visit to the disused rail line. Programmes such as he outlines can confer significant local benefits, but it is primarily for the local authorities to identify the funding to restore railway lines and, importantly, to identify the funding for any ongoing subsidy that is needed. Local authorities may well wish to consider those options in order to enhance economic growth in their areas.

[Grahame M. Morris (Easington) (Lab)]

What assessment has been made of increasing fuel prices and the rising costs of motoring in rural areas, particularly for lower-income households?

[Mr Hammond]

No specific assessment has been made by my Department, but I can tell the hon. Gentleman that independent assessments suggest that between 1997 and 2010 the real cost of motoring has declined by 7%.

Volcanic Ash (Impact on Aviation)

Grahame Morris Excerpts

Thursday 10th June 2010 Westminster Hall

[Gareth Johnson (Dartford) (Con)]

Thank you, Mr. Benton, for giving me the opportunity to make my first speech in Westminster Hall. The issue of the volcanic cloud emanating from Iceland caused huge problems for people travelling abroad and for those trying to get home in April. British airspace was closed for six days, but it was also significant that the disruption lasted much longer than that. The problem also compounded the difficulties that the airline industry has been suffering. The recession hit the industry hard, and the grounding of all flights for days on end simply added to those difficulties.

Estimates vary—the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) quoted some relating to the airport in her constituency—but the EU estimates that the ash crisis cost the airline industry £2 billion. We can all agree that there was significant loss to the industry. We shall probably never know the true figure. About 100,000 flights were cancelled in the relevant period. The industry must accept that running any kind of business will never be risk-free, but we must also recognise that April 2010 was an exceptionally tough month. Not since 11 September 2001 has aviation faced such a challenging time. The right hon. Member for Gordon (Malcolm Bruce) mentioned the surreal experience of looking up at the sky and seeing not a single aeroplane or jet engine trail, for a protracted period; I think that was only the second time that has happened in my lifetime.

I want to mention the difficulties that travellers faced. The uncertainty of the situation meant that not only could people not return home, but they did not know when they would be able to do so. There were Dartford residents who were affected by the travel disruption and could not get home or travel abroad. The ash cloud problems also coincided with the school holidays, and many people who had gone on family holidays could not return home, which had a consequential impact on them. Even my Liberal Democrat opponent in the general election, Mr. James Willis, could not get home until just before the nominations closed. Obviously, I was deeply concerned. He is a decent chap. It was sad that even in the middle of that difficult time for travellers, one airline tried to avoid liability for refunding passenger tickets, which added to the misery, uncertainty and difficulty for those travellers.

My hon. Friend the Member for Stourbridge (Margot James) mentioned leadership, which the country looked for during that period. Clearly, safety had to be the priority for the Government. They needed to ensure that it was safe for people to fly, but we need to consider whether more information on the ash cloud could have been gathered more quickly than it was, and whether flight restrictions could have been removed earlier, reducing the impact on travellers and airlines. The then Government’s initial approach was to claim that any ash in the sky meant that flights could not take place. We now have a new approach. I welcome last month’s rule change to allow flights when there is ash in the atmosphere at the safe level of 2 mg per cubic metre. We need to ensure that that is reviewed, and to consider whether the non-aviation options were properly thought through.

We also need to see whether the contingency plans shaped up. Has the Minister been able to get to the bottom of what happened to the 100 coaches we heard so much about—which were meant to bring stranded British subjects home at the same time that coaches were being used by travel companies, and were at a high premium? As far as I can tell they never materialised, so perhaps lessons can be learned from that. We need to learn such lessons, because we must ascertain whether the decisions that were made were too cautious. I believe it is inevitable that a similar situation will happen again—probably with the same volcano, whose name I shall not even attempt to pronounce. However, we can ensure that if planes can fly safely, they are allowed to do so.

We need also to learn the lessons about the repatriation of passengers, and what practical measures might have been possible to help passengers who were stuck abroad. Will the Minister consider the possibility of temporarily—I emphasise the word “temporarily”—waiving night-time restrictions on flights, to allow people to get home should a similar situation occur in the future?

[Grahame M. Morris (Easington) (Lab)]

On deregulation, I appreciate that the Conservative party is committed to the deregulation Bill, but a fundamental point of passenger safety arises and we cannot allow compromise; it must be paramount. To allow commercial interests to influence our judgment would be a terrible mistake, with potentially dangerous consequences.

It was refreshing to hear the hon. Member for Stourbridge (Margot James) suggest that perhaps the Government at the time were not to blame. Sometimes it is easy to throw rocks, even volcanic ones, at one’s opponents—in this case, the previous Government. A new phrase to use might be “tough on volcanic ash and tough on the causes of volcanic ash”.

On working with the authorities and technical people, the right hon. Member for Gordon (Malcolm Bruce) talked about the technologies—I am not sure whether they are radar or infrared technologies.

[Mr Joe Benton (in the Chair)]

Order. The hon. Gentleman’s intervention is getting rather lengthy and becoming a speech. I invite him to complete it, but he should bear it in mind that interventions should be as brief as possible.

[Grahame M. Morris]

Thank you, Mr Benton; I apologise.

My point is essentially about deregulation and not allowing it to compromise passenger safety. I would hate the drive to deregulation in the broader political environment to impinge on that, because it is vital.

[Gareth Johnson]

I agree with the hon. Gentleman that we must of course ensure that safety is treated as paramount in such situations, but it is also essential to adopt a common-sense approach. We should not enter a blame game, but should learn the lessons that are there to be learned, so that if the same situation arises again, as I believe it will, we shall be better prepared to deal with it, and so that people stranded abroad can be brought home and can fly as soon as it is safe. To learn the lessons, we need to work with the airlines, the Civil Aviation Authority and all the agencies involved, so that there can be proper contingency plans.

I agree that it is easy to look back at the volcanic ash problem with 20:20 hindsight and claim that we have all the answers, and that the previous Government should have done this or that better. That would not be fair in many instances, because at the time we faced a unique situation. However, a Government’s capability can be tested in unique situations. We witness the contingency plans—where they exist—the quality of leadership, and a Government’s adaptability in unpredictable situations and how they interact with different agencies. In the light of that, I hope my right hon. Friend the Minister will confirm that the aviation industry will be able to contribute to the scientific and technological assessments of flying into areas where ash is present in the atmosphere. I hope the technology that some airlines are already using—an issue touched on by my hon. Friend the Member for Stourbridge—will be considered for use in detecting the location of ash clouds and their density. I also hope that we continue to work in partnership with the engine manufacturers, because they understand better than anyone the capabilities of their engine and the circumstances in which it would be unsafe to fly using their engine type.

Yes, ash clouds can be extremely dangerous to aircraft, and the crew and passengers of the 1982 British Airways flight over Indonesia, which was mentioned earlier, can testify to that, but we need common sense to prevail. The zero-tolerance approach was clearly wrong—we know that now—and the repatriation of passengers lacked co-ordination. We need to learn from that and ensure that when this situation happens again, we are better placed to tackle it.