Local Bus Market

Iain Stewart Excerpts

Thursday 10th January 2013 Westminster Hall

[Iain Stewart (Milton Keynes South) (Con)]

It is an honour to serve under your chairmanship, Mr Walker, and it is always a pleasure to follow the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). I certainly enjoyed working with her and my Select Committee colleagues on the inquiry.

Bus travel certainly affects many of our constituents, and I am probably not alone in having the issue generate a fair chunk of my e-mail inbox and postbag. It was one of the first issues that I had to deal with after I was elected, and the Minister may recall that he answered an Adjournment debate that I secured within a few weeks of the general election. Before the election, my local bus company had unilaterally decided completely to reorganise its route network and timetable, without holding effective consultations, which created many problems.

I will not trouble hon. Members with the details, but many of the issues have now been satisfactorily resolved with the council, the bus company and a new bus users group. None the less, that underlines the importance of the issue and the need to have effective consultation between all the different players in the industry. There has been a happy outcome; bus usage is up in Milton Keynes. The latest figures show an 8% increase. We even got a name check in the Government’s document, “Green light for better buses”. I hope that some of the lessons that we have learned locally will be of wider benefit to the country.

The main conclusion that I draw from our investigation is that each local market is different. There is no optimal one-size-fits-all system of regulation for local bus services. What works in a large city region might not be applicable to a small cathedral city, which might be different from a new town, which might be different from a semi-rural area with many market towns and villages.

As part of our investigation, we visited Oxford, which had the most impressive transport model. I accept though that it might not be directly applicable in other areas. Good co-ordination between the different bus companies and the local authority on timetabling, routes, the location of bus stops and, crucially, ticketing has led to a welcome increase in bus usage. The model allows the ideal form of competition, without the negative aspect of different companies aggressively competing for customers.

Organised competition enables passengers to choose between different operators and drives up standards. If one operator lets its standards slip—unreliable and dirty buses and unfriendly drivers—passengers can easily switch to its competitor. I very much liked that model and saw that it could be used in other areas. The Government’s better bus area fund will help allow other local authorities to explore similar schemes and to adjust them to suit their own circumstances.

I also welcome the Government’s decision to retain some flexibility for local authorities in the regulatory structure. As I have said, different models will suit different areas, and it is right for local authorities to select the most appropriate one for their area. A successful scheme should not be kept as a secret that no other authority can pick up on. I agree that there is a role for the Department for Transport and for bodies such as the Local Government Association to share best practice and to encourage similar types of authorities to look carefully at certain models.

Furthermore, I suggest to the Government that we explore ways to move beyond just bus regulation systems—although, obviously, that must remain the main focus. There is scope to consider how regulation might be combined with buses and other modes of public transport, such as local rail services or tram services, which are being developed in many English cities.

PLUSBUS is a scheme that allows combinations of rail ticketing and bus ticketing, which is fine as far as it goes, but I suspect that it is not particularly well known or well used, and a lot more work could be done in that area. Indeed, when we looked at the competition element in the inquiry, I asked the Competition Commission whether it was looking at competition in the context of local transport services as a whole rather than just bus against bus, and I was not satisfied that it was. Clearly, better decisions could be made in that area further down the line.

Looking at transport services as a whole will be particularly important as technology evolves and more smart-ticketing options become available. I am talking about not just multi-operator tickets, which passengers can use to pop on and off different buses run by different operators without having to take a new ticket, but multi-mode tickets. The Transport Committee saw such a scheme on our recent visit to the Netherlands, Germany and Switzerland as part of our rail inquiry. One of the lessons that we received, particularly in the Netherlands, was on the development of end-to-end journeys. Dutch state railways provide the equivalent of Boris bikes and bus tickets, tram tickets and railway tickets, and it even hires out electric vehicles in city centres. The technology to allow that to be done seamlessly is developing all the time and will open up different opportunities in the future.

The single key lesson must be that passengers have confidence that when they use their smart tickets, they will be charged the cheapest fares. The system will not work if there is a fear that their accounts will be debited a vast sum of money because they have selected the wrong permutation of journeys. There must always be confidence that the consumer will get the best value ticket. I am not sure whether that requires specific Government regulation, but it is something that needs to be taken on board.

There is an upward pressure on bus fares, as there is on every mode of transport, whether private or public. That is primarily a product of rising fuel energy costs and of councils and the Government having to grapple with the public deficit, and that is not going to go away. However, I take an optimistic view. Potentially, there is a bright future for bus usage and bus fares. It is surely an economic fact that, if we encourage more people to use buses, there will be a downward pressure on fares. The reason for that is simple: if the same fixed costs are covered by a greater number of users, the unit cost will be reduced. That is a basic economic fact.

Many studies have shown that the primary factor valued by both existing and potential bus users is not so much cost but the frequency and reliability of services. If we can instil confidence in people that bus services are reliable and effective, more and more people will be encouraged to use them. There are many good examples of transport systems around the country. I highlight in particular the scheme in Oxford, which has a lot of potential.

I urge the Government to look at our recommendations for sharing best practice and for making sure that local authorities are encouraged to develop these new schemes, and I am sure that that will deliver a healthy increase in bus patronage in the future.

Rising Cost of Transport

Iain Stewart Excerpts

Wednesday 9th January 2013 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

I am pleased to have the opportunity to contribute to the debate. This is an important issue; there is a serious debate to be had about how we finance investment in the rail industry in future and about the cost of transport today. Like hon. Friends who have spoken, I will have no problem in voting against the Opposition motion; with depressing predictability, it is rather opportunistic, denies their record and contains few concrete proposals for the future. I asked the House of Commons Library for figures on how much rail fares increased between 1997 and 2010. The answer was 56% for local and regional operators and 98% for long-distance trains. Rail fare increases did not begin in May 2010.

My first main point is that although the debate on rail fare increases is important, the reporting is not always helpful or accurate; the headline turn-up-and-go “Anytime” rail fares are often cited and from that it is extrapolated that Britain has the most expensive rail system in Europe. However, those tickets account for less than 20% of ticket sales. When we look at the whole series of available fares, the position is not as straightforward.

In preparing for this debate, I looked at the Virgin Trains website for a hypothetical journey from Manchester to London. Yes, if I wanted to travel in peak time, turn up and go, a single would cost £154—a large sum. However, a wide selection of other fares for the same journey, as low as £12.50, was available on a wide range of trains. The point is that we have to look at the whole mix of fares, not just the headline ones.

We do not have the same debate in the airline industry. The difference between the cheapest and most expensive air flights on the same route, say to New York, is enormous—from a couple of hundred pounds to £1,500 if someone wanted to turn up and go.

[Mark Lazarowicz]

I am sure that it is possible to get a £12.50 fare from Manchester on Virgin Trains on some occasions. However, does the hon. Gentleman not accept that that £12.50 will be valid to London Euston, but if he wants to go to Brighton, Dover or the south-west of England with a different operator, he will not be able to get a through ticket at that rate? He will have to get two separate tickets, which might cost more than a single through ticket, because he will not be able to get a cheap through ticket.

[Iain Stewart]

I accept that there is an unnecessary complexity in the rail ticketing system. The Transport Committee has looked at that issue and will continue to do so. If the hon. Gentleman will forgive me, I will not go too far down that path, as time is limited, but he has made a valid point.

The comparison with Europe is interesting. A very good website called “The Man in Seat Sixty-One” does an independent comparison of European rail fares. Yes, when you look at the “walk up and go any time” fares, the UK is substantially more expensive, but on other tickets, including buying the day before, Britain is either on a par with France, Germany or Italy or very often considerably cheaper.

I mention that because when we talk about rail fares, we need to differentiate between passengers compelled to travel at a particular time of day and the vast majority who have some flexibility over when they travel. The Opposition are right to highlight in the motion the issue of super-peak tickets, but they miss an important point. I completely accept that some passengers will not be able to change their time of travel, but others can. A super-peak ticket should not be designed to increase prices but to give rail operators the flexibility to discount other peak-time travel and encourage passengers to travel slightly later or earlier if possible.

[Bob Stewart (Beckenham) (Con)]

Will my hon. Friend give way?

[Iain Stewart]

Certainly.

[Bob Stewart]

I thank my hon. Friend and namesake. Is it too utopian to hope that one day in future, rail fares, whatever they are charged at, will go up only by the rate of inflation, and that when we need to renovate our railways the Government will deal with that?

[Iain Stewart]

I am not sure whether it is utopian. The increased cost of investing in our railways has to be met by a mix of passenger contributions and taxpayer contributions. At the moment, the balance is about right. The cost of travel by any means is going up, and that takes into account the extra costs of energy. Similar debates are happening in Switzerland, Germany and other countries about how they cope with paying for the extra investment in the rail industry.

I return to my point about whether we can incentivise passengers to travel outwith the super-peak period. That is a line of questioning that I followed during the Transport Committee’s investigation when those in the rail industry were asked about what percentage of the daily commuter market could move their journeys as opposed to having to travel at the times they do. They were very reluctant to give a figure on that, so it is an area of uncertainty, but my own view is that with improvements in technology and more flexible working patterns, that share of the market will grow. In the last job I had before I was elected here, I had some flexibility because I could plug into the company’s database system and do a fair chunk of my work from home before having to travel in for meetings. If more and more employers give that flexibility to staff, as is entirely possible, it is perfectly feasible that rail operators will have an incentive to discount tickets—the shoulder, as it were—instead of putting up the super-peak fare, which I accept would be very unwelcome.

Time prohibits me from going into some of the other issues in depth. As the hon. Member for Liverpool, Riverside (Mrs Ellman) said, I hope that we have a further opportunity to explore the issues raised in the Select Committee report. There is a need to get the costs of running our railways down, as has been highlighted in McNulty and many other studies. I am encouraged by some of the innovations that are happening. I think particularly of the alliance between Network Rail and South West Trains. It is too early to give a full evaluation of that, but it is already showing signs of making it more efficient and cost-effective to maintain and improve the railway. There is the possibility of increasing revenue from retail space at stations. These factors will all feed into generating revenue for the railways and maintaining the pressure on keeping fare increases down.

I look forward to the Government’s conclusions from its consultation on ticketing. There is a real opportunity to drive down the cost of rail tickets in this country. However, we must look at the whole picture and recognise that we are pretty competitive compared with a lot of European countries. There will be pressures in future—that is a problem with the success of the railways to date—but the picture is not all bleak, and I very much welcome the steps that the Government are taking to improve the situation further.

West Coast Rail Franchise

Iain Stewart Excerpts

Thursday 6th December 2012 Commons Chamber

[Mr McLoughlin]

I think the hon. Gentleman, in a rather convoluted way, has called for the renationalisation of the railways. That is certainly not something this Government will do. If he can convince his Front Benchers that that might be the right way forward, we will be interested to see that development.

[Iain Stewart (Milton Keynes South) (Con)]

I very much welcome the additional services and carriages that the Secretary of State has announced. In addition, both Virgin and FirstGroup pledged in their bids significant long-term enhancements to services on the west coast main line. Whatever conclusions are reached following the Brown report, will he ensure that these additional benefits are still secured for passengers?

[Mr McLoughlin]

I am sorry, but I missed the last part of my hon. Friend’s question. I know that he, as a member of the Transport Committee, will continue to press for a very good service through his constituency.

Air Travel Organisers’ Licensing

Iain Stewart Excerpts

Thursday 22nd November 2012 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I am sorry, Mr Williams, as that comes as a bit of a surprise in that I was anticipating other colleagues to be called to speak before me. However, I am grateful for the opportunity.

[Iain Stewart (Milton Keynes South) (Con)]

In the interests of clarity, I should say that my ambition is to speak in the second debate. I hope that this brief interruption gives the hon. Gentleman time to get his paperwork in order.

[Jim Fitzpatrick]

Given the number of colleagues who have been able to attend, and given other business in the House, I would have thought that the hon. Gentleman will have ample opportunity to make a substantial contribution to the second debate, given that we have three hours in which to discuss both reports.

Welcome to the Chair, Mr Williams. It is a pleasure to see you presiding over our business. I also welcome the 17th report from the Select Committee on Transport, “Air Travel Organisers’ Licensing (ATOL) Reform”. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Chairman of the Committee, eloquently outlined in introducing the report, the air travel trust fund has its origins in the 1970s, but in March 2012 it registered a deficit of some £18.5 million. She mentioned the fact that in 1992, 98% of holidays were covered by ATOL, but in recent times the figure for the market in package holidays, which were the original target for the protection scheme, has fallen way below 40%.

As my hon. Friend also outlined, protection is not just good; it is essential. When companies fail, citizens may be abandoned, and certainly distressed. Responsibility is then on the Government to rescue them, and ultimately the taxpayer must foot the bill. That cannot be right. If people are able to enjoy holidays abroad, there must be some responsibility on them, as well as the organisations that get them to their destination, to ensure that they are covered for returning home. The previous Government were addressing the need for reform, and this Government have carried that on, as well as the need to close the deficit, balance the fund and provide future protection in the light of how bookings are made in the 21st century.

A helpful briefing from the Association of British Travel Agents says in respect of the modern way that people book holidays that

“robust evidence exists to prove that airlines can and do fail financially. Since 2000, 46% of monies paid out from the ATTF on failed ATOL holders can be attributed to the knock-on effects of airline insolvencies.”

It continues:

“In the last three years alone, 51% of all claims on the ATTF can be attributed to monies paid out following failures of ATOL holders as a direct result of airline insolvencies”.

That reinforces my hon. Friend’s point about the modern way of booking holidays.

I shall refer to some of the recommendations in the Committee’s reports, and to the Government response, to reinforce what my hon. Friend said. Recommendation 2 says that additional consumer protection is needed, and in respect of consumers the Government responded

“so they can make alternative arrangements for financial protection, if desired.”

The essential question here relates to many of the points made by my hon. Friend and to the Committee’s recommendations. As she said, only four consumers responded to the report. We had an exchange about consumer awareness of whether they are protected. People want to book the best holiday at the cheapest price, and they may not recognise whether those holidays are ATOL protected. Therefore, the Government’s comment in response to recommendation 2—that consumers

“can make alternative arrangements for financial protection, if desired”—

is somewhat inadequate. We do not want people to want to be rescued; we want them to help to pay for the cost of being rescued, because if they do not, the rescue is down to the Government and the taxpayer foots the bill.

That theme is continued in recommendation 7. The Government responded:

“When a consumer does not receive a Certificate, they will know that they will not be covered by the ATOL scheme”.

However, I am not sure that the consumer will know about that if they do not receive a certificate. It is clear that a lot of people, over recent years and decades, have been stranded, thinking that they were covered, without realising that they were not, because they did not understand the scheme.

Subsequently, the Government say that they

“will consider with the CAA… suggesting information that should be provided to consumers about financial protection every time that a flight is purchased.”

Our point of view, and the theme of the Committee’s report, is that everybody should be protected, and a way must be found to ensure that that protection is included in the price of the holiday.

Finally, the Government’s response to recommendations 5 and 9 states:

“The requirement that those organising and selling package holidays should have in place provision for refunds or repatriation in the event of organiser insolvency comes from the PTD.”

In our view, the position is straightforward: the Government need to ensure that consumers are protected, even against themselves.

Competition within the travel industry is fierce, with many great holidays on offer from airlines, travel companies, package holiday companies, and all manner of individual organisations and collectives, and the Committee is asking a number of questions that the Government need to address. My hon. Friend detailed those issues in her opening remarks, covering the scheme’s history and asking the Minister a number of questions that I know he will respond to in due course, because they are outstanding from the Committee’s report. I have reinforced some of those questions, because they are fundamental to the well-being of the scheme.

The scheme has been reformed in recent years, and that continues with the amendments to the Civil Aviation Bill moved by the Minister in the House on Tuesday. Clearly, the Government are indicating that they will continue with that reform and that, in due course, they will hold a consultation on future reforms. Comments made to me and to the Opposition suggest that there is keen interest in continuing the reform process and in making progress. If I remember correctly, the Minister said in the House on Tuesday that a further consultation is due in the spring, but the question from the industry, consumer groups and the Committee is, when is it likely to happen and can it be expedited?

This is unfinished business, going back many years. We began with it in government, and it is great to see the coalition continuing with it. We want the situation reformed, the deficit bridged, and the fund to be in surplus, not in excess, with enough to cover any contingencies. The whole travel industry—airlines and travel operators—wants exactly the same thing. There is agreement that progress has been made over recent years, but work remains to be done and I look forward to the Minister outlining how he intends to finish the job.

Flight Time Limitations

Iain Stewart Excerpts

Thursday 22nd November 2012 Westminster Hall

[Iain Stewart (Milton Keynes South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Williams, and to take part in this important debate. It is also a pleasure to follow the hon. Member for Liverpool, Riverside (Mrs Ellman), Chair of the Select Committee on Transport, who has comprehensively set out the scope of our inquiry, investigation, conclusions and proposals.

We have many debates on transport—different modes of transport, their economics, speed and social impact—but surely our most important debates are about safety. Any transport accident results in terrible cost, but clearly, the consequences of an airliner incident are particularly severe.

I have been concerned for some time about the proposals from the European Aviation Safety Agency. In addition to our work in the Select Committee, I have had meetings with the British Air Line Pilots Association. I also have a constituent who is a long-haul airline pilot, with whom I have had some discussions about the current situation and the potential consequences of the proposals.

[John Robertson in the Chair]

As has been said, the UK currently has among the strongest regulations in the world, but that does not mean that we are immune from problems. The shocking statistics have already been mentioned: 43% of pilots have reportedly fallen asleep involuntarily on a flight, and, even more disturbingly, 31% have woken up to find the co-pilot also asleep.

[Mr Burns]

May I put that in context? Those are not hard and fast statistics but a poll, which is slightly different.

[Iain Stewart]

I appreciate that it was a poll, but that finding must give us cause for concern. It gives us no room for complacency.

I want to back up those findings with an example, given to me by my constituent, of what it feels like to be a long-haul pilot. In a letter he sent me, he said:

“As I am sure you have experienced, occasional jet lag gives you a ‘hung over’, jaded feeling. Perpetual jet lag, as experienced by…long-haul pilots, gives you a much deeper seated, longer lasting ‘hung over’ feeling, with a reduction in your capacity for lucid, quality decision making…Additionally, normal sleep patterns take several weeks to return to normal, which is quite debilitating.”

That is what he feels. When we fly in an aeroplane, we put our lives in the pilots’ hands, and we must have a regime that ensures that we are as safe as we can be.

While there are concerns that Europe is harmonising and potentially reducing the standards in this country, the United States is moving in the other direction. It is looking at tightening up its regulations in response, I understand, to the Colgan air accident in New York in 2009, of which pilot fatigue was a proven cause.

As has been mentioned, the proposals for change to our regulations come from EU legislation that was passed in 2008. The possibility of the United Kingdom maintaining its own separate regulatory regime has been ruled out. I am not, in principle, against harmonisation of standards, and I completely accept and welcome the fact that for many countries in Europe, it will lead to an increase in standards. British passengers who, whether for business or for leisure, do not start or finish their journeys in the UK will rely on other European airlines, so that increase in safety is certainly welcome.

I also accept that the harmonisation of standards has potential economic benefits for airlines. They are operating in tough trading conditions, so anything that helps them to survive economically is welcome, but that cannot be at an unacceptable cost to safety.

I will not repeat all the concerns that the hon. Lady listed, but I want to give a couple of illustrations to show why there is cause for concern. Again, I go back to the example of my constituent, who flies long haul and quite often does the Los Angeles to Heathrow route. It is now exactly 3 o’clock, which is about the time the overnight flight from Los Angeles touches down in London. It is pretty windy today, so the landing would require all my constituent’s skills to be conducted safely. If he was flying today, he would have got out of bed at 2 o’clock this morning to get to the airport for a half-past 4 departure, which means that the flight time is 10 or 11 hours.

Currently, planes have three pilots in the cockpit. That gives each of them a chance to have a sleep so that they can rest and refresh themselves. I am no expert in flying a plane—the Minister will be greatly relieved that I am not flying a plane—but for all the modern equipment that modern airliners have, flying them is still a very cerebral job. Pilots are required to make tricky decisions, and to balance different decisions, to make sure the plane flies safely.

As has been mentioned, however, that three-man crew would be reduced to two under the current proposals. That reduces the potential for the crew to sleep in the bunk, and they would have to sleep in their seats. That is not something I can do—I cannot sleep in a sedentary position—but that is what we are going to require pilots to do. To me, that increases risk, and I am not satisfied that the safety implications have been fully thought through.

I want to highlight a couple of other areas that BALPA is particularly concerned about. One is the fact that pilots will be legally allowed to land after being awake for 22 hours. They could also be forced to work up to seven early starts in a row; that has been proved to cause dangerous cumulative fatigue, which can be as dangerous as drink-driving, a fact that is not fully appreciated.

My other concern is one that the Parliamentary Advisory Council for Transport Safety highlighted, and the hon. Lady also mentioned it. The proposals are complicated and interlinked; we are not looking at just one change. The advisory council’s concern was that, because the proposals were overly and unnecessarily complicated, airline companies would be able, inadvertently or deliberately, to misinterpret them, or to pick and choose from them, and they might make a decision in one area without realising its consequences elsewhere. Again, I have some concerns about that.

The decision we have to make is whether these changes amount to an acceptable risk. Any journey, on whatever mode of transport, involves an element of risk; whether we get behind the wheel of a car, get on a bus or train, walk somewhere or fly somewhere, we all accept some element of risk, but I am not yet convinced that the proposed changes fall within the bounds of acceptability.

I am particularly concerned that questions remain about whether the proposals are based on scientific evidence. I accept that the Government cannot act unilaterally in this matter, but they are part of the ongoing discussions in Europe, and I simply urge the Minister, in those discussions, to press his colleagues in Europe to base any changes on science, so that we can be as safe as possible in the sky.

I will end on the point the hon. Lady ended on: I do not want to come back to the House at some point in the future, after a disastrous air accident, to debate whether the changes that are happening now were responsible for that accident.

HGV Road User Levy Bill

Iain Stewart Excerpts

Tuesday 20th November 2012 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

I am grateful for the opportunity to make a further short contribution to this debate, following the Ways and Means debate on 23 October. I will not detain the House by repeating all the points I made then, but I want to put on the record my support for the Bill on Second Reading, and add my congratulations and thanks to the Government for bringing it in. It is a long, long overdue measure.

My interest in this subject stems partly from my membership of the Select Committee on Transport—the hon. Member for Liverpool, Riverside (Mrs Ellman) set out in detail why we have taken an interest—but I also have a constituency interest. Milton Keynes is home to many hauliers and large logistics and distribution companies. The hon. Member for Strangford (Jim Shannon) mentioned that most potatoes in the country come from his constituency. At the top end of the scale in my constituency we have the national distribution centre for John Lewis, so if Members buy their Christmas gifts from John Lewis—other department stores are available—the goods will very likely start their journey in my constituency. I paid a visit to those at the John Lewis distribution centre a couple of weeks ago and asked their opinion on the Bill. They told me: “Our view is that the Bill is a positive step, because it is helping to address the unfair balance of foreign trucks coming into the country with lower diesel costs. In that regard it is very welcome.” I believe that is the typical view of the haulage industry.

I want to use a little example to flesh out the reasons why UK hauliers are currently at a competitive disadvantage. The point has been well made that fuel prices on the continent are lower than in the UK. As of last month, the average UK diesel price after adjustments was around €1.72 a litre. That contrasts with €1.37 in Belgium, €1.35 in France, €1.30 in Luxembourg and €1.44 in the Netherlands, so foreign hauliers coming to this country stand to make a gain of 20-odd per cent. When fuel represents up to 40% of the operating costs of an HGV, that makes a critical difference to the operating margin for many haulage companies. I have had many representations from hauliers, as I am sure other Members have, about the disadvantage they face, not only from international competition, but from cabotage, whereby trucks fill up overseas and can then cherry-pick short-haul domestic journeys in this country. That can create huge employment uncertainty for HGV drivers in this country, which is a problem that I do not think has been mentioned in the debate thus far. I have had representations from constituents who have been HGV drivers for many years who have found it more and more difficult to get long-term permanent jobs because of the competition from overseas lorries. This measure will go a long way to creating some certainty and security in that employment market.

I will not detain the House any longer—I do not want just to go over all the points I made in the Ways and Means debate. I support the Bill and wish it a speedy passage today and in Committee, and I look forward to it becoming law sooner rather than later.

West Coast Main Line

Iain Stewart Excerpts

Monday 29th October 2012 Commons Chamber

[Mr McLoughlin]

Yes; the hon. Gentleman’s points are well taken. However, I do not want to prejudge the Brown inquiry, nor the final Laidlaw inquiry. It is better that I wait for those reports to see whether they have any read-across. I assure him that, as I have said throughout the statement, we are very keen to see good, reliable railway services across the country.

[Iain Stewart (Milton Keynes South) (Con)]

I thank my right hon. Friend for his comments about the continuity of services on 9 December. He also said that he is in discussion with Virgin about enhancing services in December and an improved timetable. Can he give any more details about those discussions?

[Mr McLoughlin]

I am afraid that I cannot give those details at the moment, because we are in negotiations. I know that my hon. Friend wants a better service for Milton Keynes, because every time he talks to me he talks about exactly that. As a member of the Transport Committee, he is one of those people who keep an incredibly close eye on this issue and he will no doubt pursue me at every opportunity.

HGV Road User Levy Bill (Ways and Means)

Iain Stewart Excerpts

Tuesday 23rd October 2012 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

I am pleased to have the opportunity to make a short contribution to this useful debate. Road haulage is an issue of some interest to me, first as a proud member of the Transport Committee. It is, as the Chairman of the Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), said, a subject that we have studied on a number of occasions. I will not detain the House by repeating the points that she made. Secondly, given the location of Milton Keynes and its strategic position, we are home to a large number of logistics and distribution companies. It is a hugely important sector of the local economy. That is in addition to the usual range of small and medium-sized hauliers to be found in urban areas throughout the country.

Like many Members, I have long been aware of the competitive disadvantage that our hauliers have faced. I have received a considerable volume of representations from hauliers based in my constituency that there is a need to end this unfair situation. That covers a number of points. First, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) identified, it is a point of principle that people who use our roads should make a contribution to their maintenance and to expanding the road network. That is a basic common-sense view that is shared across the House.

Secondly, many haulage companies operate on very tight margins. They make only a small profit on the goods that they transport, and when they are faced with unfair competition, that can be a critical determinant of whether they prosper or go under. I had conversations with a local firm that did go under, partly because of the unfair competition that it faced.

A large part of the problem arises because modern lorries have such huge fuel tanks that it is perfectly possible for them to be filled up abroad and drive for considerable distances round our roads without ever having to fill up here. There is therefore no gain for the British Exchequer from duty paid. The hon. Member for Liverpool, Riverside mentioned the cabotage problem. Because of the fuel advantage, they can bid effectively for UK domestic haulage as well as international transport.

The strength of feeling that has been expressed to me by local hauliers is borne out by the strength of the responses to the Government’s consultation document. Well over two thirds of respondents agree that it is a serious problem that must be addressed. I was struck by one of the comments, which was that we need to get on with this quickly. It is an issue that has been debated for many years under Governments of both colours, and I am delighted that the Government have finally found a way to navigate their way round the labyrinthine complexities of EU law. I will not touch on some of the technical issues that might arise, but I hope those can be ironed out quickly when the Bill reaches its later stages.

I want briefly to pick up a point made by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick)—I was about to say for West Ham, but I think that is a football matter, rather than a constituency one. He touched on the topic of rail freight. There is an important link between the measure, rail freight and strategic freight transportation. I have long been of the view that road freight and rail freight need to operate in tandem. Rail freight is viable and makes sense when goods are transported over a long distance. It is in everyone’s interest that the road part of haulage, when goods are distributed from rail freight terminals, is done as efficiently as possible. It goes without saying that it is good for the environment and for solving congestion on roads if we can transport more long-distance goods by rail and free up capacity for the shorter distances by road.

I have had some concern that because we have been at a competitive disadvantage in road haulage, that undermines the potential for international rail freight from the continent to this country and in reverse. I was on the Transport Committee’s visit to Europe last week, looking at rail issues. There we learned that in the Netherlands there is a new dedicated rail freight line across into Germany. In Switzerland new tunnels have been built through the Alps to aid freight travel from the north to the south of Europe. The potential difficulty is that if all these goods are transported by rail through Europe and they get to Rotterdam, say, and suddenly it is in the interest of haulage to switch to road because it can travel to the UK and pay a very low charge, that surely undermines the whole concept of an integrated freight system throughout Europe.

The measure before us will go some way to addressing that possible problem. We can look strategically at freight across rail and road in the European context. There are ambitious plans to improve rail freight, and plenty of spare capacity through the tunnel. There are new types of freight trains where the lorries can drive on to the low-slung rail wagons, which is extremely efficient. That may not be the main point of the measure but I hope it will be an additional benefit from it. I am delighted to support it today. I hope it makes speedy progress through the House. The subject that has been kicked around for far too long. Our hauliers have been at a disadvantage for far too long and it is about time we put that right.

--- Later in debate ---

[Stephen Hammond]

Well—[Interruption.] Mr Deputy Speaker, you are right on all matters, and certainly on that one. If I may, I will write to the hon. Member for Strangford (Jim Shannon) as I am afraid I do not know the answer. Although I could stand here and talk about something, it is better to say that I will write to him when I have the answer.

My hon. Friend the Member for Braintree (Mr Newmark) congratulated a number of his road hauliers—rightly so—and he got to the essence of the argument, which is about equity and economics. He was right to point that out and place it on the record, and I am delighted that his constituency has benefited from the pinch points plan that the Government announced two weeks ago.

This has been a well-informed debate and we heard two contributions, including from my hon. Friend the Member for Milton Keynes East (Iain Stewart), about modal shift.

[Iain Stewart]

South.

[Stephen Hammond]

Sorry. My hon. Friend the Member for Milton Keynes South—an important distinction—made an important point about modal shift and the encouragement of rail freight, and I combine that with the contribution from my hon. Friend the Member for Suffolk Coastal (Dr Coffey), who is no longer in her place. She made a point about the A14 being a key artery, and I will be delighted to meet her over the next couple of days to discuss that matter. She also made the point about a modal shift now that improvements have been made to the rail system out of Felixstowe. That is absolutely right, and I am convinced that the Bill does nothing to impair modal shift, but will enhance it.

West Coast Main Line

Iain Stewart Excerpts

Monday 17th September 2012 Westminster Hall

[Rosie Cooper (West Lancashire) (Lab)]

I beg to move,

That this House has considered the e-petition from Ross McKillop and others relating to the West Coast Mainline franchise decision.

The motion reflects the concerns of more than 170,000 people who have signed the e-petition and it calls on the Government to reconsider the decision to award the west coast main line franchise to FirstGroup.

It is a pleasure to serve under your chairmanship today, Mr Bone. I understand that this is the first Backbench Business Committee debate to take place in Westminster Hall on a Monday. I wish to thank the Committee for accepting the application for this debate and for granting us time before the conference recess. I congratulate the Minister on his new role at the Department for Transport. I am sure that he would have welcomed a less contentious issue so early in his post.

Due to Committee business, members of the Transport Committee are unable to join us today. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) and her Committee colleagues are already interrogating people over this matter.

[Iain Stewart (Milton Keynes South) (Con)]

I am a member of the Transport Committee and I am here.

[Rosie Cooper]

I am glad that the hon. Gentleman is here and is able to contribute to the debate. His colleagues, I believe, are away on business.

The Transport Committee is considering this matter through the work of its Rail 2020 inquiry. Several hon. Members from Lancashire, who are currently attending a meeting with Ministers on employment matters in their constituencies, wish, with your permission, Mr Bone, to speak later in the debate.

More than 170,000 people put their name to an e-petition, which was started by Ross McKillop, calling on the Government to reconsider their decision on the west coast main line franchise. That huge number of signatures, which was collected over a short period of time, reflects strong feelings and shows that the subject deserves to be debated in the House.

On the west coast main line, we are talking about 31 million passenger journeys a year and a £5.5 billion contract that will last for 15 years—that is this Parliament and the two that follow it. Hon. Members from all parts of the House have called on Transport Ministers to give Members an opportunity to scrutinise in more detail the actual process through which the decision was made. In August, my hon. Friend the Member for Garston and Halewood (Maria Eagle) wrote to the then Secretary of State for Transport, asking her to make a statement to the House. This will be the first opportunity for Members from all parts of the House, apart from the Transport Committee, to ask questions of the Minister, to begin to scrutinise the decision and to put their views and those of their constituents directly to the Minister.

A considerable amount of press coverage and opinion seeks to make the issue one of FirstGroup versus Virgin. Personally, I do not care much about the name of the company that provides the service. My priority is to ensure that the final decision, taken by the Department for Transport, is the best deal for taxpayers and fare payers. I hope to get from the Minister today the guarantees and reassurances necessary to be satisfied that the decision-making process is robust, so that the right decision is made with taxpayers’ money.

Given the determined efforts of Transport Ministers to avoid answering questions on this franchise decision, I do not begin this debate from a position of resounding confidence. We are told over and over that the process is rigorous, detailed and fair. It is as if by repeating that mantra we will all believe it. Yet there have been many complaints that the process does not even deliver against its own objectives.

The basis of the judicial review is that the Department for Transport broke its own rules when evaluating the bids, and we need to get to the bottom of that. There are those who argue that the entire franchise bidding process is flawed, and driven solely by the promise of large sums of money no matter what the cost, and irrespective of the stated objectives.

--- Later in debate ---

[Iain Stewart (Milton Keynes South) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Bone.

I draw attention to my entry in the Register of Members’ Financial Interests. My interests in this important subject are threefold. First, as I suspect is true for most hon. Members in the room, the west coast main line serves my constituency. Secondly, I use the line on a regular basis for both business and leisure. Finally, I am a member of the Select Committee on Transport and, as the hon. Member for West Lancashire (Rosie Cooper) has mentioned, we are undertaking an inquiry into the bidding process as part of our general Rail 2020 inquiry. I stress that I speak today entirely in a personal capacity and not on behalf of the Committee.

I want to take a step back and remind hon. Members of what we are debating. We are talking about a highly congested, highly used multi-use railway line that links Glasgow, north-west England, the midlands and London. The west coast main line is one of the country’s key railway arteries and has seen exceptional rises in demand from both passengers and freight over recent years. All the indications are that that demand will continue to grow over the next 10 to 15 years. Indeed, that is one of the main reasons for the High Speed 2 debate, because the line will eventually run out of capacity and intermediate steps such as lengthening trains, remodelling junctions and the rest will not deliver the capacity we need.

Within the passenger context, there is also a conflict of needs on the west coast main line. Some users want London, Birmingham, Manchester and Liverpool to be linked with very fast services, and other places on the line, such as my constituency, want inter-regional services that stop so people can travel from Milton Keynes to Glasgow or from Nuneaton, Rugby and elsewhere to other destinations on the line. Plus, of course, there is all the commuter traffic in and around the major conurbations on the line. The west coast main line is a complex railway system, and it is vital that, over the next 15 years before High Speed 2, we make the most efficient use of that line.

No one, other than the Department’s senior officials and Ministers, has seen the full detail of the two bids, which I believe run into thousands of pages and have been assessed over many months. We should, therefore, be a little careful how we approach this debate. We have all heard the accusations and counter-accusations made by the two companies, but we have not seen that information. Indeed, picking up on one of the points raised by the hon. Member for West Lancashire, I am not sure we can see the bids in any detail because the information they contain is commercially sensitive, and no bidder would want such information released during the bidding process.

[Several hon. Members]

rose—

[Iain Stewart]

I will first give way to my fellow Hutchesonian.

[Anas Sarwar (Glasgow Central) (Lab)]

I am not sure that is something I want said with some of my Labour colleagues in the room!

There has been a debate on the two companies, but does the hon. Gentleman agree that it is not about which company operates the line but about getting the right deal for the taxpayer and the passenger? People need reassurance that we will get the same quality and frequency of service and the same low fares and that taxpayers will not eventually have to foot the bill.

--- Later in debate ---

[Iain Stewart]

I agree with the hon. Gentleman. I also put it on record that I have no preference as to whether Virgin or FirstGroup wins the franchise. Virgin operated the franchise perfectly competently, and I would have had no problem had it been the successful bidder. Equally, FirstGroup has made a very attractive offer, so I approach this from a neutral perspective.

[Albert Owen (Ynys Môn) (Lab)]

In his introduction, the hon. Gentleman omitted the fact that the west cost main line also serves north Wales. I will address that important point if I catch your eye, Mr Bone.

The hon. Gentleman mentioned that we may never know the detail of the bids, but surely that is the purpose of the Transport Committee’s inquiry. Ministers are there to answer such questions, and it would be in the Government’s interest if we were to have at least a summary so that we could clear up some of what he calls “speculation.”

[Iain Stewart]

I apologise to the hon. Gentleman; of course the route also serves Chester and the north Wales coast, and I will refer to that a little later.

We have had a summary of the respective bids, but to assess fully whether the FirstGroup bid is deliverable in preference to the Virgin bid, we would need to see the very detailed evidence that supports the headlines we all know about. My contention is that we cannot expect to see that while the bidding process is ongoing, because the bids contain commercially sensitive information. That would be like a card game in which each player has to reveal their hand before they play.

[David Mowat]

My hon. Friend is right that the bids contain a huge amount of detail that is very hard for anyone here to understand. In his Select Committee role, he might like to investigate—I have heard this several times—the Virgin bid not being evaluated against the other bid because of the £250 million price gap, which has been highlighted by the hon. Member for West Lancashire (Rosie Cooper). That would be worth understanding.

[Iain Stewart]

That is a fair question. I cannot answer, but perhaps the Minister will.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

What is the purpose of the Select Committee’s report, or an inquiry, if it cannot be given the evidence that will show the difference, if there is a difference, between the two bids? The press, for instance, have suggested that the FirstGroup bid is back-loaded. How will the Select Committee work to the advantage of the taxpayer in such circumstances?

[Iain Stewart]

That is a fair question. When the Select Committee debated whether we should call Sir Richard Branson, Tim O'Toole and their colleagues, I made the point that we would not be able to probe them fully because we did not have access to the information because of the legal position. I would love to be able to go further, but we shine as much light as we can.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

rose—

--- Later in debate ---

[Iain Stewart]

I will give way one last time, but I must then make some progress.

[Mr Brown]

I thank the hon. Gentleman for giving way. Obviously, the bids contain significant detail. As he and other hon. Members have indicated, we may never find out all of it. There are so many claims and counter-claims, and through the Select Committee and this debate we are looking for a clear indication from the Minister, without the detail, of whether every claim and counter-claim was carefully considered. Has he covered everything to ensure that the outcome is fair for the taxpayer?

[Iain Stewart]

Some of those questions are for the Minister to answer. I shall come in a moment to some reasons for my own conclusions about the two bids, but there is a caveat attached to what I say, because I do not have access to that information.

For the first half of the franchise period, up to eight to 10 years, the two bids are remarkably similar. There may be a higher premium payment from one than the other in a given year, but the lines on a graph are broadly consistent. They diverge only in the last period. The shorthand explanation is that FirstGroup believes it can continue to grow the market throughout the franchise, whereas Virgin believes that revenue growth and passenger numbers will tail off towards the end. The first bid is therefore more ambitious, and consequently riskier. What we must assess is whether that risk is acceptable. My conclusion is that it is within the bounds of acceptability.

My first reason for believing that is that population growth along the route is likely to be considerable over the 15 years. The Milton Keynes area has 25,000 housing permissions over the lifetime of the bid, and other towns and cities on the route have similar housing growth ambitions for that time. Feeder services into the main line will also be enhanced. The east-west rail link in my area will, I hope, open by 2017. One of its attractions is that it will build feeder services into the west coast, for people from Oxford or Bedford who might want to travel to stations in the north-west, or Scotland. That will drive demand on the line. Similarly, in the Manchester area, the northern hub will we hope attract more rail users on to the line and enable it to continue its ambitious growth, taking passengers away from the air route. For those reasons I believe there will be sustainable demand in the next 15 years.

The next question is whether the line can deliver the capacity to meet the demand. One of Virgin’s accusations was that by the end of the franchise First will have to fill every seat on every train every day to meet its premium payments. We need to examine the detail of what First proposes. It proposes more trains than the Virgin bid does. Both companies propose to buy new electric train sets for parts of the network. I understand that the difference is that First will augment the existing fleet. Virgin would replace the Voyagers with the new electric ones, whereas FirstGroup would keep the Voyager fleet and lengthen five-car trains into 10-car trains. First also wants to use more ambitious ticketing structures: a new class of travel between standard class and first class. It makes a point about capacity; the figure for the trains across the week is only 35%, whereas other franchises run at near 50%.

[Anas Sarwar]

Is not the hon. Gentleman concerned that with that predicted doubling of user numbers on the service in the next 15 years, and given that figure for capacity of 35%, fares will go up, and will be much higher in peak times, to attract people to travel off-peak? That could lead to a massive increase in fares for people using the service at the most important times.

[Iain Stewart]

Without wanting to put words in his mouth, I think, from our questioning in Committee of Tim O’Toole of FirstGroup, that he would reflect whatever changes the Government make to the definition of the peak period. The ambition is indeed to try to get a more equitable spread of rail demand across the day so that trains are not packed at certain times while others run comparatively empty. That is a sensible ambition. However, the long-term answer to the hon. Gentleman’s question is a step change in rail capacity, which will come with High Speed 2. In the mean time, the question is how to make best use of the capacity that we have.

[Mr John Leech (Manchester, Withington) (LD)]

I thank my fellow Select Committee member for giving way. I felt that one problem with the questions to Tim O’Toole was that he seemed to argue that First would be able to get people on to those peak-time trains that are under-utilised at the moment with a 15% discount on rail fares. However, that still seems significantly more expensive than the off-peak saver returns or first advance tickets. There is a danger that the ambition to fill those trains will not be realised without increasing the cost of some first advance tickets, so that people cannot get them on off-peak trains.

[Iain Stewart]

I thank my hon. Friend and fellow Select Committee member for that point. There will still be a peak period and an off-peak period. My perspective is that we should be able to manage a more effective distribution. However, Mr O’Toole also made the point that he will not realise his ambition to fill the trains if fares are so high that people will not use them. His ambition is to achieve a modal shift from car and air to train.

[Mr Watts]

Perhaps the hon. Gentleman can clarify one point. The operators do not buy the trains; they lease them. If the increase in question does not happen, and Virgin is right and First is wrong, will First be forced to lease trains in the 10th, 11th, or 12th years—up to 15 years? Alternatively, will it just be able to decide that perhaps it will not increase capacity then, because there would be no justification?

[Iain Stewart]

I am not privy to the contractual details in relation to the trains. From memory, First would be obliged to continue with the existing Pendolino fleet, which is the mainstay of the route. The trains in question are additional ones, to meet the capacity. Things could easily go the other way. The trains that are being bought are six-car ones; if, suddenly, passenger numbers go up beyond expectations, it might be feasible to lengthen them, in the same way that the Pendolinos have been lengthened from nine to 11 cars.

[Mr Watts]

The hon. Gentleman is being generous with his time. If what he said is the case, the commitment to long-term investment may never materialise. It is one of the main planks of the argument for First, but First may not build the capacity because there might not be a justification for it. Does the hon. Gentleman agree that that is why it is important that we have more transparency, and can all see the details of the contract?

[Iain Stewart]

Perhaps it is a case of whether we see the glass as half-full or half-empty. I see an attractive proposition for growth in use. Why would FirstGroup, an experienced rail operator, want to tarnish its reputation by not delivering on what it promises? I will come on to one difficulty that I anticipate—or on which, at least, I would like reassurance. However, I think First’s ambition is genuine. As I have tried to explain, I think that there is underlying growth in the market, and that First will be able to innovate with new products to attract people on to the railways.

I do not want to continue much longer, because other hon. Members want to contribute. I have a concern about one aspect of the matter, and the hon. Member for West Lancashire touched on it. There will be considerable work on the west coast main line over the franchise period, particularly in the Euston area, if it is decided that that will be the High Speed 2 terminus. That may have an impact on the ability of the line to deliver the extra capacity. I should be grateful for a comment from the Minister, whom I welcome him to his post. He has long taken an interest in rail, and richly deserves his position. Perhaps he could say a little about how the upgrade work at Euston and elsewhere on the line will be accommodated, along with growing passenger numbers, over the period in question. I believe that there are solutions. For example, it might be possible to divert some commuter traffic on the London midland line into the Crossrail terminus while Euston is being upgraded, and for extra capacity to be created there. If the Minister would say a few words about that, I should be grateful.

[David Mowat]

Will my hon. Friend give way?

[Iain Stewart]

I will give way one last time, but then I must conclude.

[David Mowat]

The thrust of my hon. Friend’s remarks is that if there is an issue with Euston or the revenue projections, that is a problem for the Government, but it must be a problem for FirstGroup, and the contractual basis must make that clear. Such points, although interesting, do not mitigate FirstGroup’s liability. That must be a principle.

[Iain Stewart]

That is a fair point. I genuinely do not believe that FirstGroup would be making the bid if it did not believe that it could deliver. However, we do not have the full details, and I do not think that we can. I believe that the process has been rigorous. The bids were anonymised; the Government could not have displayed any commercial bias for or against any operator.

In conclusion, it is healthy that we have such a high level of ambition and competition. It is to the benefit of all who use the railway that different companies want to develop the line in innovative ways. I hope that my constituents and those of other hon. Members will see an improvement in their rail services over the life of the franchise.

Select Committee Inquiry (Aviation Strategy)

Iain Stewart Excerpts

Thursday 13th September 2012 Commons Chamber

[Mrs Ellman]

I thank my hon. Friend for his comments. The Committee will certainly be interested to hear representations on the specific issue that he has raised.

The Department for Transport has taken some time in producing its aviation strategy. The coalition rejected plans for a third runway at Heathrow in 2010, but in July this year the Government published their draft aviation policy framework for consultation. The Government say that their draft policy should make the best use of existing aviation capacity in the short term, while other long-term solutions to increase capacity are being developed.

The issue of hub status is particularly contentious. Two years after opposing plans to expand Heathrow, the Government’s draft aviation policy does not include a strategy for maintaining an aviation hub in the UK. Ensuring that the UK has an effective hub airport is important to encourage growth, maintain international connectivity and provide transport services on more marginal routes.

[Iain Stewart (Milton Keynes South) (Con)]

As a member of the Transport Select Committee, I am very much looking forward to working on this important inquiry. Will the hon. Lady confirm that the inquiry’s terms of reference will allow us to consider the interaction of aviation strategy with a high-speed rail network, so that we can explore other hub airport options rather than simply the binary choice between expanding Heathrow and building a Thames estuary airport?

[Mrs Ellman]

I can confirm that the terms of reference for the inquiry, which are now being published, will include the particular issue that the hon. Gentleman has raised.