Rail 2020

Debate between Iain Stewart and Graham Stringer

Wednesday 3rd July 2013 Commons Chamber

[Iain Stewart]

I am happy to endorse the point that my hon. Friend eloquently makes. I have travelled on that line and seen at first hand many of the improvements that have been made.

The point has been made that the rail network requires subsidy to operate, and I agree with that. Many lines would not be profitable in themselves, but for social and environmental reasons they require subsidy. We need to take into account not just the operating profit and loss of an individual rail service, but the opportunity cost: the cost to the country if that rail line did not exist and people had to travel by car or another mode of transport. We can only imagine the congestion on the roads around our major cities if we did not have commuter rail lines. They might not, in themselves, be profitable, but the environmental and financial cost of having those passengers travelling by car or another mode of transport would just be too much to bear.

I welcome the Government’s commitment to continue to subsidise large parts of our rail network, but we cannot escape the conclusion that Sir Roy McNulty and others reached in their report, which was that we should be looking to make our network as efficient as possible, in order to achieve his aim of a 30% reduction in the unit cost. Our network is comparatively expensive to run compared with others. I believe that that is a product of history, not just of one approach, be it the franchise model or the nationalised model. It is a cost that has been built into the system over many decades, particularly because until relatively recently we have had a period of managed decline of our network and what investment there has been has been made on a “make do and mend” basis. Additional costs are hard-wired into our system, but the system we now have is sensibly evolving.

[Graham Stringer]

The hon. Gentleman is a serious student of the rail system in this country. There is not a lot in what he has said with which I disagree. He is trying to put the issue into its historical perspective, so let me put it into real historical perspective. When John Major’s Conservative Government privatised the railways in the 1990s, they came to this Chamber and told right hon. and hon. Members that there would be no subsidy. That was used as justification for selling the railways off at a lower price. Network Rail now carries a debt of £30 billion on its balance sheet, so I hope the hon. Gentleman will take into consideration the false prospectus that the Conservatives gave this House in the 1990s.

[Iain Stewart]

It is always a pleasure to take an intervention from my fellow Select Committee member. If the hon. Gentleman will forgive me, I will not rehash the debates of the 1990s as I am more interested in what happens from here on. In an earlier intervention, he made the point that the Government are seeking to return the east coast main line to private hands as a matter of ideology. Equally, I could argue that it is because of ideology that the Opposition want to renationalise it. I draw the hon. Gentleman’s attention to the conclusion of Richard Brown’s report on franchising, which concluded that the franchising model was not fundamentally flawed and that although the detail could sensibly be changed, the investment in and success of the railways could not have happened if the franchising was fundamentally flawed.

Let me turn to a number of initiatives that, I believe, can deliver a more efficient railway. The hon. Member for Liverpool, Riverside mentioned the development of alliances between Network Rail and train operating companies. That is a very helpful and sensible development. The one large-scale alliance, between Network Rail and South West Trains, has not been in operation long enough for us to make any sensible assessment of what savings it can deliver, but as the real expert, Nigel Harris, said in evidence to the Select Committee, it

“is the only game in town”

at the moment and requires a fair wind to achieve the savings that it hopes to.

Such alliances are not the only form of alliance available. One or two other examples provide evidence that such an arrangement can deliver useful savings and efficiencies in the railway. The project in Scotland to electrify the branch line to Paisley Canal on the Greater Glasgow network was an alliance between Network Rail, First ScotRail and Babcock engineering. They were able to electrify the branch line at a substantially lower than expected cost and two years ahead of the planned development because the power was devolved down to that level, meaning that the various experts and operators could get together and deliver the project very efficiently.

I am doing a fellowship with the Industry and Parliament Trust on the rail industry and I have spent a good number of days going around parts of the railway system. I have seen two separate examples of an alliance between a train operating company and the rolling stock manufacturer, which enables a much more efficient system of maintenance and refurbishment of the rolling stock. I visited the Kings Heath depot, jointly operated by London Midland and Siemens on the London Midland franchise, and—this will interest my hon. Friend the Member for Folkestone and Hythe (Damian Collins)—the Hitachi depot where the Javelin trains are maintained with Southeastern. Those depots are delivering a much faster and more efficient turnaround in train maintenance. They are not “grands projets” or exciting stuff, but they deliver a much better service for rail users at a much lower cost.